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EXHIBIT 10.13
SUPPLY AGREEMENT
This Supply Agreement ("Agreement") is entered by and between TELLUS TECHNOLOGY
INCORPORATED ("Tellus"), having its principal place of business at 00000
Xxxxxxxxxxxx Xxxxxx, Xxxxxxx, Xxxxxxxxxx 00000-0000, Xxxxxx Xxxxxx of America,
and OMNISKY, INC. ("OmniSky"), having its principal offices at 0000 Xxxxxx
Xxxxx, Xxxx Xxxx, XX 00000, Xxxxxx Xxxxxx of America. Tellus and OmniSky
collectively may be referred to herein as the "Parties".
This Agreement consists of the Terms & Conditions below and any Appendices as
may be attached.
RECITALS
WHEREAS Tellus is developing a CDPD [***] for use with the [***] designated the
Tellus V230C and hereinafter referred to as the "Product";
WHEREAS OmniSky wishes to have manufactured and supplied the Product developed
by Tellus with the assistance of OmniSky; and
WHEREAS OmniSky wishes to have manufactured and supply such Product to OmniSky.
AGREEMENT
In consideration of the above recitals, Tellus and OmniSky hereby agree that
upon signing of this Agreement, Tellus will supply the Product to OmniSky
according to the following terms and conditions:
ARTICLE 1. PRICING
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(a) The Product shall be priced at $[***] per unit and shall be delivered
prior to [***].
(b) Prices are quoted FCA/FOB Xxxxxx Xxxx, Xxxxxxx, XX. Price includes the
Module, [***] of [***], rechargeable battery and a power cord. Additional
memory is available and shall be priced at the time an order is placed.
ARTICLE 2. PRODUCT SUPPLY, PRODUCT ACCEPTANCE AND TERMINATION
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(a) Tellus shall manufacture, or cause to have manufactured, the Product to
the preliminary specifications included in Appendix 1 hereto which may be
amended from time to time. The specifications will be finalized after
delivery to Tellus of a Product acceptance letter by OmniSky.
(b) In the event that OmniSky does not issue a Product acceptance letter
after testing or arranging to have tested an engineering prototype of the
Product against the Engineering Prototype Product Acceptance Test
provided for in Appendix 2 hereto on or prior to July
[***] Confidential treatment has been requested for the bracketed portions. The
confidential redacted portion has been omitted and filed separately with the
Securities and Exchange Commission.
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31, 2000 or such other date as the parties shall mutually agree, then this
Agreement shall immediately terminate.
ARTICLE 3 PURCHASE ORDERS, SHIPMENT, DELIVERY AND ACCEPTANCE
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(a) OmniSky shall place a purchase order for 25,000 units of Product
within 3 days of signing this Agreement. Orders for the first 10,000
units of Product are non-cancelable except as provided for in Article
2(b). The remaining 15,000 units of Product may not be canceled within
sixty (60) days prior to Tellus' committed delivery date. The
anticipated delivery dates for the first 10,000 units of Product are
prior to [***] and for the remaining 15,000 units of product are prior
to [***]. Definitive delivery schedules will be determined after
delivery of the Product acceptance letter by OmniSky.
(b) The purchase order shall contain the following information.
i. OmniSky's purchase order number;
ii. The quantity of Product ordered;
iii. The unit and price applicable thereto;
iv. The destination address(es) for shipping the Product;
v. Delivery schedule and shipping instructions.
(c) Deliveries are not permitted to be rescheduled less than sixty (60)
days prior to a Tellus' committed shipment date and are not permitted
to be rescheduled in quantities greater than 20% of any scheduled
delivery. Orders may not be rescheduled for delivery more than sixty
(60) days beyond the original delivery date, and may not be
rescheduled more than once.
(d) In the event OmniSky cancels the purchase of any units of product more
than 60 days prior to the committed delivery date, OmniSky shall be
liable for penalties as follows: between 60 and 120 days, 50% of the
purchase order dollar value of the units of product cancelled; and 120
days or greater, 30% of the purchase order dollar value for the units
of product cancelled.
(e) All Product purchased under this Agreement shall be shipped from
Tellus' Dock in Fremont, CA and shall be shipped to the destination(s)
specified by OmniSky on OmniSky's account, so as to be received,
allowing for normal transit times, in accordance with the delivery
schedule specified on the corresponding Purchase Order.
(f) OmniSky shall have five (5) business days after delivery to accept or
reject any delivery. A shipment will be deemed "Accepted" when less
than 2% of the units of Product fail the Delivery Acceptance Test that
shall be mutually agreed to by the Parties in conjunction with the
finalization of the Product Specifications. A shipment shall be deemed
"Rejected" when 2% or more of the units of Product fail the Delivery
Acceptance Test. In that event, Tellus shall take the necessary
actions, at Tellus's sole expense and discretion, to remedy the
identified problems and re-submit the shipment for acceptance testing.
[***] Confidential treatment has been requested for the bracketed portions. The
confidential redacted portion has been omitted and filed separately with the
Securities and Exchange Commission.
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ARTICLE 4. PAYMENTS
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(a) Payment for all Product purchased shall be as follows:
i. Payment for the first 10,000 units must be made by OmniSky
immediately upon OmniSky's delivery of a Product acceptance
letter to Tellus.
ii. Payment for the remaining 15,000 units shall be Net 30 days
except otherwise described in this Agreement.
(b) Invoices issued to OmniSky by Tellus shall be in writing and shall
contain the following information: OmniSky's purchase order number; a
description of the Product shipped, including serial numbers; the
quantity of Product shipped; and the unit and extended price
applicable thereto.
(c) Any payments due hereunder are to be made in U.S. dollars. For any
payment made more than ten (10) days after the due date, a late charge
shall be imposed at an interest rate equal to the lesser of one and
one half percent (1.5%) per month. The late charge will accrue from
the due date of such payment until the date of actual payment.
(d) All payments shall be net of all taxes, governmental withholding or
other offsets.
(e) Payments shall be made by write transfer to such bank in the United
States as Tellus may designate in writing.
ARTICLE 5 WARRANTY AND PRODUCT LIABILITY
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(a) Tellus warrants that all Product will conform to the Specifications
and be free from defects in material or workmanship for fourteen (14)
months from the date of shipment to OmniSky. Claims for Product not
complying with this warranty shall be submitted by OmniSky no later
than fifteen (15) months from the date of delivery of the
non-complying Product. Tellus' obligations, and OmniSky's sole remedy,
under this warranty shall be for Tellus, at its option and expense, to
promptly repair or replace non-complying Product, or pay OmniSky its
costs of remedying such non-compliance. The shipment of non-complying
Product by OmniSky to Tellus shall be at the expense of OmniSky, and
the return shipment of repaired or replacement Product by Tellus to
OmniSky under this Article 5(a) shall be at the expense of Tellus.
Nevertheless, if the damage or malfunction is caused by the improper
handling or operation of the end users or OmniSky, or is caused by any
rework or material changes that have been performed by any other
parties rather than Tellus or Tellus designees, then Tellus shall not
be liable.
(b) No Defect Found (NDF) is herein defined as for those Product in any
event that have been provided by Tellus to OmniSky and then been
claimed by OmniSky or any end users as non-complying Product and
returned to Tellus thereafter for repair or replacement but of
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which Tellus finds no defect. All the repair and replacement for NDF
Product, including without limitation all relevant costs of transportation
and documentation and all related engineering work and materials, shall be
the responsibility of Tellus for the first 0.25% of aggregate shipments and
shall be the responsibility of OmniSky for all NDF Product above 0.25% of
aggregate shipments. In the event that OmniSky and Tellus, after testing
all such NDF Product, disagree on such designation, then the Parties shall
mutually agree on an independent third party to test all such disputed
units and such independent third party's test results shall be accepted
without challenge by the Parties.
(c) During the term of this Agreement, Tellus shall maintain in force product
liability insurance on the Product.
(d) EXCEPT AS EXPRESSLY SET FORTH IN THIS ARTICLE 5, TELLUS MAKES NO
WARRANTIES, EXPRESS OR IMPLIED, AND SPECIFICALLY DISCLAIMS ANY WARRANTIES
OF MERCHANTABILITY, NONINFRINGEMENT OR FITNESS FOR A PARTICULAR PURPOSE.
ARTICLE 6 ENGINEERING CHANGES; OUT OF WARRANT REPAIR
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(a) Tellus agrees to repair any out-of-warranty Product that OmniSky may elect
to have repaired by Tellus and which Tellus deems repairable for a period
of at least one (1) year following the termination of this Agreement. The
cost to OmniSky for such repair by Tellus shall be negotiated at the time
of order placement but will not exceed the original price for the Product
plus actual material cost required for the repair.
(b) Any upgrades or engineering changes after the delivery of Product to
OmniSky are the responsibility of OmniSky. Should these upgrades,
engineering changes or rework be performed by Tellus upon the request of
OmniSky, OmniSky shall bear the cost of transportation, documentation and
all related engineering work and material necessary in accordance with
Tellus' regular time and materials rates.
ARTICLE 7 INDEMNITIES
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(a) INDEMNIFICATION BY TELLUS. Tellus shall defend, indemnify and hold harmless
OmniSky and its officers, directors, employees, shareholders, customers,
agents, successors and assigns from and against any and all loss, damage,
settlement, costs or expense (including legal expenses), as incurred,
resulting from, or arising out of (i) any breach of this Agreement by
Tellus; and (ii) any claim, suit or proceeding brought against OmniSky
which alleges that the Tellus Intellectual Property Rights and/or Tellus
Know-How infringe upon, misappropriates or violates any patents,
copyrights, trademarks or trade secret rights or other proprietary rights
of persons, firms or entities who are not parties to this Agreement where
such unlawful activity is completely independent of the Product. As a
condition to such defense, OmniSky will provide Tellus with prompt written
notice of the claim and permit Tellus to control the defense, settlement,
adjustment or compromise of any such claim. OmniSky may employ counsel at
its own expense to assist it with respect
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to any such claim; provided, however, that if such counsel is necessary
because of a conflict of interest of either Tellus or its counsel or
because Tellus does not assume control, Tellus will bear the expense of
such counsel. OmniSky shall have no authority to settle any claim on behalf
of Tellus.
(b) Tellus shall have no obligation under subsection (a)(ii) above to the
extent any claim of infringement or misappropriation results from: (i) use
of the Product in combination with any other Product, end item, or
subassembly if the infringement would not have occurred but for such
combination; (ii) use or incorporation in the Product of any design,
technique or specification furnished by OmniSky, if the infringement would
not have occurred but for such incorporation or use; or (iii) any claim
based on OmniSky's use of the Product as shipped after Tellus has informed
the OmniSky of modifications or changes in the Product required to avoid
such claims and offered to implement those modifications or changes, if
such claim would have been avoided by implementation of Tellus'
suggestions. Tellus shall not be liable hereunder for enhanced or punitive
damages which could have been avoided or reduced by actions within the
control of OmniSky.
(c) THE FOREGOING PROVISIONS OF THIS ARTICLE 7(a) and 7(b) STATE THE ENTIRE
LIABILITY AND OBLIGATIONS OF TELLUS AND THE EXCLUSIVE REMEDY OF OMNISKY AND
ITS CUSTOMERS, WITH RESPECT TO ANY VIOLATION OR INFRINGEMENT OF PROPRIETARY
RIGHTS, INCLUDING BUT NOT LIMITED TO ANY PATENT, COPYRIGHT, TRADEMARK, BY
THE PRODUCT OR ANY PART THEREOF. TELLUS'S OBLIGATIONS UNDER THIS ARTICLE 7
ARE SUBJECT TO THE LIMITATIONS SET FORTH IN ARTICLE 8.
(d) INDEMNIFICATION BY OMNISKY. Omnisky shall defend, indemnify and hold
harmless Tellus and its officers, directors, employees, shareholders,
customers, agents, successors and assigns from and against any and all
loss, damage, settlement, costs or expense (including legal expenses), as
incurred, resulting from, or arising out of (i) any breach of this
Agreement by OmniSky; and (ii) any claim, suit or proceeding brought
against Tellus which alleges that the OmniSky Intellectual Property Rights
and/or OmniSky Know-How infringe upon, misappropriates or violates any
patents, copyrights, trademarks or trade secret rights or other proprietary
rights of persons, firms or entities who are not parties to this Agreement
where such unlawful activity is completely independent of the Product. As a
condition to such defense and indemnification, Tellus will provide OmniSky
with prompt written notice of the claim and permit OmniSky to control the
defense, settlement, adjustment or compromise of any such claim. Tellus may
employ counsel at its own expense to assist it with respect to any such
claim; provided, however, that if such counsel is necessary because of a
conflict of interest of either OmniSky or its counsel or because OmniSky
does not assume control, OmniSky will bear the expense of such counsel.
Tellus shall have no authority to settle any claim on behalf of OmniSky.
(e) THE FOREGOING PROVISIONS OF THIS ARTICLE 7(d) and 7(e) STATE THE ENTIRE
LIABILITY AND OBLIGATIONS OF OMNISKY AND THE EXCLUSIVE REMEDY OF TELLUS AND
ITS CUSTOMERS, WITH RESPECT TO ANY VIOLATION OR INFRINGEMENT OF PROPRIETARY
RIGHTS, INCLUDING BUT NOT LIMITED TO ANY PATENT, COPYRIGHT, TRADEMARK, BY
THE PRODUCT
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OR ANY PART THEREOF. OMNISKY'S OBLIGATIONS UNDER THIS ARTICLE 7 ARE
SUBJECT TO THE LIMITATIONS SET FORTH IN ARTICLE 8.
ARTICLE 8 LIMITATION OF LIABILITY AND EXCLUSION OF CERTAIN DAMAGES
(a) IN NO EVENT SHALL TELLUS BE LIABLE FOR ANY INDIRECT, SPECIAL OR
CONSEQUENTIAL DAMAGES OF ANY NATURE OR KIND WHATSOEVER, INCLUDING BUT NOT
LIMITED TO, LOSS OF PROFITS, LOSS OF BUSINESS, OR COST OF PROCUREMENT OF
SUBSTITUTE GOODS OR SERVICES, ARISING OUT OF OR RELATING TO THIS AGREEMENT
OR THE PROVISION OF PRODUCT HEREUNDER, OR OMNISKY'S USE OR DISTRIBUTION
THEREOF.
(b) TELLUS' LIABILITY FOR DAMAGES HEREUNDER, INCLUDING ANY PAYMENTS MADE OR
EXPENSES INCURRED, IF ANY SHALL NOT EXCEED IN THE AGGREGATE THE AMOUNTS
PAID BY OMNISKY TO TELLUS HEREUNDER.
(c) IN NO EVENT SHALL OMNISKY BE LIABLE FOR ANY INDIRECT, SPECIAL OR
CONSEQUENTIAL DAMAGES OF ANY NATURE OR KIND WHATSOEVER, INCLUDING BUT NOT
LIMITED TO, LOSS OF PROFITS, OR LOSS OF BUSINESS ARISING OUT OF OR RELATING
TO THIS AGREEMENT.
ARTICLE 9 CONFIDENTIAL RELATIONSHIP
(a) Tellus and OmniSky (on behalf of themselves and their respective officers,
employees and agents) shall use all reasonable efforts to keep confidential
all Confidential Information acquired from the other Party, whether prior
to or during the term of this Agreement, except as disclosure or use of
such information is expressly permitted by this Agreement or by a writing
signed by the Parties hereto. The term "Confidential Information" shall
include all licensed technology, the terms and conditions of this
Agreement, and any other information, technical data, know-how or show-how
relating to the Product and maintained in confidence by a Party and
disclosed to the other Party hereunder. All such Confidential Information
shall be designated in writing by the disclosing Party as "confidential" or
"proprietary" or, if disclosed orally, shall be designated as Confidential
Information in writing forwarded to the receiving Party by the disclosing
Party within thirty (30) days of the date of oral disclosure.
Notwithstanding the foregoing, Confidential Information does not include
any such information, technical data or know-how which:
(i) is or becomes part of the public domain without violation of this
Agreement:
(ii) is known and on record at a receiving party prior to disclosure by
the disclosing party;
(iii) is lawfully received from a third party without restriction; or
(iv) is developed by a receiving party completely independently and
without use of the disclosing party's Confidential Information.
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Each Party agrees to maintain all written materials and comments relating
to or containing Confidential Information obtained from the other Party
(including all schematics sketches, drawings, reports and notes, and all
copies and reproductions thereof) in confidence and to designate in writing
the secret and confidential nature thereof and to use all necessary efforts
to prevent the unauthorized use or reproduction thereof, including
restriction of the disclosure to its employees of only such Confidential
Information as is necessary to such employee's responsibilities in
performing the acts required or contemplated by this Agreement.
Notwithstanding the foregoing, with the prior written consent of the other
Party either Party may disclose the existence of a vendor-customer
relationship between the Parties, provided that such disclosing Party does
not reveal the terms of this Agreement.
(b) Each Party acknowledges that in the event it breaches any of the provisions
of this Article 9, the other Party may be irreparably harmed and may not
have an adequate remedy at law. In the event of any breach or threatened
breach of this Article 9, each Party shall be entitled to injunctive relief
to enforce its rights hereunder, without being required to post any bond or
other property.
(c) The obligations of the Parties under this Article 9 shall survive the term
and termination of this Agreement for a period of five (5) years and shall
remain in full force and effect regardless of the cause of any termination.
ARTICLE 10. ADDITIONAL CLAUSES
(a) Interpretation. This Agreement shall be governed and construed in
accordance with the laws of the State of California in the United States of
America, including the California Commercial Code.
(b) Export Law. Both parties will comply with all import and export laws of the
United States of America.
(c) Order of Precedence. Any export agreement entered into with the U.S.
Government with respect to the subject matter hereof will have precedence
over the terms and condition of this Agreement.
(d) Entire Agreement. Except as provided in Article 10(c), this Agreement
constitutes the entire Agreement between the Parties and supersedes any
prior written or oral agreement or understanding with respect to the
subject matter hereof.
(e) Assignment. Neither party shall assign this Agreement, or any rights
hereunder, to any third party, including an affiliated company or any
successor who acquires substantially all of its assets and business,
without the prior written consent of the other party, which in the case of
an affiliated company in which OmniSky has at least a 20% equity interest
or a successor shall only be withheld in the situation where the other
party is reasonably construed to have a conflicting business relationship
with such third party.
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(f) Waiver. The waiver of a breach or default hereunder shall not constitute
the waiver of any subsequent breach or default.
(g) Invalidity of Provisions. Should any provision of this agreement be
invalid, such invalidity will not affect the validity of the remaining
provisions.
(h) Legal Fees. The prevailing Party in any legal action brought by one Party
against the other shall be entitled, in addition to any other rights and
remedies it may have, to reimbursement for its reasonable expenses incurred
thereby, including actual court costs and reasonable attorneys' fees.
(i) Notices. All notices or other communications required or permitted
hereunder shall be in English and shall be deemed communicated on the date
received at the address set forth below, or at such other address as to
which such party shall give written notice hereunder. In the absence of
specific notification, acceptance of any notice shall be deemed to have
occurred ten (10) days after being communicated.
TELLUS TECHNOLOGY INC. OMNISKY SYSTEMS INC.
Attention: Sales Manager Attention: Xxxxx Xxxx, Product Manager
00000 Xxxxxxxxxxxx Xxxxxx 000 Xxxxxx Xxxxx
Xxxxxxx, XX 00000-0000, XXX Xxxx Xxxx, XX 00000
Phone # x0 (000) 000 0000 Phone # x0-(000) 000-0000
Fax # x0 (000) 000 0000 Fax # x0-(000) 000-0000
(j) Agency. Nothing contained in this Agreement is intended or shall be
construed so as to constitute the Parties as partners, joint ventures or
agents of each other.
(k) Arbitration. All disputes arising out of or in connection with this
Agreement shall be finally settled by binding arbitration conducted under
the then existing Commercial Arbitration Rules of the American Arbitration
Association by a single arbitrator appointed in accordance with such Rules.
The place of the arbitration shall be San Francisco, California, USA and
the arbitration proceedings shall be conducted in the English language.
Judgment upon awards or orders for enforcement may be entered by all courts
to which an award is presented and execution may be had in accordance with
the law of execution generally applied in the countries where enforcement
is sought.
(l) Survival. The provisions of Articles 5, 6, 7, 8, 9 and the relevant
provisions of this Article 10, together with any OmniSky payment
obligations, shall survive the termination of this Agreement.
(m) Force Majeure. Nonperformance (except for the need to make payments) by
either Party shall be excused to the extent that performance is rendered
impossible by strike, fire, flood, earthquake, governmental acts or orders
or restrictions, failure of suppliers, or any other reason where failure to
perform is beyond the control of and not caused by the negligence of the
non-performing Party.
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IN WITNESS WHEREOF, the parties have caused this Agreement to be executed by
and through their duly authorized representatives on the dates specified below.
TELLUS TECHNOLOGY INC. OMNISKY, INC.
/s/ XXXXXXX X. XXXXX /s/ XXXXX XXXXXXXXX
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Signature Signature
Xxxxxxx X. Xxxxx Xxxxx Xxxxxxxxx
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Name (Print) Name (Print)
VP, Bus Dev President
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Title (Print) Title (Print)
11 May 00
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Date Date
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