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 10.1
AMENDED AND RESTATED DISTRIBUTION AGREEMENT
THIS AMENDED AND RESTATED DISTRIBUTION AGREEMENT (the "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 Xxxxxxxxxxxxx
Xxxxxxx, Xxxxxxx, XX 00000 (hereinafter "Motorola"), and BRIGHTSTAR CORP. a
corporation duly organized and existing under the laws of the State of Delaware,
having its principal place of business at 0000 X.X. 00xx Xxx., Xxxxx. XX 00000
(hereinafter "Master Services Distributor" or "MSD"), effective as of October 9,
2003 ("Effective Date").
WHEREAS, the parties hereto are party to that certain Distribution Agreement,
dated June 1, 2000 (the "Original Distribution Agreement");
WHEREAS, the parties desire and have determined it to be in their best interest
to amend and restate the Original Distribution Agreement, in its entirety, with
this Agreement;
NOW THEREFORE, in consideration of the foregoing and for other good and valuable
consideration, the sufficiency of which is hereby acknowledged, the parties
agree to amend and restate the Original Distribution Agreement as follows:
0. DEFINITIONS.
a. "Distributor Managed Account" means a customer account managed by
MSD where MSD deals directly with such customer account and MSD is
responsible for negotiating all key terms including pricing and
services.
b. "Motorola Managed Account" means a customer account supported by MSD
where Motorola deals directly with such customer account [***].
c. "Assigned Account" means an account where MSD is the designated
distributor responsible for the sale of Products and services.
d. "Jointly Serviced Account" means an account that is serviced by more
than one distributor for the sale of Products and services.
e. "Products" means cellular telephones manufactured by Motorola
f. "Purchasing Agent Agreement Accounts (PAAC)" means an account on
which MSD is authorized by customer to act as its purchasing agent.
1. APPOINTMENT AS MASTER SERVICES DISTRIBUTOR
a. Subject to the terms of this Agreement, Motorola hereby appoints
Distributor as a "Master Services Distributor," of Products and
Distributor hereby accepts the appointment, as an authorized
non-exclusive distributor of Motorola Products, as specified in
Attachment 1. Master Services 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 or destined for further distribution and use in
Mexico, Central America, South America, and the Caribbean, as
specified in Attachment 2 (hereinafter the "Territory"). Distributor
may not purchase Products from any company, person, or entity other
than Motorola, unless specifically authorized by Motorola in writing
to make such purchases. Motorola may, from time to time, at its sole
and absolute discretion (i) restrict the type of Products
Distributor is
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authorized to sell if such Products differentiate in such a way that
require a unique channel of distribution that is not being served by
MSD; or (ii) restrict the customers to whom Distributor is
authorized to sell Products, as provided in this Agreement and
subject to the provisions of attachment 5 Section 2a or (iii)
restrict the Territory, as provided in this Agreement and subject to
the provisions of attachment 5 Section 2a If notwithstanding the
restriction of Products MSD meets the criteria to distribute such
restricted Products, Motorola shall compensate MSD as provided in
Section 2b of the Attachment 5. In the event of Product restrictions
Motorola shall notify MSD with prior ninety (90) days notice.
b. Distributor acknowledges and agrees that Motorola reserves the right
to limit distribution of Motorola Products to distributors who
satisfy Motorola's qualification criteria for distribution of such
product lines. Master Services Distributor hereby consents to the
application of such criteria to its distribution of Products
purchased in connection with this Agreement. Master Services
Distributor shall incorporate this limitation into all of its
agreements for the resale of Products purchased hereunder.
c. 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, choose 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 and/or sell
the Products within the Territory. [***]
d. 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 at
Motorola's sole discretion. Motorola will notify Distributor in
writing of such restrictions from time to time and Distributor
agrees to limit its distribution of such models accordingly.
Distributor shall incorporate this limitation into all of its
agreements for the resale of Products purchased hereunder.
e. Distributor acknowledges and agrees that there will be certain
accounts that are reserved to Motorola, the Motorola Managed
Accounts, [***], pursuant to which Motorola
will deal directly with the customer [***].
2. TERM OF THIS AGREEMENT
The term of this Agreement shall commence on the Effective Date and shall
continue for a period of [***], unless terminated as permitted herein.
[***]. The number renewals notwithstanding, this Agreement shall always be
interpreted as a fixed term agreement and not as an indefinite term agreement.
3. PARTY RELATIONSHIP
It is agreed that Master Services 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 Master Services Distributor (or its employees, distributors, resellers
or agents) employees of Motorola,
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or agents with the power to bind Motorola contractually. Master Services
Distributor, its employees, distributors, resellers and agents shall have no
authority to bind, obligate or incur any liability on behalf of Motorola. This
Agreement does not create any agency, joint venture, partnership, or franchise
between Master Services Distributor and Motorola. Master Services Distributor
shall incorporate this Section 3 into all of Master Services Distributor's
agreements for agency or resale of Products purchased hereunder and Master
Services Distributor shall enforce this clause.
4. MASTER SERVICES DISTRIBUTOR RESPONSIBILITIES
In distributing Products, Master Services Distributor shall:
a. Sell, advertise, and promote the sale and use of Products throughout
the Territory.
b. MSD will maintain a greater-than [***] market share of quarterly Net
Sales After Discount of Distributor's sales of new Motorola handsets
in the Assigned Accounts in each of the following three regions: (1)
Mexico, (2) LAS (Argentina and Chile), (3) LAN (Venezuela; Central
America and Caribbean; Rest of South America - Bolivia, Colombia,
Ecuador, Paraguay, Peru, Uruguay). The [***] share shall be
calculated by region as follows:
(X-H-G-E)/(X-H-E)* 100%
Where:
[***]
x.x. If PAAC purchases are above [***] of the applicable region's
TAM, then Motorola reserves the right to reassign the PAAC customers
or customers within that region with the following options: (i) Give
MSD ninety (90) days notice or (ii) Immediate reasignment of the
PAAC account and buy back all of MSD inventory at MSD's cost for
that specific PAAC account;
MSD performance hereunder will not be contingent upon Motorola's
product mix. MSD will provide NSAD sales reports 15 days after the
end of each month. For Motorola NSAD sales such report must include
carrier, model, invoice price and a dollar value for X, H, G and E
as identified in Section 4bl. MSD will provide audited quarterly
reports thirty (30) days after the end of each quarter, certifying
the values above mentioned. Motorola will reimburse MSD for the
costs for the audit unless such audit cannot be completed for causes
attributable to MSD. The audit shall be conducted by an independent
auditor proposed by MSD and approved by Motorola.
c. Use best efforts to increase Motorola market share at those accounts
where Master Services Distributor is a purchasing Agent.
d. Maintain a sales organization, including on-site field
representatives, which in both parties determination is sufficient
to effectively promote and market the Products. Effectiveness will
be measured via top box feedback in customer satisfaction surveys
and other methods as determined by solely Motorola.
e. Maintain a technical support organization, which in both parties
determination is sufficient to effectively support the needs of the
Assigned Accounts.
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f. Purchase the Products from Motorola in the manner described in the
Section referred to as "Purchase of Products".
g. Furnish to Motorola information relating to orders, sales, service,
inventory levels, and Product sales forecasts in such manner as
Motorola may require. This includes providing all Distributor
Managed Account proposals to the local Account Manager prior to
providing it to the Distributor Managed Account.
h. Furnish Motorola, upon Motorola's request, detailed market analyses
and reports with respect to the Products in the Territory.
i. Keep accurate records of the identities, activities and contact
information of all sub-agents and sub-distributors for Motorola
products and disclose these records to Motorola, upon Motorola's
request.
j. Meet mutually agreed Net Sales After Discount for all Distributor
Managed Accounts.
k. MSD shall comply with the Collaborative Planning Forecasting and
Replenishment process ("CPFR") as defined by the Voluntary
Inter-Industry Commerce Standards Committee and agrees to maintain
sufficient Product inventory to fill Motorola Managed Accounts and
Distributor Managed Accounts in a timely manner.
l. In the event MSD fails to comply with this Section 4 of this
Agreement, the following shall apply: (i) when notified by Motorola
in writing of failure to comply, MSD shall submit to Motorola a
corrective action plan listing the measures to be undertaken by MSD
to remedy the noncompliance issues together with specific correction
measures to be reached. MSD shall submit such plan within thirty
days of Motorola's request for such plan; (ii) the corrective action
plan together with the specific correction measures to be reached by
MSD shall be subject to approval by Motorola. If within the agreed
period for the corrective action plan, MSD has not performed
according to the action plan, Motorola shall review the actions
taken by MSD to improve performance and will request MSD to
establish a revised corrective action plan for the following
quarter. If at the end of this second corrective action period,
Motorola deems the progress of Distributor to be unsatisfactory in
performance, Motorola reserves the right to terminate the Agreement
immediately and without liability.
5. CREDIT LINE
a. Motorola agrees to provide MSD 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. MSD agrees to
comply with all terms of any credit line extended by Motorola.
b. If Motorola determines that MSD'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 MSD
endorse, or cause one or more of MSD's subsidiaries to endorse,
customer receivables for Products to Motorola and/or one or more of
its affiliates (subject to MSD 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.
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d. If Motorola deems MSD'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
MSD to pay cash with order, and/or (iii) delay any further shipment
of Products to MSD.
6. PURCHASE OF PRODUCTS.
a. Under the terms and conditions of this Agreement, Master Services
Distributor agrees to purchase Products to be resold in the
Territory. Master Services 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 Master Services 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 Master Services Distributor's purchase orders shall
conform to Motorola's then current price list for Distributor
Managed Accounts, or deal prices negotiated by Motorola for Motorola
Managed Accounts, as specified in Section 9, Paragraphs a and b.
c. Motorola reserves the right in its sole discretion to accept or
reject any order for Products received from Master Services
Distributor without any further liability, including without
limitation for the failure of Master Services 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, whichever occurs
first. Motorola will have no obligation to confirm the validity of
any purchase order placed or the authority of the person placing the
purchase order.
d. Master Services Distributor shall provide Motorola on a monthly
basis, no less than [***] the start of the following month, a
continuous usage forecast for the following [***] (the 'Forecast")
for Distributor Managed Accounts to assist Motorola in maintaining
an orderly production flow for the purpose of Master Services
Distributor's delivery requirements. Master Services Distributor
shall indicate the Product model number and projected volume by
units for each month of the Forecast. Master Services 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 book the [***] of the
forecast in advance, and participate in the CPFR process. The
parties shall jointly develop CPFR standards and guidelines to
increase efficiencies in supply chain management, inventory
management, manufacturing capacity, materials reservation,
replenishment and sales forecasting.
e. Master Services Distributor shall submit firm purchase orders for
Products no less than [***] the requested shipment date, unless
otherwise agreed to by Motorola. Motorola agrees that Master
Services Distributor may adjust model quantities on any purchase
order no less than [***] shipment, as long as the total dollar
amount of the corresponding purchase order is not lower than the
original purchase order submitted. For Motorola Managed Accounts,
Master Services Distributor agrees to accept invoiced orders as
early as [***] customer requested ship date ("CRSD") or [***] CRSD,
without changes in terms and conditions. MSD has the right to cancel
a purchase order if Motorola fails to ship the Products after [***]
of the CRSD.
f. Master Services Distributor agrees to comply with any minimum
purchase amounts as required by Motorola. Motorola may modify these
amounts from time to time, at its sole discretion, by notifying
Master Services Distributor in writing. The minimum purchase amount
for cellular phones is [***] per lot, with the exception of [***]
orders into [***]. Master Services Distributor agrees that any
purchase orders submitted to comply with any minimum purchase
amounts shall be non-cancelable within [***] of ship scheduled date.
7. PAYMENT AND DELIVERY
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a. Unless otherwise approved in writing by Motorola, Master Services
Distributor must remit payment for Products within [***] of the date
of the invoice, in U.S. currency by wire transfer, to any of the
Motorola bank accounts listed below:
Bank One Citibank
One First National Plaza 000 Xxxx Xxxxxx
Xxxxxxx, XX 00000 Xxx Xxxx, XX 00000
Motorola Account Number [***] Motorola Account Number [***]
ABA [***] ABA [***]
With respect to Motorola Managed Accounts, Master Services
Distributor's payment terms shall be equal with the terms Motorola
has agreed with the Motorola Managed Account. Master Services
Distributor's payments for Motorola's Managed Accounts shall not be
contingent nor dependent in any way to (i) Master Services
Distributor's accounts receivable or (ii) late payment on the part
of the Motorola Managed Account.
b. Deliveries from [***] are [***] as defined in INCOTERMS 2000. All
other deliveries are [***] the designated manufacturing or
distribution facility from which Products are shipped, as defined in
INCOTERMS 2000. Title to the Products and risk of loss shall pass to
Master Services Distributor at the designated manufacturing or
distribution facility. All costs associated with shipment, freight,
and insurance of the Products while in transit, shall be the sole
responsibility of Master Services Distributor.
c. In the case MSD should fail to pay any non disputed invoices
Motorola will proceed as follows:
c.l. Motorola will immediately notify MSD and.
c.2. MSD shall respond in writing within 24 hours after such
notification is made regarding payment status.
c.3. MSD shall pay within 2 business days from original
notification as provided in c.1.
c.4. If MSD does not pay within 2 business days Motorola may:
(i) Place MSD on Credit Hold until payment is received
and/or
(ii) Delay any further shipment of products to MSD and/or
(iii) Cancel any previously accepted purchase order for
products and/or
(iv) Immediately terminate the Agreement.
c.5 In the event that the amount of any non-disputed unpaid invoice
or invoices (individually or in the aggregate) accepted by Motorola
exceed an amount which Motorola reasonably believes under standard
credit industry criteria would call into question MSD's
creditworthiness, Motorola may notify GE Capital and/or Ocean Bank
of an Event of Default as defined under Motorola's Intercreditor
Agreements with GE Capital and Ocean Bank, terminate this Agreement
and, subject to the Intercreditor Agreements, accelerate the
maturity of MSD's obligations to Motorola, repossess the unpaid
products and exercise any and all other rights and remedies to which
it is entitled under this Agreement or any other agreement with MSD,
or at law or in equity.
d. MSD shall immediately notify Motorola of a payment dispute. Motorola
has [***] to validate the dispute and in order for MSD to
discount the disputed invoices from the weekly payment, MSD shall
notify Motorola at least nine (9) days before the payment becomes
due.
In the case the dispute is not valid MSD shall pay in the day the
payment becomes due.
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In the case the dispute is valid Motorola and MSD will agree on an
action plan to resolve the dispute.
e. Subject to any agreements that exists between, Motorola and
Distributor, including, without limitation, that certain
Intercreditor Agreement by and among General Electric Capital
Corporation, Motorola, Brightstar U.S., Inc. and Brightstar Corp.
dated June 12, 2002, MSD grants to Motorola a security interest and
lien upon all of MSD's now existing or hereafter acquired inventory
of the products, and all of MSD's accounts, chattel paper,
instruments, contract rights, general intangibles, accounts
receivable and the proceeds thereof now existing or arising out of
MSD's sale or other disposition of the Products. MSD agrees to
cooperate in whatever manner requested by Motorola that is
reasonably necessary to assist in perfecting and recording such
security interest and lien.
8. INVENTORY REPORTING
Master Services Distributor shall furnish Motorola with accurate weekly reports
of Master Services Distributor's inventory and monthly sell-through of Products,
by model, and the identities of customers to whom Master Services Distributor
sold the Products. In addition, Master Service Distributor shall furnish
Motorola with accurate reports of Master Services Distributor's subsidiaries
inventory. Distributor will deliver such weekly and monthly reports on the dates
as provided in Attachment 7. Motorola and Master Services Distributor will meet
on a regular basis to review Master Services Distributor's inventory of
Products, including any Products that may be overstocked or slow moving, and
Master Services Distributor's marketing and sales plan to move such products.
9. PRICE PROTECTION
a. During the term of this Agreement for Products intended for sale to
Motorola Managed Accounts, if Motorola reduces the price of a
particular model of Product, then Motorola will [***] communicate
the price changes to MSD within [***] of Motorola's approval of the
new pricing to the account [***].
b. During the term of this Agreement, for Products intended for sale to
Distributor Managed Accounts, if Motorola reduces the price of a
particular model of Product , then Motorola will credit Master
Services Distributor's account an amount equal to [***].
c. Motorola will audit Master Services Distributor, for purposes of
verifying inventory levels that may be subject to price protection.
Such audits shall occur during regular business hours as follows:
(i) For Motorola Managed Accounts such audit will occur within 48
hours of the new price effective date and; (ii) for the Distributor
Managed Accounts such audit shall occur as provided in Attachment 7.
d. Motorola will release the MSD Price List for Distributor Managed
Accounts on the Monday [***], as identified in Attachment 7.
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10. PRIVATE LABEL RESTRICTION
Master Services Distributor understands that Motorola will be investing a
tremendous amount of time, resources, money and know how in MSD in helping it to
grow its business. Accordingly, MSD agrees to limit itself, and its subsidiaries
and affiliates to distributing third-party manufactured products in the
Territory and any other territory in which MSD, its subsidiaries or affiliates
is a distributor of Motorola handsets. In the event, MSD, its subsidiaries or
affiliates elects to develop a competitive product to the Products and/or
distribute any competitive product to the Products that is labeled or branded by
MSD, outside the Territory or any territory in which MSD or its subsidiaries or
affiliates distributes Motorola handsets, during the term of this Agreement or
any renewal term, Motorola reserves the right to terminate the Agreement.
11. NO TRANSSHIPMENT
a. Master Services Distributor agrees to limit its distribution of the
Products purchased hereunder to direct sale by Master Services
Distributor destined to customers located in the Territory.
b. Master Services Distributor may not transship, sell or otherwise
transfer Products purchased hereunder outside the Territory. Master
Services Distributor shall incorporate this limitation into all of
its agreements for the resale of Products purchased hereunder and
Master Services Distributor shall enforce this restriction.
b. Sales within the Territory without transshipment is a material
condition to Master Services Distributor's rights under this
Agreement, and the parties agree that any direct transfer,
transshipment and/or sale of Products outside the Territory by
Master Services Distributor shall be a material breach of this
Agreement and will result in substantial damage to Motorola which
will be difficult to quantify. Accordingly, the parties agree that
for every Motorola cellular telephone with an electronic serial
number traceable to purchases by Master Services Distributor will be
subject, at Motorola's discretion, to pay Motorola as liquidated
damages [***]. Furthermore, in the event of any direct transshipment
Motorola may immediately terminate this Agreement for cause, or
Motorola may reject some or all purchase orders from Master Services
Distributor, and/or Motorola may cancel some or all purchase orders
previously accepted, until Master Services 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.
c. Any indirect transfer, transshipment and/or sale of Products outside
of the Territory by others purchasing through MSD will result in
MSD's obligation to immediately terminate the commercial
relationship in connection with the Products between MSD and the
other party involved in such transaction. If indirect transshipment
reoccurs with the same MSD customer, then Motorola has the right to
immediately terminate this Agreement with no liability.
12. WARRANTY
Motorola warrants each Product only to the original end-user purchasers and/or
licensees, under the limited hardware and/or software warranty (as applicable)
that Motorola ships with such Product MOTOROLA MAKES NO REPRESENTATION OR OTHER
WARRANTY OF ANY OTHER KIND, EXPRESS OR IMPLIED. MOTOROLA SPECIFICALLY DISCLAIMS
ANY IMPLIED WARRANTIES OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE.
Master Services Distributor agrees to extend these warranties to its end-user
customers (directly or through agents, distributors or resellers) and to
indemnify, defend and hold Motorola harmless from claims and actions arising
from Master Services Distributor's business or distribution of the Products not
covered by Motorola's warranties. If any Product is defective at time of
delivery to Master Services Distributor, Master Services Distributor's sole
remedy shall be to return the Product to Motorola for replacement or repair, as
determined solely by Motorola, EXCEPT for Products that, in Motorola's sole
discretion, require reprogramming or
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reflashing. If such replacement or repair is not performed within the [***] by
Motorola, Motorola MSD shall return the product for credit in [***]. MSD agrees
to reprogram and/or reflash such Products that, in Motorola's sole discretion,
require reprogramming or reflashing due to warranty defect. Such reprogramming
or reflashing at Motorola's request will be paid [***] at standard third-party
service rates.
13. PATENT AND COPYRIGHT INDEMNIFICATION
a. Motorola agrees to defend, indemnify, and hold harmless MSD, its
affiliates, and their respective officers, directors, employees,
agents, and other representatives from and against any third party
judgments, losses, damages, liabilities, costs or expenses
(including, but not limited to, reasonable attorneys' fees and legal
expenses) against Master Services Distributor based upon a claim
that any Product furnished hereunder by Motorola directly infringes
a valid patent or copyright in the Territory, and to pay costs and
damages finally awarded based upon such claim in any such suit,
provided that Motorola is: (i) promptly notified by Master Services
Distributor in writing as soon as reasonably practicable after
Master Services Distributor first becomes aware of the claim of
infringement or misappropriation, but in no event later than fifteen
(15) days from the date on which Master Services Distributor first
received notice of such claim; 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 Motorola's written consent. If the use or
sale of any Product furnished under this Agreement is enjoined as a
result of such suit, Motorola at its sole option and at no expense
to Master Services Distributor, will: (i) obtain for Master Services
Distributor the right to use or sell such Products; (ii) substitute
an equivalent product reasonably acceptable to Master Services
Distributor and extend this indemnity thereto, or; (iii) accept the
return of the Products and reimburse Master Services 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 this Agreement.
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 Master Services
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; or (iii) designed
and/or manufactured in accordance with Master Services Distributor's
designs, specifications, or instructions. In no event shall
Motorola's liability resulting from its indemnity obligation to
Master Services Distributor extend in any way to royalties payable
based on a per use basis, or subscriber revenues derived by Master
Services Distributor there from, or any royalty basis.
The indemnity provided in this section is the sole, exclusive, and
entire liability of Motorola and the remedies provided in this
section shall be Master Services Distributor's exclusive remedies
against Motorola for patent or copyright infringement, 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. NOTWITHSTANDING THE ABOVE INDEMNITY, IN NO EVENT SHALL MOTOROLA BE
LIABLE FOR INCIDENTAL OR CONSEQUENTIAL DAMAGES ARISING FROM
INFRINGEMENT OR ALLEGED INFRINGEMENT OF PATENTS, TRADEMARKS OR
COPYRIGHTS.
14. PRODUCTS LIABILITY INDEMNIFICATION
Motorola agrees to defend, indemnify, defend, and hold harmless,
MSD, its affiliates, and their respective officers, directors,
employees, agents, and other representatives from and against any
third party judgments, losses, damages, liabilities, costs or
expenses (including, but not limited to, reasonable attorneys' fees
and legal expenses) against MSD, which are based upon a claim by a
third party, that a material defect in any Products famished
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 suit; provided that Motorola is: (i) notified by MSD in
writing within 15 days of the date on which MSD first received
notice of the claim (provided that MSD's failure to timely notify
Motorola of any such claim shall not excuse Motorola from its
obligation to
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indemnify MDS 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.
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 MSD or any third party without the express
written consent of Motorola or without using the software provided
by Motorola for programming; (ii) combined with any other products
or elements. not furnished by Motorola, or (iii) designed and/or
manufactured in accordance with MSD's designs, specifications, or
instructions. 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 MSD'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.
15. MASTER SERVICES DISTRIBUTOR INDEMNITY
Master Services Distributor, at its own expense, shall indemnify, defend, and
hold harmless, Motorola, its affiliates, and their respective officers,
directors, employees, agents, and other representatives from and against any
third party judgments, losses, damages, liabilities, costs or expenses
(including, but not limited to, reasonable attorneys' fees and legal expenses)
associated with or arising from: (i) Master Services Distributor's breach of
section 3, 11, 12, 15, 16, 17, 21, 24, 25 or 30; (ii) any claim or action
relating to Master Services Distributor's business operations, activities,
employees or employee actions.
16. DISCLAIMER OF 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, corporate logo, goodwill and product
designations, Master Services 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.
17. TAXES AND FEES
Master Services Distributor shall pay all applicable fees, custom duties,
assessments or taxes which may be assessed or levied as a result of Master
Services Distributor's performance under this Agreement or against any of the
Products ordered hereunder by Master Services Distributor, on any software or
its license or use, or on any amount payable or any services furnished under
this Agreement, exclusive of personal property taxes assessed on software and
taxes based on Motorola net income.
18. LIMITATION OF LIABILITY
(1) LIMITATION OF LIABILITY. EXCEPT FOR PERSONAL INJURY, MOTOROLA'S
TOTAL LIABILITY ARISING OUT OF OR RELATED TO THIS AGREEMENT
WHETHER FOR BREACH OF CONTRACT, WARRANTY, MOTOROLA'S NEGLIGENCE,
STRICT LIABILITY IN TORT OR OTHERWISE, IS LIMITED TO THE PRICE OF
THE PARTICULAR PRODUCTS SOLD
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HEREUNDER WITH RESPECT TO WHICH LOSSES OR DAMAGES ARE CLAIMED.
MASTER SERVICES DISTRIBUTOR'S SOLE REMEDY IS TO REQUEST MOTOROLA AT
MOTOROLA'S OPTION TO EITHER REFUND THE PURCHASE PRICE, OR REPAIR OR
REPLACE PRODUCTS THAT ARE NOT AS WARRANTED. IN NO EVENT, WHETHER FOR
BREACH OF CONTRACT, WARRANTY, MOTOROLA'S NEGLIGENCE, STRICT
LIABILITY IN TORT, OR OTHERWISE, WILL MOTOROLA BE LIABLE FOR
INCIDENTAL, SPECIAL OR CONSEQUENTIAL DAMAGES, INCLUDING, BUT NOT
LIMITED TO, FRUSTRATION OF ECONOMIC OR BUSINESS EXPECTATIONS, LOSS
OF PROFITS, LOSS OF DATA, COST OF CAPITAL, COST OF SUBSTITUTE
PRODUCT(S), FACILITIES OR SERVICES, DOWNTIME COST OR ANY CLAIM
AGAINST MASTER SERVICES DISTRIBUTOR BY ANY OTHER PARTY.
(2) INSURANCE. It is further understood that Motorola is not an insurer
and that Master Services Distributor shall obtain all insurance;
required by this Agreement and that Motorola does not represent or
warrant that Motorola products will avert or prevent occurrences, or
the consequences therefrom, which are monitored, detected or
controlled with use of the products.
(3) TIME TO XXX. Except for money due upon an open account, no action
shall be brought either party for any breach of this Agreement more
than two (2) years after the non-breaching party knew or should have
known of such cause of action except where a shorter limitation
period is provided by applicable law.
(4) NO REPRESENTATIONS. The issuance of information, advice, approvals,
instructions or cost projections by either party's sales personnel
or other representatives shall be deemed expressions of personal
opinion only and shall not affect Motorola's and Master Services
Distributor's rights and obligations hereunder unless the same is in
writing and signed by the other party with the explicit statement
that it constitutes an amendment to this Agreement.
19. FORCE MAJEURE
Neither party shall be held liable for any delay or failure to perform due to
any cause beyond its reasonable control such as acts of God, acts of civil or
military authority, epidemics, fires, floods, war or riots, lockouts or other
labor disputes, except the obligation to pay money when due. The party so
affected shall, upon giving prompt written notice to the other party of the
delay and the cause, be excused from performance to the extent of the
prevention, restriction or interference. The delivery schedule shall be
considered extended by a period of time equal to the time lost because of any
excusable delay.
20. 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.
21. TERMINATION
a. During the initial term, this Agreement may be terminated by either
party without cause upon not less than one hundred eighty (180) days
prior written notice to Master Services Distributor. Thereafter,
this Agreement may be terminated by either party without-cause upon
one hundred eighty (180) days prior written notice to the other
party, however, if either party defaults on any obligation herein
during the notice period, the non-defaulting party may terminate
immediately this Agreement for cause upon written notice to the
defaulting party.
b. Motorola may terminate this Agreement immediately upon the
occurrence of any of the following events: (i) a breach of one or
more of the following Sections: "Appointment As Master Services
Distributor", "Credit Line", "Government Sales", "Compliance With
Law", "Ethical Standards", or "Confidentiality"; "Private Label
Restriction" (ii) a change in the control or management of Master
Services Distributor
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which is unacceptable to Motorola (iii) Master Services 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) Except as otherwise provided in this Agreement,
Master Services Distributor's failure to cure a breach of this
Agreement within [***] after Motorola's written notification to
Master Services Distributor of such breach; or (v) Master Services
Distributor's failure to make a payment to Motorola when due, as
provided in Section 7 of this Agreement.
c. Except as provided in this Agreement, neither termination nor
expiration of this Agreement shall relieve or release either party
from making payment that may be owing to the other party under the
terms of this Agreement.
d. Except as provided in this Agreement, neither Motorola nor Master
Services 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 Master Services
Distributor or otherwise. Master Services Distributor represents to
Motorola that, as of the date of this Agreement, Master Services
Distributor had on hand a trained staff of personnel, facilities,
and equipment necessary to effectively distribute the Products in
the Territory and that Master Services Distributor has incurred no
extra expense in respect of the same upon entering into this
Agreement.
e. Upon termination of this Agreement, Master Services Distributor
shall return to Motorola all Product catalogues, sales literature,
samples, demonstration equipment or other promotional materials.
Also, within one (1) month after the date of termination of any
license granted under this Agreement, Master Services Distributor
will certify to Motorola that through Master Services Distributor's
best efforts, and to the best of Master Services Distributor's
knowledge, the equipment, software and documents received from
Motorola have been returned, and that all software placed in any
storage apparatus under Master Services 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 Master Services
Distributor's possession [***]. Said option shall be exercisable
upon written notice to Master Services Distributor within [***]
following notice of termination of this Agreement. Upon exercise of
said option to repurchase. Motorola and Master Services Distributor
shall at Motorola's option take an inventory of all Products
remaining in Master Services Distributor's possession. Motorola
shall pay Master Services Distributor for the inventory of
repurchased Products within [***] of receipt thereof by Motorola.
g. Motorola shall have the right to offset against any money payable
hereunder by Motorola, any money that is due and owing from Master
Services Distributor to Motorola as of the date any such payment is
due.
22. GOVERNMENT SALES
In the event that Master Services Distributor elects to sell Motorola Products
or services to any state, county, municipal or other governmental entity, or to
a prime contractor selling to any such governmental entity within the Territory.
Master Services Distributor remains 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.
23. DISPUTE RESOLUTION
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The parties agree that any claims or disputes will be submitted to non-binding
mediation prior to initiation of any formal legal process provided however, this
provision shall not preclude either Party from resorting to judicial proceedings
if (i) the claim or dispute relates to intellectual property rights; or (ii)
equitable relief from a court is necessary to prevent serious and irreparable
injury to the complaining party or to third parties.. Costs of mediation will be
shared equally. Disputes concerning the relationship between Motorola and Master
Services 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. Master Services Distributor
hereby consents to exclusive jurisdiction by such courts. Master Services
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.
24. COMPLIANCE WITH LAW
Master Services Distributor shall at all times conduct its efforts hereunder in
strict accordance with all applicable laws and regulations and with the highest
commercial standards. Master Services Distributor 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. Master Services Distributor shall indemnify and hold Motorola
harmless for any losses, damages or other liabilities resulting from Master
Services Distributor's failure to comply with the provisions of this Section.
25. 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. Master
Services Distributor agrees with the Motorola policy stated in this Section and
agrees that failure of Master Services 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.
26. NON-SOLICITATION
Both Parties expressly agree that they will not hire any of the other's
employees or temporary workers during the term of this Agreement and for one (1)
year afterward without the other party's written consent. Notwithstanding the
foregoing, neither party shall be precluded from conducting generalized searches
for employees (and hiring those employees who respond to generalized searches)
either through the use of search firms or advertisements in the media, provided
that searches are not specifically targeted to employees of the other party.
27. 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 party 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 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 in writing that all such copies
have been destroyed.
28. 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 Xxxxxx Xxxxxxxxx, with a copy
to Xxxxxxxx Xxxxx - both at Motorola Inc., 000 Xxxxxxxxxxxxx Xxxxxxx, Xxxxxxx,
XX 00000 - and the Motorola Law Department, Mail Drop AW-438, 000 X.X.X.
Xxxxxxx 00, Xxxxxxxxxxxx, XX 00000.
If to MSD, the notice should be addressed to R. Xxxxxxx Xxxxxx, with a copy to
Xxxxxxx X. Xxxxxx, Esq. Xxxxxxxxxxx & Xxxxxxxx LLP, 000 xxxxx Xxxxxxxx
Xxxxxxxxx, xxxxx 0000, Xxxxx, Xxxxxxx 33131.]
A notice will not be effective until the addressee actually receives it.
29. BREW DEVICES
The Parties agree that the terms and conditions in Attachment 3 shall apply to
the sale and distribution of Brew Devices [***].
30. EXPORT CONTROL
Master Services Distributor shall be the exporter of record and shall be
responsible for obtaining all export licenses that may be required to export the
Products from the U.S. to the Territory. Master Services Distributor agrees to
comply with all applicable export laws, regulations and orders. Specifically,
but without limitation, Master Services Distributor agrees that it will not
resell, re-export or ship, directly or indirectly, any Product or technical data
in any form without obtaining appropriate export or re-export licenses from the
United States Government. Master Services Distributor acknowledges that the
applicable export laws, regulations and orders may differ from item to item
and/or from time to time.
31 TRADEMARKS; PROMOTIONAL MATERIALS
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, corporate logo, goodwill and product
designations, MSD shall have no right to use any such marks, names,
slogans or designations of Motorola in the sale or advertising of
any Products or on any Product container, component part, business
form, sign, business cards, sales, advertising or promotional
materials or other business materials, whether in writing, orally or
otherwise, without the express written consent of Motorola. Further,
MSD
MOTOROLA CONFIDENTIAL PROPRIETARY
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shall not use "Motorola" or any other trademark of Motorola as all
or part of the name under which it is organized or conducts
business, nor as all or part of a domain name.
c. Motorola Grant of Consent to Use Motorola Trademarks in Promotional
Materials. Motorola grants to MSD during the term of this Agreement,
in the Territory, its limited consent to use the Motorola Trademarks
(as set forth on Attachment 6) in the advertising and promotion of
Motorola's products and services, provided that: (i) MSD does not
create a unitary composite xxxx involving a Motorola Trademark or
any other trademark of Motorola; (ii) all Promotional Materials
display such symbols and notices provided by Motorola to indicate
the trademark status and ownership of the Motorola Trademarks; and
(iii) the Promotional Materials have been approved by Motorola as
provided below. Master Services Distributor's right to use Motorola
Trademarks cease immediately upon termination of this Agreement
except to the extent necessary, but not exceeding 180 days, for
Master Service Distributor to liquidate its inventory of Products as
permitted pursuant to the preceding sentence. MSD 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. Approval; Motorola Usage Guidelines. At a minimum all advertising
and promotional materials for Motorola'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.
Further, MSD agrees to comply with any and all usage guidelines
promulgated by Motorola with respect to the Motorola Trademarks, and
Motorola reserves the right to modify such guidelines from time to
time upon reasonable notice to MSD. MSD shall supply to Motorola
specimens of all advertising, marketing and/or promotional materials
related to Motorola's products and services and/or bearing the
Motorola Trademarks for inspection and approval, which approval
shall not be unreasonably withheld. If Motorola has not approved
such specimens in writing within ten (10) Business Days after
receiving such specimens, such specimens shall be deemed disapproved
by Motorola.
e. The Products and packaging shipped under the terms and conditions of
this agreement may carry the Motorola Trademarks and/or such other
trademarks of Motorola, as Motorola shall determine in its sole
discretion. In no event shall MSD purposely alter, remove, obscure,
erase, deface or otherwise hide from view, any Motorola Trademark,
other trademark of Motorola, or any proprietary rights notice of
Motorola.
f. MSD hereby acknowledges that the Motorola Trademarks are the sole
and exclusive property of Motorola, and agrees that its use of the
Motorola Trademarks as provided herein shall inure to the benefit of
Motorola. MSD shall not do anything to infringe upon, harm, or
contest the validity of the Motorola Trademarks or any other
trademark of Motorola. At Motorola's request, MSD shall reasonably
cooperate with Motorola in any action or proceeding to register,
renew or enforce Motorola's rights in the Motorola Trademarks or
other trademarks of Motorola.
32. GENERAL
a. No alterations or modifications of this Agreement shall be binding
upon either Master Services 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. Except for either party's standard recruitment practice which may
include solicitation of employees through employment agencies,
advertisements in newspapers, magazines, trade journals, or Internet
Web sites, during the Term and for six (6) months thereafter,
neither party shall, without the other party's prior written
consent, which may be withheld in its sole discretion, directly or
indirectly solicit any employee of the other party to leave the
other party's employ in order to accept employment with the
soliciting party or its actual or prospective agents or
sub-distributors.
MOTOROLA CONFIDENTIAL PROPRIETARY
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d. No assignment of this Agreement or of any right granted herewith
shall be made by Master Services Distributor without the prior
written consent of Motorola.
e. This Agreement and its attachments set forth the entire
understanding between the parties hereto and supersedes all prior
agreements, arrangements and communications, whether oral or
written, with respect to the subject matter hereof. 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. Master Services 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., BRIGHTSTAR CORP.
By: /s/ Xxxxxxxx Xxxxx By: /s/ R. Xxxxxxx Xxxxxx
--------------------------- --------------------------
Name: Xxxxxxxx Xxxxx Name: R. Xxxxxxx Xxxxxx
Title: Senior Vice President and General Manager Title: President & CEO
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ATTACHMENT 1
Master Services Distributor shall be authorized to distribute the following
Products pursuant to this Agreement:
All Motorola Cellular and PCS handsets. For the avoidance of doubt iDEN handsets
are hereby excluded
With Motorola's approval, end of life and refurbished Products.
MOTOROLA CONFIDENTIAL PROPRIETARY
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ATTACHMENT 2
I. Territory
Anguilla
Antigua & Barbuda
Argentina
Aruba
Bahamas
Barbados
Belize
Bolivia
Cayman Islands
Chile
Colombia
Costa Rica
Dominica
Dominican Republic
Ecuador
Falkland Islands
Grenada
Guadeloupe
Guatemala
Guyana
Haiti
Honduras
Jamaica
Martinique
Mexico
Montserrat
Netherlands Antilles
Nicaragua
Panama
Paraguay
Peru
Puerto Rico
El Salvador
St. Kitts-Nevis
St. Lucia
St. Xxxxxx
St. Xxxxxx
St. Xxxxxxx
Surinam
Turks & Caicos
Trinidad & Tobago
Uruguay
Venezuela
British Virgin Islands
Virgin Islands (U.S.)
MOTOROLA CONFIDENTIAL PROPRIETARY
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ATTACHMENT 3
WHEREAS, Master Services 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") and other Latin American carriers defined by
Motorola in the future;
WHEREAS, Master Services 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 other Latin American
carriers defined by Motorola in the future; and
WHEREAS, Motorola desires to sell such BREW Devices to Master Services
Distributor;
NOW THEREFORE, the Parties hereto agree as follows:
1. Definitions.
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. Motorola may add additional products as Brew Devices
in the future.
[***]
2. With respect to Master Services Distributor's purchase of BREW Devices,
Master Services Distributor hereby agrees to:
(1) only sell such BREW Devices to the Verizon or Verizon
authorized locations in United States and other Latin American
carriers defined by Motorola and as described in this
Agreement;
[***]
[***]
[***]
4. Reports. Within 20 calendar days after the end of each quarter, Master
Services 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 or Verizon authorized locations in the
United States and other Latin American carriers defined by Motorola for
each month of the quarter. Motorola may make reasonable changes to the
Report from time to time.
MOTOROLA CONFIDENTIAL PROPRIETARY
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ATTACHMENT 3 (Cont.)
[***]
MOTOROLA CONFIDENTIAL PROPRIETARY
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ATTACHMENT 4
I. Motorola Managed Accounts:
a.
[***]
b. To compensate the Master Services Distributor for the services it will be
providing to the Motorola Managed Accounts assigned to MSD as identified in
Table 2, Motorola will pay a service fee for the services identified in Table 1.
Motorola will provide Master Services Distributor with a schedule outlining the
service fee in a format similar to Attachment 5. Motorola will review the
schedule periodically with Master Services Distributor.
c. Master Services Distributor shall only provide services to Assigned and
Jointly serviced accounts, as identified in Table 2 - List of Accounts.
d. Master Services Distributor may not sell Product to the following Motorola
Managed Accounts:
[***]
e. Master Services Distributor may bundle other Value Added Services with sales
to Motorola Managed Accounts. The benefit of any Value Added Services provided
will belong to the Distributor.
f. Consistent with the terms of this Agreement, Motorola may modify, change or
otherwise alter the assignment of Motorola Managed Accounts based upon Master
Services Distributor's performance or any other basis that Motorola determines
is necessary to support the customer and promote Products. Any compensation that
may be due MSD is identified in the Attachment 5.
II. Distributor Managed Accounts:
a. Compensation for the services Master Services Distributor will be providing
to Distributor Managed Accounts assigned to MSD as described in Table 1, shall
be derived directly from sales of Products to these accounts.
b. In the rare instance when Master Services Distributor requests an additional
discount on a particular Product from Motorola for a specific deal to a
Distributor Managed Account to meet a competitive offer, Motorola reserves the
right to deny such request and may, if it elects to provide an additional
discount, require MSD to either [***]. The Motorola discount will be defined in
a Deal Sheet by the local Motorola Account Manager, with standard Motorola
internal approvals.
c. From time to time MSD may request funds to support marketing programs or
other programs designed to increase sales of Products to Distributor Managed
Accounts. Such request should be made through the form provided in Table 3.
Motorola will provide funds at is discretion.
c. The Distributor Managed Accounts MSD has been assigned and those Jointly
Serviced are identified in Table 2 - List of Accounts.
d. The following Distributor Managed Accounts may not be serviced by Master
Services Distributor: [***]
e. Upon [***] notice, Motorola may modify, change or otherwise alter
the allocation of Distributor
MOTOROLA CONFIDENTIAL PROPRIETARY
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Managed Accounts based on any basis that Motorola determines is necessary to
support the customer and promote Products. Any compensation that may be due to
MSD will be determined on the same basis for Distributor Managed Accounts as for
Motorola Managed Accounts as provided in Attachment 5, Section 2 for Motorola
Managed Accounts. [***]
III. New Accounts. Accounts that are not currently serviced by either party or
otherwise identified in any of the Attachments at the Effective Date shall be
defined as "New Accounts". New Accounts automatically default to Motorola
Managed Accounts, unless otherwise specified in writing by an officer of
Motorola. After [***], Motorola will re-evaluate any New Accounts based
on Motorola's market requirements. In cases where MSD demonstrates to Motorola
that MSD is the best option to fulfill Motorola's market requirements and with
the consent of the New Account, MSD will be Motorola's preferred option to be
assigned as a distributor for such New Account.
MOTOROLA CONFIDENTIAL PROPRIETARY
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ATTACHMENT 4 (CONT.)
Table 1 - LIST OF DISTRIBUTOR SERVICES
SERVICE LEVEL AGREEMENT
SERVICE PROVIDED DESCRIPTION DISTRIBUTOR MANAGED MOTOROLA MANAGED (REGION) MOTOROLA MANAGED (MEXICO)
---------------- ----------- ------------------- ------------------------- -------------------------
In-bound logistics Transportation and [***] [***] [***]
insurance from
Motorola DC to 1st
MSD DC and in
country MSD DC
Financial Costs Financing import [***] [***] [***]
duties and VAT
Material Handling Property Insurance, [***] [***] [***]
Scanning, Pick, Pack
& Ship at all MSD
DCs and Sampling &
Receiving Inspection
at both MSD DCs
or when dropshipped
Programming (See Flex,Flash & Content [***] [***] [***]
comments below) (ringertones,
wallpapers, themes
screensavers, and
Java apps)
Fulfillment & Programming of MIN, [***] [***] [***]
Customization labeling, insertion
of carrier collateral
materials, additional
accessories,placement
of scutcheons, security
seals & cost of
sleeves
Invoicing & A/R Insurance, Self [***] [***] [***]
Collection insurance for
deductible, cost of
capital, devaluation
& fx exposure,
invoicing
inventory Cost of Capital to [***] [***] [***]
carry inventory
Out-bound logistics Transportation and [***] [***] [***]
insurance from in
country MSD DC to
Carrier's warehouse
Reverse logistics Administration of the [***] [***] [***]
collection from
carrier's central
location Motorola's
standard DOA and OOB
All in country taxes Transaction taxes, [***] [***] [***]
patent taxes, etc.
1. With respect to Programming, the following seven high-volume properties will
primarily be programmed by Motorola:
[***]
2. Any other properties not listed above will be delivered as Distributor Sales
Model and will be programmed by MSD as shown in Table 2 of this Attachment 2.
MSD agrees to remain as the back-up for programming for these properties
identified in 1., above. After September 15. 2003, in the event that Motorola
requests in writing programming support for these properties a negotiated fee of
[***] will be paid to MSD. Motorola reserves the right to perform this
programming services in house or with another third party.
[***]
MOTOROLA CONFIDENTIAL PROPRIETARY
ATTACHMENT 4 (CONT.)
Table 2 - List of Accounts (Programming Plan, Primary Distributor, Account
Type,)
REGION COUNTRY OPERATOR (A.K.A.) OWNERS/PARTNERS TECH FREQ PROG. ACCT TYPE ASSIGNED
------ ------- ----------------- --------------- ---- ---- ----- --------- --------
LAS Argentina [***] [***] CDMA 1900 [***] [***] [***]
[***]
LAS Argentina [***] [***] CDMA 1900 [***] [***] [***]
LAS Argentina [***] [***] 1900 [***] [***] [***]
LAS Argentina [***} [***] TDMA/GSM 1900 [***] [***] [***]
[***]
LAS Chile [***] [***] CDMA 1900 [***] [***] [***]
LAS Chile [***] [***] GSM 1900 [***] [***] [***]
LAS Chile [***] [***] TDMA->CDMA 800->1.9 [***] [***] [***]
[***]
LAS Chile [***] [***] TDMA->GSM 800->1.9 [***] [***] [***]
[***]
LAN-R Uruguay [***] [***] CDMA 1900 [***] [***] [***]
LAN-R Uruguay [***] [***] TDMA 800 [***] [***] [***]
LAN-R Paraguay [***] [***] GSM 1900 [***] [***] [***]
[***]
LAN-R Paraguay [***] [***] GSM 1900 [***] [***] [***]
LAN-R Paraguay [***] [***] TDMA 19/800 [***] [***] [***]
LAN-R Paraguay [***] [***] TDMA 19/800 [***] [***] [***]
[***]
LAN-R Paraguay [***] [***] TDMA 19/800 [***] [***] [***]
LAN-R Bolivia [***] [***] GSM 1900 [***] [***] [***]
LAN-R Bolivia [***] [***] TDMA 800 [***] [***] [***]
[***]
[***] [***]
LAN-R Bolivia [***] [***] TDMA 800 [***] [***] [***]
[***]
Mexico Mexico [***] [***] TDMA->GSM 800/1900 [***] [***] [***]
Mexico Mexico [***] [***] CDMA 800/1900 [***] [***] [***]
Mexico Mexico [***] [***] CDMA 800 [***] [***] [***]
Mexico Mexico [***] [***] CDMA ; GSM 800/1900;1900 [***] [***] [***]
Mexico Mexico [***] [***] CDMA 1900 [***] [***] [***]
[***]
[***]
Mexico Mexico [***] [***] CDMA 1900 [***] [***] [***]
[***]
LAN-A Venezuela [***] [***] CDMA 800 [***] [***] [***]
LAN-A Venezuela [***] [***] GSM 900 [***] [***] [***]
LAN-A Venezuela [***] GSM 900 [***] [***] [***]
LAN-A Venezuela [***] [***] TDMA->CDMA 800/800 [***] [***] [***]
[***]
LAN-A Peru [***] [***] CDMA 800 8K [***] [***] [***]
LAN-A Peru [***] [***] GSM 1900 [***] [***] [***]
[***]
LAN-A Peru [***] [***] TDMA 800 [***] [***] [***]
LAN-A Ecuador [***] [***] TDMA -> GSM 800/850 [***] [***] [***]
LAN-A Ecuador [***] [***] TDMA->CDMA 800/800 [***] [***] [***]
LAN-A Ecuador [***] [***] CDMA 1900 [***] [***] [***]
[***]
LAN-A Colombia [***] [***] TDMA->CDMA 800/800 [***] [***] [***]
LAN-A Colombia [***] [***] TDMA -> GSM 800/850 [***] [***] [***]
LAN-A Colombia [***] [***] GSM 1900 [***] [***] [***]
LAN-CA Panama [***] [***] TDMA -> GSM 800/850 [***] [***] [***]
LAN-CA Panama [***] [***] TDMA->CDMA1X 800/800 [***] [***] [***]
LAN-CA Nicaragua [***] [***] GSM 1900 [***] [***] [***]
LAN-CA Nicaragua [***] GSM 1900 [***] [***] [***]
LAN-CA Nicaragua [***] [***] TDMA->CDMA1X 800/800 [***] [***] [***]
LAN-CA Honduras [***] [***] CDMA 800 [***] [***] [***]
[***]
LAN-CA Guatemala [***] [***] CDMA 1900 [***] [***] [***]
[***]
LAN-CA Guatemala [***] [***] CDMA -> GSM 1900/1900 [***] [***] [***]
LAN-CA Guatemala [***] [***] CDMA 1900 [***] [***] [***]
LAN-CA Guatemala [***] [***] TDMA 800 [***] [***] [***]
[***]
LAN-CA El Salvador [***] [***] CDMA 800 8K [***] [***] [***]
LAN-CA El Salvador [***] [***] GSM 1900 [***] [***] [***]
LAN-CA El Salvador [***] [***] GSM 900 [***] [***] [***]
LAN-CA El Salvador [***] [***] TDMA 800 [***] [***] [***]
LAN-CA Costa Rica [***] [***] TDMA -> GSM 800/1800 [***] [***] [***]
[***]
LAN-CA Belize [***] [***] TDMA -> GSM 800/1900 [***] [***] [***]
LAN-CA Belize [***] GSM 800/1800 [***] [***] [***]
MOTOROLA CONFIDENTIAL PROPRIETARY
25
[***] Denotes Confidential Treatment Requested
ATTACHMENT 4 (CONT.)
Table 2 (Cont.) - List of Accounts (Programming Plan, Account Type, Assigned
Accounts)
REGION COUNTRY OPERATOR (A.K.A.) OWNERS/PARTNERS TECH FREQ PROG. ACCT TYPE ASSIGNED
LAN-C US Virgin
Islands
LAN-C Turks &
Caicos ls. TDMA -> GSM 8/9,18,1900
LAN-C Trinidad &
Tobago TDMA -> GSM 900
LAN-C St. Xxxxxxx
&Xxx.xx TDMA -> GSM 8/9,18,1900
LAN-C St. Marteen
GSM 18/900
LAN-C St. Marteen TDMA 800
LAN-C St. Lucia TDMA -> GSM 800;850/1900
LAN-C St. Lucia TDMA -> GSM 850/1900
LAN-C St. Kitts TDMA -> GSM 850/1900
LAN-C St. Croix TDMA 800
LAN-C St. Barts TDMA -> GSM 8/9,850/1900
LAN-C Puerto Rico CDMA 1900
LAN-C Puerto Rico
CDMA 1900
LAN-C Puerto Rico
TDMA -> GSM 800;850,1900
LAN-C Puerto Rico
TDMA 800
LAN-C Puerto Rico
TDMA -> GSM 1900/1900
LAN-C Montserrat TDMA -> GSM 8/9,850/1900
LAN-C Martinique GSM 1800/900
LAN-C Jamaica
CDMA 800
LAN-C Jamaica [***] GSM 900/1800 [***]
LAN-C Jamaica TDMA-> GSM 800;850/1900
LAN-C Haiti GSM 18/900
LAN-C Haiti TDMA 800
LAN-C Xxxxxxxxx GSM 18/900
LAN-C Grenada TDMA -> GSM 850/1900
LAN-C Dominican
Rep. CDMA 1900
LAN-C Dominican
Rep. CDMA 1900
LAN-C Dominican
Rep. CDMA 1900
LAN-C Dominican
Rep. GSM 1900
LAN-C Dominica TDMA -> GSM 8/9,850/1900
LAN-C Curacao TDMA 800
LAN-C Curacao TDMA 800
LAN-C Cayman
islands TDMA -> GSM 8/9,850/1900
LAN-C Xxxx.Xxxxxx
Islands TDMA 800
LAN-C Bonaire TDMA 800
LAN-C Bermuda TDMA 800
LAN-C Bermuda TDMA 800
LAN-C Bermuda TDMA 800
LAN-C Barbados TDMA -> GSM S/9,18,1900
LAN-C Bahamas TDMA 800
Aruba TDMA 800
Anguila TDMA -> GSM 8/9,850,1900
LAN-C Antigua &
Barbud; GSM 1900
LAN-C Surinam TDMA 800
LAN-C Guyana TDMA 800
LAN-C French
Guyana GSM 18/900
[***]
MOTOROLA CONFIDENTIAL PROPRIETARY
26
[***] Denotes Confidential Treatment Requested
Table 3
[***]
[***] Denotes Confidential Treatment Requested
ATTACHMENT 5-COMPENSATION
1. The compensation for Motorola Managed Accounts will be based on [***]
and categorized, as follows:
Product Categories Service Fee
------------------ -----------
a. Good less than [***] [***] of Net Carrier Cost or [***]
b. Better [***] [***] of Net Carrier Cost
c. Best more than [***] [***] of Net Carrier Cost***
* New models and changes within a product category will be defined [***],
concurrent with the publishing of the MSD Price List.
** Good category compensation will be [***] or [***] per unit, whichever is
more.
*** In the event that MSD exceeds the Best category goal described at the end of
this paragraph by [***], MSD will earn a [***] incentive on the Best category
sales. In addition to being measured [***] for this goal, Distributor will be
given the opportunity to make-up any missed [***] goals through an end of
calendar-year total evaluation. The Distributor Goal for Best category is equal
to [***]. These goals will be updated semi-annually beginning 2004. The 2003
Best category goals are: 3Q03 = [***] 4Q03 = [***].
The Product Categories and corresponding price tiers apply for products included
in the MSD price list and approved refurbished list. End of life products are
not included in the Product Categories. As long as Motorola has a portfolio of
at least three products in a given wireless technology category, Motorola will
include at least one product in the "Best" Product Category, above. To the
extent a product needs to be elevated from the "Better" or "Good" category, the
product with the highest price will be elevated to the "Best" category. If
Motorola later introduces a product that qualifies for the "Best" category, any
elevated products will immediately revert to their appropriate Product Category.
Motorola may, at its sole discretion, revise the Product Categories based on
market conditions.
2 Service Fees apply to current Products being sold by MSD to Motorola Managed
Accounts. The fee is not applicable to end-of-life or cancelled product sales.
[***] A) In the event Motorola exercises its right to re-designate a Motorola
Managed Account assigned to MSD ("Assigned Account" -- See Attachment 4, Table
2); by restricting the Territory or otherwise to an account that Motorola will
supply directly or through another distributor, Motorola will pay Master
Services Distributor the Service Fee for [***] by Motorola to the applicable
customer that MSD would have serviced if such customer were not re-designated;
such Service Fee shall be payable for a period of [***] to compensate MSD for
its prior management of the Assigned Account, [***]
ANY PAYMENTS MADE UNDER THIS SECTION 2 OF ATTACHMENT 5, SHALL BE MSD'S SOLE AND
EXCLUSIVE REMEDY.
MOTOROLA CONFIDENTIAL PROPRIETARY
28
[***] Confidential Treatment Requested
ATTACHMENT 5 (CONT.)
[***]
[***]
5. Master Services Distributor will purchase Products for Motorola Managed
Accounts[***]
[***]
[***]
[***]
[***]
[***]
[***]
[***]
[***]
MOTOROLA CONFIDENTIAL PROPRIETARY
29
[***] Confidential Treatment Requested
ATTACHMENT 5 (CONT.)
[***]
9. All redirected inventory as described in 5, 6, and 7 above, must be approved
by the Motorola Distributor General Manager. In addition, the programming costs
and the replacement requirement (not always necessary) will be defined by the
Motorola Distributor General Manager, in writing, prior to MSD making any
changes or promises to the accounts.
10. This compensation is subject to change in the event of a major reduction in
the Motorola Business Plan, implementation of a consignment-like program, or a
similar major change in the business. A compensation review request will be in
writing, and both parties shall make reasonable commercial effort to respond
within 15 days.
MOTOROLA CONFIDENTIAL PROPRIETARY
30
[***] Confidential Treatment Requested
ATTACHMENT 6 - MOTOROLA TRADEMARKS
[ MOTOROLA LOGO ]
MOTOROLA CONFIDENTIAL PROPRIETARY
31
[***] Confidential Treatment Requested
ATTACHMENT 7
[REPORTS SCHEDULE CALENDAR]
[***]
MOTOROLA CONFIDENTIAL PROPRIETARY
32
[***] Denotes Confidential Treatment Requested
ATTACHMENT 7 (CONT.)
[ REPORTS SCHEDULE CALENDAR ]
MOTOROLA CONFIDENTIAL PROPRIETARY
33
