EXHIBIT 10.5
Product Purchase Agreement
Between
@Road, Inc.
And
Novatel Wireless Technologies, Inc.
This agreement is made by @Road, Inc. and Novatel Wireless Technologies, Inc.
and is effective as of April 1, 2000. The terms and conditions contained in this
Agreement shall govern the production, purchase, warranty and support of the
product mentioned below as "Product". In the event of any conflict between this
Agreement and the terms and conditions of an order, as defined below, this
Agreement shall govern. Novatel Wireless Technologies, Inc shall be referred as
Novatel and @Road, Inc. shall be referred as @Road.
1.0 Product
1.1 Product supplied to @Road is Expedite CDPD 0.6- Watt radio modem. The
unit includes the communications board, top and bottom shield covers
and a 50-ohm RF connector for antenna connection.
1.2 Novatel may, at its discretion, implement changes in the Product,
modify the drawings and its specifications, or substitute a Product of
more recent design; provided, however, that any such changes,
modifications or substitutions, under normal and proper use shall not
materially and adversely affect functional performance, form or fit of
the product. Novatel agrees to provide @Road with 60 days written
notice of such changes.
2.0 Pricing
2.1 Novatel agrees to supply the Expedite CDPD modems, to @Road at a unit
price of [*] during the entire term of this Agreement, which shall run
from April 1, 2000 to June 30, 2001.
2.2 The price is FOB Novatel's facility in Carlsbad, California. The price
includes normal packing for domestic and international shipments. All
duties, insurance, special packing costs and expenses, and all
Federal, Provincial, State and local excise, sales, use and other
similar taxes are for Customer's account and will appear as additional
items on invoices.
2.3 Novatel reserves the right to create additional FOB locations as
additional contract manufactures are selected.
CONFIDENTIAL TREATMENT REQUESTED. CONFIDENTIAL PORTIONS OF THIS DOCUMENT HAVE
BEEN REDACTED AND HAVE BEEN SEPARATELY FILED WITH THE COMMISSION.
* CONFIDENTIAL MATERIAL REDACTED AND FILED SEPARATELY WITH THE COMMISSION.
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3.0 Forecast, Purchase Order and Liability
3.1 @Road has provided a 12-month rolling forecast to Novatel. This
forecast will be updated at the beginning of each calendar month. The
following changes to the quantity forecasts will be allowed:
Time Line Stocking agreement
1 to 90 days no variance
91 to 150 days 50% variance
3.2 @Road will issue purchase orders for the 90-day time frame with
deliveries in increments of 500 units.
3.3 Payments terms will be full payment made upon the delivery.
3.4 If there is more than a 20% negative variance in the @Road forecast
vs. the quarter to date numbers included in schedule B, @Road will be
responsible for making payments of $30 per unit on the variance
between the forecast and the actual consumption.
3.5 If there is more than a 20% negative variance in Novatel's ability to
ship vs. the quarter to date purchase orders, Novatel will be
responsible for making payments of $30 per unit on the variance
between the purchase orders and the actual shipments.
4.0 Warranty
4.1 Warranties shall be defined in Schedule 'A'
4.2 @Road will be responsible for sending units to Novatel's facility in
Carlsbad if warranty repairs are required. If product is determined to
be no fault found, @Road will be responsible for all freight costs to
and from Carlsbad.
5.0 Miscellaneous
5.1 This agreement cannot be assigned to a third party without the written
consent of @Road and Novatel.
5.2 All modems sold to @Road must be for internal consumption and cannot
be resold on the market.
5.3 @Road agrees to include the Novatel logo for @Road marketing
materials. This will be defined jointly by the two marketing
departments at a later date.
IN WITNESS WHEREOF, the parties have caused this Agreement to be executed by
their duly authorized representatives.
Novatel Wireless Technologies, Inc. @Road, Inc.
/s/ Xxxxxx Xxxxx /s/ Xxxxx Xxxx
------------------------------ ---------------------
Xxxxxx Xxxxx Xxxx Xxxx
President and CEO President and CEO
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Schedule 'A'
------------
1. Novatel Wireless warrants for a period of 1 year from delivery at the FCA
point that its Products are free from defects in material and workmanship,
conform to Novatel Wireless specifications and that the software shall be
free from errors which materially affect performance. THESE WARRANTIES ARE
EXPRESSLY IN LIEU OF ALL OTHER WARRANTIES, EXPRESS OR IMPLIED, INCLUDING,
WITHOUT LIMITATION, ALL IMPLIED WARRANTIES OF MERCHANTABILITY AND FITNESS
FOR A PARTICULAR PURPOSE. NOVATEL WIRELESS SHALL IN NO EVENT BE LIABLE FOR
SPECIAL, INDIRECT, INCIDENTAL, OR CONSEQUENTIAL DAMAGES, OF ANY KIND OR
NATURE DUE TO ANY CAUSE.
2. Novatel Wireless' obligations are limited to correction of such failure, by
implementation of the module swap warranty procedure whenever practicable
and are conditioned upon the Product having been maintained in accordance
with Novatel Wireless specifications and the Product not having been
modified by any party other than Novatel Wireless except as expressly
permitted in writing.
3. The foregoing warranties do not extend to (i) nonconformity's, defects or
errors in the Product due to accident, abuse, misuse or negligent use of
the Product or use in other than a normal and customary manner,
environmental conditions not conforming to Novatel Wireless'
specifications, or failure to follow prescribed operating maintenance
procedures, (ii) defects, errors or nonconformity's in the Product due to
modifications, alterations, additions or Product changes not made or
authorized to be made by Novatel Wireless, (iii) normal wear and tear, or
(iv) damage caused by force of nature or act of any third party.
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Schedule B
Year 2000 Year 2001
PERIOD MONTH QTY TOTAL PERIOD MONTH QTY TOTAL
------ ----- --- ----- ------ ----- --- -----
X0 0000 Apr 5,000 Q1 2001 Jan 5,000
May 5,000 Feb 5,000
Jun 6,000 16,000 Mar 5,000 15,000
Q3 2000 Jul 7,000 Q2 2001 Apr 5,000
Aug 7,000 May 5,000
Sep 6,000 20,000 Jun 5,000 15,000
Q4 2000 Oct 10,000
Nov 10,000
Dec 5,000 25,000
15 MONTH TOTAL 91,000
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