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EXHIBIT 10.15
AGREEMENT FOR PURCHASE AND SALE
OF
NOVATEL WIRELESS INC. MOBILE TERMINAL UNITS
BETWEEN
NOVATEL WIRELESS INC.
AND
VOICESTREAM WIRELESS CORPORATION
* Certain information on this page has been omitted and filed separately with
the Commission. Confidential treatment has been requested with respect to the
omitted portions.
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TABLE OF CONTENTS
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1 DEFINITIONS.............................................................................1
2 PURCHASES AND SCOPE OF SUPPLY...........................................................4
2.3 PERSONS AUTHORIZED TO PURCHASE; SUPPLY OF DELIVERABLES AND PURCHASE ORDERS...........4
2.5 TECHNICAL INTERFACE..................................................................4
2.6 POINT-OF-SALE PACKAGING..............................................................5
2.13 CO PRODUCTS..........................................................................7
2.8 PRODUCT TEST INSTRUMENTATION.........................................................7
2.9 ACCESSORIES..........................................................................7
2.12 UPDATE TO CHANGED STANDARDS..........................................................8
2.15 MINIMUM HANDSET PROCUREMENT..........................................................8
2.14 ALLOCATION OF PRODUCTION.............................................................9
2.18 EMBEDDED PERMITTED SYSTEM RESTRICTION; PRE-LOADED SIM................................9
2.19 RESALE BY BUYER.....................................................................10
2.20 SOFTWARE LICENSE....................................................................10
2.21 DATABASE............................................................................10
2.22 COUNTRY OF ORIGIN...................................................................10
2.23 BATTERY RECYCLING...................................................................10
2.24 ADVERTISING DISPLAY MATERIAL........................................................10
3 CUSTOMER REPRESENTATIVE................................................................11
3.1 PROGRAM MANAGER REQUIRED............................................................11
3.3 REPORTING AND MEETINGS..............................................................11
4 PRICES.................................................................................11
5.1 PRICE LIST; CHANGES AS NEW PRODUCTS ARE INTRODUCED..................................12
5.2 MOST FAVORED CUSTOMER...............................................................13
5.7 TAXES AND OTHER CHARGES.............................................................14
5 INVOICING AND TERMS OF PAYMENT.........................................................14
6.2 INVOICE UPON SHIPMENT...............................................................14
6.5 PAYMENT.............................................................................14
6.6 PAST DUE PAYMENTS...................................................................14
6.7 AMOUNTS IN DISPUTE..................................................................14
6 SELLER ADVERTISING ACCOUNT.............................................................14
7 TRADEMARKS AND LOGOS...................................................................15
9.1 BUYER'S LOGO ON PRODUCTS; ADVANCE CONSENT OF BUYER FOR OTHER LOGOS..................15
9.2 ARTWORK AND REPRODUCTION............................................................15
10.8 INABILITY TO MEET REQUIRED DELIVERY DATE............................................18
10.10 FAILURE TO MEET REQUIRED DELIVERY DATE............................................18
10.10 RIGHT TO COVER....................................................................18
10.12 DISCREPANCIES.....................................................................19
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10.15 MODIFICATIONS TO PURCHASE ORDER....................................................19
4.1 ACCEPTANCE TEST PROCEDURE TO BE DEFINED.............................................20
4.2 REGULATORY..........................................................................20
4.7 ISO 9000 COMPLIANCE; AUDITS.........................................................20
4.4 COMMERCIAL TEST PROCEDURES MARKET VERIFICATION TEST.................................21
4.6 SAMPLE TESTING......................................................................21
12.2 EXTENDED TERM FOR CERTAIN PROVISIONS................................................23
11. TITLE AND RISK OF LOSS...............................................................23
12 PRODUCT SUPPORT.......................................................................23
14.1 TRAINING SUPPORT....................................................................23
14.2 TECHNICAL SUPPORT...................................................................24
14.3 DOCUMENTATION.......................................................................24
14.4 SURVIVAL AND EXTENDED TERM..........................................................25
13 WARRANTY AND SERVICE REPAIR...........................................................26
4.3 INTER-OPERABILITY TESTING...........................................................26
2.4 COMPLIANCE..........................................................................26
11.1 RETURN OF DEFECTIVE PRODUCTS........................................................28
16.3 SURVIVAL AND TERM...................................................................29
14 TERMINATION; LIMITATION OF LIABILITY..................................................29
17.1 DEFAULT.............................................................................29
17.3 BANKRUPTCY..........................................................................29
17.4 LIMITATION OF LIABILITY.............................................................30
17.6 RIGHTS OF PARTIES UPON TERMINATION BY SELLER........................................31
15 CONFIDENTIALITY.......................................................................31
18.1 CONFIDENTIAL INFORMATION DEFINED....................................................31
18.2 EXCEPTIONS..........................................................................32
18.3 SURVIVAL............................................................................32
16 FORCE MAJEURE.........................................................................32
19.1 FORCE MAJEURE.......................................................................32
19.3 BUYER'S RIGHT TO TERMINATE FOR FORCE MAJEURE........................................33
19.4 SELLER'S RIGHT TO TERMINATE FOR FORCE MAJEURE.......................................33
17 PRODUCT LIABILITY INDEMNIFICATION.....................................................33
18 INTELLECTUAL PROPERTY INDEMNIFICATION.................................................33
19 DISPUTE RESOLUTION....................................................................34
22.1 INTERNAL ESCALATION.................................................................34
22.2 MEDIATION...........................................................................35
22.3 ARBITRATION OF DISPUTES.............................................................35
22.4 CONTINUE TO PERFORM.................................................................36
20 NON-EXCLUSIVE AGREEMENT...............................................................36
21 INSURANCE.............................................................................36
24.1 SELLER TO MAINTAIN..................................................................36
24.3 LEVEL OF INSURANCE..................................................................37
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24.4 CERTIFICATES OF INSURANCE...........................................................37
24.5 NO WAIVER...........................................................................37
22 ASSIGNMENT............................................................................37
25.1 CONSENT REQUIRED....................................................................37
25.2 INVALID WITHOUT COMPLIANCE..........................................................37
25.3 ASSIGNS.............................................................................38
23 NOTICES...............................................................................38
24 PUBLICITY.............................................................................38
25 COMPLIANCE WITH LAWS; GOVERNING LAW...................................................39
26 WAIVERS OF DEFAULT....................................................................39
27 AMENDMENTS............................................................................39
28 ORDER OF PRECEDENCE...................................................................39
29 HEADINGS..............................................................................40
30 SEVERABILITY..........................................................................40
31 SURVIVAL..............................................................................40
32 LICENSE...............................................................................40
33 PARTY RELATIONSHIP....................................................................40
35 COUNTERPARTS..........................................................................41
39.1 INCORPORATION.......................................................................41
37 ENTIRE AGREEMENT......................................................................41
ATTACHMENT A-1 PRODUCT 1 -- GPRS - PCS PC CARD..........................................44
ATTACHMENT A-2 PRODUCT 2 -- GPRS - PCS PC CARD 8-SLOT...................................46
ATTACHMENT A-3 PRODUCT 3 -- GPRS - GSM/PCS PC CARD 900/1900.............................48
ATTACHMENT B DATES FOR COMPLETION OF ATTACHMENTS.........................................50
ATTACHMENT C PRICES......................................................................51
ATTACHMENT D SAMPLE TESTING PROTOCOL.....................................................53
ATTACHMENT E ACCEPTANCE TEST PROCEDURE..................................................56
PENDING..................................................................................56
ATTACHMENT F WARRANTY....................................................................57
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ATTACHMENT G DATABASE FORMAT.............................................................58
ATTACHMENT H ADVERTISING DISPLAY MATERIAL................................................59
ATTACHMENT I RETURN POLICY...............................................................60
ATTACHMENT J GPRS DEVELOPMENT SCHEDULE..................................................61
LEVEL ONE TECHNICAL SUPPORT..............................................................63
LEVEL TWO TECHNICAL SUPPORT..............................................................63
TECHNICAL SUPPORT TRAINING...............................................................64
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LIST OF CONTRACT ATTACHMENTS
ATTACHMENT DESCRIPTION
Attachment A-1 Description of Product 1 (specifications)
Attachment A-2 Description of Product 2 (specifications)
Attachment A-3 Description of Product 3 (specifications)
Attachment B Dates for Completion of Attachments
Attachment C Prices
Attachment D Sample Testing Protocol
Attachment E Acceptance Test Procedure
Attachment F End-user warranty
Attachment G Database Format
Attachment H Advertising Display Material
Attachment I Return Policy
Attachment J GPRS Development Schedule
Attachment K Technical Support
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AGREEMENT FOR PURCHASE AND SALE
OF
NOVATEL WIRELESS INC. GPRS MOBILE TERMINAL UNITS
THIS AGREEMENT FOR PURCHASE AND SALE OF NOVATEL WIRELESS INC. MOBILE TERMINAL
UNITS (the "Agreement"), is made and effective as of the __ day of March, 2000,
by and between VoiceStream Wireless Corporation, a Delaware corporation with its
principal place of business in Bellevue, Washington ("Buyer"), and Novatel
Wireless Inc., a Delaware corporation, with its principal place of business in
San Diego, California ("Seller").
RECITALS
A. Buyer has received authority from the FCC (as defined herein below) to
construct and operate PCS (as defined herein below) networks in certain
areas within the jurisdiction of the United States and may receive
authority to operate additional such systems.
B. Seller has offered to sell to Buyer and Buyer wishes to buy the wireless
communications subscriber devices and accessories described herein at
the prices and discounts and on the terms and conditions specified
herein .
AGREEMENT
NOW, THEREFORE, in consideration of the premises and mutual covenants
set forth herein and for other good and valuable consideration, the
sufficiency of which is hereby acknowledged, the parties, intending to
be legally bound, agree as follows:
1 DEFINITIONS
The capitalized terms used in this Agreement or in an Attachment to this
Agreement have the meanings set forth below:
AFFILIATE means any partnership, corporation or other entity in which Buyer owns
a fifteen percent (15%) or greater equity interest or any entity
controlling, controlled by or under common control with Buyer, which
operates or is authorized to operate a Cellular System or PCS system in
North America including the Caribbean Islands.
ANNUAL FORECAST means that annual forecast of Buyer's purchase volume only,
updated monthly, supplied by Buyer to Seller, as more specifically
described in Section 8.1.
AUTHORIZED PURCHASER means Buyer's selected, dealers, and agents, GSM network
operators, retail stores, distribution centers, third party warehouses,
and those other third party
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dealers with whom Buyer has a relationship at the time of such third
party's contracting with Seller for the purchase of Handsets.
BTA means Basic Trading Area, a geographic area designated by the Federal
Communications Commission for the purpose of granting authorizations to
construct and operate PCS networks.
COMMERCIAL PRODUCTS means that Products have passed the testing process defined
in Section 9, have received any necessary regulatory approvals, and is
ready in all respects for public sale.
COMMERCIAL TEST PROCEDURES (CTP) means that test procedure, as provided in
Section 9 and elsewhere, for Commercial Products.
CONFIDENTIAL INFORMATION means information that the parties are obligated to
protect as more fully provided in Section 15.
END-USER means the owner or user of a Handset (i.e., the person who buys and
uses a Product).
FCC OR FEDERAL COMMUNICATIONS COMMISSION means the agency of the United States
Government charged with authorizing PCS networks, currently the Federal
Communications Commission, or its successor agency.
HANDSET(s) means a mobile station in the PCS service intended to be used while
in motion or during halts at unspecified points and conforming to the
PCS 1900 specifications, as appropriate. Handsets include handheld
portable units and units installed in vehicles. Handsets shall also
include data-only or voice and data subscriber equipment products
designed for use with computer devices, and includes the PCS cards
described on Attachments A-1 through A-3 and such other attachments upon
which the parties may subsequently agree in writing and attach to this
Agreement.
INTELLECTUAL PROPERTY CLAIM (IP CLAIM) means a claim involving Buyer's or
Seller's intellectual property rights, as more fully described in
Section 19.
INVENTORY means all Products owned and held by Buyer or its Authorized
Purchasers for resale or use.
MINIMUM PURCHASE TERM means that 12-month period of time (i) commencing on the
date of delivery from Seller of the first Commercial Products purchased
and accepted by Buyer.
MTA means Major Trading Area, a geographic area designated by the Federal
Communications Commission for the purpose of granting authorizations to
construct and operate PCS networks. References to MTAs shall include
BTAs.
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PERSONAL COMMUNICATIONS SERVICE ("PCS") means a system authorized by the FCC to
provide public correspondence using cellular radio techniques and
operating in the frequency band 1850 MHz to 1910 MHz and 1930 MHz to
1990 MHz.
PRODUCTS means the Handsets and accessories identified in Attachments A-1
through A-3 hereto, including related documentation as the same may be
modified, added or discontinued during the Term (where the addition,
modification or discontinuance is in accordance with this Agreement) and
available for purchase by Buyer or otherwise supplied to Buyer under
this Agreement.
PROTOTYPE PRODUCT means an engineering version of a Product that is not a
Commercial Product, capable of demonstrating size, weight, feel and some
basic functionality (e.g., the ability to place/receive voice telephony
calls, of the final Product). Prototype Products are not necessarily
produced with production tooling nor do they necessarily have final
production software. Prototype Products are built in limited volumes,
primarily for engineering design validation purposes, and may include
Alpha (first generation) and Beta versions..
PURCHASE ORDER means Buyer's order to Seller for specific Products, as more
fully described in Section 8.
SECTION means, when used without any other reference, sections, including
subsections, within this Agreement.
SOFTWARE means (a) all computer software furnished hereunder for use with
Products including, but not limited to, computer programs contained on a
magnetic or optical storage medium, in a semiconductor device, or in
another memory device or system memory consisting of (i) hardwired logic
instructions which manipulate data in central processors, control
input-output operations, and error diagnostic and recovery routines,
(ii) instruction sequences in machine-readable code that control call
processing, peripheral equipment and administration and maintenance
functions; and (b) documentation furnished hereunder for use and
maintenance of the Software.
SPECIFIED SHIPPING DATE means the date, as shown in a Purchase Order or
otherwise, upon which Buyer requests shipping of certain Products, as
more fully described in Section 8.
SUBSCRIBER IDENTITY MODULE (SIM) means mean an electronic module, either in the
form of an integrated circuit "smart card" or otherwise, that contains
personalization information concerning a user and is intended to be
inserted in and removed from a SIM reader in Handset Products.
TERM means, unless sooner terminated subject to section 14, the initial three
(3) year duration of this Agreement commencing on the date that it is
completely executed by the parties, which initial term shall be extended
for additional one-year terms unless, ninety (90) days before the
*Certain information on this page has been omitted and filed separately with the
Commission. Confidential treatment has been requested with respect to the
omitted portions.
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expiration of the initial or any other term, one party gives written
notice to the other of non-renewal.
2 PURCHASES AND SCOPE OF SUPPLY
2.1 PERSONS AUTHORIZED TO PURCHASE .
2.1.1 PERSONS PERMITTED TO BUY PRODUCTS. This Agreement
contemplates purchases by Buyer, its Affiliates, and its
Authorized Purchasers, all sometimes collectively referred
to as "Permitted Purchasers."
2.1.1.1 BUYER AND AFFILIATES. Buyer is permitted to
purchase under the terms and conditions
applicable to Buyer on its own account or for its
Affiliates and Authorized Purchasers.
2.1.1.2 AUTHORIZED PURCHASERS. To simplify administration
of purchases by Affiliates and Authorized
Purchasers, unless otherwise agreed by the
parties, each Affiliate or Authorized Purchaser
may enter into a separate contract with Seller
consistent with Seller's obligations to provide
to such Affiliate or Authorized Purchaser
identical pricing and substantially and
materially the same terms and conditions provided
to Buyer herein
2.1.2 Nothwithstanding the foregoing, Buyer has no
responsibility for payments of obligations incurred by any
other purchaser. Seller shall not seek payment from Buyer
for any sums owed by any purchaser except Buyer.
2.1.3 EXCLUSIVE PURCHASES. Nothing in this Agreement shall
require Buyer, or any other Permitted Purchasers, to
purchase exclusively from Seller.
2.14 CREDITWORTHINESS. For any Permitted Purchaser other than
Buyer, Seller may establish commercially reasonable,
non-discriminatory credit (and other) qualifications as a
pre-condition to sales. Seller shall provide written
notice to Buyer of any proposed disqualification.
2.2 TECHNICAL INTERFACE.
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2.2.1 INFORMATION REQUIRED. Within forty five (45) days from the
effective date hereof, Seller shall provide Buyer with
detailed information concerning the diagnostic and
monitoring capabilities, operating software
specifications, and detailed product specifications of
Products, except information Seller reasonably considers
proprietary or confidential. The information to be
provided by Seller to Buyer shall also include the
electrical interface specifications and the data flow
specifications. All such information provided by Seller
shall be sufficient enough to permit Buyer to use and
maintain the Products as test equipment and to effectively
test the Products in Buyer's network. As new Products are
developed or as the electrical interface or data flow
specifications are changed, Seller shall timely supply
updated information to Buyer, except information Seller
reasonably considers to be proprietary or confidential.
The information supplied shall include instruction on how
to place Products into diagnostic or monitor mode and, if
hardware or Software components are necessary, Seller
shall supply Buyer, without charge, with a quantity of
such components sufficient for Buyer's reasonable
requirements. The diagnostic and monitoring information to
be provided by Seller shall include specific
diagnostic/monitoring testing features on PCS 1900
equipment. If unique or proprietary connecting cables are
necessary to communicate with the Product when in
diagnostic or monitor mode, Seller shall furnish Buyer
with a reasonable quantity of such cables, without charge.
2.2.2 USE OF INFORMATION. Seller hereby grants to Buyer a
royalty-free license to use the information described in
2.2.1 for Buyer's purposes in constructing, testing,
maintaining, using, and operating the Products. Seller
shall develop sample software demonstrating interfaces and
communications with the Product in diagnostic or monitor
mode and Seller shall supply, without charge, copies of
same, including sample source code (i.e., sample AT
command script), to Buyer for Buyer's use. Buyer shall
have the right to incorporate Products in this
configuration into its test equipment for testing the
Products, including the right to transfer information
furnished under this Section 2.2.2 to third parties to
develop test equipment for Buyer or to develop such test
equipment directly. Seller shall not charge Buyer or any
such third party any royalty or other similar charge where
the test equipment so developed is used for Buyer's
purposes testing the Products.
2.3 POINT-OF-SALE PACKAGING.
Seller shall use EAN 328, "3 of 9", or Universal Product Code
("UPC") stock control numbering ("SKU") markings or other
customer-specific bar code markings and human readable format on
the outside of the point-of-sale package
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for each of the packaging options described below. Seller shall
provide information to Buyer concerning Seller's bar coding and
serial number coding for Products, sufficient to permit Buyer to
properly electronically read Seller's bar coding and to be able
to monitor and track Products received. Invoices and shipping
notices shall include electronic copies of serial numbers and
other information reasonably needed by Buyer to track and control
inventory.
Buyer shall select, from time-to-time, its desired packaging
format from among the options described below, subject to the
limitations established therein. In the event that Buyer wishes
to change its desired packaging format, Buyer and Seller shall
agree upon the lead time necessary to effect such change, Buyer
shall provide Seller with Notice of its desire to change
packaging format as soon as possible (but no less than 90 days
before the format change is desired), and Seller shall use
reasonable efforts to afford the shortest lead time possible.
2.3.1 SELLER-LABELED BOX. The Product is packaged and shipped in
Seller's standard size rectangular box labeled with
Seller's trade name.
2.3.2 GENERIC BOX. The Product is packaged and shipped in
Seller's standard size rectangular box without any labels,
in a plain white cardboard format. In the event that any
labels, packaging or identifying marks are intended to be
attached to, or wrapped around such box, and Buyer uses
its transparent packaging, Seller shall design the Product
so that the "Novatel Inc." logo will be visible to the End
User.
2.3.3 BULK-SHIP. The Product is shipped in a bulk package,
without individual packages for each unit of Product.
Buyer has the obligation to arrange for individual unit
packaging. In the event that any labels, packaging or
identifying marks are attached to, or wrapped around any
individual unit packaging, and Buyer uses its transparent
packaging, Seller shall design the Product so that the
"Novatel Inc." logo will be visible to the End User.
2.3.4 CUSTOM PACKAGE. The Product is packaged and shipped in
Seller's standard size rectangular box with Buyer's
artwork and inserts (Commercial Product packaging). Buyer
shall provide the necessary artwork in such format and
upon such schedules as may be reasonably agreed by the
parties. The parties shall agree upon a
commercially-reasonable minimum order for such custom
packaging. In the event that the cost for producing and
shipping such a custom package exceeds Seller's cost to
produce and ship its Seller-labeled box, Buyer shall pay
that excess amount upon Seller's providing such
documentation as Buyer may reasonably require.
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2.3.5 PACKAGE INSERTS. With respect to the packaging performed
in sections 2.3.1, 2.3.2, and 2.3.4, Seller shall, without
charge to Buyer, insert into each point-of-sale package up
to four (4) pieces of Buyer-provided materials such as,
but not limited to, promotional materials and Buyer's
service provider information. Buyer's promotional
materials and information may be different for different
models of Products and may differ geographically, which
would require different SKU's for each package
configuration, but they shall be designed to fit within
the point of sale packaging with the Product, without
significantly increasing the packaging costs. Seller shall
ensure that the proper materials and information are
inserted into the corresponding Commercial Product
packaging and are delivered to the corresponding
geographical regions.
2.4 CO-BRANDED PRODUCTS.
2.4.1 CO-BRANDED PRODUCTS. Buyer may wish to receive all or part
of its orders in the form of co-branded Products in such
form as Buyer shall direct in advance, whereby Buyer's
name appears on the Product in addition to Seller's name
(such Products being referred to as "Co-Branded
Products"). Such Co-Branded Products may be in slightly
different form, different color, etc. as may be mutually
agreed by Buyer and Seller. Co-Branded Products shall be
available to Permitted Purchasers to the extent determined
and permitted in writing by Buyer. Seller's logo shall
also appear on Co-Branded Products.
2.4.2 PRICES FOR CO-BRANDED PRODUCTS.
2.4.2.1 ***
2.4.2.2 *** the *** charge for a Co-Branded Product shall
be based upon ***. Seller shall document its
incremental expenses and present the
documentation to Buyer. Notwithstanding anything
to the contrary contained in the preceding
sentences, the parties may mutually agree upon a
commercially reasonable charge for custom
manuals, documentation or other similar changes
from Seller's standard practices. ***" Seller's
charges for packaging of a Co-Branded Product are
to be determined consistent with this Section
2.4.
2.5 PRODUCT TEST INSTRUMENTATION. ***, beginning when the first
Commercial Products are delivered, Seller shall provide Buyer
with current Software and shall continue to provide current
updated Software subject to the terms of this Agreement.
2.6 ACCESSORIES. Seller will include a standard set of accessories
with each Handset as identified and set forth in Attachment A-1
through Attachment A-3, including, at
*Certain information on this page has been omitted and filed separately with the
Commission. Confidential treatment has been requested with respect to the
omitted portions.
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a minimum, antenna, headpiece/earset, user guide and necessary
device driver software supplied on computer readable media (i.e.
CD-ROM). In addition, Seller will offer a set of optional
accessories available *** as identified in Attachment C, which
shall be updated from time to time as mutually agreed to by the
parties.
2.7 UPDATE TO CHANGED STANDARDS. The parties recognize that the PCS
1900 technology is still undergoing development and that
Commercial Products may require post-production modification to
meet changes in the various standards governing such Commercial
Products.
2.7.1 Seller agrees to provide to Buyer, ***, all Software
necessary to update any Products provided under this
Agreement to meet standards changes relevant to the
Product, where such standards change becomes effective
within *** from the date of delivery of the Product to the
End-User and (i) where, without the update, use of the
Product would be significantly impaired; or (ii) where the
update is necessary to remove a safety risk to users of
the Product; or (iii) where the update is necessary in
order to continue the safe, efficient and economic
operation of Buyer's network; or (iv) where the change is
required by operation of federal, state, local, or
international law or regulation.
2.7.2 Further, Seller agrees to provide to Buyer, ***, any
Software necessary to update any Products provided under
this Agreement to meet standards changes relevant to such
Products where such standards changes become effective
within *** from the date of delivery of the Products to
Buyer and where, without the update (i) there would be a
material degradation in the operation of significant
features of the Products available to End-Users prior to
such standards changes and such material degradation
occurred with respect to a material number of Products, or
(ii) there would be a material degradation in the
operation of the network.
2.7.3 Notwithstanding anything to the contrary contained herein,
Seller shall comply with the final order of any court or
administrative body with respect to any required
modification of any Product.
2.8 MINIMUM PRODUCT PROCUREMENT. ***
2.8.1 RECORDS AND REPORTS. Seller shall maintain records
sufficient to accurately determine the actual purchase
volume credited to Buyer. Not later than thirty (30) days
after the end of each preceding month, Seller shall
prepare and provide to Buyer a report of qualifying
purchases and credits toward purchases (if appropriate)
for the preceding month. The report shall be furnished in
both paper and electronic versions. Seller shall certify
the accuracy of the report by signature of an appropriate
officer of Seller. The report shall be categorized by
identity of purchaser
*Certain information on this page has been omitted and filed separately with the
Commission. Confidential treatment has been requested with respect to the
omitted portions.
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(Buyer,Affiliates, Authorized Purchasers) and model of
Product purchased or credits toward purchases made, and
the report shall indicate the unit volume of purchases
qualifying for aggregation in each category.
2.8.2 CONTINUE TO DEVELOP COMPETITIVE PRODUCTS. Buyer's guaranty
to purchase the Minimum Purchase Quantity is conditioned
upon Seller's ability to continue to supply
state-of-the-art Products that are readily accepted by the
marketplace.
2.9 ALLOCATION OF PRODUCTION. In the event that Seller is unable to
meet its orders for Products as set forth in Purchase Orders that
have been accepted by the Seller, and without derogation of
Buyer's other remedies under this Agreement, Seller grants Buyer
***. Buyer shall retain this right of first refusal until Buyer
has met its Minimum Purchase Quantity commitment, or the Minimum
Purchase Term has expired, whichever is earlier. Buyer's right of
first refusal shall apply to purchases by Affiliates and
Authorized Purchasers.
2.10 EMBEDDED PERMITTED SYSTEM RESTRICTION; PRE-LOADED SIM.
2.10.1 EMBEDDED PERMITTED SYSTEM RESTRICTION. All Co-Branded
Handset Products sold to Permitted Purchasers shall be
configured with embedded software so as to function only
with a SIM supplied by Buyer or, as provided in Section
2.10.2, by Seller, unless otherwise specifically requested
by Buyer. Handsets shall be inoperable, except for
emergency calls, using a SIM for a network other than
Buyer's. Roaming operation with Buyer's network as the
subscriber's home system shall be unaffected by this
restriction. Such restriction shall be removable only
through an input key sequence unique to each individual
Handset (i.e., a common un-restriction code for all
Handsets of a particular model is not acceptable).
Following removal, the Handset shall operate with any SIM.
The removal key sequence shall be supplied to Buyer in an
electronic database, indexed by the serial number of the
Handset or other unique identifier agreed to by Buyer. The
removal key sequence shall not be supplied to any other
Permitted Purchaser or to the users of Handsets without
the written consent of Buyer on a case-by-case basis.
2.10.2 PRE-LOADED SIM; PRE-PAID SIMS. Buyer intends that all
Handsets sold to Permitted Purchasers shall have a SIM
configured for Buyer's network pre-installed unless
otherwise directed by Buyer. The parties shall negotiate
the method of effecting Buyer's intention, recognizing the
need for security in the SIM configuration and the need to
accomplish installation in a cost-effective fashion. The
installation method may involve Buyer supplying configured
SIMs to Seller for installation. In those instances where
Seller is to install SIMs, the compensation to be
*Certain information on this page has been omitted and filed separately with the
Commission. Confidential treatment has been requested with respect to the
omitted portions.
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paid to Seller shall be as set forth in Attachment C.
Where the parties agree that Seller is to assume
responsibility for installing SIMs, information concerning
the SIM and International Mobile Equipment Identity
("IMEI"), etc., shall be provided to Buyer in a mutually
agreed electronic form. ***. Seller agrees that it will
implement reasonable and prudent safeguards to protect all
SIMs over which it has custody. In connection therewith,
no less frequently than once per calendar quarter, Seller
shall provide Buyer with a detail inventory report and
proper accounting of SIMs provided to Seller hereunder.
Seller agrees promptly to implement pre-paid SIM support
in its Handsets upon completion of pre-paid SIM standards.
2.11 RESALE BY BUYER. Buyer shall have the right to resell Products
upon the prices and terms and conditions to be determined by
Buyer. Seller shall honor the warranty and other obligations
imposed in this Agreement with respect to any Affiliate,
Authorized Purchaser, or End User to the same extent required for
a direct sale by Seller.
2.12 SOFTWARE LICENSE. Subject to the limitations set forth elsewhere
in this Agreement, at no charge to Buyer, Seller hereby grants to
Buyer and its End Users a nonexclusive license to use Software
associated with Products delivered to Buyer.
2.13 DATABASE. Seller shall provide electronic format data concerning
each Handset Product shipped, in the format and on the dates set
forth in Attachment G. The form of data and its media may be
changed from time-to-time by mutual agreement of the parties.
2.14 COUNTRY OF ORIGIN. Upon request by Buyer, Seller shall provide
Buyer with evidence of country of origin of Products, including
the usual and customary certificates of country of origin, signed
by an appropriate authorized official of Seller.
2.15 BATTERY RECYCLING. If Seller's Products contain separate
batteries or batteries replacable by End-Users, Seller shall
establish a "used battery return program," whereby Buyer and
End-Users of Seller's Products may obtain information on
recycling used batteries through a nationwide toll-free "800"
telephone number. Information concerning this program shall be
included in the user information supplied with Products and
replacement batteries.
2.16 ADVERTISING DISPLAY MATERIAL. Seller shall create the normal and
customary point-of-sale display material, product brochures,
dummy Handsets, etc. and furnish reasonable quantities of the
same to Permitted Purchasers at the prices set forth in
Attachment C. Seller shall cooperate with Buyer in producing this
*Certain information on this page has been omitted and filed separately with the
Commission. Confidential treatment has been requested with respect to the
omitted portions.
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material and, upon request by Buyer, add reasonable Buyer-defined
information to the point-of-sale material. Reasonable quantities
of the sales material described in Attachment H will be provided
by Seller to Buyer without charge. Such quantities shall be
consistent with those quantities offered to other customers of
Seller under similar circumstances.
3 CUSTOMER REPRESENTATIVE
3.1 CUSTOMER REPRESENTATIVE. No more than 30 days subsequent to the
effective date hereof, Seller shall identify a customer
representative (the "Customer Representative") to whom it shall
delegate such authority within Seller's organization as is
necessary for proper discharge of the duties and obligations set
forth in this Agreement. By illustration and not limitation, the
Customer Representative shall provide timely information to Buyer
concerning development, testing and manufacturing schedules, test
procedures, test execution, shipping and delivery schedules,
manufacturing of co-branded or other custom Products,
specifications, features and functions, inter-operability, and
other related matters. The Customer Representative shall be
Buyer's primary point of contact for all issues arising from the
implementation and execution of the terms and conditions of this
Agreement.
3.2 UPDATE MEETINGS. The parties shall meet not less than once every
calendar quarter to review Buyer's needs for Products, and
discuss new Products (such meeting being referred to as an
"Update Meeting"). At least thirty (30) days prior to each Update
Meeting, Buyer shall submit to Seller a written, proposed agenda,
outlining the development issues Buyer would like addressed by
Seller. Seller shall review such proposed agenda and will provide
an update to Buyer on any such issue where Seller has provided,
or is willing to provide, an update to any customer or other
third party. Further, at each Update Meeting, Seller will provide
to Buyer an update on the status of the development of any
features Seller anticipates will be launched within the
forthcoming two (2) years, provided that Seller has disclosed, or
is willing to disclose, such information to any customer or other
third party. Buyer agrees that certain of this information may be
Confidential Information and shall be treated as such in accord
with the terms of this Agreement.
4 PRICES
4.1 ***
4.2 ***. Subject to the terms and conditions set forth in Section 8,
***
*Certain information on this page has been omitted and filed separately with the
Commission. Confidential treatment has been requested with respect to the
omitted portions.
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4.2.1 In the event that Seller fails for any reason to develop
and deliver any of the Commercial Products listed on Attachments
A-1, A-2, or A-3 within the time periods previously agreed upon
by the parties, then ***
4.3 PRICE LIST; CHANGES AS NEW PRODUCTS ARE INTRODUCED. The prices
for the Products as set forth in Attachment C are ***. If Seller
implements changes in the Products, modifies the drawings and
specifications relating thereto, or substitutes therefor products
of more recent design through proposed amendments to Attachments
A-1 through A-3 or the addition of a new Attachment, in addition
to any other requirements provided in this Agreement, any
changes, modifications or substitutions must comply with each of
the following requirements with respect to changes to existing
Products or new Products intended as replacements for existing
Products:
4.3.1 INTERCHANGEABILITY. Where the new or changed Product is
intended to be physically interchangeable with an existing
Product, such new or changed Product must not adversely
affect physical or functional interchangeability with
existing Products or performance, unless otherwise agreed
in writing by Buyer.
4.3.2 PRICE. The price for an equivalent Product (i.e., with
similar form including size and weight, features,
functionality and accessories) must be ***.
4.3.3 ADVANCE NOTICE.
4.3.3.1 Seller will provide Buyer with advance written
notice of any substantial change, modification
substitution, or discontinuance, including notice
of Seller's intention to change the Product's
price as set forth in section 4.3.2. Except where
unplanned and immediate market changes make such
notice impracticable, the notice shall be given
at least ninety (90) days in advance of the
effective date of the change, modification or
substitution, except that notice of Seller's
intention to change the Product's price shall be
given at least thirty (30) days in advance of the
effective date of the change. Should Seller not
have made its final pricing decisions at the date
of notice, Seller shall provide Buyer with
Seller's estimated prices *** and shall furnish
the final price information to Buyer not later
than thirty (30) days in advance of the effective
date. In the event that Seller has failed to
provide the required advance written notice, then
Buyer may, at its option, return all unsold
inventory of the Products to which the price
change applies and receive a credit from Seller
in the amount paid by Buyer for the
*Certain information on this page has been omitted and filed separately with the
Commission. Confidential treatment has been requested with respect to the
omitted portions.
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returned products. The price for any Product that
has not been shipped as of the effective date of
the price change shall be deemed to be restated
at the new, lower amount.
4.3.4 ACCESSORY COMPATIBILITY. Where a new Product is
introduced, Seller shall ensure that, to the greatest
extent reasonably feasible, the new Product is
plug-compatible with older Products for accessories. It is
not Buyer's intention to limit Seller's ability to
introduce smaller or lighter Products through this Section
4.3.4. However, Seller shall give due consideration to
ensuring compatibility of, among other things, battery
chargers, hands-free kits, etc., when introducing new
Products.
4.4 ***.
***
4.4.2 *** either by (i) delivering a check made payable to the
order of Buyer or delivering cash to Buyer; or (ii)
applying a credit or offset against any outstanding
undisputed invoices Buyer has with Seller and delivering a
check to Buyer for the remaining amount. In addition to
the foregoing, the parties may agree that Seller may apply
*** rebate either by (x) delivering to Buyer such quantity
of Products as has an aggregate value equal to the ***; or
(y) combining any of the first three methods set forth in
this Section 4.4.2.
4.4.3 CERTIFICATION. Buyer may from time to time obtain from
Seller, ***, a certification signed by an authorized
officer, stating that the price review was performed and
whether Buyer or any other Permitted Purchaser is entitled
to a rebate or a lower price upon the conclusion of the
quarterly price analysis described above. At Buyer's
request, Seller shall provide the results and
documentation of the review to Buyer's outside independent
firm of certified public accountants for verification;
provided that the accountants shall not disclose any
information related to such review to Buyer, unless Buyer
is entitled to lower prices or more favorable terms of
sale under this provision and then only such information
as may be necessary to request such prices or terms. All
information delivered to Buyer shall also be delivered to
Seller. In the event that the outside audit determines
that a price reduction should have been made but was not
made by Seller, Seller shall bear all expenses of the
audit. In the event that the outside audit determines that
no price reduction should have been made, Buyer shall bear
all expenses of the audit.
*Certain information on this page has been omitted and filed separately with the
Commission. Confidential treatment has been requested with respect to the
omitted portions.
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4.5 RETURN POLICY. Buyer shall have the right to return Product,
subject to re-stocking charges and other reasonable limitations
set forth in Seller's "Standard Return Policy," as amended from
time to time by mutual agreement, a copy of which is attached
hereto as Attachment I. ***
4.6 TAXES AND OTHER CHARGES. Seller shall bear the cost of all taxes,
import and export duties, and other governmental fees of whatever
nature except sales and use taxes. Seller shall not charge Buyer
sales tax, provided that Buyer has provided Seller with a current
tax-exempt certificate.
4.7 SELLER TO HOLD BUYER HARMLESS. Seller agrees to pay, and to hold
Buyer harmless from and against, any penalty, interest, tax or
other charge that may be levied or assessed as a result of the
delay or failure of Seller for any reason to pay any tax or file
any return or information required by law, rule or regulation or
by this Agreement to be paid or filed by Seller.
5 INVOICING AND TERMS OF PAYMENT
5.1 INVOICE UPON SHIPMENT. Seller shall issue an invoice to Buyer in
detail satisfactory to Buyer, including a mutually-agreed upon
electronic format, for Products at the time of shipment.
5.2 PAYMENT. Buyer guarantees to Seller to pay invoices within thirty
(30) calendar days of the later of both (i) Buyer's receipt of an
invoice and (ii) receipt by Buyer of Products corresponding to
such Invoice.
5.3 PAST DUE PAYMENTS. Any payment not made within thirty (30) days
of receipt of invoice shall be subject to a late payment charge
of *** per month applied against the unpaid portion of the
charge. In the event that any payment becomes more than sixty
(60) days past due, Seller may at its option (i) cease shipment
of any Products ordered in accord with this Agreement and (ii)
provide the thirty (30) notice of termination with Buyer's right
to cure as set forth in section 14.1.
5.4 AMOUNTS IN DISPUTE. Where Buyer disputes the amount due under an
invoice, Buyer shall pay the sum not in dispute. Sums disputed in
good faith shall not be considered late under Section 5.3.
6 SELLER ADVERTISING ACCOUNT
Buyer may purchase advertising and promotion in the Buyer's MTA's and
BTA's with a total value of *** purchased by Permitted Purchasers from
Seller hereunder, and Seller shall credit *** against amounts otherwise
due Seller (the "Advertising Allowance"). Buyer shall earn the
Advertising Allowance monthly and may use it at any time over the
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Commission. Confidential treatment has been requested with respect to the
omitted portions.
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twelve (12) month period immediately following the month in which the
Advertising Allowance was earned. The Advertising Allowance shall be
applicable to the Minimum Purchase Quantity only once the Minimum
Purchase Quantity has been delivered, but it may be spent at any time in
the twelve (12) month period immediately following completion of
delivery of the Minimum Purchase Quantity.
7 TRADEMARKS AND LOGOS
7.1 LOGOS ON PRODUCTS; ADVANCE CONSENT FOR OTHER LOGOS. At either
party's reasonable request, the Products shipped under this
Agreement shall carry that party's designated logo and/or
labeling as described in Section 2.
7.2 LIMITED USE OF MARKS. To ensure protection of each party's
trademarks, trade names, corporate slogans, corporate logo,
goodwill and product designations, neither party, without the
express written consent of the other, shall have the right to use
any such marks, names, slogans or designations of the other, in
the sales, lease or advertising of any Products or on any Product
container, component part, business forms, sales, advertising and
promotional materials or other business supplies or material,
whether in writing, orally or otherwise.
7.3 ARTWORK AND REPRODUCTION. To the extent requested by a party and
in accordance with Sections 2 and 7.1, the other shall provide
camera-ready artwork of the other's trademarked logo labels. The
providing party hereby authorizes the receiving party to
reproduce such trademarked labels to the providing party's
satisfaction for the sole purpose of affixing such trademarked
labels to the Products and point-of-sale packaging in accordance
with the providing party's specifications. Each party represents
and warrants to the other that it has the right, by way of
ownership or otherwise, to use such logo and further agrees to
indemnify and hold the other harmless for any losses, damages or
other liabilities resulting from the use of the providing party's
designated logo. The parties will agree upon reasonable
provisions for samples and approval of trademarked labels added
to Products.
8. FORECASTING AND PURCHASE ORDERS.
8.1 FORECAST OF DEMAND. Buyer shall MONTHLY FURNISH SELLER WITH
twelve-month rolling forecasts, showing Buyer's projected purchases month by
month. Buyer shall use its reasonable efforts to make the rolling forecasts
accurate but the rolling forecast does not obligate Buyer to purchase any
specific Products or quantities of Products, subject to the Minimum Purchase
Quantity commitment. Seller shall notify Buyer promptly upon receipt of each
forecast whether Seller can provide Products sufficient to meet the forecast.
Buyer shall provide the first forecast within two business days after complete
execution of this Agreement.
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8.2 PURCHASE ORDERS; ACCEPTANCE; THE MINIMUM PURCHASE QUANTITY.
Buyer shall periodically submit to Seller orders for the purchase of the
Products (each a "Purchase Order") as set forth below. Purchase Orders shall be
governed by the terms and conditions of this Agreement. If a Purchase Order
specifies quantities that do not exceed the forecast, then Seller must accept
that Purchase Order. If a Purchase Order specifies quantities that exceed the
forecast, Seller may at its option accept all of the Purchase Order, but it must
accept that portion or quantity of the Purchase Order specified in the forecast.
If a Purchase Order is within the forecast and Seller can only deliver less, the
difference between the quantity within the forecast and the quantity delivered
shall be applied against Buyer's obligation to purchase the Minimum Purchase
Quantity. In the event that Seller refuses to provide Products in excess of the
quantities set forth in the forecast, then such amounts shall not be applied
against Buyer's obligation to purchase the Minimum Purchase Quantity.
8.3 FORM OF PURCHASE ORDER. Each Purchase Order shall specify:
(a) the models, unit extended, and total cost of
Products to be delivered;
(b) the quantity of Products to be delivered,
provided, however, that each Purchase Order
shall be for a minimum of four pallets, each
sized 40" X 48" X 60", and containing no fewer
than *** units of the Products;
(c) Buyer's required date of delivery of the
Products (the "Specified Delivery Date"),
provided, however, that in no event shall the
Specified Delivery Date be sooner than ninety
(90) days after Seller receives the Purchase
Order;
(d) Where the Products are to be delivered, which
may include any or all of Buyer's, Affiliates',
or Authorized Purchasers' delivery points, or
third party delivery points or warehouses [the
"Delivery Location(s)"];
(e) the preferred method of shipping;
(f) the SKU and any other Products packaging or
labeling requirements; and
(g) Name, address and phone number of the person to
receive the notice of receipt.
8.4. RECEIPTS OF PURCHASE ORDERS. Seller shall provide Buyer with
electronic (to include facsimile) or written notice of receipt of Purchase
Orders. Subject to the terms and restrictions of section 8.2, within five (5)
business days of Buyer's placement of a
*Certain information on this page has been omitted and filed separately with the
Commission. Confidential treatment has been requested with respect to the
omitted portions.
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Purchase Order, Seller shall notify Buyer in writing of its acceptance or
rejection of Buyer's Purchase Order including shipment dates. Seller shall also
provide to Buyer notices of actual shipments on each day of shipment. Such
notices shall include the serial numbers of Products being shipped and the
Purchase Order number being filled, SKU, description, quantity shipped and
quantities backordered, the name of the carrier and the carrier's tracking
number, delivery date, and Universal Product Codes ("UPC") related to the
shipment.
8.5. SIM UNLOCK DATA. Seller shall provide Buyer with all handset
SIM unlock data via electronic or disks within five (5) days of any handset
deliveries. The data format shall follow the GSM NA reference document NAPT 14
(or successor thereto). Upon prior written approval by Buyer, Seller may
implement an alternate means of Seller's choice of providing the SIM unlock
data, provided, however, that if such alternate means requires additional costs
or equipment, this shall be provided to Buyer by Seller free of charge.
8.6 CHANGES TO DELIVERY LOCATIONS. Changes to the Delivery
Location(s) originally specified on a purchase order must be submitted to Seller
in writing at least fifteen (15) business days prior to the Shipment Date.
8.7 TEMPORARY HOLD ON DELIVERIES. Buyer shall have the right to
require Seller to hold delivery of up to twenty percent (20%) of any shipment
for a period not to exceed sixty (60) days, where the hold notice is given at
least thirty (30) days in advance of the scheduled shipping date; provided,
however, for all such shipments scheduled to be made during the last calendar
quarter of any year, Seller may, at its option, in lieu of postponing shipment
according to the terms of this Section 8.7, ship the Products as scheduled.
However, if Seller elects not to honor Buyer's hold notice and instead elects to
ship the entire quantity of Product ordered by Buyer, Buyer shall be afforded
sixty (60) days from the date of receipt of the invoice applicable to such
shipped order in which to pay Seller for such shipment. Notwithstanding anything
to the contrary contained in this Section 8.7, if Buyer shall invoke its
privilege to delay delivery of up to twenty percent (20%) and shipment is
delayed as provided herein, the liquidated damages provision of Section 8.10
shall not apply to the late delivery of the re-scheduled shipment(s) and Buyer
expressly acknowledges that Seller may sell to another of Seller's customers any
delayed Handset inventory on hold.
8.8 CHANGE OF MODEL MIX. Buyer may change the model mix of any
shipment of any Purchase Order and Seller shall honor such
changes subject to the following:
8.8.1. All such changes must be made in writing.
8.8.2. For changes requested where Products are sought
to be substituted for other Products within that
same model family, requests for changes made at
least ninety (90) days prior to the Specified
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Shipping Date shall be honored, without adjustment
to the Specified Shipping Date.
8.8.3 For changes requested where (a) Products are
sought to be substituted for other Products
within that same model family, but the request is
made less than ninety (90) prior to the Specified
Shipping Date or (b) Products are sought to be
substituted for other Products outside the model
family, Seller shall, within ten (10) days of
receipt of such request, notify Seller whether
the requested change is acceptable and/or whether
such changes will necessitate a change in the
Specified Shipping Date.
8.9 INABILITY TO MEET A SPECIFIED SHIPPING DATE. Once a Purchase
Order has been accepted, Seller is expected to deliver the
Products in such quantities, in such manner and in such time as
specified in the Purchase Order. As soon as Seller believes that
it will be unable to meet the Specified Shipping Date, Seller
shall without delay provide notice to Buyer.
8.10. FAILURE TO MEET SPECIFIED SHIPPING DATE. Regardless of whether
Buyer has been notified of Seller's inability to meet a Specified
Shipping Date, should Seller fail to ship Products within
fourteen (14) days of the Specified Shipping Date, Buyer shall
have the option, which shall not be unreasonably invoked, to
exercise any one or more of the remedies defined below:
8.10.1 Cancel the Purchase Order, in whole or in part, with no
obligation to pay for the Products specified in the
Purchase Order.
8.10.2 Reschedule the delivery date for all or any part of the
late shipment.
8.10.3 If delivery is not complete by the Specified Shipping
Date, then Seller shall be liable for the following late
delivery damages: ***
8.10.4 If Seller fails to make a full delivery within 30 days of
the Specified Shipping Date, in addition to the foregoing
remedies, ***
8.11 RIGHT TO COVER. Except as otherwise limited in the manner
described in this Section 8.11, in addition to any other rights
that Buyer might have elsewhere in this Agreement, including
specifically section 8.10, should Seller fail to meet its
Specified Shipping Date for any Product, at its sole option and
after providing Seller with written notice no less than thirty
(30) days prior to seeking alternative supplies, Buyer may seek
alternative supplies from other manufacturers or distributors.
However, if within such thirty (30) day period, Seller resolves
the delivery problems that have caused Buyer to seek such
alternative supplies, Buyer shall renew purchasing Products from
Seller on the terms and conditions set forth in this Agreement.
*Certain information on this page has been omitted and filed separately with the
Commission. Confidential treatment has been requested with respect to the
omitted portions.
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Should Buyer exercise its option to seek alternative supplies
after the thirty (30) day period described above, Buyer's Minimum
Purchase Quantity shall be reduced by the number of units that
Buyer obtains from its alternative source. The number of units
that Buyer obtains from its alternative source shall also count
toward Buyer's ***, as set forth in Section 4.2. For example, in
the event that Seller fails to meet a Specified Delivery Date for
*** units, and after 30 days, Buyer exercises its option to
purchase those *** units from an alternative source, then those
*** units shall count as purchased in determining when Buyer
shall begin to recoup the Product Development Fee. If Buyer has
already begun to ***, then those units shall be eligible for ***
in accordance with Section 4.2.
Should Buyer exercise its option to seek alternative supplies
after the thirty (30) day period described above, Seller shall be
liable to Buyer for Buyer's increased costs, including
differences in unit prices, expedited shipping charges and
related operating costs related acquiring comparable Products
from an alternative source. Notwithstanding anything to the
contrary in the immediately preceding sentence, Buyer agrees that
it shall take reasonable steps to mitigate the level of such
increased costs and the resultant impact on Buyer's operations.
8.12 DISCREPANCIES. Buyer shall report to Seller any discrepancies
concerning the quantity of Products shipped or drop-shipped
within either five (5) days following delivery or three (3) days
of discovery of the discrepancy, whichever comes later.
8.13 MODIFICATIONS TO PURCHASE ORDER. Except to the extent restricted
by this Agreement, Buyer retains the right to modify or cancel,
in whole or in part, any Purchase Order prior to complete
performance thereof by Seller. Any such modification or
cancellation shall be subject to the provisions set forth below
and to this Agreement.
8.13.1 MODIFIED OR CANCELED PURCHASE ORDER. Notwithstanding the
foregoing, Buyer may modify or cancel any Purchase Order
through notice to Seller. In the event of modification or
cancellation of a Purchase Order by Buyer, Seller may be
entitled to claim compensation as provided in Section
8.13.2.
8.13.2 CHANGE IN COSTS. If Seller has performed work that is not
reusable in fulfilling its obligations under other
Purchase Orders issued by Buyer, or that such non-reusable
work cannot reasonably be restocked or otherwise used by
Seller in fulfillment of its obligations to other
customers without increased cost to Seller, then the
purchase price to be charged by Seller shall be equitably
adjusted. Seller shall inform Buyer of its intention to
demand a price increase due to the variation within two
(2) weeks after the receipt by the Seller of the modified
or canceled Purchase Order. Buyer need not give notice to
Seller of Buyer's intention to claim a
*Certain information on this page has been omitted and filed separately with the
Commission. Confidential treatment has been requested with respect to the
omitted portions.
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payment reduction due to any cancellation or reduction in
quantity of Products. In such instances, Seller shall
reduce appropriately and automatically the invoice amount
to reflect the reduced quantity of Product ordered. The
determination of any price adjustment shall in no event
delay any performance by Seller under this Agreement.
9 QUALITY ASSURANCE
9.1 ACCEPTANCE TEST PROCEDURE TO BE DEFINED. Buyer and Seller will
jointly establish the appropriate Acceptance Test Procedures that
will be added to this Agreement subsequent to the date hereof as
Attachment E not later than the dates set forth in Attachment B.
Notwithstanding the preceding sentence, Seller is expected to
plan other tests, generate test procedures, incorporate Buyer
input, to the extent Seller believes such input is reasonably
appropriate, execute tests, report results and rectify test
failures, before testing a Product for Acceptance.
9.2 REGULATORY. Seller shall be responsible at its sole cost for
obtaining any and all approvals and certifications required by
governing bodies, including, but not limited to, FCC approvals,
Underwriter's Laboratory approval, etc. Seller is deemed to be an
expert in obtaining any regulatory approvals and delays in
obtaining regulatory approval shall not constitute an excusable
delay, unless such delay is the result of system simulator
failure or similar problems, or such delay results from an event
deemed to be Force Majeure, unless Seller can clearly demonstrate
such, where requests are timely filed. Seller represents and
warrants that all Products delivered hereunder will have received
all necessary regulatory approvals. By illustration and not
limitation of the foregoing, Seller warrants that, upon delivery,
Products will comply with all FCC rules or other regulations
including, without limitation, compatibility with disabled or
handicapped End-Users, including hearing impaired End-Users using
hearing aids, blind End-Users, etc., applicable as of the date of
such delivery. Seller also warrants that, to the extent
applicable to Seller or Buyer, Seller's Products comply with the
requirements of the Americans With Disabilities Act, 42 U.S.C.
Section 12101. Seller shall add to its instruction manuals
information concerning use of Products by disabled or handicapped
persons. Buyer agrees to provide Seller at Seller's expense with
reasonable assistance and backup support when so requested by
Seller and where necessary in obtaining such approvals.
9.3 ISO 9000 COMPLIANCE; AUDITS. Seller shall endeavor to produce
Products in accordance with a quality system meeting the
requirements established in ISO Standard 9001. Seller shall work
to gain ISO 9001 certification and shall, upon request by Buyer,
furnish Buyer a copy of Seller's ISO certification plans and
timetable. Buyer may conduct quality audits of Seller's
manufacturing facilities up to four times a year, with advance
notice of five (5) working days.
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9.4 MARKET VERIFICATION TEST; COMMERCIAL TEST PROCEDURES. For each
Prototype model of Product, within five (5) days of the first day
on which Alpha units are available (as set forth in Attachment
J), Seller will provide Buyer, at no charge, two (2) such
Prototypes for testing. Buyer shall test the units according to
any protocols submitted by Seller and may additionally test the
units as Buyer deems appropriate. In addition, for each new model
of Product, within five (5) days of the first (1st) day of Beta
testing (generally, about thirty (30) days before launch), Seller
will provide Buyer, at no charge, one hundred (100) units for
Beta testing in accordance with Seller's protocols. Buyer shall
conduct all such testing in good faith and shall submit the
results to Seller within ten (10) days of completion of testing.
In addition, if Seller so requests, all test units on loan to
Buyer shall be (i) returned to Seller, or (ii) destroyed by
Buyer, either at Seller's expense.
9.5 FIELD TRIALS. Where Buyer and Seller agree to conduct field
trials using Buyer's network and Prototype Products, should FCC
type acceptance or other regulatory approval not have been
granted for the Prototype or Pre-production Products, Seller, at
its cost and with appropriate support from Buyer in Buyer's
discretion, shall promptly seek and diligently prosecute, a
request for expedited approval or an interim waiver to meet
regulatory requirements. In connection with such field trials, at
no charge to Seller, Buyer shall provide Seller with a
commercially reasonable number of SIMs for the purpose of
conducting such field trials. The SIMs to be provided to Seller
shall be enabled for use in Buyer's home network and for roaming
in other networks. The reasonable and customary expenses incurred
by Seller in performing such tests shall be borne by Seller.
9.6 SAMPLE TESTING. Seller may at its sole option, but is not
obligated to, perform adequate testing to assure that shipped
Products meet Buyer's sample testing criteria established in
Attachment D. Notwithstanding the foregoing, prior to Seller
initiating the volume manufacture of Products, Buyer shall have
the right at its sole option, but is not obligated to, conduct
sample testing of incoming Products and to reject lots that fail
to meet the applicable product specifications and quality levels
set forth in this Agreement and Attachments hereto (including the
quality levels set forth in Attachment D), and/or US regulatory
requirements and US law. Buyer shall have the right to conduct
such testing either at Seller's manufacturing facility ("on-site
testing") or Buyer's facility ("off-site testing"). Neither
Buyer's waiver of its right to conduct sample testing nor Buyer's
conducting sample testing in any way other than as set forth in
Attachment D shall derogate from or otherwise affect in any way
Buyer's other rights or remedies under this Agreement, including
by illustration and not limitation its rights and remedies under
sections 13, 14, or 17.
9.6.1 ON-SITE TESTING. Buyer shall have the right to conduct at
Seller's site acceptance tests of manufactured Products in
such time frames as are
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mutually agreed upon by the parties. Buyer's acceptance
tests shall not unreasonably interfere with Seller's
normal business operations, and Buyer may not require
Seller to provide test equipment for such tests beyond
that which Seller normally uses to perform such tests.
This testing in no way relieves Seller of any other
responsibilities under this Agreement. Seller shall make
available such test equipment to Buyer at Seller's
location to perform such tests. In the event Buyer
requests tests that are not normally performed by Seller,
Buyer and Seller shall work together to implement Buyer
specific end of process tests. Any increases in cost to
Seller to perform such Buyer tests will be negotiated in
good faith by both parties prior to Seller initiating such
tests.
9.6.2 OFF-SITE TESTING. Seller acknowledges and agrees that, in
addition to the testing described in Section 9.6.1 or in
lieu thereof, Buyer shall have the right to conduct
off-site sample testing of incoming Products and to reject
lots that fail to meet the quality levels set forth in
Attachment D. In connection with such off-site testing,
Buyer shall bear the cost of any additional test equipment
required to perform such test(s); however, Seller shall
provide Buyer, without charge, all upgrade(s) to any
Seller owned software used in the test equipment so that
Buyer is able to test and confirm the quality of the
various releases of Products provided hereunder. Buyer
shall be solely responsible for any additional testing
required to qualify Products for sale in any market other
than the U.S. Seller shall perform adequate testing to
assure that shipped Products meet Buyer's sample testing
criteria set forth in Attachment D.
9.7 INCOMING INSPECTION. In addition to the sample testing described
in Section 9.6, Buyer shall have the right to conduct up to one
hundred percent (100%) inspection of all incoming products
("Incoming Inspection"). Any Incoming Inspection shall be
completed within thirty (30) days of receipt of the Product
undergoing inspection. The Incoming Inspection shall determine
completeness of shipment, physical and electrical condition of
Products, and otherwise verify conformance of the Products with
the specifications thereof. Buyer shall have the right to reject
any such shipment as having failed Incoming Inspection. In such
event, at the Seller's discretion either (i) Buyer may reject the
shipment and return it to Seller at Seller's expense or (ii)
Buyer may reject the shipment, and, as soon as commercially
feasible but no later than seventy-two (72) hours after receiving
Buyer's notice of rejection, Seller will fly one or more of its
personnel to the location of such rejected shipment for the
purpose of examining the same and rectifying the cause for
Buyer's rejection. Buyer, however, shall not have the right to
delay payment, where payment to Seller is otherwise due, by
virtue of Buyer's failure to complete Incoming Inspection within
thirty (30) days. Buyer's performance of Incoming Inspection,
however, shall not prevent Buyer from making claims under other
provisions of this Agreement for defective, misdelivered or
otherwise incorrect Products.
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9.8 RETURN OF DEFECTIVE PRODUCTS OTHER THAN IN WHOLE SHIPMENTS. With
respect to Products failing Buyer's acceptance tests, where such
failures are random in nature and type and are not common
failures (e.g., a software program bug that affects every unit
shipped in the same or a similar manner), Seller shall compensate
Buyer in liquidated damages for Buyer's efforts in identifying
Defective Products and returning them to Seller for credit
against Buyer's account. A Product Defect shall include, but not
be limited to, a damaged, mislabeled or mis-packaged Product, an
incorrect Product model or improperly operating Product, or a
Product not in compliance with the specifications as set forth in
Attachments A-1 through A-3 of this Agreement or such subsequent
Attachment (a "Defect" or "Defective Product"). The liquidated
damages shall be in the form of additional like Products shipped
at Seller's expense, provided without additional charge to Buyer,
and shall be in addition to any other remedies for Defective
equipment as provided elsewhere in this Agreement. The liquidated
damages shall be determined as follows:
9.8.1 ***
9.8.2 ***
10. EXTENDED TERM FOR CERTAIN PROVISIONS. Except as may be more specifically
set forth in an individual section, sections 1, 2, 7, 10, 12, 13, 14,
15, 17, 18, 19, 25, and 32 shall survive the termination of other
portions of this Agreement.
11. TITLE AND RISK OF LOSS
Title and risk of loss shall pass to Buyer upon delivery of the
Products to the location specified in the Purchase Order. Seller
shall pay for all freight charges from Seller's configuration
center to Seller's warehouse in San Diego, California. Seller
shall bill all additional freight charges to Buyer's Delivery
Points at the amounts set forth in Attachment C. Delivery of the
Products shall convey to Buyer all rights and title therein by
appropriate documents with warranty of title, free and clear of
all liens and encumbrances. Title to Seller's intellectual
property, including software, patents, copyrights, trademarks and
trade names, shall not be conveyed to Buyer at any time.
12 PRODUCT SUPPORT
12.1 TRAINING SUPPORT. Seller shall provide, without charge, training
support to Buyer as provided below:
12.1.1 TECHNICAL TRAINING. Seller will train Buyer's personnel in
connection with the installation, re-programming, use, and
maintenance of the Products. Consistent with the
requirements of Section 12.3, Seller shall
*Certain information on this page has been omitted and filed separately with the
Commission. Confidential treatment has been requested with respect to the
omitted portions.
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give Buyer a reasonable number of copies of Product
documentation, including, but not limited to,
re-programming and installation instructions, standards
and specifications, maintenance procedures and usage
instructions, except as Seller reasonably considers to be
proprietary or confidential.
12.1.2 SALES TRAINING. Seller shall train Buyer's sales personnel
on the Products, including training materials for on-site
sales personnel training, providing detailed feature and
benefits summaries, configuration drawings, accessory
descriptions, programming instructions and the like.
12.1.3 CUSTOMER SERVICE TRAINING. Seller shall train Buyer's
customer operations personnel, including training
materials for on-site customer service training, providing
detailed feature, configuration drawings, trouble shooting
Q&A, and programming instructions.
12.1.4 REPRODUCTION RIGHTS; UPDATED TRAINING MATERIAL. Buyer has
the right to video tape all training classes conducted by
Seller for Buyer's employees and to use the video tapes as
training tools for new hires. Seller will provide Buyer
with training documentation in both paper and electronic
formats and for on-line documentation to be shared by
multiple users. Seller will provide Buyer with updates to
training manuals and training equipment and software at no
charge to Buyer. Buyer will work with Seller to establish
the training guidelines and modules. Seller will conduct
training at Buyer's sites of choice with no more than five
(5) sites in each MTA or BTA for each category of training
defined in Sections 12.1.1 through 12.1.3. Seller will
provide Buyer with a training support line, during normal
business hours, at no charge to Buyer. Buyer will provide
Seller with a single point of contact for updates and
resolutions.
12.2 TECHNICAL SUPPORT. Seller shall provide, without charge,
technical support to Buyer and End Users as described on Exhibit
K.
12.3 DOCUMENTATION. Seller shall supply Buyer with the documentation
described below in both printed format and on magnetic storage
medium. Where documentation exists in draft or preliminary form,
it shall be supplied to Buyer in such draft or preliminary form,
and updated as described in Section 12.4. All documentation
supplied shall be in accordance with the best standards for
similar Products, whether from Seller or other suppliers.
12.3.1 TECHNICAL DOCUMENTATION. Except as Seller reasonably
considers to be proprietary or confidential, technical
documents to be supplied include, but are not limited to:
block diagrams; service manual (including theory
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of operation); installation and preventive maintenance
procedures; training manual; configuration guide;
installation and planning guide; commercial/sales training
instructions.
12.3.2 FIRMWARE. Except as Seller reasonably considers to be
proprietary or confidential, Seller shall provide to Buyer
a firmware manual, including general description of
firmware architecture, to the extent appropriate for the
level of maintenance performed by Buyer.
12.3.3 DELIVERY DATES AND REPRODUCTION. Complete sets of the
documents described in Sections 12.3.1 and 12.3.2,
inclusive, shall be delivered within a mutually agreed and
established time schedule and in correspondence with any
addition or modification to Products or the addition of
new Products to this Agreement. Buyer is authorized to
modify, reproduce and distribute such documents, whether
in whole or in part, as Buyer sees fit, for purposes
related to the operation, maintenance or business
activities of its PCS business.
12.3.4 TECHNICAL BULLETINS AND NOTES. Except as Seller reasonably
considers to be proprietary or confidential, Seller shall
provide to Buyer, without charge, all technical bulletins
and notes related to Products, whether issued periodically
or aperiodically.
12.3.5 TEST AND DIAGNOSTIC MODE INFORMATION. Except as Seller
reasonably considers to be proprietary or confidential,
Seller shall provide the information specified at Section
2.2 concerning the technical interface to Products,
including test and diagnostic mode information.
12.3.6 CUSTOMER SERVICE. Seller shall provide customer service to
the extent and in the manner described in Attachment K.
Further, Seller shall make a good faith effort to
coordinate customer service efforts with Buyer's
contractor, Wireless Data Services.
12.4 SURVIVAL AND EXTENDED TERM. Seller shall be responsible for
revising and issuing its documentation and for providing Buyer
with complete and up-to-date documentation as provided in Section
12.3 and for providing Buyer with technical support as provided
in Section 12.2. Seller's obligations under Sections 12.2 and
12.3 and this Section 12.4 shall survive the term of this
Agreement and shall end three (3) years after the delivery of the
last unit of any Product under this Agreement.
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13 WARRANTY AND SERVICE REPAIR
13.1 PRODUCT WARRANTY. Without reducing the scope of warranties
provided by Seller elsewhere in this Agreement or that may be
imposed upon Seller at law or in equity, Seller hereby represents
and warrants to Buyer as follows:
13.1.1 INTER-OPERABILITY TESTING. Seller shall warrant and
certify that it has tested its PCS 1900 Products with PCS
1900 network infrastructure manufactured by Northern
Telecom, Ericsson, Siemens, Motorola, Nokia and Lucent, to
the extent these manufacturers have a functioning PCS 1900
test system and are willing to cooperate with Seller in
such compatibility testing, and that the results of such
tests demonstrate proper inter-operability as of the date
of testing. Seller shall periodically inform Buyer of the
status of its compatibility testing and shall provide such
information to Buyer when Seller introduces a new
configuration Product.
13.1.2 REGULATORY APPROVALS. Seller warrants that all Products
have received all necessary regulatory approvals and
comply with all applicable federal and state laws, rules,
regulations, and codes in existence during the term hereof
(including without limitation FCC rules, regulations and
requirements),.
13.1.3 COMPLIANCE. Seller warrants that all Products will work on
the full PCS spectrum, Bands A through F, inclusive,
except as may be specifically excluded on a
product-by-product basis in Buyer's sole discretion.
Seller further warrants that the Products comply with all
EIA/TIA, GSM, GSM NA, PTCRB, and ETSI standards and all
other mutually agreed industry specifications and
standards. Seller further warrants that the Products are
and will be fully Year 2000 compliant, meaning that the
advent of the Year 2000 shall not adversely affect the
performance, operation, or networking of any Products,
with respect to date or date-dependent data or functions.
13.1.4 GOOD TITLE. Seller warrants that it has good title to the
Products and the right to sell them to Buyer free of any
proprietary rights of any other party, security interest,
lien or any other encumbrance whatsoever.
13.1.5 OPERATIONS WARRANTY. Seller warrants that Products
furnished by Seller hereunder shall be free from defects
in manufacture, material, design, workmanship and title,
and shall conform to published specifications at the time
of original purchase. This warranty shall not apply to any
Product, or part thereof, which (i) has been modified or
otherwise altered other than pursuant to Seller's written
instructions or written approval, (ii) is in the normal
course consumed or depleted in operation or, (iii) is not
properly stored, installed, used, maintained or repaired
other than by
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Seller-authorized repair, or, (iv) has been subjected to
any other type of misuse or detrimental exposure, or has
been involved in an accident.
13.1.6 If a Product fails to meet the foregoing Warranties during
the warranty period, Seller shall promptly correct the
failure. Any repaired or replacement part furnished
hereunder shall be warranted for either the longer of (a)
the remainder of the warranty period of the Products in
which it is installed or (b) ninety (90) days after the
repair or replacement. In the event that Seller is unable
to correct the failure through either repair or
replacement, Buyer shall return the Product and Seller
shall refund the purchase price of the Product.
13.2 LIMITATION. SUBJECT TO SECTIONS 4, 9, 11, AND 12, THE WARRANTIES
SET FORTH IN THIS SECTION 13 ARE THE ONLY WARRANTIES, EITHER
EXPRESS OR IMPLIED, THAT ARE MADE BY SELLER TO BUYER AS TO THE
PRODUCTS, AND ALL OTHER WARRANTIES, EXPRESS OR IMPLIED, STATUTORY
OR COMMON LAW, ARE HEREBY EXPRESSLY DISCLAIMED, INCLUDING, BUT
NOT LIMITED TO, THE IMPLIED WARRANTIES OF MERCHANTIBILITY AND
FITNESS FOR A PARTICULAR PURPOSE.
13.3 END-USER WARRANTY. In addition, each Product shall come with such
warranty to the End-User, as Seller shall establish as its
standard End-User warranty for the Products from time to time,
the current such standard warranty to the End-User being
substantially in the form attached hereto as Attachment F. Under
no circumstances shall the warranty period under the End-User
warranty be for less than the longer of either (a) one year from
the purchase of the Product or (b) ninety (90) days from the date
of repair of the Product.
13.4 SERVICE REPAIR AND REPLACEMENT. Seller shall maintain one or more
authorized service centers as may be necessary to provide
warranty service for the Products. The authorized service centers
shall be equipped to repair or exchange, at no cost to the owner
of the Product, defective Products that are within the warranty
period, as described above. For products requiring repair or
replacement after expiration of the applicable warranty period,
Seller's authorized service center shall implement an exchange
and repaid policy at reasonable rates.
13.5 EXCHANGE PROGRAM. In order to minimize end-user time without
Handsets in the event of warranty repairs, Seller shall support a
Handset exchange program to be administered by PCS Partners or
other servicer authorized by Seller and selected by Buyer (PCSP).
Such support shall consist of (a) supplying an appropriate number
of handsets and standard accessories to PCSP as seed stock
sufficient to meet warranty replacement needs, and (b) the
payment of fees to PCSP to cover repairs, refurbishing and one
way standard ground freight for in-warranty
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defective Seller products received from end-users. PCSP shall use
all in-warranty repaired and refurbished units as replacements
under the exchange program.
13.6 CONSISTENT FAILURES. Notwithstanding any disclaimer of warranties
herein, where delivered Products repeatedly exhibit Defect
failure rates during the warranty period with regard to any
particular model of Product (i.e. any lot, batch, or other
separately distinguishable group of Product sold or delivered to
the End-user or remaining in inventory has more than ***of the
same or similar Defect, or *** failure due to cumulative
Defects), Seller and Buyer shall immediately initiate a joint
program for appropriate countermeasures and, in addition to any
other remedy ultimately available to Buyer under this Agreement
or otherwise, Buyer shall have the option to exercise any of the
following rights, individually or cumulatively:
13.6.1 COVER. Buyer may purchase substitute products from another
supplier, in which case Seller shall be liable to Buyer
for Buyer's increased costs, including increased operating
costs, resulting from the substitute products
13.6.2 TERMINATE FOR CAUSE. Buyer may terminate this Agreement
for cause; provided, however, Buyer shall deliver notice
to Seller of its intent to terminate this Agreement for
cause pursuant to this Section 13.6 and Seller shall be
given thirty (30) days in which to completely remedy to
Buyer's reasonable satisfaction the problem or problems
creating the unacceptable consistent defective failure
rate.
13.6.3 RETURN OF DEFECTIVE PRODUCTS. Upon notice from Buyer of a
Product Defect, Seller shall issue a return authorization
to Buyer within 48 hours of receipt of notice. A Defective
Product may be returned directly by any Permitted
Purchaser or by Buyer's distributors or retailers at
Seller's expense. Seller shall accept returns even though
the Product is no longer in its original point-of-sale
packaging. Buyer agrees that each Defective Product is to
be returned to Seller without its associated SIM. Buyer's
distributors and retailers may return Defective Products
for a period starting upon receipt of such Product and
ending one (1) year after the last date the particular
model of Product has been purchased and received by an
End-User. Where Buyer elects to proceed under this Section
13.6.3, Seller shall issue an open credit memo to Buyer in
the amount of the full invoice purchase price for all
returned Products within thirty (30) days of return. Once
repaired or replaced, the Products will be delivered with
new invoices. This return policy shall continue to apply
notwithstanding that Seller has discontinued the model of
the Defective Products.
*Certain information on this page has been omitted and filed separately with the
Commission. Confidential treatment has been requested with respect to the
omitted portions.
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13.6.4 CANCELLATION OF PURCHASE ORDER. Cancel the Purchase Order,
in whole or in part, and return Defective and
non-Defective Products to Seller. Should Buyer exercise
its option under this section, Buyer's Minimum Purchase
Quantity shall be reduced by the number of units returned.
That number of units returned shall also count toward
Buyer's recoupment of the Product Development Fee, as set
forth in Section 4.2.
13.6.5 RESHIPMENT. Require Seller to ship within 48 hours a
comparable non-Defective Product to the location requested
by Buyer, at Seller's expense; provided, however, such
right shall be exercised by Buyer only for returns of
twenty-five (25) or few units of Product.
13.6.6 DURATION OF RIGHTS. Buyer shall be entitled to exercise
its rights under Section 13.6 until such time as Seller
establishes to Buyer's reasonable satisfaction that it has
cured the consistent failures. Provided, however, that
should Buyer have exercised its rights to terminate under
Section 13.6.2, Buyer shall be under no obligation to
reinstate this Agreement and provided that should Buyer
have exercised the remedies identified in Sections 13.6.1,
Seller shall be obligated to supply alternative Products
and cover Buyer's reasonable expenses, respectively, until
Seller has demonstrated, through delivery of Products to
Buyer, a period of three (3) consecutive months'
compliance with a failure rate of *** in each delivery
lot. Where Buyer elects to terminate this Agreement under
Section 13.6.2 during the Minimum Purchase Term, Seller
shall be liable to Buyer for Buyer's increased costs for
the remainder of the Minimum Purchase Term. Where Buyer
elects the right of cover under section 13.6.1, for a
period of forty-five (45) days following receipt by Seller
of notice of Buyer's remedy, Buyer shall provide Seller
the opportunity to negotiate the supply contract necessary
to effect such cover.
13.7 SURVIVAL AND TERM. The rights and warranties granted in this
Section 13 shall survive the term of this Agreement and shall
remain valid for the periods during which the right or warranty
is provided as described in this Section 13.
14 TERMINATION; LIMITATION OF LIABILITY
14.1 DEFAULT. In the event of a material breach of this Agreement, the
non-breaching party shall have the right to terminate this
Agreement upon thirty (30) days prior written notice of
termination to the other party, unless such breach and any
intervening breaches have been cured.
14.2 BANKRUPTCY. Either party may terminate this Agreement by written
notice in the event that the other party (i) applies for or
consents to the appointment of, or the
*Certain information on this page has been omitted and filed separately with the
Commission. Confidential treatment has been requested with respect to the
omitted portions.
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taking of possession by a receiver, custodian, trustee, or
liquidator of itself or of all or a substantial part of its
property, (ii) makes a general assignment for the benefit of its
creditors, (iii) commences a voluntary proceeding under the
Federal Bankruptcy code or under any other law relating to relief
from creditors generally, or (iv) fails to contest in a timely or
appropriate manner, or acquiesces in writing to, any petition
filed against it in an involuntary proceeding under the Federal
Bankruptcy Code or under any other law relating to relief from
creditors generally, or any application for the appointment of a
receiver, custodian, trustee, or liquidator of itself or of all
or a substantial part of its property, or its liquidation,
reorganization, dissolution, or winding-up.
14.3 LIMITATION OF LIABILITY.
14.3.1 EXCEPT FOR SELLER'S LIABILITY UNDER SECTIONS 9, 12, 13,
15, 17, AND 18, AND EXCEPT FOR SELLER'S GROSSLY NEGLIGENT OR
INTENTIONALLY WRONGFUL ACTS OR OMISSIONS, THE TOTAL LIABILITY OF
SELLER, ON ANY AND ALL CLAIMS, WHETHER IN CONTRACT, WARRANTY,
TORT (INCLUDING NEGLIGENCE) OR OTHERWISE, ARISING OUT OF,
CONNECTED WITH, OR RESULTING FROM THE PERFORMANCE OR
NON-PERFORMANCE OF ANY AGREEMENT RESULTING HEREFROM OR FROM THE
MANUFACTURE, SALE, DELIVERY, RESALE, REPAIR, REPLACEMENT OR USE
OF THE PRODUCTS OR THE FURNISHING OF ANY SERVICE, SHALL NOT
EXCEED THE PRICE ALLOCABLE TO THE PRODUCT OR SERVICE WHICH GIVES
RISE TO THE CLAIM.
14.3.2 Where a remedy, including a series of optional remedies or
multiple remedies, is set forth in the Agreement, those remedies
shall be the sole and exclusive remedies for the breach or event
for which it is specified, unless such section states that the
series of remedies are not exclusive of other remedies. Where no
specific remedy is provided, the non-defaulting party shall have
the right to recover from the defaulting party only its direct
damages arising out of that breach or event. NOTWITHSTANDING
ANYTHING TO THE CONTRARY CONTAINED IN THIS AGREEMENT, IN NO
EVENT, WHETHER AS A RESULT OF BREACH OF CONTRACT, WARRANTY, TORT
(INCLUDING BUT NOT LIMITED TO NEGLIGENCE OR INFRINGEMENT) SHALL
SELLER OR BUYER BE LIABLE UNDER THIS AGREEMENT FOR ANY
CONSEQUENTIAL OR INCIDENTAL DAMAGES OF ANY NATURE WHATSOEVER,
INCLUDING LOST PROFITS, OF THE OTHER PARTY, REGARDLESS OF WHETHER
SUCH DAMAGES ARE FORESEEABLE OR WHETHER A PARTY HAS BEEN ADVISED
OF THE POSSIBILITY OF DAMAGES.
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14.4 RIGHTS OF PARTIES UPON TERMINATION BY EITHER PARTY. In the event
of a termination by Buyer or Seller pursuant to the terms hereof,
the parties shall make an equitable accounting of any sums due
Seller for partial deliveries, such accounting to be completed
within sixty (60) days following the effective date of
termination, with payment by Buyer to be completed within thirty
(30) days following the completion of such accounting.
Seller acknowledges and agrees that the Minimum Purchase Quantity
commitment of Section 2.8 imposed upon Buyer shall be terminated
in the event of any termination hereunder due to the Seller's
breach of this Agreement.
14.5 OTHER GROUNDS FOR TERMINATION. Notwithstanding anything to the
contrary contained elsewhere in this Agreement, this Agreement
may be terminated and the obligations of the parties hereunder
shall be ended under the following circumstances:
(a) Buyer and Seller mutually agree in writing to
terminate this Agreement;
(b) Buyer determines that the development of Products is
more than 6 months behind the development schedule set
forth in Attachment J; or
(c) Buyer determines that key performance requirements
(e.g., dataspeeds, etc.) are beyond the deviation or
tolerance standards set forth in this Agreement or in any
Attachments hereto.
15 CONFIDENTIALITY
15.1 CONFIDENTIAL INFORMATION DEFINED. During the term of this
Agreement and thereafter it may be necessary for the parties to
mutually exchange certain information, data and material of a
proprietary nature whether relating to marketing, technical,
financial and other matters. To be treated as confidential
hereunder ("Confidential Information"), information disclosed in
writing shall be marked as confidential or proprietary, and the
disclosing party shall indicate the confidential nature of verbal
information at the time of disclosure. All Confidential
Information shall:
15.1.1 BE HELD IN CONFIDENCE. Be received and retained in the
strictest confidence by the parties and will be deemed to
be proprietary information of the disclosing party and the
recipient(s) of such Confidential Information agree(s)
that it (or they) will not disclose it to third parties
and further, will treat such information, data or material
as proprietary using the same degree of care that it (or
they) would normally use in protecting its (or their) own
proprietary information.
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15.1.2 LIMITED USE. Be used by the parties hereto solely for the
purpose of implementing this Agreement.
15.2 EXCEPTIONS. The provisions of Section 15.1 above shall not apply
to any Confidential Information which:
(a) Is known by the receiving party prior to the date
hereof, and is not subject to or in violation of an
obligation of confidentiality;
(b) Is or becomes public knowledge other than by default
of the receiving party;
(c) Is obtained by the receiving party from a bona-fide
third party having free right of disposal of such
information;
(d) Is wholly and independently developed by receiving
party without reference to the Confidential Information;
or
(e) The receiving party is required to disclose pursuant
to a valid order of a court or other governmental body or
any political subdivision thereof, provided, however, that
the recipient of the information shall first have given
notice to the disclosing party and made a reasonable
effort to obtain a protective order requiring that the
information and/or documents so disclosed be used only for
the purposes for which the order was issued.
15.3 SURVIVAL. This Section 15 shall survive any termination of this
Agreement for a period of two (2) years.
16 FORCE MAJEURE
16.1 FORCE MAJEURE. Neither of the parties hereto shall be liable for
any damages or penalty for delay in performance of its
obligations under this Agreement when such delay is due to acts
of God, acts of civil or military authority, fires, floods,
epidemics, war or riots, industry-wide strikes, lockouts or other
labor disputes, , or any other causes beyond the reasonable
control of such party. The party so affected shall, upon giving
prompt written notice to the other party of the delay and the
cause therefore, be excused from performance to the extent of the
prevention, restriction or interference; provided, however, that
the party so affected shall use reasonable efforts to avoid or
remove such causes of nonperformance and shall continue
performance hereunder with the utmost dispatch whenever such
causes are removed. In the event of Force Majeure delays, the
time for performance shall be extended by mutual agreement of the
parties as
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provided above, but in no case shall the extension exceed a
day-for-day extension based upon the duration of the act of Force
Majeure.
16.2 BUYER'S RIGHT TO TERMINATE FOR FORCE MAJEURE. Should Force
Majeure prevent Seller from timely performing under this
Agreement, where the Force Majeure delays Seller's performance by
such time that, in Buyer's reasonable judgment, Buyer has lost
the benefit of the bargain or where the delay is such that Buyer
must reasonably look to substitute supplies to protect Buyer's
position, Buyer has the right to terminate this Agreement,
notwithstanding the provisions of Section 18.1.
16.3 SELLER'S RIGHT TO TERMINATE FOR FORCE MAJEURE. Should Force
Majeure prevent Buyer's performance under this Agreement for a
period of more than six (6) months, Seller has the right to
terminate this Agreement, notwithstanding the provisions of
Section 16.1.
17 PRODUCT LIABILITY INDEMNIFICATION
Notwithstanding anything to the contrary contained herein, Seller agrees
to defend, hold harmless and indemnify Buyer, its subsidiaries and
Affiliates, and its and their officers, agents and employees, from and
against any damages, claims, demands, liabilities and expenses
(including reasonable attorneys' fees) that arise out of, or result
from, the death or bodily injury to, or damage to tangible property of
any third party resulting (including Seller's employees) from the
design, manufacture, or use of a Product, whether or not resulting from
a Defect, produced by Seller or Seller's affiliate. Seller shall pay all
costs, damages and reasonable attorneys' fees that a court awards as a
result of such claim provided that: (i) Seller has sole control of the
defense and related settlement negotiations; (ii) Buyer provides Seller
with assistance, information and authority reasonably necessary for
Seller to perform its obligations under this Section 17; and (iii) Buyer
notifies Seller in writing within thirty (30) days of the discovery of
the claim. Seller shall not be responsible for any settlement made
without its consent. Buyer shall not be required to admit any liability
either to obtain Seller's compliance with the indemnification provisions
of this Section or for any other reason.
18 INTELLECTUAL PROPERTY INDEMNIFICATION
18.1 Seller warrants that the Products furnished hereunder shall be
delivered free of any rightful claim of any third party for
infringement of any patent, copyright, trademark, trade secret,
or other intellectual property right. If Buyer notifies Seller
with thirty (30) days of the receipt of any claim that the
Products infringes a patent, copyright, trademark, trade secret,
or other intellectual property right, and gives Seller
information assistance and exclusive authority to settle and
defend such claim, Seller at its own expense shall indemnify,
defend, and hold harmless
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<PAGE> 40
Buyer, or may settle, any suit or proceeding against Buyer so far
as based on a claimed infringement which breaches this warranty.
If, in any such suit arising from such claim, the continued use
of the Products for the purpose intended is enjoined by any court
of competent jurisdiction, Seller shall, at its expense and
option, either: (i) procure for Buyer the right to continue using
the Products, or (ii) modify the Products so that they become
non-infringing, or (iii) replace the Products or portions thereof
so that they become non-infringing, or (iv) if none of (i), (ii),
or (iii) can be accomplished within a reasonable period, accept
the return of the Products and refund the purchase price. The
foregoing states the entire liability of Seller for patent,
copyright, trademark, trade secret or other intellectual property
right infringement by the Products and is subject to any
limitation of total liability set forth in this Contract. Buyer
shall not be required to admit any liability either to obtain
Seller's compliance with the indemnification provisions of this
Section or for any other reason.
18.2 The preceding subsection 18.1 shall not apply to: (i) any portion
of the Products that is manufactured to Buyer's design, provided
that the claim of infringement arose out of Buyer's design or
(ii) the use of the Products for a purpose not intended or in
conjunction with any other apparatus or material not supplied by
Seller to the extent that such conjoined use causes the alleged
infringement. As to any portion of the Products or use described
in the preceding sentence, Seller assumes no liability whatsoever
for patent, copyright, trademark, trade secrets, or intellectual
property rights infringement.
18.3 Seller will not be responsible for any compromise or settlement
made without its written consent.
19 DISPUTE RESOLUTION
19.1 INTERNAL ESCALATION. In the event that a dispute arises over the
interpretation or application of any provision of this Agreement
or the grounds for termination hereof, any party may request that
the parties meet within ten (10) days of such request and seek to
resolve the dispute by negotiation of the appropriate officers of
each party, with the request for resolution being passed to each
officer at the next higher level of authority, in turn. Such
meetings shall be attended by individuals with decision-making
authority, to attempt in good faith to negotiate a resolution of
the dispute prior to pursuing other available remedies. If,
within ten (10) days after the first such meeting, the parties
have not succeeded in negotiating a resolution of the dispute, or
if it has not been possible to schedule a meeting within ten (10)
days following request thereof by a party, a party may request
that such dispute be mediated in accordance with Subsection 19.2.
Notwithstanding anything to the contrary contained in the
foregoing, any disputes with respect to intellectual property
rights shall be submitted to the courts and not
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<PAGE> 41
subject to the provisions of Subsection 19.2, unless otherwise
agreed by both Buyer and Seller.
19.2 MEDIATION. If the attempts to resolve a dispute described in
Subsection 19.1 fail, then such dispute will be mediated by a
mutually acceptable mediator to be chosen by Seller and Buyer
within twenty (20) days after written notice by either party
demanding mediation. A party may not unreasonably withhold
consent to the selection of a mediator, and Seller and Buyer
shall share the costs of mediation equally. Each party shall pay
its own attorneys' fees. By mutual agreement, however, Seller and
Buyer may postpone mediation until each has completed some
specified but limited discovery regarding the dispute. The
parties may also agree to replace mediation with some other form
of alternate dispute resolution, such as neutral fact-finding or
mini-trial.
19.3 ARBITRATION OF DISPUTES. Any controversy or claim arising out of
or relating to this Agreement for the breach hereof which cannot
be settled by the parties pursuant to Section 19.1 and 19.2,
shall be settled by arbitration in accordance with the commercial
arbitration rules of the American Arbitration Association as set
forth herein.
19.3.1 SELECTION OF ARBITRATORS. Each party may select one
arbitrator. Selection shall be completed within ten (10)
days of the receipt of a demand for arbitration. If either
party fails to select an arbitrator within such ten (10)
day period, the one selected shall act as sole arbitrator.
If two (2) arbitrators have been selected, the two
arbitrators selected shall select a third within fifteen
(15) days after their selection. If they fail to do so,
the third arbitrator shall be selected by the American
Arbitration Association. The arbitrators shall set a date
of hearing no later than sixty (60) days from the date all
arbitrators have been selected and shall enter a decision
within thirty (30) days at the end of the proceeding
19.3.2 LANGUAGE. All proceedings shall be conducted in the
English language.
19.3.3 LOCATION. The arbitration shall take place at a location
to be agreed upon by the parties. If the parties are
unable to agree, the arbitration shall be in Bellevue, or
Seattle, Washington, as designated by Buyer.
19.3.4 FRCP TO APPLY. In any such arbitration proceeding the
arbitrators shall adopt and apply the provisions of the
Federal Rules of Civil Procedure relating to discovery so
that each party shall allow and may obtain discovery of
any matter not privileged which is relevant to the subject
matter involved in the arbitration to the same extent as
if such arbitration were a civil action pending in a
United States District Court; provided, however, that each
party shall be entitled to no more than four (4)
35
<PAGE> 42
depositions upon oral examination of no more than one (1)
day in length each.
19.3.5 FINAL AWARD. The award of any arbitration shall be final,
conclusive and binding on the parties hereto.
19.3.6 REMEDY. The arbitrators may award any legal or equitable
remedy. The arbitration award shall include an award of
reasonable attorney's fees, in the amount of such fees, to
the prevailing party. Judgment upon any arbitration award
may be entered and enforced in any court of competent
jurisdiction.
19.3.7 INJUNCTIVE RELIEF. Either party to an arbitration
hereunder may bring an action for injunctive relief
against the other party if such action is necessary to
preserve jurisdiction of the arbitrators or to maintain
status quo pending the arbitrators' decision. Any such
action called pursuant to this paragraph shall be
discontinued upon assumption of jurisdiction by the
arbitrators and their opportunity to consider the request
for equitable relief pending final decision in the
arbitration.
19.4 CONTINUE TO PERFORM. The parties shall continue to perform all
obligations under the Agreement pending the above-described
dispute resolution proceedings, subject to full reservation of
rights at law or under this Agreement.
19.5 CHOICE OF LAW. THIS AGREEMENT SHALL BE CONSTRUED AND ENFORCED IN
ACCORDANCE WITH AND GOVERNED BY THE INTERNAL LAWS OF THE STATE OF
WASHINGTON, WITHOUT GIVING EFFECT TO PRINCIPLES OF CONFLICTS OF
LAW THEREOF.
20 NON-EXCLUSIVE AGREEMENT
This Agreement is a nonexclusive agreement. Buyer expressly reserves the
right to contract with others for any of the goods or services it may
require, including those that may duplicate Products.
21 INSURANCE
21.1 SELLER TO MAINTAIN. Seller shall maintain and keep in force all
risk insurance, in form and substance and with insurers
reasonably satisfactory to Buyer, covering all Products delivered
to Buyer the risk of loss to which has not passed to Buyer, and
shall furnish Buyer with proof that such insurance has been
obtained and is in force.
36
<PAGE> 43
21.2 LEVEL OF INSURANCE. Seller shall at all times while performing
services on Buyer's premises carry insurance with limits not less
than the limits described as follows:
(a) Employer's General Liability: Limits ***.
(b) Comprehensive General Public Liability: *** single
limit bodily injury and property damage combined; such
coverage shall include a broad form liability rider,
completed operations coverage rider and contractual
liability rider.
(c) An umbrella policy: with *** single limit bodily
injury and property damage combined.
(d) Workmen's Compensation: maintained at least at the
level required by statute in the states in which Seller is
to perform work under this Agreement.
21.3 CERTIFICATES OF INSURANCE. Seller shall provide Buyer with
certificates of insurance (i) evidencing the insurance to be
carried under this Article 21, naming the Buyer as an additional
insured and (ii) including provisions that such insurance policy
shall not be subject to cancellation, expiration or reduction
without thirty (30) days written notice to Buyer.
21.4 NO WAIVER. Notwithstanding the requirements as to insurance to be
carried, the insolvency, bankruptcy or failure of any insurance
company carrying insurance for either party, or failure of any
such insurance company to pay claims accruing, shall not be held
to waive any of the provisions of this Agreement or relieve
either party from any obligations under this Agreement.
22 ASSIGNMENT
22.1 CONSENT REQUIRED. Except as otherwise expressly provided in this
Agreement, no party shall have the right to assign its rights or
delegate its duties under this Agreement or any Purchase Order
hereunder, without the prior written consent of the other party
hereto, which consent shall not be unreasonably withheld.
Notwithstanding the foregoing, Buyer may assign its rights and
obligations hereunder to (1) any corporation resulting from any
merger or other reorganization to which Buyer is a party, (2) any
corporation, partnership, association, or other person or entity
to which Buyer may transfer all or substantially all of its
assets or business existing at such time, or (3) any entity which
controls, is controlled by, or under common control with Buyer.
22.2 INVALID WITHOUT COMPLIANCE. Any attempted assignment or
delegation in contravention of this Section 22 shall be void and
of no effect and shall be
*Certain information on this page has been omitted and filed separately with the
Commission. Confidential treatment has been requested with respect to the
omitted portions.
37
<PAGE> 44
grounds for immediate termination by the non-breaching party, for
cause, as provided in Section 12 hereof.
22.3 ASSIGNS. Subject to the provisions of Section 22.1 above, this
Agreement shall inure to the benefit of and be binding upon the
respective successors and assigns, if any, of the parties hereto.
23 NOTICES
Except as otherwise provided in this Agreement, or applicable Purchase
Order, all notices or other communications hereunder shall be deemed to
have been duly given when made in writing and mailed by certified mail,
return receipt request, facsimile transmission upon confirmation of
receipt, overnight courier or hand delivery to the parties at the
addresses set forth below or at such other addresses as may be
designated by the parties in writing:
To: Seller:
NOVATEL INC.
Attn: Greg Robins
9360 Towne Center Drive, Suite 110
San Diego, CA 92122
Phone: 858-320-8813
Fax: 858-784-0626
To: Buyer:
VoiceStream Wireless Corporation
Attn: David A. Miller
Vice President of Legal Affairs
3650 131st Ave. SE, Suite 200
Bellevue WA 98006
with a copy, which shall not constitute notice, to:
Attn: Stuart Funk
Director of Contracts and Supplier Relations
3650 131st Ave. SE, Suite 200
Bellevue WA 98006
24 PUBLICITY
Except with respect to Co-Op Advertising (for which Buyer is allowed to
use Seller's name in accordance with Buyer's guidelines), Seller shall
submit to Buyer and Buyer
38
<PAGE> 45
shall submit to Seller, as the case may be, all advertising, sales
promotion, press releases and other publicity relating to the subject
matter of this Agreement wherein Buyer's or Seller's name or names
(including the names of Affiliates) are mentioned or language, signs,
markings or symbols are used from which the connection of a Buyer's or
Seller's name or names therewith may, in Buyer's or Seller's judgment,
as applicable, be reasonably inferred or implied. Seller or Buyer, as
applicable, shall not publish or use such advertising, sales promotion,
press release or publicity matter without Buyer's Seller's, as
applicable, prior written approval, which approval may be withheld or
delayed for any or no reason.
25 COMPLIANCE WITH LAWS; GOVERNING LAW
Each party shall comply with all applicable federal, state and local
laws, regulations and codes, including the procurement of permits and
licenses when needed, in the performance of this Agreement. Each party
shall indemnify the other party against any loss or damage that may be
sustained by reason of such party's failure to comply with such federal,
state and local laws, regulations and codes. This Agreement shall be
construed and enforced in accordance with the laws of the State of
Washington, without regard to the conflict of laws of Washington or any
other state.
26 WAIVERS OF DEFAULT
Waiver by a party of any default by another party shall not be deemed a
waiver by the non-defaulting party of any other default. Failure of a
party to exercise a right or remedy shall not be deemed a waiver of that
right or remedy.
27 AMENDMENTS
No provisions of this Agreement or any Purchase Order shall be deemed
waived, amended or modified by a party, unless such waiver, amendment or
modification is in writing and signed by the authorized representative
of the party against whom it is sought to enforce such waiver, amendment
or modification.
28 ORDER OF PRECEDENCE
During the Term, Buyer's purchase of Products from Seller shall be
deemed to be purchased under the terms and conditions of this Agreement.
The terms and conditions of Buyer's Purchase Order, Seller's
acknowledgments, invoices or any other writings by either party which
differ from the terms hereunder shall not be effective unless
specifically accepted in writing by amendment to this Agreement made
separate and apart from said terms and conditions and signed by all of
the parties to this Agreement. In the event of any conflict or
inconsistency among the provisions of this Agreement and the
39
<PAGE> 46
documents attached and incorporated herein, such conflict or
inconsistency shall be resolved, by giving precedence to this Agreement
and thereafter to the Attachments.
29 HEADINGS
The section headings contained in this Agreement are for reference
purposes only and shall not affect in any way the meaning or
interpretation of this Agreement.
30 SEVERABILITY
If any provision or any part of a provision of this Agreement shall be
invalid or unenforceable, such invalidity or unenforceability shall not
invalidate or render unenforceable the entire Agreement, but rather the
entire provision or the Agreement shall be construed as if not
containing the particular invalid or unenforceable provision or
provisions, and the rights and obligations of the parties shall be
construed and enforced accordingly, provided, that the deletion of such
provision does not change the intent of the Agreement.
31 SURVIVAL
The provisions contained in this Agreement that by their sense and
context are intended to survive the cancellation or termination of this
Agreement or any Purchase Order hereunder shall survive such
Cancellation and termination.
32 LICENSE
Except as specifically provided in Section 2 hereof, no licenses,
express or implied, under any patents, copyrights, trademarks or trade
secrets are granted by Buyer or Seller to the other hereunder.
33 PARTY RELATIONSHIP
It is expressly understood that the parties intend by this Agreement to
establish the relationship of independent contractors. No party shall
have any authority to create or assume in the name of or on behalf of
the other party any obligation, express or implied, nor to act or to
purport to act as the agent or legally empowered representative of the
other party hereto for any purpose whatsoever.
34 CONTRACT/TARGET DATES
40
<PAGE> 47
Performance of this Agreement will also be subject to Seller working
towards completion of tasks subject to agreed target and contract
completion dates, set out in Attachment J.
35 COUNTERPARTS
This Agreement may be executed in two (2) separate counterparts, each of
which shall be deemed an original and both of which taken together shall
constitute one and the same instrument.
36 ATTACHMENTS AND INCORPORATION
36.1 INCORPORATION. The following documents attached hereto are
incorporated herein by reference and made a part of this
Agreement with the same force and effect as though set forth in
their entirety herein (such documents together with this
Agreement are herein referred to as the "Agreement").
<TABLE>
<CAPTION>
ATTACHMENT DESCRIPTION
<S> <C>
Attachment A-1 Description of Product 1 (specifications)
Attachment A-2 Description of Product 2 (specifications)
Attachment A-3 Description of Product 3 (specifications)
Attachment B Dates for Completion of Attachments
Attachment C Prices
Attachment D Sample Testing Protocol
Attachment E Acceptance Test Procedures
Attachment F End-user warranty
Attachment G Database Format
Attachment H Advertising Display Material
Attachment I Return Policy
Attachment J GPRS Development Schedule
Attachment K Technical Support
</TABLE>
37 ENTIRE AGREEMENT
This Agreement constitutes the entire agreement between the parties with
respect to the subject matter thereof. All prior agreements,
representations, statements, negotiations, understandings and
undertakings are superseded hereby.
41
<PAGE> 48
IN WITNESS HEREOF, THE PARTIES HEREBY EXECUTE THIS AGREEMENT BELOW.
SELLER: BUYER:
Novatel Wireless Inc., VoiceStream Wireless Corporation
a Delaware Corporation a Delaware Corporation
/s/ /s/
----------------------------------- -----------------------------------
By: By:
Cole Brodman
----------------------------------- -----------------------------------
Name: [Print] Name: [Print]
Title: Title:
----------------------------- -----------------------------
42
<PAGE> 49
ATTACHMENTS
43
<PAGE> 50
Attachment A-1
VoiceStream Wireless Corporation/Novatel Inc.
ATTACHMENT A-1 PRODUCT 1 - GPRS - PCS PC CARD
Overview:
***
Features:
***
Specifications:
***
*Certain information on this page has been omitted and filed separately with the
Commission. Confidential treatment has been requested with respect to the
omitted portions.
44
<PAGE> 51
***
*Certain information on this page has been omitted and filed separately with the
Commission. Confidential treatment has been requested with respect to the
omitted portions.
45
<PAGE> 52
Attachment A-2
VoiceStream Wireless Corporation/Novatel Inc.
ATTACHMENT A-2 PRODUCT 2 - GPRS - PCS PC CARD 8-SLOT
Overview:
***
Features:
***
Specifications:
***
*Certain information on this page has been omitted and filed separately with the
Commission. Confidential treatment has been requested with respect to the
omitted portions.
46
<PAGE> 53
***
*Certain information on this page has been omitted and filed separately with the
Commission. Confidential treatment has been requested with respect to the
omitted portions.
47
<PAGE> 54
Attachment A-3
VoiceStream Wireless Corporation/Novatel Inc.
ATTACHMENT A-3 PRODUCT 3 -- GPRS - GSM/PCS PC CARD 900/1900
Overview:
***
Features:
***
Specifications:
***
*Certain information on this page has been omitted and filed separately with the
Commission. Confidential treatment has been requested with respect to the
omitted portions.
48
<PAGE> 55
***
*Certain information on this page has been omitted and filed separately with the
Commission. Confidential treatment has been requested with respect to the
omitted portions.
49
<PAGE> 56
Attachment B
VoiceStream Wireless Corporation/Novatel Inc.
ATTACHMENT B DATES FOR COMPLETION OF ATTACHMENTS
<TABLE>
<CAPTION>
ATTACHMENT DESCRIPTION Completion Date
---------- ----------- ---------------
<S> <C> <C>
Attachment A-1 Description of Product 1 (specifications) ***
Attachment A-2 Description of Product 2 (specifications) ***
Attachment A-3 Description of Product 3 (specifications) ***
Attachment B Dates for Completion of Attachments ***
Attachment C Prices ***
Attachment D Sample Testing Protocol ***
Attachment E Acceptance Test Procedures ***
Attachment F End-user warranty ***
Attachment G Database Format ***
Attachment H Advertising Display Material ***
Attachment I Return Policy ***
Attachment J GPRS Development Schedule ***
Attachment K Technical Support ***
</TABLE>
*Certain information on this page has been omitted and filed separately with the
Commission. Confidential treatment has been requested with respect to the
omitted portions.
50
<PAGE> 57
Attachment C
VoiceStream Wireless Corporation/Novatel Inc.
ATTACHMENT C PRICES
Net Price* to Buyer shall be determined by adding the Base Price plus all
applicable adjustments as set forth below:
BASE PRICE
THE NOT-TO-EXCEED PRICE FOR PRODUCTS 1 THROUGH 3 AS DEFINED IN ATTACHMENTS A-1
THROUGH A-3 SHALL BE ***.
Prices charged in the future may be adjusted downward to the best prevailing
market price at the time of shipment in accordance with the *** section of this
agreement.
ADJUSTMENTS TO PRICE
<TABLE>
<CAPTION>
UPCHARGE UPCHARGE
APPLIED APPLIED TO
SECTION TO ALL AFFECTED
NUMBER SUBJECT PRODUCTS PRODUCTS
------- ------- -------- --------
<S> <C> <C> <C>
2.6.4 *** ***
2.7 *** ***
2.11.1 *** ***
2.15.2 *** ***
2.20 *** ***
4.3 *** ***
5.5 *** ***
9.6 *** ***
12.1.2 *** ***
12.1.3 *** ***
12.2.1 *** ***
12.3.1 *** ***
12.3.2 *** ***
12.3.4 *** ***
12.3.5 *** ***
</TABLE>
*Certain information on this page has been omitted and filed separately with the
Commission. Confidential treatment has been requested with respect to the
omitted portions.
51
<PAGE> 58
<TABLE>
<S> <C> <C> <C>
12.3.6 *** ***
Attachments A-1 *** ***
through A-3
****
</TABLE>
ACCESSORY PRICES
No accessories are currently contemplated.
*Certain information on this page has been omitted and filed separately with the
Commission. Confidential treatment has been requested with respect to the
omitted portions.
52
<PAGE> 59
Attachment D
VoiceStream Wireless Corporation/Novatel Inc.
ATTACHMENT D SAMPLE TESTING PROTOCOL
***
*Certain information on this page has been omitted and filed separately with the
Commission. Confidential treatment has been requested with respect to the
omitted portions.
53
<PAGE> 60
<TABLE>
<CAPTION>
------------------------------------------------------------------------------------------
ACCEPTANCE SAMPLE TESTING
------------------------------------------------------------------------------------------
NUMBER OF PRODUCTS FOUND
IN SAMPLE QUANTITY WITH A MAJOR DEFECT
------------------------------------------------------------------------------------------
ACCEPT IF THIS REJECT IF THIS
NUMBER OR FEWER ARE NUMBER OR MORE ARE
LOT SIZE SAMPLE QUANTITY FOUND FOUND
------------------------------------------------------------------------------------------
<S> <C> <C> <C>
*** *** *** ***
------------------------------------------------------------------------------------------
*** *** *** ***
------------------------------------------------------------------------------------------
*** *** *** ***
------------------------------------------------------------------------------------------
*** *** *** ***
------------------------------------------------------------------------------------------
*** *** *** ***
------------------------------------------------------------------------------------------
*** *** *** ***
------------------------------------------------------------------------------------------
*** *** *** ***
------------------------------------------------------------------------------------------
*** *** *** ***
------------------------------------------------------------------------------------------
*** *** *** ***
------------------------------------------------------------------------------------------
*** *** *** ***
------------------------------------------------------------------------------------------
*** *** *** ***
------------------------------------------------------------------------------------------
*** *** *** ***
------------------------------------------------------------------------------------------
*** *** *** ***
------------------------------------------------------------------------------------------
*** *** *** ***
------------------------------------------------------------------------------------------
*** *** *** ***
------------------------------------------------------------------------------------------
</TABLE>
Notwithstanding anything to the contrary set forth herein below, three Minor
Defects (as defined in the Defect Categorization for AQL Testing table set forth
herein below) of Handset Products shall also be deemed to constitute a Major
Defect and contribute to the acceptance or rejection of a lot as provided in the
table, rounded downward (i.e., five (5) Minor Defects should be counted as one
(1) Major Defect, while six (6) Minor Defects shall be counted as two (2) Major
Defects).
Major and Minor Defects are determined on a per-Product basis (i.e., a single
unit of Product with two (2) Major Defects is counted only as a single Major
Defect for the purpose of acceptance or rejection of a lot).
Should Buyer reject a lot based upon sample testing in accordance with this
Attachment E, Seller shall have the option to perform 100% testing of the lot,
at Seller's sole expense, at Buyer's premises or elsewhere with Buyer having the
right of observation of the tests and may re-submit the lot (less any defective
units) to Buyer. Seller agrees that Buyer may then re-sample test the
re-submitted lot, and Buyer may accept or reject such lot based on the testing
criteria set forth above.
Seller shall provide Buyer with Product specifications, including pass/fail
limits on parameters.
*Certain information on this page has been omitted and filed separately with the
Commission. Confidential treatment has been requested with respect to the
omitted portions.
54
<PAGE> 61
<TABLE>
<CAPTION>
------------------------------------------------------------------------------------------
DEFECT CATEGORIZATION FOR AQL TESTING
------------------------------------------------------------------------------------------
DEFECT TYPE MAJOR DEFECT MINOR DEFECT
------------------------------------------------------------------------------------------
<S> <C> <C>
ESN does not match declared ESN X
------------------------------------------------------------------------------------------
Shipping container seriously damaged X
------------------------------------------------------------------------------------------
Shipping list inconsistent with Purchase Order X
------------------------------------------------------------------------------------------
Visual assembly defect, not repaired, per
Seller's workmanship standards X
------------------------------------------------------------------------------------------
Mechanical part missing, damaged or broken, but
not restricting product integration X
------------------------------------------------------------------------------------------
Connectors damaged or not functional X
------------------------------------------------------------------------------------------
Failure to pass Seller's Product test program X
------------------------------------------------------------------------------------------
Foreign material on the Product X
------------------------------------------------------------------------------------------
Display damaged or inoperable X
------------------------------------------------------------------------------------------
Failure to conform with the PCS 1900
specifications or Seller's Product tolerances X
------------------------------------------------------------------------------------------
</TABLE>
55
<PAGE> 62
Attachment E
VoiceStream Wireless Corporation/Novatel Inc.
ATTACHMENT E ACCEPTANCE TEST PROCEDURE
Pending
(To be jointly developed by the Parties)
56
<PAGE> 63
Attachment F
VoiceStream Wireless Corporation/Novatel Inc.
ATTACHMENT F WARRANTY
Novatel warrants for a period either of the longer of 1 year from delivery at
the customer's location or ninety days after repair or replacement that its
Products are free from defects in material and workmanship, conform to Novatel
specifications and that the software shall be free from errors which materially
affect performance. THESE WARRANTIES ARE EXPRESSLY IN LIEU OF ALL OTHER
WARRANTIES, EXPRESS OR IMPLIED, INCLUDING, WITHOUT LIMITATION, ALL IMPLIED
WARRANTIES OF MERCHANTABILITY AND FITNESS FOR A PARTICULAR PURPOSE. NOVATEL
WIRELESS SHALL IN NO EVENT BE LIABLE FOR SPECIAL, INDIRECT, INCIDENTAL, OR
CONSEQUENTIAL DAMAGES, OF ANY KIND OR NATURE DUE TO ANY CAUSE.
Novatel's obligations are limited to correction of such failure, repair or
replacement and are conditioned upon the Product having been maintained in
accordance with Novatel specifications and the Product not having been modified
by any party other than Novatel except as expressly permitted in writing.
The foregoing warranties do not extend to (i) nonconformities, defects or errors
in the Product due to accident, abuse, misuse or negligent use of the Product or
use in other than a normal and customary manner, environmental conditions not
conforming to Novatel's specifications, or failure to follow prescribed
operating maintenance procedures, (ii) defects, errors or nonconformities in the
Product due to modifications, alterations, additions or Product changes not made
or authorized to be made by Novatel, (iii) normal wear and tear, or (iv) damage
caused by force of nature or act of any third party.
57
<PAGE> 64
Attachment G
VoiceStream Wireless Corporation/Novatel Inc.
ATTACHMENT G DATABASE FORMAT
(To be supplied by Novatel)
58
<PAGE> 65
Attachment H
VoiceStream Wireless Corporation/Novatel Inc.
ATTACHMENT H ADVERTISING DISPLAY MATERIAL
(To be supplied by Novatel)
59
<PAGE> 66
Attachment I
VoiceStream Wireless Corporation/Novatel Inc.
ATTACHMENT I RETURN POLICY
Recognizing that product sold to our customers is done so in good faith, the
return of stock is considered contrary to the original purchase terms. However,
at your request, Seller will consider the return of customer's inventory under
certain market conditions. Seller will only consider credit returns if our
customer has demonstrated active promotion and proper positioning of our
product.
This agreement is necessitated by the cost prohibitive nature of stock returns
and covers the blanket guidelines for processing a return. As a partner with
Seller interested in growing our relationship and respective businesses,
customers are asked to share the cost of this burden.
Note that each request for return must be specifically agreed to by the Seller
customer representative and Seller management. To obtain approval for a specific
restock return for credit, a customer signed agreement in accordance with the
following return guidelines is required:
The product must be in current production and directly purchased by
Buyer within the last 90 days. If product is determined to been
purchased from other suppliers, product will be returned to customer.
The product must be in new, immediate resoluble condition including
original packaging and master cartons.
***
A return authorization will be provided by your sales representative. It
will be valid for 30 days from issuance.
Stock is to be returned to the Seller San Diego, California, facility.
No custom products are returnable under this policy.
Buyer shall pay freight on returns.
Credit will be provided to customer's account within thirty (30) days.
*Certain information on this page has been omitted and filed separately with the
Commission. Confidential treatment has been requested with respect to the
omitted portions.
60
<PAGE> 67
Attachment J
VoiceStream Wireless Corporation/Novatel Inc.
ATTACHMENT J GPRS DEVELOPMENT SCHEDULE
THE FOLLOWING SCHEDULE IS CONTINGENT UPON THE OPERABILITY AND COMMERCIAL
AVAILABILITY OF A NORTH AMERICAN GSM 1900 NETWORK.
GPRS DEVELOPMENT SCHEDULE:
<TABLE>
<CAPTION>
-------------------------------------------------------------------------------------
14.4KBPS 43.3KBPS 56KBPS
-------------------------------------------------------------------------------------
PROTOTYPE
QUANTITY 10 20 100
-------------------------------------------------------------------------------------
<S> <C> <C> <C>
*** *** *** ***
-------------------------------------------------------------------------------------
*** *** *** ***
-------------------------------------------------------------------------------------
*** *** *** ***
-------------------------------------------------------------------------------------
*** *** *** ***
-------------------------------------------------------------------------------------
*** *** *** ***
-------------------------------------------------------------------------------------
*** *** *** ***
-------------------------------------------------------------------------------------
*** *** *** ***
-------------------------------------------------------------------------------------
*** *** *** ***
-------------------------------------------------------------------------------------
</TABLE>
GPRS PC CARD PRODUCT DEVELOPMENT MILESTONES:
FIRST 1 SLOT ENGINEERING SAMPLES: ***
INDUSTRIAL DESIGN COMPLETE: ***
ALPHA TEST BEGINS IN PC CARD FORM FACTOR: ***
FCC CERTIFICATION BEGINS: ***
PILOT RUN: ***
BETA TEST BEGINS : ***
CARRIER CERTIFICATION BEGINS: ***
RELEASE TO MANUFACTURING: ***
FIRST PRODUCTION UNITS: ***
TARGET DEVELOPMENT SCHEDULE FOR 115KBPS GPRS*:
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115KBPS
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SCHEDULE PROTOTYPE-12 MONTHS ARO
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VOLUME-14 MONTHS ARO
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CONTINGENT ON SOURCE OF
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SILICON
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*Certain information on this page has been omitted and filed separately with the
Commission. Confidential treatment has been requested with respect to the
omitted portions.
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CONFIGURATION 8 RECEIVE, 2 TRANSMIT
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SPEED 115KBPS DOWNLOAD
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28.8KBPS UPLOAD
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* Project totally dependent on delivery of silicon capable of this
configuration.
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Attachment K
VoiceStream Wireless Corporation/Novatel
ATTACHMENT K TECHNICAL SUPPORT
TECHNICAL SUPPORT
Technical Support for the Novatel GSM/GPRS 900/1900 Mhz PC Card delivered to
Voicestream or a Voicestream Designated Channel Partner will be managed via a
three-tier Technical Support infrastructure and process as follows:
LEVEL ONE TECHNICAL SUPPORT
Level one Technical Support will be provided by Voicestream or
Voicestream Designated Channel Partner to their direct and indirect
customers. Level one support is defined as calls* originating from
Voicestream or Voicestream Designated Channel Partner customers,
resellers or distributors regarding Voicestream or Voicestream
Designated Channel Partner Service, Wireless Service Providers, Novatel
GPRS PC Card products including but not limited to pre and post sale
inquiries concerning the basic operation of the hardware and software,
functionality, interoperability and capabilities of those products and
services.
For calls regarding the Novatel GPRS PC Card products, Voicestream or
Voicestream Designated Channel Partner will make every attempt to answer
customer questions and resolve issues using available tools,
documentation, test equipment and other materials used to support the
Novatel GPRS PC Card products (see training section below). If the
customer question/issue regarding the Novatel GPRS PC Card product
cannot be resolved by Voicestream or Voicestream Designated Channel
Partner support personnel to the customers' satisfaction, the issue will
be forwarded to Novatel level two Technical Support for further
investigation and resolution.
*Calls include phone calls, e-mail, web-based inquiries, faxes and
letters.
LEVEL TWO TECHNICAL SUPPORT
Level two Technical Support will be provided by Novatel Wireless support
staff directly to Voicestream or Voicestream Designated Channel Partner
level one support personnel to assist in the resolution of open customer
issues that have not been resolved to Voicestream or Voicestream Designated
Channel Partner customers satisfaction during a level one support call.
Voicestream or Voicestream Designated Channel Partner will have direct
access to designated support staff within the Novatel Wireless support
organization for this purpose. A direct line of communication between the
two organizations will be established and Novatel
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Wireless support technicians will be available during normal Voicestream or
Voicestream Designated Channel Partner Technical Support operation hours to
assist in resolution of customer problems. Novatel Wireless support
engineering will work directly with Voicestream or Voicestream Designated
Channel Partner support staff to resolve issues and answer questions, this
may require Voicestream or Voicestream Designated Channel Partner support
staff to gather additional information and provide system information or
test results back to Novatel support staff to aid in the definition and
resolution of the problem. It will be Voicestream or Voicestream Designated
Channel Partner support staff's responsibility to communicate directly with
the end-user customer. Problems that are not resolved *** or problems that
are flagged as sensitive/mission critical will be escalated to level three
Technical Support for final resolution.
LEVEL THREE TECHNICAL SUPPORT (ESCALATION)
Level three Technical Support will be provided by Novatel support and
system engineering staff to resolve issues that cannot be satisfactorily
resolved by level one and level two support personnel. Level three
support will handle all Voicestream or Voicestream Designated Channel
Partner product escalations issues including unresolved support calls
and will work directly with Novatel engineering staff to resolve those
issues.
TECHNICAL SUPPORT TRAINING
Technical Support training and documentation for the Novatel GPRS PC
Card Product will be provided to Voicestream or Voicestream Designated
Channel Partner level one support staff by Novatel Wireless. Voicestream
or Voicestream Designated Channel Partner support staff will receive
training on the general use, functionality, operation and compatibility
of the Novatel GPRS PC Card products. In addition all support related
documentation, training materials, notes, FAQ's, and web based support
materials will be made available to Voicestream or Voicestream
Designated Channel Partner for their use in supporting these products.
*Certain information on this page has been omitted and filed separately with the
Commission. Confidential treatment has been requested with respect to the
omitted portions.
64
