Product Purchase Agreement - @Road Inc. and Novatel Wireless Technologies Inc.
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. 1 of 4 <PAGE> 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/ Robert Corey /s/ Krish Panu ------------------------------ --------------------- Robert Corey Kris Panu President and CEO President and CEO 2 of 4 <PAGE> 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. 3 of 4 <PAGE> Schedule B Year 2000 Year 2001 PERIOD MONTH QTY TOTAL PERIOD MONTH QTY TOTAL ------ ----- --- ----- ------ ----- --- ----- Q2 2000 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 4 of 4