EXHIBIT 10.1
THIRD PARTY LOGISTICS & PURCHASE AGREEMENT
THIS THIRD PARTY LOGISTICS AND PURCHASE AGREEMENT ("AGREEMENT") ENTERED INTO AS
OF NOVEMBER 3, 2008 BY AND BETWEEN BRINK'S HOME SECURITY, INC., LOCATED AT 0000
XXXXXX XXXXXXXXX, XXXXXX, XXXXX 00000 ("BHS") AND UNIVERSAL POWER GROUP, INC.,
LOCATED AT 0000 XXXXXX XXXXX, XXXXXXXXXX, XX 00000 ("UPG") BY WHICH UPG WILL
PROVIDE THIRD PARTY LOGISTICS SERVICES TO BHS INCLUDING, BUT NOT LIMITED TO,
ASSEMBLING, SHIPPING, STORING, PROCURING AND OTHER RELATED SERVICES. UPG WILL
ALSO COORDINATE BATTERY RECYCLING SERVICES PROVIDED TO BHS. THE FOLLOWING TERMS
AND CONDITIONS APPLY:
1. SERVICES, BATTERY AND TRANSFORMER PURCHASES AND WARRANTIES: (a) As
requested by BHS, UPG shall procure components for residential and/or
commercial alarm systems including tools and supplies necessary for
installation ("Alarm System Components") from manufacturers specified by
BHS, who have existing contracts with BHS. UPG shall also procure packing,
and other related materials, and shall store such Alarm System Components
and materials in UPG's distribution centers. UPG shall assemble kits of the
following components: control panel; battery; transformer; RJ block;
speaker; motion sensor (in certain cases); and instruction materials
("Kits"). Specific brands and models of components that should be included
in the Kits will be specified by BHS. UPG shall ship Kits to destinations
specified by BHS. If BHS changes the equipment, or the configuration of the
equipment, in the Kits and thus causes UPG's supply of existing packaging
(box and partitions) to be unusable, BHS shall reimburse UPG for the cost
of the unusable packaging that cannot be returned or reimbursed. UPG shall
also store, ship and procure other additional Alarm System Components, that
are not products included in Kits, from manufacturers specified by BHS, who
have existing contracts and pricing arrangements with BHS.
(b) BHS may also purchase from UPG batteries, transformers, and other Kit
components from manufacturers of UPG's choice that are produced to BHS
specifications.
(c) For batteries and transformers not included in a Kit, UPG warrants that
those products will be new and in conformance with the specifications
provided to and by BHS, and that its products will be free from material
and workmanship defects and other product warranties including, without
limitation, the warranties described in Exhibit A, attached hereto. Other
terms of purchase are also specified in Exhibit A.
(d) In consideration of BHS obligations under this Agreement, UPG will
coordinate battery recycling services to BHS for the duration of this
Agreement, in accordance with Exhibit B, attached hereto, at no additional
charge.
2. AUTHORITY. Except as expressly set forth in this Agreement, UPG shall have
no authority to enter into contracts, or other commitments, with other
persons, companies, corporations or entities on BHS behalf, and shall not
be permitted to represent or bind BHS in any way.
3. FEES. (a) For Kits shipped to BHS locations, BHS agrees to pay UPG as
specified in Exhibit C(a). Applicable sales tax, if any, shall be added to
invoices, unless BHS provides UPG a valid sales tax exemption certificate
applicable to purchases.
(b) BHS may periodically, at BHS option, request that UPG procure
additional Alarm System Components that BHS has sourced from the same or
additional manufacturers. In that event, UPG' shall be compensated as set
forth in Exhibit C(b).
(c) BHS has established an authorized dealer program that may require
authorized dealers to purchase approved Kits and Alarm System Components
from UPG. BHS authorized dealers are solely responsible for setting up an
account and credit terms with UPG. UPG agrees that warehousing and other
charges to BHS authorized dealers will not exceed the amounts as specified
in Exhibit C(c). BHS may, at its option, purchase equipment directly from
UPG for BHS authorized dealers. If BHS exercises this option, BHS will pay
UPG the amounts described in Exhibit C(h).
(d) In the event that BHS purchases products directly from a manufacturer,
and such products are shipped to UPG for handling and distribution, UPG may
charge BHS the shipping and handling fees described in Exhibit C(b). BHS
shall provide UPG with product cost information for this purpose.
(e) For items ordered by UPG and drop-shipped directly to a destination
specified by BHS (other than UPG's distribution centers), BHS shall pay UPG
the amounts for these items, as specified in Exhibit C(d).
(f) Immediately after UPG receives notification from a manufacturer of its
effective date of any price changes for Alarm System Components, UPG will
notify BHS of the manufacturer's price changes and the effective date. BHS
agrees to provide UPG with price change approvals prior to the effective
date of manufacturer's price change so that UPG may procure products
timely, if possible. UPG will charge BHS the new price thirty (30) days
after the manufacturer's effective date. UPG shall not procure products at
new prices without BHS approval and instructions.
(g) BHS may also purchase from UPG products that are manufactured by
manufacturers of UPG's choice and who have existing contracts with UPG.
Products will be packaged by UPG as a normal distribution product. BHS
shall pay UPG the amounts as specified in Exhibit C(e).
4. FREIGHT & FUEL SURCHARGES. BHS agrees to pay UPG an index-based fuel
surcharge that is adjusted quarterly. Changes to the fuel surcharge will be
effective immediately on the first Monday of each calendar quarter. UPG
will provide written notice to BHS two weeks prior to the effective date of
the fuel surcharge adjustment for approval. The surcharge will be
calculated as specified in Exhibit C(f).
5. PAYMENT. UPG shall provide weekly invoices to BHS. BHS shall pay UPG within
thirty (30) days from the receipt of UPG's invoice. Each UPG invoice will
separately list in detail the: actual cost to BHS for products obtained;
shipping charges; warehousing and other handling charges; and fuel
surcharges.
6. PURCHASE ORDERS. (a) BHS shall submit to UPG, at intervals of BHS choice,
requests for UPG to procure Alarm System Components and related materials
from manufacturers specified by BHS. UPG, as promptly as practical after
receipt of such requests, shall submit purchase orders to manufacturers for
materials specified by BHS and shall diligently expedite such purchase
orders (subject always to availability of product from the specified
manufacturer) with a view towards maintaining adequate inventory.
(b) For critical custom products not available from other sources (e.g.,
Honeywell Series 4000 control panels and motherboards, compatible Honeywell
keypads, receivers, fob kits, radios, telephone control modules, zone
expanders, and System Sensor model 2112ATL/2112ATLA smoke detectors), UPG
agrees to exercise additional diligence in maintaining adequate inventory.
7. SHIPMENTS. Within 24 hours after BHS places an order with UPG, UPG shall
ship Kits, Alarm System Components and related materials to BHS branch
office, dealer office or final user specified in BHS instructions within
the continental United States. If for any reason material orders do not
ship within 48 hours, backorders will be immediately reported to BHS. All
surface shipping and handling costs to any branch office, dealer or final
user in the continental United States shall be at UPG's sole expense;
however, if BHS requests shipment by air freight or to a destination
outside the 48 states, UPG shall prepay such air freight or other shipping
charge and BHS shall reimburse UPG for the actual charges incurred, less
the allowed freight portion already included in pricing. UPG shall endeavor
to assure that all Alarm System Components and related materials shipped by
UPG are delivered as promptly as possible in a reasonable amount of time so
as not to disrupt BHS operations. Any time UPG is scheduled to not ship
product for an entire day or more, such as when UPG performs periodic
physical inventory counts, a ten (10) day notice must be provided to BHS.
8. MANUFACTURERS' WARRANTIES. BHS shall be the beneficiary of all
manufacturers' warranties. UPG shall take such reasonable steps (excluding
institution of litigation) to enforce the terms of all manufacturers'
warranties with respect to the Alarm System Components and related
materials, including but not limited to, returning defective items for
repair or replacement. UPG, AS A PROVIDER OF WAREHOUSING AND SHIPPING
SERVICES AND AS A WHOLESALE DISTRIBUTOR, MAKES NO WARRANTIES OF ITS OWN,
EITHER EXPRESS OR IMPLIED, INCLUDING IMPLIED WARRANTIES OF MERCHANTABILITY
OR FITNESS FOR A PARTICULAR PURPOSE, OF THESE PRODUCTS NOT MANUFACTURED BY
UPG,
AND SHALL NOT BE LIABLE FOR SPECIAL OR CONSEQUENTIAL DAMAGES, PROVIDED UPG
DOES NOT COMMIT A NEGLIGENT OR WILLFUL ACT OR OMISSION RELATED THERETO. UPG
WILL EXTEND WARRANTIES ON ITEMS MANUFACTURED BY UPG AND UPG VENDORS PER
RESPECTIVE PRODUCT WARRANTIES.
9. TITLE AND RISK OF LOSS. Title and risk of loss to all Alarm System
Components, Kits and other products and related materials purchased,
stored, assembled, shipped and sold by UPG under this Agreement shall pass
upon to BHS upon delivery by carrier to BHS' branch office, dealer office
or the end user as instructed by BHS. It shall be UPG's responsibility to
file claims with the carrier provided that, if the carrier requires that
any claim be filed in BHS' name, BHS will provide UPG with the means to do
so.
10. RETURNS. In the event of a return authorized by BHS and subject to an
equipment or material return authorization issued by UPG, BHS shall pay UPG
for any restock charge imposed by the manufacturer of the product. UPG
shall provide BHS branches with credits upon receipt of credits from the
manufacturer. At UPG's discretion, UPG may provide authorized dealers with
immediate credit for returns of equipment or material to the manufacturer.
If reconciliation is required upon receipt by the manufacturer, UPG will
invoice BHS or the authorized dealer in full or for the difference, as the
case may be. If a return is made by BHS as a result of UPG's negligence,
BHS shall not be responsible for return postage or restocking fees.
11. EFFECTIVE DATE, TERM AND TERMINATION.
(a) This Agreement shall become effective as of the date written above, and
shall continue for an initial term of 24 months. At the end of the initial
term, this Agreement will renew for successive one year renewal terms,
unless cancelled in writing by either party without cause at least 120 days
before the end of the initial or any renewal term. This Agreement may be
terminated by BHS as specified in Exhibit C(g). This Agreement supersedes
any and all prior agreements between the parties.
(b) In the event that either party commits a Default under this Agreement,
the non-defaulting party shall give written notice of the Default to the
defaulting party. If the defaulting party does not cure such default within
seven business days, or if there is a subsequent Default of the same nature
within a 6-month period of each other, then the non-defaulting party shall
have the right to terminate this Agreement by giving thirty days' written
notice. With respect to UPG, the term "Default" means a failure to meet a
material shipping or warehousing obligation under this Agreement. With
respect to BHS, the term "Default" means a failure to meet a material
payment obligation under this Agreement. With respect to both parties, an
occurrence shall not be considered a Default if it is caused by an event or
condition beyond the party's reasonable control, including Acts of God, war
and terrorist attacks or threats. Provided, however, upon early
termination, BHS will purchase from UPG any and all remaining inventory
procured by UPG pursuant to this Agreement (including inventory in transit)
and pay any applicable cancellation fees of the manufacturer.
SIGNATURE PAGE
BRINK'S HOME SECURITY, INC.
By: /s/ XXXXXXX XXXXXX
------------------
Xxxxxxx Xxxxxx
Xx. VP and CFO
Date: November 3, 2008
UNIVERSAL POWER GROUP, INC.
By: /s/ XXXXX XXXXXX By: /s/ XXXX XXX
----------------------- ----------------------------------------
Xxxxx Xxxxxx Xxxx Xxx
President & CEO Sr. VP Business Development & Marketing
Date: October 31, 2008 Date: October 31, 2008
