68
EXHIBIT 10.3
Original Equipment Manufacturer
Volume Purchase Agreement
Agreement No. SHD-01-0499
This Agreement ("Agreement") is made and entered into as of
January 4th, 1999 ("Effective Date") by and between MOTOROLA, INC., a
Delaware Corporation, by and through its Paging Architecture Group
having a place of business at ▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇,
▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇ ("Motorola" or "Seller") and ELITE LOGISTICS
SERVICES, INC., a Texas Corporation, having its place of business at
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ ▇, ▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇ ("Buyer")
Motorola, Inc. and Buyer agree that the following terms and
conditions will govern the sale by Motorola to Buyer of the data
communications equipment covered by this Agreement. All schedules and
other appendices attached to this Agreement are incorporated in its
terms.
Section 1. Scope of the Agreement
1.1 In this Agreement, the words "you," "your" and "Buyer" each
mean (Buyer). The words "we," "us," "our," "Motorola" and "Seller"
each mean Motorola, Inc. The term "us" may also be used on occasion
to refer to Seller and Buyer collectively when it is clear from the
context that the term means the two parties together.
1.2 During the Term of this Agreement, we will sell to you the
equipment, options and other products listed on Schedule A to this
Agreement ("the Equipment") as you may purchase from time to time for
resale. You acknowledge that we offer other products and services,
and agree that the Equipment is limited to those products and
services listed on Schedule A.
1.3 The intent of this Agreement is to offer you a volume
discount on the Equipment you purchase from us. You represent that
you will incorporate the Equipment you purchase with hardware or
software of your own manufacture, assembly or design, which you will
then market in the regular course of your business and under your own
name to Buyers. In granting you any volume discounts, we are relying
on that representation, and you will forfeit those discounts if you
do not comply with it.
1.4 The discounts under this Agreement will apply only to the
Equipment, and you will not be entitled to any discount on any other
products or services unless we specifically agree in writing. Nothing
in this Agreement will preclude you from purchasing or licensing
similar products from other vendors or prevent us from selling or
licensing the Equipment and its related software to other Buyers.
69
1.5 This Agreement is not a contract for (or an order from you
to purchase) any Equipment, and we are not authorized to manufacture
a product for you until we receive a purchase order from you for it.
Purchase orders submitted under this Agreement must reference the
Agreement number on the front of this Agreement. But each of your
purchase orders and each of our acknowledgment forms will incorporate
the terms of this Agreement, whether or not this Agreement is
specifically mentioned. When ordering the Equipment, the only effect
of any term of your purchase order will be to provide us with the
following information: (a) the model number; (b) quantity; (c)
requested shipping date; (d) list of accessory items, if any, (e)
delivery instructions, including ship-to address; and (f) any other
special information required by this Agreement,
1.6 Each of your orders is an offer by you which will be subject
to our acceptance. All Equipment is subject to its availability, and
we reserve the right to reject any order if in our opinion we cannot
fulfill it. Neither Buyer or Seller will be bound by any order until
Seller accepts it, but at that time both of us will be bound and a
contract will exist under the terms of this Agreement. Once we have
accepted your order, you cannot cancel or reschedule it except under
the conditions expressly stated in this Agreement.
1.8 Your resale of the Equipment Will be for your own account
and at your own risk. You are solely responsible for the selection of
the Equipment, its ability to achieve the results you intend, its use
with your software, peripherals and integrated systems, and the
performance you and your Buyers obtain from using it Any technical
support for the Equipment, software, peripherals and integrated
systems which you sell or license will also be solely your
responsibility, unless both of us agree in writing otherwise.
1.9 You acknowledge that you cannot resell the Equipment, or
component parts thereof, as a stand alone product without our written
authorization, and must incorporate the Equipment in products of your
own design in no event shall the Equipment be used to manufacture
pagers or be sold to any third parties for manufacturing of pagers.
Section 2. Term
2.1 This Agreement will begin on the Effective Date listed above
and will terminate twenty-four (24) months following Motorola's Ship
Acceptance of the Equipment or thirty-six (36) months following the
Effective Date, whichever is later ("the Term") unless either of us
terminates the Agreement earlier under its provisions. At the
expiration of the Term, the Agreement will be renewed on Its
anniversary date for additional periods of one-year each, unless
either of us notifies the other that the Agreement will not be
renewed. Any purchase order for Equipment must be received and
accepted while the Agreement is actually in force.
70
Section 3. Equipment
3.1 To the extent we agree, you may market the Equipment under
your own product colors, logo and trade name (after removing any
Motorola name), or you may market Equipment which we have marked with
the Motorola name and 1000 for that product.
3.2 Before shipping any Item of Equipment to you, we will
perform our standard factory inspection and acceptance tests on the
unit. If you request, we will either certify that we have completed
those tests or else permit your representatives to witness them, but
their satisfactory completion will constitute your acceptance of the
item. Your acceptance of the product will not waive any of your
warranty rights under Section 11.
3.4 We do not represent that we will continue to manufacture any
particular item of Equipment indefinitely or for any specific period,
In Tact, we specifically reserve the fight to remove any product from
the market, and or to cease manufacturing or supporting it. Any
decision to discontinue the product will require written notification
six (5) months prior to the cancellation date and offer a "life time
buy" in any requested volumes to be delivered prior to the
cancellation date.
3.5 We also reserve the right to modify any of the
specifications or characteristics of our products. We will use
reasonable efforts to provide you with advance notification of
modifications, updates, new releases and improvements in
functionality and performance. If we modify a product so that we
adversely affect (a) its form, fit or function; or (b) its
integration, compatibility or ability to operate with other Equipment
we have sold to you, then you may cancel any undelivered order
affected by that modification.
3.6 You will assume any warranty obligations with your Buyers,
and you have no authority to obligate us in any way under that
warranty. In particular, we will not be liable for any claim from
anyone based upon any representations or warranties about the
Equipment which we have not made to you.
3.7 You will be responsible for installing the Equipment in
accordance with our manuals or other instructions.
3.8 We will not be responsible for safety or type approval for
the Equipment in any jurisdiction, other than the certifications we
have already obtained for it. But we will assist you In obtaining
those approvals by providing you with available documentation,
information and advice about the Equipment.
71
Section 4. Shipment and Risk of Loss
4.1 We will pack the equipment for shipment and storage to meet
commercial standards. Unless you provide us with special written
instructions regarding shipment, we will choose the method of
shipment and carrier to be used. We may make partial shipments to you
by line item and Invoice you for them unless specifically and clearly
noted otherwise on the purchase order.
4.2 We will use reasonable efforts to meet the shipment date you
request for each item, but we may delay the scheduled shipment date
if unforeseen problems prevent us from meeting it. We will notify you
promptly when any shipment will be delayed. If we are negligent In
failing to ship the Equipment to you within a reasonable time, you
will have the right to cancel the order (and/or terminate this
Agreement) without being liable to us for any Equipment except those
units we have already shipped to you. But we will not be liable to
you for any expenses or damages because of that delay.
4.3 You will have the right to make reasonable changes in
requested shipment dates if you notify us at least 30 days in advance
of the scheduled shipment date.
4.4 Title and risk of loss or damage Will pass to you, FOB our
shipping dock.
Transportation will then be at your risk, and any loss or damage
after our delivery to the carrier will be your responsibility and
will not relieve you of your payment obligations to us. All export
and import costs and duties are your responsibility.
Section 5. Prices
5.1 We will sell the Equipment to you at the prices specified on
our current price list on the date of your order during the initial
term of this agreement. Thereafter, we reserve the right to change
the price of any item effective 60 days after our written notice to
you of the change. It the price of an item Is reduced, the lower
price will apply to all your unshipped orders as soon as It becomes
effective. But a price increase will not apply to any order we have
accepted from you before the date of our notice if the scheduled
shipment date is less than 60 days from the date of the order.
Section 6. Purchase Discount
6.1 The Intent of this Agreement is to offer you a quantity
discount based upon the amount of Equipment you purchase from us
during the Term. It is contingent on your making an accurate forecast
by quarter of your anticipated purchases and your prompt payment for
all shipments we make to you. We will grant you the applicable
discount level stated on the discount schedule, provided that you
comply with all the terms of this Agreement.
72
6.2 At the beginning of the Term, you will submit to us a valid,
good-faith forecast of the total unit volume of Equipment you
anticipate buying from us during each three-month period of the Term.
That forecast will be summarized on Schedule A to this Agreement. We
will then establish from that Schedule an interim discount level for
billing during the Term ("the Interim Discount!). That level will be
based on the net dollar volume of products you anticipate buying from
us during the Term.
6.3 If at the end of each three months of the Term, you have not
purchased and taken delivery of the unit volume you had forecast,
then we shall have the right to revise your discount Level to reflect
the fact that you will purchase a substantially smaller volume of
Equipment during the Term. The adjustment will reflect the volume
level which we believe you ran realistically achieve for the Term. We
will notify you in writing of this adjustment, which shall become
effective Immediately and will then apply to all future orders as
well as any order to be shipped more than 30 days after the date of
the adjustment ("the Revised Discount").
6.4 If the total amount of Equipment which you purchase reaches
an amount entitling you under the Discount Schedule to a discount
level greater than the one we have used for your billing, then we
will use that higher discount level to ▇▇▇▇ you for the unshipped
balance of products you purchase from us for the remainder of the
Term.
Section 7. Taxes and Other Additional Charges
7.1 You Will pay all sales, use, excise taxes on the Equipment
(except those on our not income or net worth) unless you furnish us
with a valid resale or exemption certificate.
Section 8. Support Services, Parts and Documentation
8.1 From time to time at Your request, we will assist you in
training your employees in the use, operation, sale, service and
support of the Equipment. But those services are subject to their
availability at the time, and you will pay us our standard charges
for those services and reimburse reasonable travel expenses for our
employees where applicable.
8.2 At your request and subject to the availability of parts,
we will repair our-of-warranty Equipment for you at our standard
costs for such services.
Section 9 Product Warranty
9.1 We warrant that any Equipment sold to you under this
Agreement will conform to our then current published specifications
and will be free from defects in materials and workmanship under
normal use and service. This warranty is limited to a period of two
year from date of our shipment to you. Our sole obligation to you and
your exclusive remedy under this warranty is as follows:
73
a. We will repair or replace without charge any Equipment
unit found to be defective if you return it to us, freight
prepaid, to the factory or service center we designate.
b. This warranty does not apply to any unit which we
determine has been subjected by you or another party to (1)
operating or environmental conditions in excess of our written
specifications or recommendations; (2) damage, misuse or neglect
or (3) improper installation, repair or alteration.
9.2 Except as to title, this is our only warranty for the
Equipment. Motorola EXPRESSLY DISCLAIMS ALL OTHER WARRANTIES,G
UARANTEES OR REMEDIES --- WHETHER EXPRESS, IMPLIED, OR STATUTORY ---
INCLUDING ANY IMPLIED WARRANTY OF MERCHANTABILITY OR FITNESS FOR A
PARTICULAR PURPOSE. We also disclaim any implied warranty arising out
of trade usage or out of a course of dealing or course of
performance. We do not guarantee the integrity of data or warrant
that the Equipment will operate uninterrupted or error-free. And in
no event shall all our liability to you exceed the limitations
specified in Section 10.
Section 10. Limitation of Liability and Remedies
10.1 Your exclusive remedies concerning our performance or
nonperformance are those expressly stated in this Agreement. Under no
circumstances will we be liable for loss of data, re-procurement
costs, lost revenue or profits, or for any other special, incidental
or consequential damages, even if they were foreseeable or you have
informed us of their potential, Motorola will not be liable for any
damages claimed by you based upon any third-party claim.
10.2 Our total liability to you for damages under this Agreement
will not exceed the greater of $100,000 or the price you paid us for
the Equipment at issue in your claim. This limitation will apply
regardless of the form of action (i.e., whether the lawsuit Is in
contract or in tort, including negligence).
Section 11. Termination for Convenience
11.1 After the initial term of this agreement, either Seller or
Buyer may terminate this Agreement at any time for any reason by
giving at least 90 days prior written notice to the other . Neither
the expiration nor the earlier termination of this Agreement shall
release either party from any obligation which has accrued as of the
date of termination.
11.2 Except as expressly stated in this Agreement, neither of us
will be liable to the other for any damages or compensation due to
the termination of this Agreement. This waiver includes any possible
claims for the loss of present or future profits, for reimbursement
for any investments or expenditures made in connection with this
Agreement, or for any goodwill of a business. And this Agreement does
not entitle you to any mask, pattern, design, mold or other tooling
we may develop to produce the Equipment for you.
74
Section 12. Proprietary Information
12.1 During the course of our relationship under this Agreement,
each party may be given access to confidential or proprietary
information of the other. Seller and Buyer will each exercise due
diligence to maintain in confidence any such information disclosed by
one to the other, if the information is furnished on a confidential
basis and marked or identified as confidential or proprietary when
first disclosed ("Proprietary Information"). Our Proprietary
Information may Include the documents we supply you to aid in the
installation, operation, test Or maintenance of the Equipment. You
may include information about your hardware, software or marketing
strategy, which we may need to bid or supply Equipment to you. As
used here, the term "due diligence" means the same precaution and
standard of care which the receiving party uses to safeguard its own
proprietary information, but in no event less than reasonable care.
12.2 The receiving party may not reproduce, distribute or
disclose any Proprietary Information to others, or use it for any
commercial purpose outside this Agreement without first obtaining the
written permission of the party which furnished it. In particular,
Seller and Buyer will each ensure that all employees who are given
access to the Proprietary Information of the other will be required
to hold that information in confidence and to use it only in the
course of their employees business.
12.3 This section does not impose any obligation on either of us
if the information is: (1) publicly known at the time of disclosure;
(2) already known to the receiving party at the time; (3) furnished
by the disclosing party to others without restrictions on its use or
disclosure; or (4) independently developed by the receiving party
without use of the Proprietary Information. Unless we agree
otherwise, the obligations under this Section will expire five years
after the date of our last shipment to you under this Agreement.
12.4 This Agreement does not grant you any license under any
patents or other industrial property rights we may own, control. or
be licensed to use, except the right to buy, sell, and deal in the
Equipment we furnish you. In particular, you acknowledge that this
Agreement does not grant you any right to manufacture the Equipment
under any circumstances.
Section 13. Default
13.1 Neither Seller nor Buyer will be liable to the other for
any delay or failure to perform if that delay or failure results from
a cause beyond its reasonable control.
13.2 Either party will be considered to be in default if any of
the following occurs: (a) it assigns this Agreement or any of its
rights under this Agreement; (b) it fails to perform any material
obligation under this Agreement. Including the obligation to pay
amounts when due; (c) it makes an assignment for the benefit of its
creditors, or a receiver, trustee in bankruptcy or similar officer is
75
appointed to take charge of its assets; (d) it files for relief under
state or federal bankruptcy laws; or (e) there is a substantial
change in its ownership. In that event, the non-defaulting party may
terminate this Agreement if the other has failed to take corrective
action within 30 days after its receipt of a notice of default and
intent to terminate.
Section 14. Exports
14.1 Neither of us will commit any act or request the other to
commit any act which would violate any applicable export control
laws or regulations of the United States or other export control
laws, rules or regulations, and neither of us will fall to undertake
any action reasonably within our capacity to assure compliance with
such laws, rules or regulations.
Section 15. Use of Our Trademarks and Copyrighted Materials
15.1 You acknowledge that:
(a) we own all right, title and interest in the Motorola
name and logotype;
(b) Motorola is the owner of certain other trademarks and
trade names which are used by each company in connection with
certain product lines; and
(c) you will not acquire any interest in any of these
trademarks or trade names by virtue of this Agreement, your
activities under it, or any relationship you may have with
Motorola
15.2 During the terms of this Agreement you may indicate to the
public and the trade that you utilize OEM Equipment from Motorola.
With our prior written approval, you may also use the Motorola
trademarks and trade names to promote and solicit sales of the
Equipment and licensing of associated software if you strictly comply
with our instructions regarding that use. But you will not adopt or
use those trademarks or trade names --- or any confusingly similar
word or symbol --- as part of your company name or (to the extent
you have power to prevent such use) allow others to use such names or
marks.
15.3 At the expiration or termination of this Agreement, you
will immediately discontinue any use of the Motorola name and
trademark, as well as any other combination of words. designs,
trademarks or trade names that would indicate that you are or were
purchasing OEM Equipment from Motorola.
76
Section 16. Patent Indemnity
16.1 Motorola shall defend Buyer in any suit or proceeding and
hold Buyer harmless from any claims, demands, costs, damages,
charges, awards, or losses (including legal fees) arising from a suit
or proceeding brought against Buyer based on a claim that the
Products supplied by Motorola under this Agreement infringe any
patents, copyrights, or trade secrets, provided that Motorola is
notified promptly in writing and given authority. information and
assistance for the settlement or defense of the same, which, other
than for the assistance of Buyers employees, shall be at Motorola's
expense. In the event the Product or any part thereof is in such a
suit or proceeding held to constitute infringement and the use of
such Product or part thereof is enjoined, Motorola shall, at its own
expense and at its option, either (a) procedure for Buyer the right
to continue using said Product or part, (b) with the approval of
Buyer modify the same to become non-infringing, or (c) with the
approval of Buyer, substitute another interchangeable Product with
substantially the same performance but which is noninfringing.
16.2 The foregoing states the entire liability of Motorola for
patent Infringement as to the Products or any part thereof, and does
not extend to claims covering combinations of the said Products with
other devices or elements.
Section 17. Dispute Resolution
17.1 Except for claims based on patent or trademark
infringement, Seller and Buyer will attempt to settle any claim or
controversy arising out of It through consultation and negotiation in
good faith and a spirit of mutual cooperation. If those attempts
fail, then the dispute will be mediated by a mutually-acceptable
mediator to be chosen by Seller and Buyer within 45 days after
written notice by one of us demanding mediation. Neither of us may
unreasonably withhold consent to the selection of a mediator, and
Seller and Buyer will share the costs of the mediation equally.
17.2 Any dispute which we cannot resolve between us through
negotiation or mediation within six months of the date of the initial
demand by either of us may then be submitted to the courts within the
state of Illinois, USA, for resolution. The use of any alternative
dispute resolution procedure will not be construed under the
doctrines of laches, waiver or estoppel to affect adversely the
rights of either party. And nothing in this paragraph Will prevent
either party from resorting to judicial proceedings if (a) good faith
efforts to resolve the dispute under these procedures have been
unsuccessful or (b) interim relief from a court is necessary to
prevent serious and irreparable injury to one party or to others.
77
Section 18. Relationship of the Parties
18.1 Each of us will be deemed to be an independent contractor
and not an agent, joint venture, or representative of the other, and
neither of us may create any obligations or responsibilities on
behalf of or in the name of the other. Under no circumstances may you
hold yourself out to be a partner, employee, franchisee,
representative, servant or gent of Motorola. You also agree that
your will not make false ro misleading statements, claims or
representatives about Motorola, our products, or your relationship to
us.
Section 19. Assignment
19.1 Neither party may assign this Agreement or delegate its
performance under it without the prior written consent of the other.
You agree, however, that we may assign this entire Agreement to our
parent or other affiliate or sell, transfer or assign to a financing
institution our rights to receive payment from you.
Section 20. General
20.1 In the sale of your products, which incorporate our
Equipment, you agree to comply with applicable local regulations and
laws of the country in which it is sold.
20.2 In the event that you elect to sell MOTOROLA Equipment to
the U.S. Government, or to a prime contractor selling to the U.S.
Government, you do so solely at your own option and risk and you
agree not to obligate MOTOROLA as a subcontractor or otherwise to the
U.S. Government. The Buyer remains solely and exclusively responsible
for compliance with all statutes and regulations governing sales to
the U.S. Government. 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.
20.3 With respect to Equal Employment Opportunity/Affirmative
Action requirements, Motorola represents that it complies with the
following FAR clauses:
FAR clause Title
52.222-21 Certification on Non-segregate Facilities
52.272-22 Previous Contracts and Compliance Reports
52.222-25 Affirmative Action Compliance
52.222-26 Equal Opportunity
52.222-35 Affirmative Action For Special Disabled and
Vietnam Era Veterans
52.222-36 Affirmative Action for Handicapped Workers
52.222-37 Employment Reports On Special Disabled
Veterans Of The Vietnam Era
20.4 Motorola Products are not designed, intended or authorized
for use in life support systems or nuclear power plants.
78
20.3 Notices under this Agreement must be sent by facsimile,
express delivery or registered mail to the appropriate party at its
address stated on the first page of this Agreement (or to a now
address if the other has been properly notified of the change).
20.4 This Agreement, its performance and enforcement shall be
construed and governed by the substantive law, excluding its conflict
of laws rules, of the State of Illinois, United States of America.
20.5 This contract represents the entire agreement between us
regarding this subject and the Equipment we are to sell you under it.
It supersedes any terms or conditions contained on printed forms
submitted with purchase orders sales acknowledgments or invoices. It
also supersedes our catalog sales terms and conditions and all
previous oral or written communications between us regarding the
subject, and it may not be modified or waived except in writing and
signed by an officer or other authorized representative of each
party. If any provision is held invalid, all other provisions shall
remain valid, unless such invalidity would frustrate the purpose of
our agreement.
20.5 Finally, you acknowledge that you have read this Agreement,
understand it, and agree to be bound by its terms.
MOTOROLA, INC. BUYER
BY: /s/ ▇▇▇▇▇ ▇▇▇▇▇ BY: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Signature Signature
▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Print Name Print Name
VP & Dir Distribution President
Title Title
Exhibit A
Equipment Quantity Price Delivery
CreataLink2-XT 100,000
Contract Quarter
following Motorola Delivery Cumulative
Ship Acceptance Requirements Total
Q2 - 1999 200 200
Q3 - 1999 2,000 2,200
Q4 - 1999 6,000 8,200
Q1 - 2000 8,000 16,200
Q2 - 2000 12,000 28,200
Q3 - 2000 15,000 43,000
Q4 - 2000 24,000 67,200
Q1 - 2001 32,800 100,000
79
Exhibit B
OEM Volume Pricing
Quantity Amount
1 to 199
200 to 10,000
10,001 to 25,000
25,001 to 50,000
50,001 to 100,000
100,001 & above
Prices based on OEM commitments.
