PORTIONS OF THIS DOCUMENT INDICATED BY AN [***] HAVE BEEN OMITTED AND FILED
SEPARATELY WITH THE SECURITIES EXCHANGE COMMISSION PURSUANT TO A REQUEST FOR
CONFIDENTIAL TREATMENT OF SUCH INFORMATION.
EXHIBIT 10.6
UNITED STATES
DISTRIBUTION AGREEMENT
FOR CELLULAR PHONES AND ACCESSORIES
ENTERED INTO BY AND BETWEEN
MOTOROLA, INC.
AND
BRIGHTSTAR US, INC.
Effective Date: October 1, 2003
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U.S. DISTRIBUTION AGREEMENT
THIS DISTRIBUTION AGREEMENT (THIS "AGREEMENT") IS ENTERED INTO BETWEEN
MOTOROLA, INC., A CORPORATION DULY ORGANIZED AND EXISTING UNDER THE LAWS
OF THE STATE OF DELAWARE, HAVING A PLACE OF BUSINESS AT 000 XXXXX X.X.
XXXXXXX 00, XXXXXXXXXXXX, XXXXXXXX 00000-0000 (HEREINAFTER "MOTOROLA"),
AND BRIGHTSTAR US. INC., A CORPORATION DULY ORGANIZED AND EXISTING UNDER
THE LAWS OF THE STATE OF FLORIDA, HAVING ITS PRINCIPAL PLACE OF BUSINESS
AT 000 XXXXXX XXXX XX. XXXXXX XXXXX, XX 00000 (HEREINAFTER "DISTRIBUTOR"),
EFFECTIVE AS OF OCTOBER 1, 2003("EFFECTIVE DATE").
WHEREAS, Motorola manufactures cellular telephones and accessories
(hereinafter the "Products") and distributes them directly to its
customers and also through independent distributors;
WHEREAS, Motorola wishes to continue selling its Products directly, and
also through independent distributors to customers in the Untied States;
and
WHEREAS, Distributor wishes to be a distributor of the Motorola Products
in the United States.
NOW THEREFORE, the parties agree as follows:
1. APPOINTMENT AS DISTRIBUTOR
a. Subject to the terms of this Agreement, Motorola hereby appoints
Distributor, and Distributor hereby accepts the appointment, as an
authorized distributor of Motorola Products listed in Attachment I (the
Products"). FOR THE PURPOSES OF SECTION 1 ONLY, "PRODUCTS" MEANS ONLY
HANDSETS AND NOT ACCESSORIES. Distributor's right to sell and distribute
Motorola Products shall be non-exclusive, except as provided in section
le. Distributor is authorized to purchase Products directly from Motorola
pursuant to purchase orders entered into in connection with this Agreement
and resell such Products solely within the United States (hereinafter the
"Territory"). Distributor acknowledges and agrees that Motorola reserves
the right to appoint other distributors within the Territory and that
Motorola may, at its sole and unrestricted discretion, chose to use other
agents, dealers, distributors, representatives and independent
contractors, as well as its regularly employed sales force and that of its
subsidiaries or affiliated companies, to promote the sale of Products
within the Territory. Distributor acknowledges and agrees that Motorola
reserves the right to restrict the distribution of specific models of
Products to specific areas and/or customers within the Territory and
Distributor agrees to limit its distribution of such models accordingly.
Upon ninety (90) days notice, Motorola will provide updated and revised
price lists to Distributor for the Products that Distributor is authorized
to sell.
b. For any End of Life Products ("EOL Products") that Motorola, in its sole
discretion, chooses not to sell via its online channels, Motorola will
offer Distributor the first right of refusal to purchase such EOL
Products. EOL Products are defined as products that have been announced as
discontinued to all channels and which a replacement product has launched
and is available for Distributor to purchase. If Motorola makes such an
offer to Distributor, Distributor Shall have [***] to bid upon such EOL
Products. If Distributor does not exercise its right to purchase the EOL
Products within [***] of Motorola making the offer, by offering at least
as much as [***] for the Products, Motorola may offer the EOL Products to
any other customer(s) or channel(s) of Motorola's sole choosing.
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c. Distributor may not purchase Motorola Products from any company, person,
or entity other than Motorola for Products that are currently shipping
from Motorola's inventory. An exception may exist, at Motorola's sole
discretion, for this provision if Distributor is able to provide
documentation to Motorola that the current price being charged by Motorola
to Distributor for any particular product is higher than is being offered
elsewhere in the marketplace. If Distributor is able to provide, such
documentation to Motorola's satisfaction, Motorola may either choose to
make an offer to Distributor ("Offer") to match the market price within
[***] or not. Such [***] premium will fund MDF programs for the
particular products. If Motorola makes a offer that is within [***] of
the market price, Distributor must purchase the relevant products from
Motorola. If Motorola chooses not to make an Offer that matches the market
price within [***], Distributor will be released from the requirement to
purchase the relevant product from Motorola for that particular purchase
only. In the course of making such Offer, Motorola may insist on any terms
and conditions necessary, including, but not limited to, specifically
excluding items such as price protection from the Offer.
d. Distributor acknowledges and agrees that Motorola reserves the right to
limit distribution of Motorola Products to distributors who satisfy
Motorola's requirements for distribution of Motorola Products. Distributor
hereby consents to the application of such criteria to its distribution of
Products purchased in connection with this Agreement.
e. Distributor shall have the right to sell Motorola Products to two classes
of accounts. Distributor shall be able to sell Motorola Products to
Assigned Accounts, a list of which are set out on Attachment 2 of this
Agreement, and may be modified from time to time. Assigned Accounts are
defined as accounts to which only Distributor is the exclusive provider of
Motorola Products under this Agreement. No other distributor shall have
the right to sell Motorola Products to the Assigned Accounts unless, as
set out below, any Assigned Account becomes a Pool Account. Pool Accounts
are defined as accounts to which Motorola Products may be sold by
Distributor, as well as other distributors. Pool Accounts shall include,
but are not limited to, [***], and are set out upon Attachment 3 to this
Agreement.
1. Distributor is required to maintain at least a [***] percent
([***]%) market share of Motorola Products in each of its Assigned
Accounts. Motorola and Distributor will meet at least quarterly to review
Distributor's performance in serving both Assigned Accounts and Pool
Accounts with Motorola Products purchased from Motorola under this
Agreement. These reviews will include an analysis and discussion of, among
other items, TAM Projections, competitive activity, Motorola sales
activity, current promotions, and other pertinent issues. During these
reviews, Motorola and Distributor will determine whether Distributor has
met the [***] percent market share requirements as set out above. If
Distributor has not met the [***] percent requirement in any of its
Assigned Accounts, the procedures set out below will take place at
Motorola's sole discretion.
2a. If, during the ninety (90) day period preceding the quarterly
meeting between Motorola and Distributor, Distributor has not met the
[***] percent requirement for a particular Assigned Account, or if
Motorola is notified by any Assigned Account that Distributor is not
providing adequate and appropriate service and the Assigned Account wishes
Distributor be removed as its only provider of Motorola Products,
Distributor shall have ten (10) business days from the date of the
quarterly meeting or notification to Motorola by an Assigned Account, to
provide Motorola with a remedial plan ("Remedial Plan") for increasing the
market share of the Assigned Account up to at least the [***] percent
threshold, or for providing the appropriate service level to the Assigned
Account. Once Distributor provides the Remedial Plan, Motorola shall have
five business days to approve or disapprove, in its sole discretion, the
Remedial Plan. If Motorola approves the Remedial Plan, Distributor shall
have ninety (90) days to increase the market share of the Assigned
Account(s) to at least the [***] percent market share threshold, or gain
approval from the Assigned Account regarding the service level provided by
Distributor. If at the end of the ninety (90) period Distributor is unable
to increase the market share of Motorola Products to at least the [***]
percent threshold, or satisfy the Assigned Account, Motorola may, at any
time, in its sole discretion, undertake the option(s) set out below in
section 1(e) (3).
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b. If Motorola does not approve the Distributor's Remedial Plan,
Distributor shall have five business days to revise the Remedial Plan and
resubmit the Remedial Plan to Motorola. After resubmission, Motorola shall
have five (5) business days to approve or disapprove the Remedial Plan.
After resubmission, the process set out above shall occur again.
Distributor understands and agrees that, at any time after the first
resubmission, Motorola may, at any time, in its sole discretion, undertake
the option(s) set out below in section 1(e)(3).
3. Upon the occurrence of either of the following events:
a. Distributor is unable to raise the market share of a
particular Assigned Account within the ninety (90) day
time period referenced above in section 1 (e) (2), or is
unable to provide a higher level of service to the
Assigned Account, such that the Assigned Account is
satisfied with the service level; or,
b. Distributor is required to make more than one submission
of its Remedial Plan to Motorola in order to provide
appropriate documentation of Distributor's plan to raise
the market share of Motorola Products within a
particular Assigned Account;
Motorola may, in its sole discretion, and upon not less than
five (5) business days notice to Distributor, notify
Distributor that that particular Assigned Account will become
a Pool Account, as defined above in section 1 (e). Upon such
notice by Motorola, and the passage of the notification
period, Assigned Account shall become a Pool Account and such
account shall be serviced by other distributors, as well as
Distributor.
f. In addition to the rights granted in this Section, Distributor shall also
have the non-exclusive right to sell Motorola Products to any Master
Agent, Sub-Agent or Independent Agent of any carrier customer of Motorola,
(hereinafter collectively referred to as "Agents") so long as the Agent
directly activates Motorola's Products on networks owned and operated by
any wireless carrier that allows Distributor to sell to its Agents.
Distributor is not permitted to sell Motorola Products to any other
distributor or other entity which does not directly activate Motorola
Products on a wireless network except for those entities that distribute
to mutually agreed upon special markets. In the event that any wireless
carrier specifies to Motorola that Distributor is not permitted to sell to
its Agents, Motorola shall promptly notify Distributor and Distributor
shall immediately cease and desist selling any Motorola Products to that
particular wireless carrier's Agents. In the event that Distributor
violates the terms of this provision by selling to any company or entity
that does not directly activate Motorola Products on a wireless carrier's
network, or by selling Motorola Products to an Agent after notice by
Motorola that Distributor is not authorized to sell to its Agents, then
Motorola may, in addition to any other remedy or recourse it may possess
at law or equity, suspend or cancel, any Market Development Funds
previously accrued, or which may accrue in the future, with no further
obligation or liability to Distributor.
2. TERM OF THIS AGREEMENT
The term of this Agreement shall commence on the Effective Date and shall
continue for [***], unless terminated as permitted herein. [***] The
number of renewals notwithstanding, this Agreement shall always be
interpreted as a fixed term agreement and not as an indefinite term
agreement.
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3. PARTY RELATIONSHIP
It is agreed that Distributor's relationship to Motorola is that of an
independent contractor and no other relationship is intended to be created
between the parties hereto. Nothing in this Agreement shall be construed
so as to make Distributor (or its employees or agents) an employee of
Motorola, or an agent with the power to bind Motorola contractually.
Distributor shall have no authority to bind, obligate or incur any
liability on behalf of Motorola. This Agreement does not create any
agency, joint venture or partnership between Distributor and Motorola.
4. DISTRIBUTOR RESPONSIBILITIES
In distributing Products Distributor shall perform the following services:
a. Sell, advertise, and promote the sale and use of Products throughout
the Territory.
b. Maintain a sales organization, to effectively promote and market the
Products.
c. Maintain a technical support organization, which in Motorola's sole
determination, is sufficient to effectively support provide first tier
support of Distributor's customers.
d. Furnish to Motorola information relating to orders, sales, service,
inventory levels, and Product sales forecasts upon request.
e. Purchase the Products from Motorola in the manner described in the
Section referred to as "Purchase of Products."
5. MOTOROLA RESPONSBILITIES
Motorola, agrees that it will use reasonable efforts during the term of
this Agreement to supply the Distributor with the Products pursuant to the
terms of the relevant Purchase Orders and provide to the Distributor any
information and technical support reasonably requested by the Distributor
in connection with the marketing, advertising, packing and product content
of the Products.
6. PURCHASE OF PRODUCTS.
a. Under the terms and conditions of this Agreement, Distributor agrees to
purchase Products to be resold in the Territory. Distributor shall submit
to Motorola for its acceptance purchase orders listing the model,
quantity, and requested shipment date of the Products requested. All other
terms and conditions on Distributor's purchase order form are hereby
rendered null, void, and of no effect, by the terms and conditions of this
Agreement.
b. Prices stated on Distributor's purchase orders shall conform to Motorola's
then current price list, copies of which will be made available to
Distributor.
c. Distributor shall provide Motorola on a monthly basis, no less than thirty
(30) days prior to the start of the following month, a continuous usage
forecast for the following six (6) calendar months (the "Forecast") to
assist Motorola in maintaining an orderly production flow for the purpose
of Distributor's delivery requirements. Distributor shall indicate the
Product model number and projected volume by units for each month of the
Forecast. Distributor's failure to provide such information may be
considered cause for Motorola's excusable delivery delay. In addition to
the Forecasts mentioned herein, the Parties also agree to participate in
the Collaborative Planning Forecasting and Replenishment process
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("CPFR") as defined by the Voluntary Inter-Industry Commerce Standards
Committee. The parties shall jointly develop CPFR standards and guidelines
to increase efficiencies in supply chain management, inventory management,
manufacturing capacity, materials reservation, replemishment and sales
forecasting.
d. Motorola reserves the right in its sole discretion to accept or reject any
order for Products received from Distributor without any futher liability
including without limitation for the failure of Distributor to satisfy
Motorola's distribution qualification requirements for distribution of the
requested Product. No purchase order is binding on Motorola until
accepted. A purchase order is accepted by Motorola when Product is shipped
or when acceptance is acknowledged in writing by a duly authorized officer
or employee of Motorola, or as it is normally accomplished through the
CPFR process that the parties utilize to manage purchase orders and
shipments, whichever occurs first.
e. Distributor shall submit firm processable purchase orders for Products no
less than forty-five (45) days prior to the requested shipment date,
unless otherwise agreed to by Motorola. Motorola agrees that Distributor
may adjust model quantities on any purchase order no less than days prior
to shipment, so long as the total dollar amount of the corresponding
purchase order is not lower than the original purchase order submitted.
Cancellation of product is allowed no less than thirty (30) days prior to
the requested ship date. If Motorola is delinquent by on any delivery By
more than 7 days, Distributor may also cancel the outstanding purchase
order.
7. PAYMENT AND DELIVERY
a. Unless otherwise approved in writing by Motorola. Distributor must pay for
Products within [***] of the date of the invoice. [***]
b. All deliveries are FOB the designated Motorola manufacturing or
distribution facility from which Products are shipped. Title to the
Products and risk of loss shall pass to Distributor at the FOB point. All
costs associated with shipment, freight, and insurance of the products
while in transit, shall be the sole responsibility of Distributor.
c. If Distributor should fail to pay any invoice for Products within three
(3) days of notice of non-payment by Motorola,, or in the event that
Motorola, in its sole reasonable discretion deems Distributor's financial
condition inadequate or unsatisfactory, then in addition to its other
rights herein, Motorola may repossess the unpaid Products, cancel any
previously accepted purchase order for Products, or delay any further
shipment of Products to Distributor, without incurring any liability for
loss or damage of any kind occasioned by reason of any such cancellation
or delay. Furthermore, such failure to pay may be deemed, at Motorola's
option, a justified cause for termination of this Agreement.
d. Subject to any agreements that exist between, Motorola and Distributor,
including, without limitation, that certain Intercreditor Agreement by and
among General Electric Capital Corporation, Motorola, Distributor and
Brightstar Corp. dated June 12, 2002, Distributor grants to Motorola a
security interest and lien upon all of Distributor's now existing or
hereafter acquired inventory of the products, and all of Distributor's
accounts, chattel paper, instruments, contract rights, general
intangibles, accounts receivable, and the proceeds thereof now existing or
arising out of Distributor's sale or other disposition of the products.
Distributor agrees to cooperate in whatever manner requested by Motorola
that is reasonably necessary to assist in perfecting and recording such
security interest and lien.
Motorola's invoicing and shipment of Distributor's purchase orders will be
subject to Motorola's approval of Distributor's credit, which credit shall
be pursuant to and in accordance with any written agreement entered into
between Distributor and Motorola establishing the terms and conditions of
any such credit to be extended by Motorola to Distributor.
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8. INVENTORY REPORTING
Distributor shall furnish Motorola with accurate monthly reports of
Distributor's inventory and sell-through of Products, by model. Motorola
and Distributor will meet on a regular basis to review Distributor's
Inventory, including Products that are overstocked or slow moving, and
Distributor's marketing and sales plans.
9. PRICE PROTECTION
a. During the term of this Agreement, if Motorola reduces the price of a
particular model of Product or Accessory, then Motorola will credit
Distributors account an amount equal to [***]
[***]
10. NO TRANSSHIPMENT
a. Distributor agrees to limit its distribution of the Products purchased
hereunder to direct sale by Distributor to customers located in the United
States. Distributor may sell Products only from addresses approved by
Motorola, which approval shall not be unreasonably withheld.
b. Distributor may not transship, sell or otherwise transfer Products
purchased hereunder outside the Territory.
c. In the event of any transshipment Motorola may, in addition to any other
remedies that it may possess at law or equity, suspend or cancel, any
Market Development Funds previously accrued, or which may accrue in the
future, with no further obligation or liability to Distributor, until
Distributor can demonstrate that it has instituted policies and procedures
to prevent any such occurrences in the future. The foregoing are in
addition to, and not in lieu of, the remedies that Motorola has at law or
in equity.
11. WARRANTY
Motorola warrants each Product in accordance with the Limited Warranty
that Motorola ships with such Product. The Limited Warranty is attached
hereto as Attachment 4. Motorola in its sole discretion may revise this
warranty, and any such revision shall be applicable to units shipped by
Motorola on or after the effective date of the revision. MOTOROLA MAKES NO
OTHER REPRESENTATION OR WARRANTY OF ANY KIND, EXPRESS OR IMPLIED EXCEPT AS
OTHERWISE PROVIDED IN THE LIMITED WARRANTY ATTACHED. MOTOROLA SPECIFICALLY
DISCLAIMS ANY IMPLIED WARRANTY OF MERCHANTABILITY OR FITNESS FOR A
PARTICULAR PURPOSE. Motorola's warranty will not be enlarged or expanded,
and no obligation or liability will arise out of
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Motorola's rendering of support, technical advice, or other services in
connection with Distributor's purchase of Products. In addition to the
foregoing, the Parties will work together to formulate within sixty (60)
days of execution of this Agreement, written policies and guidelines for
managing the warranty, return, service and repair process. Said guidelines
will include, but not be limited to, standards for field replacement
units, units with no trouble found, and out-of-box failures.
12. PATENT AND COPYRIGHT INDEMNIFICATION
a. Motorola agrees to defend at its expense, any suits against Distributor
based upon a claim that any Product furnished hereunder by Motorola
directly infringes a valid U.S. patent or copyright or misappropriates a
trade secret and to pay costs and damages finally awarded based upon such
claim in any such suit, provided that Motorola is: (i) promptly notified
by Distributor in writing as soon as reasonably practicable after
Distributor first becomes aware of the claim of infringement or
misappropriation, but in no event later than 15 days from the date on
which Distributor first received notice of such claim ( provided that
Distributor's failure to timely notify Motorola of any such claim shall
not excuse Motorola from its obligation to indemnify Distributor hereunder
unless such delay has caused Motorola to suffer specific and irreparable
prejudice); and (ii) at Motorola's request and expense is given sole
control of the suit and all requested assistance for defense of same.
Motorola shall not be liable for any settlement made without its written
consent. Motorola may settle such suit without the written consent of
Distributor if, and only if, such settlement will not result in any cost
or expense to Distributor and will not result in judgment of any sort
being entered against Distributor. If the use or sale of any Product
furnished under this Agreement is enjoined as a result of such suit,
Motorola at its option and at no expense to Distributor, will: (i) obtain
for Distributor the right to use or sell such Products; (ii) substitute an
equivalent product reasonably acceptable to Distributor and extend this
indemnity thereto, or: (iii) accept the return of the Products and
reimburse Distributor the purchase price therefore, less a reasonable
charge for prior use, if any. If the infringement is alleged prior to
completion of delivery of the Products, Motorola shall have the right to
decline to make further shipments without being in breach of contract.
This indemnity does not extend to any suit based upon any infringement or
alleged infringement arising from Products furnished by Motorola that are:
(i) altered in any way by Distributor or any third party if the alleged
infringement would not have occurred but for such alteration; (ii)
combined with any other products or elements not furnished by Motorola if
the alleged infringement would not have occurred but for such combination;
or (iii) designed and/or manufactured in accordance with Distributor's
designs, specifications, or instructions if the alleged infringement would
not have occurred but for such designs, specifications, or instructions.
In no event shall Motorola's liability resulting from its indemnity
obligation to Distributor extend in any way to royalties payable based on
a per use basis, or subscriber revenues derived by Distributor therefrom,
or any royalty basis other than a reasonable royalty based upon revenue
derived by Motorola from Distributor from sales or license of the
infringing Product.
The indemnity provided in this section is the sole, exclusive, and entire
liability of Motorola and the remedies provided in this section shall be
Distributor's exclusive remedies against Motorola for patent copyright
infringement or trade secret misappropriation,, whether direct or
contributory and is provided in lieu of all warranties, express, implied
or statutory in regard thereto, including, without limitation, the
warranty against infringement specified in the Uniform Commercial Code.
b. In no event shall Motorola be liable for incidental or consequential
damages arising from infringement or alleged infringement of patents,
trademarks or copyrights.
13. PRODUCT LIABILITY INDEMNIFICATION
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Motorola agrees to defend at its expense, any claims against Distributor,
which are based upon a claim by a third party, that a material defect in
any Products furnished hereunder by Motorola caused death or bodily
injury to any person and to pay costs and damages finally awarded based
upon such claim in any such suit; provided that Motorola is: (i) notified
by Distributor in writing within 15 days of the date on which Distributor
first received notice of the claim (provided that Distributor's failure to
timely notify Motorola of any such claim shall not excuse Motorola from
its obligation to indemnify Distributor hereunder unless such delay has
caused Motorola to suffer specific and irreparable prejudice); and (ii) at
Motorola's request and expense is given sole control of the suit and all
requested assistance for defense of same. Motorola shall not be liable for
any settlement made without its written consent. Motorola may settle such
suit without the written consent of Distributor if, and only if, such
settlement will not result in any cost or expense to Distributor and will
not result in a judgement of any sort being entered against Distributor.
This indemnity does not extend to any suits based upon death or bodily
injury arising from Products furnished by Motorola that are: (i) altered
in any way by Distributor or any third party if the alleged death or
bodily injury would not have occurred but for such alteration; (ii)
combined with any other products or elements not furnished by Motorola if
the alleged death or bodily injury would not have occurred but for such
combination: or (iii) designed and/or manufactured in accordance with
Distributor's designs, specifications, or instructions if the alleged
death or bodily injury to any person or damage to any property would not
have occurred but for such designs, specifications or instruction. This
indemnity does not extend to any suits or claims based upon death or
bodily injury to any person or damage to any property, where the event or
exposure which allegedly caused the injury occurred prior to the Effective
Date of this Agreement.
The indemnity provided in this section is the sole, exclusive, and entire
liability of Motorola and the remedies provided in this section shall be
Customer's exclusive remedies against Motorola for claims by third parties
for death or bodily injury and is provided in lieu of all warranties,
express, implied or statutory in regard thereto.
14. TRADEMARK; INTELLECTUAL PROPERTY LICENSE
a. Nothing contained herein shall be deemed to grant either directly or by
implication, estoppel, or otherwise, any license under any patents,
copyrights, trademarks or trade secrets of Motorola.
b. In order that Motorola may protect its trademarks, trade names, corporate
slogans, corporatelogo, goodwill and product designations, Distributor,
without the express written consent of Motorola, shall have no right to
use any such marks, names, slogans or designations of Motorola in the
sales or advertising of any Products or on any product container,
component part, business form, sales advertising or promotional materials
or other business materials, whether in writing, orally or otherwise.
c. Motorola Grant of Consent to Use Motorola Trademarks in Promotional
Materials. Motorola grants to Distributor during the term of this
Agreement, in the Territory, its limited consent to use the Motorola
Trademarks in the advertising and promotion of its products and services,
provided that: (i) Distributor does not create a unitary composite xxxx
involving a Motorola Trademark or any other trademark of Motorola: and
(ii) all Promotional Materials shall display such symbols and notices
provided by Motorola indicating the trademark status and ownership of the
Motorola Trademarks. At a minimum all advertising and promotional
materials for Distributor's products and services shall state (in writing
or verbally as appropriate) "Phones by Motorola" or an equivalent phrase
approved by Motorola in its sole discretion. In no event shall Distributor
purposely alter, remove, obscure, erase or deface or otherwise hide from
view, any Motorola Trademark or proprietary rights notice of Motorola.
Distributor agrees and acknowledges that, other than the limited rights to
use the Motorola Trademarks granted herein, it shall have no right to use
the Motorola Trademarks, unless such right is granted in a separate
agreement between the parties.
d. Motorola Usage Guidelines. Distributor agrees to comply with any and all
usage guidelines promulgated by Motorola with respect to the Motorola
Trademarks, and Motorola reserves
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the right to modify such guidelines from time to time upon reasonable
notice to Distributor. Distributor shall supply, upon Motorola's written
request, specimens of all advertising, marketing and/or promotional
materials related to the Distributor's products and services for
inspection and approval, which approval shall not be unreasonably
withheld. If Motorola has not indicated its approval or rejection of such
specimens within ten (10) Business Days after receiving such specimens,
such specimens shall be deemed disapproved by Motorola.
15. TAXES AND FEES
Distributor shall pay all applicable fees, custom duties, assessments or
taxes which may be assessed or levied as a result of Distributor's
performance under this Agreement or against any of the Products ordered
hereunder by Distributor, or on any amount payable or any services
furnished under this Agreement, exclusive of personal property taxes
assessed on the Software and taxes based on Motorola net income.
16. LIMITATION OF LIABILITY
a. Motorola's total liability whether for breach of contract, warranty,
negligence, strict liability in tort or otherwise, is limited to the price
of the particular Products sold hereunder with respect to which losses or
damages are claimed. Distributor's sole remedy is to request Motorola at
Motorola's option to either refund the purchase price, repair ,or replace
Product(s) that are not as warranted. In no event will Motorola be liable
for any loss of use, loss of time, inconvenience, commercial loss, lost
profits or savings or other incidental, punitive, or consequential damages
to the full extent such may be disclaimed by law.
b. Distributor's total liability, whether for breach of contract, warranty,
negligence, strict liability in tort or otherwise, is limited to payment
of the purchase price for Products purchased from Motorola hereunder.
Motorola's sole remedy is to request that Distributor pay such purchase
price. In no event will Distributor be liable for any loss of use, loss of
time, inconvenience, commercial loss, lost profits or savings by other
incidental, punitive, or consequential damages to the full extent such may
be disclaimed by law.
17. FORCE MAJEURE
Neither party shall be held liable for any delay or failure to perform due
to any cause beyond its reasonable control except the obligation to pay
money when due. The delivery schedule shall be considered extended by a
period of time equal to the time lost because of any excusable delay.
18. WAIVER
The failure of either party to insist in any one or more instances, upon
the performance of any of the terms or conditions herein or to exercise
any right hereunder shall not be construed as a waiver or relinquishment
of the future performance of any such terms or conditions or the future
exercise of such right but the obligation of the other party with respect
to such future performance shall continue in full force and effect
19. TERMINATION
a. This Agreement may be terminated by either party without cause upon not
less than ninety (90) days notice to the other party.
b. Motorola may terminate this Agreement upon the occurrence of any of the
following events which are not cured by Distributor within the cure period
provided in Section 19c below: (i) a breach of one or more of the
following Sections: "Appointment As Distributor", "No Transshipment",
"Government Sales", "Compliance With Law", "Ethical Standards", or
"Confidentiality"; (ii) a change in the control or management of
Distributor which is
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unacceptable to Motorola; (iii) Distributor ceasing to function as a going
concern, declaring bankruptcy, having a receiver appointed, for it, or
otherwise taking advantage of any insolvency law; (iv) Distributor's
failure to cure a breach of this Agreement, other than a breach of the
Sections specified in this Section 19b, within thirty (30) days after
Motorola's notification to Distributor of such breach; or (v)
Distributor's failure to make a payment when due.
c. The notice provision of section 19a, notwithstanding, Motorola may, upon
the occurrence of an event of default as set forth in Section 19b above,
submit written notice to Distributor specifying such event and require
that Distributor develop a plan to cure or correct such default. Any such
plan shall provide for not less than thirty (30) days to implement such
plan and cure the event of default. At the end of such thirty (30) days
cure period. Motorola shall determine if such default has been remedied.
If Motorola determines in its reasonable discretion that such default has
not been cured within the thirty (30) day cure period, Motorola may, in
its sole discretion, terminate this Agreement at the expiration of the
thirty (30) day cure period.
c. Neither termination nor expiration of this Agreement shall relieve or
release either party from making payment which may be owing to the other
party under the terms of this Agreement.
d. Neither Motorola nor Distributor shall be liable by reason of termination,
expiration or non-renewal of this Agreement to the other for compensation,
reimbursement or damages on account of the loss of prospective profits on
anticipated sales or on account of expenditures, investments, leases or
commitments in connection with the business, or good will of Motorola or
Distributor or otherwise. Distributor represents to Motorola that, as of
the date of this Agreement. Distributor, had on hand a trained staff of
personnel, facilities, and equipment necessary to effectively distribute
the Products in the Territory and that Distributor has incurred no extra
expense in respect of the same upon entering into this Agreement.
e. Upon termination of this Agreement Distributor shall return to Motorola
all Product catalogues, sales literature, samples, demonstration equipment
or other promotional materials at Motorola's expense, if Motorola
terminated for reason other than Distributor's breach. Also, within one
(1) month after the date of termination of any license granted under this
Agreement, Distributor will certify to Motorola that through Distributor's
best efforts, and to the best of Distributor's knowledge, the Equipment,
Software and Documents received from Motorola have been returned, and that
all Software placed in any storage apparatus under Distributor's control
has been rendered unusable.
f. Upon termination of this Agreement Motorola shall have the option, but not
the obligation, to repurchase all or any part of the remaining inventory
of the Products remaining in Distributor's possession at the net price
paid to Motorola for such inventory, less Motorola's cost for repairing,
renewing or reconditioning such repurchased Products. Said option shall be
exercisable upon written notice to Distributor within thirty (30) days
following notice of termination of this Agreement. Upon exercise of said
option to repurchase, Motorola and Distributor shall at Motorola's option
take an inventory of all Products remaining in Distributor's possession.
Motorola shall pay Distributor for the inventory of repurchased Products
within fifteen (15) days after the date of receipt thereof by Motorola.
Either party shall have the right to offset against any money payable
hereunder by it, any money that is due and owing in respect of any
repurchase of inventory. The parties agree that if Motorola does not
exercise its option to repurchase any remaining inventory as set out
above, the parties will meet and mutually agree on a reasonable period for
Distributor to "sell off" any Motorola Products remaining in its
inventory. If this event occurs, then any and all provisions of this
Agreement which by their nature are an essential requirement of this
Agreement, will continue and remain in force for the time remaining for
Distributor to sell off its remaining inventory.
20. GOVERNMENT SALES
In the event that Distributor elects to sell Motorola Products or services
to the U.S.
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Government or any state, county, municipal or other governmental entity,
or to a prime contractor selling to any such governmental solely and
exclusively responsible for compliance with all statutes and regulations
governing such sales. Motorola makes no representations, certifications or
warranties whatsoever with respect to the ability of its goods, services
or prices to satisfy any such statutes or regulations.
21. DISPUTE RESOLUTION
The parties agree that any claims or disputes will be submitted to
non-binding mediation prior to initiation of any formal legal process.
Costs of mediation will be shared equally. Disputes concerning the
relationship between Motorola and Distributor shall be resolved in
accordance with the laws of the State of Illinois and any court actions
shall be filed in a state or federal court of competent jurisdiction in
the State of Illinois. Distributor hereby consents to exclusive
jurisdiction by such courts. Distributor waives personal service of any
process upon it and consents that all service of process shall be made by
registered mail to it at the address set forth in the introductory
paragraph of this Agreement.
22. COMPLIANCE WITH LAW
Each party shall at all times conduct its efforts hereunder in strict
accordance with all applicable laws and regulations and with the highest
commercial standards. Each party shall effect or secure and maintain at
its own cost all necessary governmental permits, licenses, approvals and
registrations required in connection with the execution or performance of
this Agreement. Each party shall indemnify xxx hold Motorola harmless for
any losses, damages or other liabilities resulting from Distributor's
failure to comply with the provisions of this Section.
23. ETHICAL STANDARDS
Motorola has historically depended on product quality and superiority,
combined with outstanding support capability, to sell its Products in all
parts of the world. Motorola believes it can continue to grow and to
prosper without succumbing to legally questionable or unethical demands.
Motorola will not do business with any distributor, agent, customer or any
other person where Motorola knows or suspects the existence of
questionable practices. Distributor agrees with the Motorola policy stated
in this Section and agrees that failure of Distributor or any other person
under its responsibility to comply in all respects with said policy shall
constitute just cause for immediate termination of this Agreement by
Motorola without any liability.
24. CONFIDENTIALITY
a. All terms of this Agreement including the existence of this Agreement
itself, and all Product pricing information delivered hereunder, is
confidential.
b. Either part shall treat as confidential all business or technical
information of the other party that either party learns in its
conversations with the other party or in performance of its
responsibilities hereunder. Such information is collectively referred to
as "Confidential Proprietary Information". The foregoing obligation of
confidentiality shall commence on the first date that either party
discloses to the other party Confidential Proprietary Information. Each
party shall protect the confidentiality of the other party's Confidential
Proprietary Information disclosed to it, using the same degree of care as
each party uses to protect its own confidential proprietary information of
like kind (but in no event less than reasonable care). Neither party shall
not use any Confidential proprietary Information, of the other except as
necessary for performance of its responsibilities hereunder.
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c. Both parties shall limit disclosure of Confidential Proprietary
Information to only those of its employees with a need to know for the
purposes authorized herein, and who have signed written agreements
containing provisions of confidentiality similar to those contained in
this Section.
d. Neither party shall disclose any Confidential Proprietary Information of
the other party to any third party without prior written consent of the
party whose information is subject to potential disclosure.
e. Excluded from the obligations of confidentiality in this Section is
information known or that becomes known to the general public without
breach of this Agreement by either party.
f. Upon termination of this Agreement, both parties shall return to the other
all copies of Confidential Proprietary Information in its possession or
certify to the other party in writing that all such copies have been
destroyed.
25. NOTICES
All notices required under this Agreement (other than purchase orders and
invoices) will be sent by fax, overnight courier or registered or
certified mail to the appropriate party at its address stated on the first
page of this Agreement (or to a new address if the other has been properly
notified of the change). If to Motorola, the notice should be addressed to
Xxxx XxXxxxx, Sales Vice President, with a copy to Xxxxxxx Xxxxxxxxx,
Director, Contracts. If to Distributor, the notice should be addressed to
Xxxxxx Xxxxxxxx, Vice President Operations. A notice will not be effective
until the addressee actually receives it.
26. BREW DEVICES
The Parties agree that the terms and conditions, in Attachment 6 shall
apply to the sale and distribution of Brew Devices [***].
27. [***]
a. [***]
b. [***]
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28. ACCESSORIES
The terms and conditions of this Agreement shall apply to the sale and
distribution of accessories as well as cellular phones unless otherwise
noted. Additional terms that apply only to the sale and distribution of
accessories are contained in Attachment 5. To the extent that there is or
may arise, any conflict or inconsistency between Attachment 5 and this
Agreement, then the terms and conditions of Attachment 5 shall govern for
purposes of sale and distribution of accessories only.
29. JOINT AND SEVERAL LIABILITY
Distributor and Brightstar Corp., shall be jointly and severally liable
for all obligations, (past present, and future), of the Distributor or
Brigtstar Corp. to Motorola and its affiliate arising under this
Agreement, or any other Agreement which Distributor or Brightstar Corp.
may enter into with Motorola or its affiliates.
30. CREDIT LINE
a. Motorola agrees to provide Distributor with a credit line that Motorola
determines is appropriate based upon standard credit industry criteria
that helps determine the credit worthiness of Master Services Distributor.
("Credit Line") The Credit Line represents the total available credit for
the Products for all Master Services Distributor's divisions, affiliates,
parent companies, and subsidiaries worldwide. The Credit Line will remain
available to Master Services Distributor as long as Master Services
Distributor's financial status remains acceptable to Motorola. Distributor
agrees to comply with all terms of any credit line extended by Motorola.
b. If Motorola determines that Distributor's orders and/or forecasts indicate
that the Credit Line will be exceeded during any given month, Motorola
may, at Motorola's sole option, (i) require that Distributor endorse, or
cause one or more of Distributor's subsidiaries to endorse, customer
receivables for Products to Motorola and/or one or more of its affiliates
(subject to Distributor and/or its subsidiaries, as the case may be,
obtaining any necessary prior approvals required under its financing
agreements), or (ii) pursue a fee for service model for selected accounts
and/or Products.
c. Motorola may, at Motorola's sole discretion, increase Master Services
Distributor Credit Line per Motorola credit risk standards, if and when
Master Services Distributor financial status changes to qualify for such
an increase.
d. If Motorola deems Distributor's financial condition or credit is
inadequate or unsatisfactory under standard credit industry criteria, then
in addition to Motorola's other rights, Motorola may take any of the
following actions without incurring further liability: (i) Cancel any
previously accepted purchase order for Products; (ii) Require Distributor
to pay cash with order, and/or (iii) delay any further shipment of
Products to Distributor.
31. GENERAL
a. No alterations or modifications of this Agreement shall be binding upon
either Distributor or Motorola unless made in writing and signed by an
authorized representative of each party.
b. If any term or condition of this Agreement shall to any extent be held by
a court or other tribunal to be invalid, void or unenforceable, then that
term or condition shall be inoperative and void insofar as it is in
conflict with law, but the remaining rights and obligations of the parties
shall be construed and enforced as if this Agreement did not contain the
particular term or condition held to be invalid, void or unenforceable.
c. No assignment of this Agreement or of any right granted herewith shall be
made by
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Distributor without the prior written consent of Motorola.
d. This Agreement and its attachments set forth the entire understanding
between the parties hereto and, except as expressly provided otherwise in
this Agreement, supersedes all prior agreements, arrangement and
communications, whether oral or written, with respect to the subject
matter hereof. Specifically, superceded and replaced by this Agreement,
solely to the extent they relate to the relationship Between Motorola and
Distributor, are the following: a) the Distribution Agreement between
Motorola Inc. and Brightstar Corp. deted June 1, 2000; b) The United
States Wireless Products Supply Agreement dated may 22, 2001 (subsequently
retitled Amendment Number One to the Distribution Agreement); c) The
Second Amendment to thee Distribution Agreement dated May 24, 2002; d) the
third Amendment between Brightstar US Inc., and Motorola, Inc. concerning
distribution of "BREW" devices. Notwithstanding the foregoing, this
Agreement does not, and is not intended by the parties hereto, to replace,
amend, modify or supercede any Agreement currently in place including,
without limitation, the above referenced agreements, to the extent they
relate to the relationship between Motorola and Brightstar Corp. and/or
its affiliates (other than Distributor), and any such agreements which may
be in effect shall continue in full force under its own terms. No other
agreements, representations, warranties or other matters, whether oral or
written, shall be deemed to bind the parties hereto with respect to the
subject matter hereof. Distributor acknowledges that it is entering into
this Agreement solely on the basis of the agreements and representations
contained herein.
IN WITNESS WHEREOF, the parties have caused this AGREEMENT to be executed
by their duly authorized representatives on the dates under their
signatures below.
"MOTOROLA" "DISTRIBUTOR"
MOTOROLA, INC., BRIGTSTAR US, INC.
By: /s/ Xxxx X. XxXxxxx By: /s/ Xxxxxx Xxxxxx
------------------- ----------------------
Name: Xxxx X. XxXxxxx Name: Xxxxxx Xxxxxx
Title: VP and GM Title: President & Coo
["OFFICIAL SEAL]
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ATTACHMENT 1-PRODUCTS
Subject to the terms and conditions of this Agreement, Distributor is authorized
to sell mutually agreed to Products in the Territory, which may change from time
to time.
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ATTACHMENT 2
BRIGHTSTAR'S ASSIGNED ACCOUNTS FOR SALE OF MOTOROLA HANDSETS
[***]
[***]
CARRIER
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BRIGHTSTAR'S ASSIGNED ACCOUNTS FOR SALE OF MOTOROLA ACCESSORIES
CARRIERS
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RETAIL ACCOUNTS
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ATTACHMENT 3
POOL ACCOUNTS
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ATTACHMENT 4
MOTOROLA LIMITED WARRANTY FOR PERSONAL COMMUNICATION PRODUCTS, ACCESSORIES AND
SOFTWARE PURCHASED IN THE UNITED STATES OR CANADA
WHAT DOES THIS WARRANTY COVER? Subject to the exclusions contained below,
Motorola, Inc. warrants its wireless telephones, pagers and consumer two-way
radios that operate via Family Radio Service or General Mobile Radio Service
("Products"), Motorola-branded or certified accessories sold for use with these
Products ("Accessories") and Motorola software contained on CD-Roms,or other
tangible media and sold for use with these Products ("Software") to be free from
defects in materials and workmanship under normal consumer usage for the
period(s) outlined below. This limited warranty is a consumer's exclusive
remedy, and applies as follows to new Motorola Products, Accessories and
Software
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purchased by consumers in the United States or Canada, which are accompanied by
this written warranty:
PRODUCTS LENGTH OF
COVERED COVERAGE EXCLUSIONS
----------------------------------------------------------------------------------------------------
A. PRODUCTS AND ACCESSORIES as A. ONE (1) YEAR from the date NORMAL WEAR AND TEAR. Periodic
defined above, unless of purchase by the first maintenance, repair and
otherwise provided for below. consumer purchaser of the replacement of parts due to
product unless otherwise normal wear and tear are
provided for below. excluded from coverage.
1. DECORATIVE ACCESSORIES AND 1. LIMITED LIFETIME WARRANTY BATTERIES. Only batteries
CASES. Decorative covers, for the lifetime of ownership whose fully charged capacity
charged capacity fully by the first consumer falls below 80% of their rated
bezels, PhoneWrap(TM) covers purchaser of the product. capacity and batteries that
and cases. leak are covered by this
limited warranty.
2. MONAURAL HEADSETS. Bar buds 2. LIMITED LIFETIME WARRANTY ABUSE & MISUSE. Defects or
and boom headsets that for the lifetime of ownership damage that result from (a)
transmit mono sound through a by me first consumer purchaser improper operation, storage,
wired connection. of the product. misuse or abuse, accident or
neglect, such as physical
3. NINETY (90) DAYS from the damage (cracks, scratches,
3. CONSUMER TWO-WAV RADIO date of purchase by the first etc.) to the surface of the
ACCESSORIES. consumer purchaser of the product resulting from misuse;
product. (b) contact with liquid,
water, rain, extreme humidity
4. THE BALANCE OF THE ORIGINAL or heavy perspiration, sand,
WARRANTY OR FOR NINETY (90) dirt or the like, extreme
4. PRODUCTS AND ACCESSORIES DAYS From the date returned to heat, or food; (c) use of the
THAT ARE REPAIRED OR REPLACED. the consumer, whichever is Products or Accessories for
longer. commercial purposes or
subjecting the Product or
Accessory to abnormal usage or
conditions; or (d) other acts
which are not the fault of
Motorola, are excluded from
coverage.
USE OF NON-MOTOROLA PRODUCTS
AND ACCESSORIES. Defects or
damage that result from me use
of Non-Motorola branded or
certified Products,
Accessories, Software or other
peripheral equipment are
excluded from coverage.
UNAUTHORIZED SERVICE OR
MODIFICATION. Defects or
damages resulting from
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service, testing, adjustment,
installation, maintenance,
alteration, or modification.
in any way by someone other
than Motorola, or its
authorized service centers,
are excluded from coverage.
ALTERED PRODUCTS. Products or
Accessories with (a) serial
numbers or date tags that have
been removed, altered or
obliterated; (b) broken seals
or that show evidence of
tampering; (c) mismatched
board serial numbers; or (d)
nonconforming or non-Motorola
housings, or parts, are
excluded form coverage.
COMMUNICATION SERVICES.
Defects, damages, or the
failure of Products,
Accessories or Software due to
any communication service or
signal you may subscribe to or
use with the Products
Accessories or Software is
excluded from coverage.
B. SOFTWARE. Applies only to B. NINETY (90) DAYS from the SOFTWARE EMBODIED IN PHYSICAL
physical detects in the media date of purchase. MEDIA. No warranty is made
that embodies the copy of the that the software will meet
software (e.g. CD-ROM, or your requirements or will work
floppy disk). in combination with any
hardware or software
applications provided by
third parties, that the
operation of the software
products will be uninterrupted
or error free, or that all
defects in the software
products will be corrected.
SOFTWARE NOT EMBODIED IN
PHYSICAL MEDIA. Software that
is not embodied in physical
media, (e.g. software that is
downloaded from the internet),
is provided "AS IS" AND
WITHOUT WARRANTY.
WHO IS COVERED? This warranty extends only to the first consumer purchaser, and
is not transferable.
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WHAT WILL MOTOROLA DO? Motorola, at its option, will at no charge repair,
replace or refund the purchase price of any Products, Accessories or Software
that does not conform to this warranty. We may use functionally equivalent
reconditioned/refurbished/pre-owned or new Products, Accessories or parts. No
data, software or applications added to your Product, Accessory or Software,
including but not limited to personal contacts, games and ringer tones, will be
reinstalled. To avoid losing such data, software and applications please create
a back up prior to requesting service.
HOW TO OBTAIN WARRANTY SERVICE OR OTHER INFORMATION? To obtain service or
information, please call:
USA PHONES 0-000-000-0000 CANADA ALL PRODUCTS 1-800-461-4575
PAGERS 0-000-000-0000 TTY 0-000-000-0000
TWO-WAY RADIOS 0-000-000-0000
TTY 0-000-000-0000
For ACCESSORIES AND SOFTWARE, please call the telephone number designated
above for the product with which they are used.
You will receive instructions on how to ship the Products, Accessories or
Software, at your expense, to a Motorola Authorized Repair Center. To obtain
service, you must include: (a) a copy of your receipt, xxxx of sale or other
comparable proof of purchase; (b) a written description of the problem; (c) the
name of your service provider, if applicable; (d) the name and location of the
installation facility (if applicable) and, most importantly; (e) your address
and telephone number.
WHAT OTHER LIMITATIONS ARE THERE? ANY IMPLIED WARRANTIES, INCLUDING WITHOUT
LIMITATION THE IMPLIED WARRANTIES OF MERCHANT ABILITY AND FITNESS FOR A
PARTICULAR PURPOSE, SHALL BE LIMITED TO THE DURATION OF THIS LIMITED WARRANTY,
OTHERWISE THE REPAIR REPLACEMENT, OR REFUND AS PROVIDED UNDER THIS EXPRESS
LIMITED WARRANTY IS THE EXCLUSIVE REMEDY OF THE CONSUMER, AND IS PROVIDED IN
LIEU OF ALL OTHER WARRANTIES, EXPRESS OF IMPLIED. IN NO EVENT SHALL MOTOROLA BE
LIABLE. WHETHER IN CONTRACT OR TORT (INCLUDING NEGLIGENCE) FOR DAMAGES IN EXCESS
OF THE PURCHASE PRICE OF THE PRODUCT, ACCESSORY OR SOFTWARE, OR FOR ANY
INDIRECT, INCIDENTAL SPECIAL OR CONSEQUIOTIAL DAMAGES OF ANY KIND. OR LOSS OR
REVENUE OR PROFITS, LOSS OF BUSINESS, LOSS OF INFORMATION OR DATA, SOFTWARE OR
APPLICATIONS OR OTHER FINANCIAL LOSS ARISING OUT OF OR IN CONNECTION WITH THE
ABILITY OR INABILITY TO USE THE PRODUCTS, ACCESSORIES OR SOFTWARE TO THE FULL
EXTENT THESE DAMAGES MAY BE DISCLAIMED BY LAW.
SOME STATES AND JURISDICTIONS DO NOT ALLOW THE LIMITATION OR EXCLUSION OF
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INCIDENTAL OR CONSEQUENTIAL DAMAGES, OR LIMITATION ON THE LENGTH OF AN IMPLIED
WARRANTY, SO THE ABOVE LIMITATIONS OR EXCLUSIONS MAY NOT APPLY TO YOU. THIS
WARRANTY GIVES YOU SPECIFIC LEGAL RIGHTS, AND YOU MAY ALSO HAVE OTHER RIGHTS
THAT VARY FROM STATE TO STATE OR FROM ONE JURISDICTION TO ANOTHER.
Laws in the United States and other countries preserve for Motorola certain
exclusive rights for copyrighted Motorola software such as the exclusive rights
to reproduce and distribute copies of the Motorola software. Motorola software
may only be copied into, used in, and redistributed with, the Products
associated with such Motorola software. No other use, including without
limitation disassembly of such Motorola software or exercise of the exclusive
rights reserved for Motorola, is permitted.
ATTACHMENT 5
ACCESSORIES
1. Sub-Sections l(e), l(f), and l(h) of Section 1 of me Agreement entitled
"APPOINTMENT AS DISTRIBUTOR" shall not apply to the sale and distribution of
accessories. The parties agree and acknowledge that Distributor's primary focus
for the sale of Motorola accessories shall be to sell to those markets and
distribution channels where Motorola has no direct sales presence. Consequently,
Distributor agrees that if it should sell any Motorola accessory to any carrier
customer that purchases cellular phones directly from Motorola, then such
accessory sale by Distributor shall not be counted towards any marketing fund,
accruals, and shall not be counted towards any of Distributor's minimum purchase
obligations.
MOTOROLA CONFIDENTIAL PROPRIETARY
II. The distributor is, by contract, obligated to:
1. Meet stated purchase minimums of Motorola accessories per quarter,
as listed below. These minimums are exclusive of all products
purchased by the carrier for the fulfillment of direct carrier-owned
retail stores and/or carrier fulfillment programs.
a. Bright Star... [***]
Failure to meet the purchase minimums in any quarter will result in
potential forfeiture, of any accrued marketing funds. Cumulative
results will also be considered with regard to contract status and
MDF.
2. Provide monthly sell through reports showing sales to all Carrier
Direct customers of Motorola Original Accessories.
3. Provide ongoing monthly, written forecasts 90 days in advance of
CRSD. Purchase orders placed-45 days in advance of CRSD can be
substituted for forecasts.
4. Upon request, Brightstar will share current inventory levels as part
of the CPFR Process.
5. Drive business into markets/channels where there is no Motorola
direct coverage (i,e. Carrier indirect stores, small and medium
sized retail outlets, regional master agents, web fulfillment,
Business-to-business sales, and Regional Carriers not mentioned in
Attachment B.)
6. Offer a value-added service between Motorola and the regional
carrier/retailer/agent/dealer (i.e. training, POS displays,
packaging, etc.)
7. Have a sales support person responsible for Motorola accessory sales
support at the distributor.
8. Utilize MDF dollars earned to develop programs by distributors or
jointly with Motorola. MDF is to be used for programs with
Agents/Dealer, RSA's and assigned accounts, and not carrier-direct
programs. MDF is designed to directly promotes the sales development
of Motorola Original Accessories. These programs are to be developed
by the
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distributor and pre-approved by Motorola CPAD (Consumer Products and
Accessory Division) in order to qualify for MDF reimbursement.
II. At the same time, the distributor is by contract, obligated NOT to engage in
the following activities, or risk losing their status as a direct Motorola
distributor.
1. Sell Motorola Original Accessories into other regions outside the
U.S. (Transship) without Motorola's consent which will not
unreasonably be withheld.
2. Purchase Motorola Original Accessories from any source other then
Motorola, provided the item(s) are available through Motorola. (Grey
Market)
III. Motorola offers the following support and incentive program:
Distributor can earn market development funds (excluding all
purchases for carrier direct fulfillment programs) according to the
following scale:
Annual Sales Target of [***]
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An additional potential [***] MDF, based on distributor's purchases (excluding
all carrier direct fulfillment program purchases) are available through
attainment of attachment rate targets by quarter as follows. Attachment rate is
defined as total accessory net dollar Motorola shipments to distributor
(excluding all shipments for carrier direct fulfillment programs) divided by
total net Motorola phone unites shipments from Motorola to distributor in the
same quarter.: Quarterly Attachment Rate
1. [***] per unit or higher......... [***] MDF
2. [***] per unit or higher......... [***] MDF
MDF is to be used by the distributor expressly for the sole purpose of promoting
Motorola Original Accessories within the non-carrier direct channels in their
markets these funds are accrued but not awarded without a claim form describing
the program/promotion/advertising that was run. All MDF eligible programs must
receive prior approval by Motorola. All distributions for MDF dollars must be
claimed within 90 days of the closing quarter (Q2 allocation must be claimed
before Q3 begins). Any unclaimed MDF dollars in the 90 days following the
accrual will be lost, but not before Motorola's accessory sales representative
contacts Brightstar to explain the earned MDF dollars and expiration timelines.
Each quarterly goal is independent of the prior quarter.
In addition to the MDF program detailed above, distributor is also eligible to
participate in the following programs:
1. Access to Motorola marketing programs, such as the NFL.
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2. [***] Non-Return Warranty Credit. In lieu of Distributor returning
defective product to Motorola for warranty reimbursement,
Distributor is to keep any and all defective product and will
receive a [***] trailing credit from Motorola to cover associated
costs of replacing customer's defective accessories. Distributor
understands that it may request the allocation of up to [***]
additional accessory MDF, and Motorola may decide, in its reasonable
discretion, to allow such allocation on a case by case basis.
3. Access to Motorola package support for custom packaging programs.
In addition, Motorola will hold a formal 90-day scorecard session with each
distributor to review contractual obligations and review distributor progress
against contractual minimum purchase targets, upcoming market development funds
and usage.
ATTACHMENT 6
WHEREAS, Distributor is aware that Motorola has a license from Qualcomm, Inc.
("Qualcomm") to integrate Binary Runtime Environment for Wireless ("BREW")
technology into certain Motorola CDMA wireless devices being offered to Verizon;
Wireless ("Verizon");
WHEREAS, Distributor as an authorized distributor of certain wireless products
desires to purchase BREW Devices for resale to certain Verizon or Verizon
authorized locations in the United States; and
WHEREAS, Motorola desires to sell such BREW Devices to Distributor;
NOW THEREFORE, the Parties hereto agree as follows:
1. Definitions.
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a. "BREW Device" means a complete end-user CDMA wireless device into
which Motorola has integrated the Qualcomm BREW technology. For
purposes of this Attachment, the term BREW Device is limited to the
T720 and V60e.
b. [***]
2. With respect to Distributor's purchase of BREW Devices, Distributor hereby
agrees to:
(1) only sell such BREW Devices to the Verizon or Verizon
authorized locations in the United States as described
in this Agreement;
(2) [***]
(3) [***]
3. [***]
4. Reports. Within 20 calendar days after the end of each quarter, Distributor
shall provide Motorola with a written report, ("Report") in the form to
be provided by Motorola that includes the number of BREW Devices shipped
to Verizon of Verizon authorized locations in the United States for each
month of the quarter. Motorola may make reasonable changes to the Report
from time to time.
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MOTOROLA CONFIDENTIAL PROPRIETARY
