EXHIBIT 10.1
SALES REPRESENTATIVE AGREEMENT
This Sales Representative Agreement (the "Agreement") is made and entered
into as of March 31, 2005 (the "Effective Date"), by and between MOBILITY
ELECTRONICS, INC., a Delaware corporation and its affiliates having its
principal office at 17800 N. Perimeter Dr., Suite 200, Scottsdale, Arizona 85255
("Mobility") and MOTOROLA, INC., a Delaware corporation, and its affiliates
having its principal office at 600 North US Highway 45, Libertyville, Illinois
60048 ("Sales Rep"). Mobility and Sales Rep are sometimes each referred to
herein as a "Party" and collectively, as the "Parties".
1. FORMATION OF DIVISION.
(a) Formation. Effective as of the Effective Date, Mobility will,
for purposes of this Agreement, form a division of Mobility for the purpose of
designing, developing, manufacturing, marketing and selling iTip Products (the
"Division"). The Parties acknowledge and agree that the Division will not be a
separate legal entity, but will be part of Mobility.
(b) Resources and Expenses. The Division will utilize employees and
resources of Mobility, but will maintain its own accounting records. The
Division will be allocated the cost of dedicated personnel, resources and
expenses (the "Direct Expenses"), a percentage of the cost of intellectual
property filings, defense, enforcement and protection that is related to iTip
Technology (the "IP Expenses") as provided below and a reasonable portion of any
Mobility shared personnel, resources and expenses incurred on behalf of the
Division (the "Indirect Expenses"); it being agreed and understood that: (i) all
Permitted Sales Revenues (as defined below), cost of goods sold, and Direct
Expenses shall be determined in accordance with generally accepted accounting
principles, consistently applied ("GAAP"); (ii) 50% of the IP Expenses shall be
allocated to the Division, and (iii) a reasonable portion of the quarterly
Indirect Expenses shall be allocated to the Division; provided, however, that
notwithstanding the above, the total sales, marketing, research and development
and general and administrative expenses, Indirect Expenses and IP Expenses of
the Division (excluding the iTip Products Commission (and any similar commission
to any other sales representative of Mobility)) (the "Total Operating Expenses")
shall not exceed (1) if the Permitted Sales Revenues of the Division for any
calendar year is less than $50 million, thirty percent (30%) of the Permitted
Sales Revenue of the Division for such calendar year; (2) if the Permitted Sales
Revenue of the Division for any calendar year is at least $50 million but less
than $100 million, the lesser of (A) twenty five percent (25%) of the Permitted
Sales Revenue of the Division for such calendar year, or (B) the percentage
equal to Mobility's overall sales, marketing, research and development, and
general and administrative expenses as compared to its overall revenues (net of
returns and allowances) for such calendar year (for each calendar year, the
"Maximum Overall Operating Expense Percentage"); (3) if the Permitted Sales
Revenue of the Division for any calendar year is $100 million or more, the
lesser of (A) twenty percent (20%) of the Permitted Sales Revenue of the
Division for such calendar year, or (B) the Maximum Overall Operating Expense
Percentage for such calendar year. The limitations set forth in (1), (2) and (3)
of the previous sentence being collectively referred to as the "Maximum
Percentages".
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(c) Management. The Division will be under the management and
control of Mobility.
2. ENGAGEMENT OF SERVICES.
(a) Generally. Sales Rep will serve as Mobility's non-exclusive,
worldwide representative for the sale of Mobility's Computer Products and
Mobility's iTip Products (collectively, the "Mobility Products"). For purposes
of this Agreement:
(i) "Computer Products" means Mobility's existing line of
universal power products for computers (including notebook, laptop,
handheld, tablet computers and the like, but excluding personal
digital assistants, wireless internet (or e-mail devices),
smartphones and the like (the "Portable Computers")) and all future
versions (including expanded functionality), modifications,
enhancements, and derivatives to such products, and any new
universal power product for Portable Computers which is 60 watts or
more in power and is offered for sale by Mobility from time to time.
Such products may also include features for charging non-computer
mobile electronic devices. Some of the current Computer Products
currently offered for sale by Mobility are listed in Exhibit B
attached hereto.
(ii) "iTips" means any tip, cord or removable or
interchangeable item that utilizes iTip Technology to remotely
program a power product (including the remote programming of any
iTip Product) to correctly determine and provide the appropriate
voltage, current and/or power requirements for the purpose of
operating or charging the battery for an electronic device (e.g.,
cell phones, PDA's, digital cameras, MP3 players, CD players, and
the like).
(iii) "iTip Products" means Mobility's existing line of
universal power products for use with mobile electronic devices and
all future versions (including expanded functionality),
modifications, enhancements, and derivatives to such products, and
any new universal power products offered for sale by Mobility from
time to time, which: (i) are 70 watts or less in power; (ii) utilize
iTip Technology; and (iii) cannot be used to power or charge a
Portable Computer. Some of the current iTip Products currently
offered for sale by Mobility are listed in Exhibit B attached
hereto.
(iv) "iTip Technology" means the underlying iTip, combination
AC/DC, simultaneous charging and other related Intellectual Property
Rights (as defined below) of Mobility that are incorporated into the
iTips and products of Mobility that utilize iTips, including, but
not limited to, the patents and patents pending listed on Exhibit A
attached hereto.
(b) Sales Channels and Territory. Sales Rep shall have the worldwide
right to act as Mobility's sales representative for the sale of Mobility
Products; provided, however, that in the event of any channel conflict issues
affecting Sales Rep, Mobility shall consult with Sales Rep regarding such issues
and give due consideration to the input provided by Sales Rep. Mobility shall
then resolve such issues in a manner which considers the interests of all
Parties
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and third parties involved in the channel conflict issue (including, without
limitation, consideration of Sales Rep's pre-existing relationships with carrier
customers). In the event that Sales Rep does not accept Mobility's resolution of
the channel conflict issue, Sales Rep can appeal such decision to the Chief
Executive Officer, President or Chief Operating Officer of Mobility, who shall
make the final determination of such channel conflict issue. If following such
final determination Sales Rep still does not accept such resolution, Sales Rep
may terminate this Agreement without liability upon written notice to Mobility,
in which event, this Agreement shall be null and void and of no further force or
effect. Notwithstanding anything in this Agreement to the contrary, Sales Rep
will not have the right to sell Computer Products to the customers identified in
Exhibit C attached hereto, except as approved in advance in writing by Mobility
from time to time. Sales Rep will use good faith efforts to market iTips
Products to its carrier and wireless distributor customers, and to other persons
as agreed to by the Parties. In addition, Sales Rep and Mobility agree to work
together to develop a plan for including iTips in handset packaging.
(c) Sales Policies. All sales activities conducted by Sales Rep
pertaining to the Mobility Products will be in accordance with the sales
policies of Mobility, which sales policies are attached hereto as Exhibit D
(which sales policies may be changed by Mobility from time to time after prior
written notice to, and notice and consultation with, Sales Rep). In the event
that Sales Rep does not accept any change made by Mobility to its sales policy,
Sales Rep can appeal such decision to the Chief Executive Officer, President or
Chief Operating Officer of Mobility, who shall make the final determination of
such sales policy change. If following such final determination Sales Rep still
does not accept such sales policy change, Sales Rep may terminate this Agreement
without liability upon written notice to Mobility, in which event, this
Agreement shall be null and void and of no further force or effect. All orders
for the Mobility Products shall be solicited at prices specified by Mobility.
Sales Rep acknowledges specifically that all sales solicitations are to be made
on the basis of Mobility's sales policy as provided in Exhibit D, as may be
changed as provided above.
(d) Sales Orders. All sales orders and agreements relating to the
purchase of Mobility Products shall be subject to approval by Mobility, and all
contracts and purchase orders shall be executed and placed with Mobility.
Mobility's approval of a sales order or agreement relating to the purchase of
Mobility Products shall be based primarily on Sales Rep's compliance with
Mobility's sales policies. Sales Rep shall promptly notify Mobility with respect
to any and all customers who are interested in purchasing Mobility Products, and
any and all potential customer issues. If Sales Rep desires pre-approval by
Mobility of a sales order for a particular potential customer, Mobility shall,
upon the request of Sales Rep, provide Sales Rep certain terms and conditions
for such pre-approval (e.g., quantity, price, payment terms and delivery
schedule). Notwithstanding anything to the contrary contained in this Agreement,
no order for Mobility Products shall be binding unless accepted in writing by an
authorized representative of Mobility (except that any pre-approved conditions
quoted by Mobility to Sales Rep for a particular potential customer for a
specified order shall be binding upon Mobility for that particular customer
pertaining to such specified order).
(e) Collection Activities. Mobility shall be responsible for the
collection of all accounts receivable relating to the sale of Mobility Products,
but Sales Rep agrees to provide reasonable assistance to Mobility in this area
for customers of Mobility managed by Sales Rep
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(e.g., making phone calls, requesting payment and/or other communications with
the customer) as reasonably requested by Mobility from time to time.
(f) Rolling Forecast. Mobility and Sales Rep will work together to
formulate, on a monthly basis, a detailed, non-binding, rolling 12-month
forecast for: (i) Sales Rep's sales of Mobility Products (broken-down by
product, customer and geography) on behalf of Mobility; and (ii) Mobility's
manufacturing and delivery schedule and backlog, with the first forecast being
completed on or prior to April 30, 2005.
(g) Customer Support and Other Product Issues. Except as otherwise
specified herein, Mobility shall be responsible for all Mobility Product related
issues (and expenses), including, without limitation, technical support and
warranty issues. Furthermore, Sales Rep will not hold any inventory under this
Agreement nor will Sales Rep be responsible for any costs of distribution
programs established by Mobility. Notwithstanding the above, all of the costs
and expenses described above in this subsection (g) shall be considered costs
and expenses of the Division and shall be paid for by the Division.
(h) Representations and Warranties. Mobility represents and warrants
that it is under no obligation or restriction, and it will not assume or incur
any such obligation or restriction, that does or would in any material way
interfere or conflict with the performance of this Agreement by Mobility.
Mobility represents and warrants that (i) it has and will have full and
sufficient title and/or right and interest to the Mobility Products and
underlying technology to grant the rights to Sales Rep that are granted pursuant
to this Agreement; and (ii) neither the execution or performance by Mobility of
this Agreement, nor the consummation of any transactions contemplated herein
does or will (a) violate any law, order, regulation or ruling applicable to
Mobility, or (b) infringe any intellectual or other property, personal or
contract rights of any third party. To the extent permitted under Regulation FD,
Mobility agrees to promptly inform Sales Rep upon the occurrence of: (i)
Mobility's receipt of any third party intellectual property infringement claims
and any third party material lawsuits, in either case, which affects the
Division or the iTip Technology; (ii) any change to the composition of
Mobility's senior management team; and (iii) any decision by Mobility to undergo
a Change in Control (as defined in Section 8(b)) or to enter into a joint
venture, partnership or acquire all or substantially all of the assets of a
third party, in any case. which affects the Division or the iTip Technology.
(i) Most Favored Sales Representative. Mobility represents and
warrants that it will not enter into any sales representative agreement related
to iTip Products which provides for a "profits participation" type of sharing
arrangement similar to that of Section 3(a) below on terms and conditions more
favorable than those set forth in this Agreement.
3. COMMISSIONS.
(a) Commissions for iTip Products. Mobility will pay Sales Rep a
commission, payable on a calendar quarterly basis, equal to twenty-four and one
half percent (24.5%) of the "Pre-Commission EBIT" earned by the Division during
each calendar quarter (collectively, the "iTip Products Commission"); provided,
however, if Pre-Commission EBIT for any period is a negative number (i.e., a
loss for such period) (an "EBIT Loss"), then the EBIT
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Loss shall be allocated entirely to Mobility, and for any subsequent period(s)
in which there is a positive pre-Commission EBIT, Mobility shall be allocated
all of such Pre-Commission EBIT until Mobility recovers all EBIT Loss previously
allocated to Mobility. For purposes of calculating the Commission, the following
terms shall have the following meanings:
(i) "Pre-Commission EBIT" means Permitted Sales Revenues of
the Division for iTip Products less: (1) returns and allowances for
iTip Products; (2) cost of goods sold of the Division for iTip
Products (excluding cost of goods sold for products where the
revenue is excluded from the definition of Permitted Sales Revenue
(as provided in such definition)); (3) the Direct Expenses of the
Division; (4) the IP Expenses; and (5) the Indirect Expenses of the
Division.
(ii) "Permitted Sales Revenues" means all revenues (including
without limitation, licensing revenues and sales revenues) of the
Division for iTip Products and/or iTip Technology, excluding: (1)
the Computer Portion of the sales revenues attributable to any
product that is an iTip Product, but is bundled with any one or more
Computer Products; and (2) revenues generated from the sale of the
products through the RadioShack Channel during the transition period
as provided for in Exhibit E attached hereto. As used above, (i)
"Computer Portion" shall mean that portion of sales revenue for the
bundled product multiplied by a fraction, the numerator of which
shall be the manufactured suggested retail price of the Computer
Product contained in such bundled product, and the denominator of
which shall be the manufactured suggested retail price of the iTip
Product portion of the bundled product plus the manufactured
suggested retail price of the Computer Product contained in such
bundled product (provided, however, that the portion remaining after
excluding the Computer Portion must be greater than the
manufacturing cost of the iTip Product portion of the bundled
product); and (ii) "RadioShack Channels" shall mean RadioShack
Corporation's retail stores (including its dealer/franchise stores,
but excluding its Sam's Club program, and its Sprint kiosk program)
in the United States and its territories and Mexico, and
RadioShack.com.
(b) Commissions for Computer Products. Mobility will pay Sales Rep a
commission, payable on a calendar quarterly basis, equal to three percent (3.0%)
of the sales price (net of returns and allowances) for any Computer Product sold
by Sales Rep under this Agreement during each calendar quarter; provided,
however, for any Computer Product bundled with any iTip Product, such commission
shall be reduced by the three percent (3.0%) of the iTip Portion (the "Computer
Products Commission", and collectively with the iTip Products Commission, the
"Commissions"). As used above, "iTip Portion" shall mean that portion of sales
revenue for the bundled product multiplied by a fraction, the numerator of which
shall be the manufactured suggested retail price of the iTip Product contained
in such bundled product, and the denominator of which shall be the manufactured
suggested retail price of the iTip Product portion of the bundled product plus
the manufactured suggested retail price of the Computer Product contained in
such bundled product.
(c) Payments. Within twenty (20) days after the end of each calendar
quarter, Mobility shall provide a report to Sales Rep setting forth the
Commission due to Sales Rep for
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such calendar quarter (the "Commission Report"), and shall pay such Commissions
concurrent with the delivery of the Commission Report.
(d) Audit Rights. Mobility agrees to make and maintain such books,
records and accounts as are reasonably necessary to verify the accuracy of the
Commissions payments made to Sales Rep. Mobility agrees that it will, at the
sole expense of Sales Rep, permit Sales Rep's auditors to have reasonable access
to Mobility's business records and books of account, upon at least five (5)
business days' prior notice and no more than once during each fiscal year,
during Mobility's normal business hours for the purpose of determining whether
the appropriate Commissions have been made to Sales Rep for the prior 12-month
period. If any such audit discloses that Mobility has underpaid Sales Rep,
Mobility agrees to pay any shortfall within thirty (30) days; provided, however,
if Mobility disagrees with any underpayment, Mobility will direct its auditors
to engage in discussions with Sales Rep's auditors in order to reach a mutually
agreeable resolution of the issue. If any such audit discloses an underpayment
of over five percent (5%) of amounts otherwise owed to Sales Rep, Mobility shall
reimburse Sales Rep for the reasonable costs of the audit. If any audit
discloses any overpayment to Sales Rep by Mobility, Sales Rep shall refund the
amount of such overpayment within thirty (30) days. Notwithstanding anything to
the contrary contained in this subsection (d), if during a calendar year the
Total Operating Expenses (expressed as a percentage of the Permitted Sales
Revenue of the Division) do not exceed the Maximum Overall Operating Expense
Percentage for such calendar year, then in no event may Sales Rep audit or
question any determination by Mobility to incur a particular cost or expense or
take a particular action (e.g., hire personnel, purchase equipment, develop a
product, sue for intellectual property infringement, etc); although Sales Rep
may audit whether the allocation was proper.
(e) Commissions Adjustments. Returns, allowances, other deductions
from the sale price, or any other adjustments to the Commissions calculations
shall be debited or credited, as appropriate, during the calendar quarter in
which they arise.
4. EXPENSES. Mobility shall have no liability for any expenses that may be
incurred by Sales Rep to carry out its obligations under this Agreement. Sales
Rep agrees that it shall incur no expense chargeable to Mobility except as may
be specifically authorized in advance and in writing by an authorized officer of
Mobility.
5. MARKETING MATERIALS. Mobility will provide, without cost to Sales Rep,
reasonable supplies of standard advertising literature and samples which
Mobility deems to be required to encourage and facilitate the sale of the
Mobility Products. In the event that a customer or potential customer desires or
requires specialized marketing materials and/or advertising allowances in order
to undertake a marketing or advertising program involving Mobility Products,
Mobility and Sales Rep shall work together to determine the extent of Mobility's
financial commitment thereto, if any; it being the intent of the Parties that
Mobility will incur such types of expenses in situations where it is
economically justified or "standard practice" (e.g., carrier co-op programs).
Such commitments by Mobility will be deemed Direct Expenses of the Division.
6. NON-COMPETITION AND RESTRICTED ACTIVITIES.
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(a) Sales Rep agrees that during the Term it will cause the Motorola
Mobile Devices Business, as the same may be reorganized or restructured from
time to time not to manufacture, have manufactured, offer to sell, sell, market
or distribute any product that is a "Competitive Functional Equivalent". As used
herein, "Competitive Functional Equivalent" shall mean any product that
incorporates or utilizes iTip Technology.
(b) Only Sales Rep's Mobile Devices Business, and no other part of
Sales Rep including any Affiliates, ("Motorola MDB") hereby agrees that so long
as Sales Rep owns any securities of Mobility, Motorola MDB will not directly or
indirectly: [*].
(c) As used above, an "Affiliate" of any Party means any
corporation, entity or person controlling, controlled by , or under common
control with such Party.
7. INDEPENDENT CONTRACTOR RELATIONSHIP. The relationship of Sales Rep to
Mobility shall be that of special representative for purposes of sales
solicitation. Sales Rep shall not be considered the agent or legal
representative of Mobility for any purpose, except as provided herein, and no
officer, agent or employee of Sales Rep shall be considered as having employee
status with Mobility. Sales Rep shall remain, for all purposes, an independent
contractor and nothing in this Agreement shall constitute Sales Rep as an agent,
representative, subsidiary, joint venture, partner, employee, or servant of
Mobility for any purpose whatsoever. Sales Rep is not granted the right of
authority to assume, or to create any obligation or responsibility, express or
implied, on behalf of, or in the name of, Mobility, except as may be provided
herein, or as may specifically be authorized in writing by an authorized
official of Mobility.
8. TERM AND TERMINATION.
(a) Initial Term. This Agreement shall be effective as of the
Effective Date and shall remain in effect for fifteen (15) years following the
Effective Date (the "Initial Term"). Thereafter, this Agreement shall
automatically renew for subsequent one year periods (each, a "Renewal Term"),
unless either Party terminates this Agreement by written notice to the other
Party at least one hundred and twenty (120) days prior to the end of the Initial
Term or any Renewal Term. The Initial Term and any Renewal Term(s) are
collectively referred to herein as the "Term". Notwithstanding anything in this
Agreement to the contrary: (i) Sales Rep may terminate this Agreement upon
written notice to Mobility at any time after five (5) years following the
Effective Date, in which case, all terms and provisions of this Agreement shall
terminate and be of no further or effect; and (ii) if this Agreement expires at
the end of any Initial Term or Renewal Term or is terminated by Sales Rep after
the Initial Term then the provisions of Sections 3(a), (c), (d) and (e) and
Section 6, as well as the applicable definitions in this Agreement, shall
survive such expiration or termination, unless Sales Rep provides a written
notice to Mobility at the time of such expiration or termination that Sales Rep
elects to terminate the provisions of Sections 3(a), (c), (d) and (e) above, in
which event all terms and provisions of this Agreement shall terminate and be of
no further force or effect.
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* Confidential information on this page has been omitted and filed separately
with the Securities and Exchange Commission pursuant to a Confidential Treatment
Request.
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(b) Termination. In addition to the other termination rights set
forth in this Agreement, a Party will only have the right to terminate this
Agreement during the Term if (i) the non-terminating Party is declared or
acknowledges that it is insolvent or otherwise unable to pay its debts as they
become due or upon the filing of any proceeding (whether voluntary or
involuntary) for bankruptcy, insolvency or relief from creditors; (ii) a Change
of Control (defined below) of a Party has occurred; and/or (iii) the
non-terminating Party has committed (through any act or omission) a material
default or breach of any covenant, obligation, representation or warranty under
this Agreement, and such default or breach has not been cured within thirty (30)
days after receipt of written notice from the other Party specifying such
default or breach. Any determination to terminate this Agreement following the
expiration of such thirty (30) day notice shall be in writing and delivered to
the other Party. Upon any such termination, this Agreement shall be null and
void and of no further force or effect. "Change of Control" shall mean (a) the
consummation of a reorganization, merger or consolidation or sale or other
disposition of all or substantially all of the assets of any Party; (b) the
acquisition by any Person or group (within the meaning of Section 13(d)(3) or
14(d)(2) of the Securities Exchange Act of 1934, as amended) of beneficial
ownership (within the meaning of Rule 13d-3 promulgated under such Act) of more
than fifty percent (50%) of either: (i) the then outstanding shares of common
stock of any Party hereto; (ii) the combined voting power of the then
outstanding voting securities of any Party hereto entitled to vote generally in
the election of directors; or (iii) the income and profits interest of the
general partners or limited partners where the entity is a limited partnership;
or (c) in the case of Mobility, the consummation of a reorganization, merger or
consolidation or sale or other disposition of the Division. The right to
terminate the Agreement as a result of a Change of Control shall lie only with
the Party who did not have a Change of Control.
(c) Liability Upon Termination. Neither Party shall be liable to the
other, because of such termination, for compensation (other than Commission
which may become payable as a result of orders accepted by Mobility prior to
termination and released for shipment within ninety (90) days after such
termination), reimbursement, or damages on account of the loss of prospective
profits on anticipated sales, or on account of expenditures, investments,
leases, or any type of commitments made in connection with the business of
either caused by the termination of this Agreement.
(d) Return of Materials. Upon termination, Sales Rep shall
immediately return all proprietary and confidential material, including but not
limited to price books, customer catalogues, installation drawings, sales
manuals, designer guides and owner's manuals.
(e) Mitigation of Damages. Upon the occurrence of an event creating
grounds for termination under this Section 8, the Parties shall use commercially
reasonable efforts to mitigate damages caused by the occurrence of such event.
9. CONFIDENTIALITY AND NON-DISPARAGEMENT. Each Party agrees to identify in
writing as confidential or proprietary, or mark as confidential or proprietary,
any information that either Party deems to be confidential information. Each
Party agrees that information that is disclosed orally shall not be considered
confidential information unless it is reduced to writing or to a written summary
that identifies the orally-disclosed topics to be considered as confidential
information and such writing is provided to the recipient at the time of
disclosure or within thirty
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(30) days thereafter. Each Party agrees to treat such confidential information
as strictly confidential and shall take reasonable precautions to safeguard such
information, shall not use it for any unauthorized purposes, and shall not
disclose it to any third party without the prior written consent of the Party
from whom it was obtained; provided, however, that the Party receiving the
confidential information may disclose such information to its responsible
officers, employees, agents and representatives who require such information for
the purposes contemplated by this Agreement, provided that such persons shall be
subject to the obligations of confidentiality provided in this Section 9.
Notwithstanding this Section 9, confidential information shall not include
information that: (i) the recipient can demonstrate by written evidence was
lawfully in its possession prior to its first receipt of such information from
the deliverer thereof; (ii) is independently developed by the recipient without
use of any confidential information of the other Party; (iii) is or becomes
available in the public domain at the time of disclosure or thereafter other
than as a result of disclosure by the recipient; or (iv) is received from a
third party with a legal or contractual right to disclose such information. Each
Party agrees to conduct its business in such a way as not to damage the other's
valuable reputation, or disparage such Party, its employees, directors, parent,
subsidiaries, or affiliates.
10. LIMITATION OF LIABILITY.
(a) TO THE EXTENT ALLOWED BY APPLICABLE LAW, IN NO EVENT SHALL
EITHER PARTY BE LIABLE FOR ANY LOSS OF PROFITS, LOSS OF USE OR DATA,
INTERRUPTION OF BUSINESS, OR FOR INDIRECT, SPECIAL, INCIDENTAL OR CONSEQUENTIAL
DAMAGES OF ANY KIND, EVEN IF SUCH PARTY HAS BEEN ADVISED OF THE POSSIBILITY OF
SUCH DAMAGES AND NOTWITHSTANDING ANY FAILURE OF ESSENTIAL PURPOSE OF ANY LIMITED
REMEDY.
(b) IN NO EVENT SHALL MOBILITY OR ITS SUPPLIERS BE LIABLE TO SALES
REP FOR ANY UNAUTHORIZED REPRESENTATION OR WARRANTY MADE TO ANY THIRD PARTY BY
SALES REP.
11. INDEMNIFICATION.
(a) Indemnity. Subject to the limitations set forth in Section
10(a), each Party (the "Indemnifying Party") agrees to indemnify, defend and
hold harmless the other Party and its officers, directors, employees, agents and
subsidiaries, and each of its representatives, and its successors and permitted
assigns (an "Indemnified Party") at all times from and after the Effective Date
from and against Damages that the Indemnified Parties may at any time suffer or
incur or become subject to as a direct or indirect result of: (i) any breach of
any representation or warranty made by the Indemnifying Party in this Agreement;
(ii) any breach or default in the performance by the Indemnifying Party of any
of the covenants to be performed by the Indemnifying Party under this Agreement;
(iii) any gross negligence, willful misconduct or dishonesty of the Indemnifying
Party or its employees, agents, representatives, contractors or any other person
under its control; (iv) any infringement of intellectual property rights of any
third person resulting from any Party's use of any such intellectual property
rights that is provided by the Indemnifying Party; or (v) any acts or omissions
of the Indemnifying Party in violation of federal, state or local laws.
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(b) Damages. For the purposes of this Agreement, the term "Damages"
shall include all losses, costs, expenses, damages and liabilities incurred by,
and all claims made and amounts finally awarded or charged against any
Indemnified Party, including all payments and settlements in discharge thereof,
and reasonable professional and attorneys' fees and expenses incurred in
investigating or in attempting to avoid the same or oppose the imposition
thereof (provided, however, that for claims between the Parties, Damages shall
include attorneys' fees only under circumstances of the gross negligence or
willful behavior of the Indemnifying Party), together with lawful interest
thereon. The term "Damages" shall not include any amounts for which any
Indemnified Party actually receives payment under an insurance policy, excluding
self-insured amounts and deductible amounts which are deemed "Damages"
hereunder.
12. GENERAL.
(a) Notices. All notices hereunder given by a Party shall be in
writing and shall be hand delivered or sent by U.S. Registered or Certified
Mail, postage prepaid, return-receipt requested, or delivered by a courier
company, prepaid, to the addresses indicated below. The addresses of the Parties
until further written notice to the contrary are:
Mobility: Mobility Electronics, Inc.
17800 Perimeter Drive, Suite 200
Scottsdale, Arizona 85255
Attn: Charles R. Mollo, CEO
Sales Rep: Motorola, Inc.
600 North US Highway 45
Libertyville, Illinois 60048
Attn: President and CEO,
Mobile Devices Business
with a copy to: Motorola, Inc.
600 North US Highway 45
Libertyville, Illinois 60048
Attn: Law Director,
Mobile Devices Business
(b) Headings. The headings and captions used in connection with the
Sections and paragraphs of this Agreement are inserted only for the purpose of
reference. Such captions shall not be deemed to govern, limit, modify, or in any
other manner affect the scope, meaning or intent of the provisions of this
Agreement or any part thereof; nor shall such captions otherwise be given any
legal effect.
(c) Choice of Law. This Agreement shall be governed by, construed
under, and enforced in accordance with the laws of the State of New York and
applicable federal law, without reference to any conflicts of laws principles
that may require reference to the laws of other jurisdictions.
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(d) Severability. If any provision of this Agreement should be
determined by a court of competent jurisdiction to be void or in any measure
unenforceable, the Parties intend that such determination shall amend or modify
this Agreement by eliminating or modifying only those provisions affected by the
determination.
(e) Amendments. This Agreement may be amended or modified only by a
written agreement signed by both Parties.
(f) Entire Agreement. This Agreement contains the complete statement
of all the agreements between the Parties with respect to its subject matter,
and cannot be changed or terminated orally, and will be binding upon and shall
inure to the benefit of such Party's successors and permitted assigns.
(g) Counterparts. This Agreement may be executed in counterparts,
each of which shall be deemed an original, and all of which together shall
constitute one and the same document.
(h) Assignment. Except where expressly provided in this Agreement to
the contrary, a Party shall not assign or in any other way transfer this
Agreement or any right or obligation hereunder, whether by operation of law or
otherwise, without the prior written consent of the other Party, which consent
shall not be unreasonably withheld or delayed . This Section 12(h) shall not in
any manner affect a Party's right to terminate this Agreement upon the
occurrence of a Change of Control if permitted to do so under Section 8(b)
above.
11
IN WITNESS WHEREOF, the Parties hereto have caused this Agreement to be
executed as of the date first above written.
MOBILITY ELECTRONICS, INC.
By: /s/ Charles R. Mollo
--------------------
Charles R. Mollo,
Chief Executive Officer
MOTOROLA, INC.
By: /s/ Susan M. Fullman
--------------------
Susan M. Fullman,
Corporate Vice President
Customer Solutions & Support
Motorola Mobile Devices
12
EXHIBIT A
ITIP TECHNOLOGY
ISSUED POWER PATENTS
ISSUED PATENT # TITLE
- --------------- -----
5,347,211 Selectable Output Power Converter
6,643,158 Dual input AC/DC to Programmable DC
Output Converter
6,700,808 Dual Input AC and DC Power Supply
Having a Programmable DC Output
Utilizing A Secondary Buck Converter
6,650,560 Dual Input AC and DC Power Supply
Having a Programmable DC Output
Utilizing Single-Loop Optical Feedback
6,751,109 Dual Input AC/DC Battery Operated
Power Supply
6,064,177 Two-Part Battery Charger/Power Cable
Article with Multiple Device Capability
6,433,274 Power Converter Device
Dual Input AC/DC to Programmable DC
6,775,163 Output Converter
6,791,853 Dual Input AC/DC Power Converter
Having a Programmable Peripheral Power
Hub Module
D2004/1351/A Singapore - 5 Watt Connector Solid
Lines
D2004/1352/H Singapore - 5 Watt Receptacle Solid
Lines
D2004/1353/D Singapore - 15 Watt Connector Solid
Lines
D2004/1354/J Singapore - 15 Watt Receptacle Solid
Lines
D2004/1355/G Singapore - 25 Watt Connector Solid
Lines
A-1
D2004/1356/C Singapore - 25 Watt Receptacle Solid
Lines
D2004/1357/Z Singapore - 35 Watt Connector Solid
Lines
D2004/1358/F Singapore - 35 Watt Receptacle Solid
Lines
157405 Australia - 15 Watt Connector Solid
Lines
157401 Australia - 15 Watt Receptacle Solid
Lines
157404 Australia - 15 Watt Connector Solid
Lines
157507 Australia - 15 Watt Receptacle Solid
Lines
157403 Australia - 15 Watt Plug only
157400 Australia - 25 Watt Receptacle Solid
Lines
157406 Australia - 25 Watt Connector Solid
Lines
157503 Australia - 25 Watt Receptacle Solid
Lines
157506 Australia - 25 Watt Plug only
157402 Australia - 35 Watt Receptacle Solid
Lines
157399 Australia - 35 Watt Connector Solid
Lines
157505 Australia - 35 Watt Receptacle Solid
Lines
157502 Australia - 35 Watt Connector Solid
Lines
157508 Australia - 35 Watt Plug only
PENDING POWER PATENT APPLICATIONS
SERIAL # TITLE
10/790,654 Dual Input AC and DC Power Supply
Having a Programmable DC Output
Utilizing A Secondary Buck Converter
10/715,259 Dual Input AC and DC Power Supply
Having A Programmable DC Output
Utilizing Single-Loop Optical Feedback
A-2
US02/03542 PCT Dual Input AC and DC Power Supply
Having a Programmable DC Output
Utilizing A Secondary Buck Converter
US02/34766 PCT Dual Input AC/DC Battery Operated
Power Supply
US02/34749 PCT Dual Input AC and DC Power Supply
Having a Programmable DC Output
Utilizing Single-Loop Optical Feedback
US02/34748 PCT Dual Input AC/DC to Programmable DC
Output Converter
10/623,060 Programmable Power Converter
60/494,860 Dual Input AC/DC Fuel Cell Operated
Power Supply
10/663,868 Compact Electronics Plenum
60/525,857 Retractable Cable System For Power
Converter
02707726.2 Dual Input AC and DC Power Supply
Having a Programmable DC Output
(Europe)
02815764.8 Dual Input AC and DC Power Supply
Having a Programmable DC Output (China)
10-2004-7002345 Dual Input AC and DC Power Supply
Having a Programmable DC Output (South
Korea)
2003-541,122 Dual Input AC and DC Power Supply
Having a Programmable DC Output (Japan)
2004104345 Dual Input AC and DC Power Supply
Having a Programmable DC Output
(Russia)
2002242115 Dual Input AC and DC Power Supply
Having a Programmable DC Output
(Australia)
160167 Dual Input AC and DC Power Supply
Having a Programmable DC Output
Utilizing a Secondary Buck Converter
(Israel)
2004/0930 Dual Input AC and DC Power Supply
Having a Programmable DC Output (South
Africa)
A-3
00315/DELNP/2004 Dual Input AC and DC Power Supply
Having a Programmable DC Output (India)
2004 0455 Dual Input AC and DC Power Supply
Having a Programmable DC Output
(Norway)
200400703-5 Dual Input AC and DC Power Supply
Having a Programmable DC Output
(Singapore)
2,454,044 Dual Input AC and DC Power Supply
Having a Programmable DC Output
(Canada)
10/790,877 Key Universal Power Tip and Power
Source Connectors
US2004/007084 PCT Dual Input AC/DC Power Converter
Having A Programmable Peripheral Power
Hub Module
US04/16292 PCT Key Universal Power Tip and Power
Source Connectors
10-2004-7006621 Dual Input AC/DC Battery Operated
Power Supply (South Korea)
2003-541,121 Dual Input AC/DC Battery Operated
Power Supply (Japan)
2002342210 Dual Input AC/DC Battery Operated
Power Supply (Australia)
US02/34766 Dual Input AC/DC Battery Operated
Power Supply ( China)
02776371.3 Dual Input AC/DC Battery Operated
Power Supply (Europe)
2,466,162 Dual Input AC/DC Battery Operated
Power Supply (Canada)
01172/DELNP/200 Dual Input AC/DC Battery Operated
Power Supply (India)
US04/19301 PCT Programmable Power Converter
US04/16292 Key Universal Power Tip and Power
Source Connectors (China)
A-4
10-2004-7013263 Key Universal Power Tip and Power
Source Connectors (South Korea)
US04/16292 Key Universal Power Tip and Power
Source Connectors (Japan)
US04/16292 Key Universal Power Tip and Power
Source Connectors (Russia)
2004208705 Key Universal Power Tip and Power
Source Connectors (Australia)
US04/16292 Key Universal Power Tip and Power
Source Connectors (Israel)
2004/6728 Key Universal Power Tip and Power
Source Connectors (South Africa)
US04/16292 Key Universal Power Tip and Power
Source Connectors (India)
US04/16292 Key Universal Power Tip and Power
Source Connectors (Norway)
US04/16292 Key Universal Power Tip and Power
Source Connectors (Singapore)
2,475,060 Key Universal Power Tip and Power
Source Connectors (Canada)
29/198,752 CONNECTOR ( 5 Watt Connector TIP)
29/198,801 CONNECTOR (15 Watt Connector TIP)
29/198,777 CONNECTOR (25 Watt Connector TIP)
29/198,775 CONNECTOR (35 Watt Connector TIP)
29/198,754 CONNECTOR ( 5 Watt Receptacle)
29/198,776 CONNECTOR (15 Watt Receptacle)
29/198,755 CONNECTOR (25 Watt Receptacle)
29/198,756 CONNECTOR (35 Watt Receptacle)
29/206,090 CONNECTOR (5 Watt Connector-Revised)
A-5
29/206,089 CONNECTOR (5 Watt Receptacle-Revised)
CANADA
08-901134CA 5 Watt Connector Dashed/Solid Lines
08-901135CA 5 Watt Receptacle Dashed/Solid Lines
08-901136CA 15 Watt Connector Dashed/Solid Lines
08-901137CA 15 Watt Receptacle Dashed/Solid Lines
08-901138CA 25 Watt Connector Dashed/Solid Lines
08-901139CA 25 Watt Receptacle Dashed/Solid Lines
08-901140CA 35 Watt Connector Dashed/Solid Lines
08-901141CA 35 Watt Receptacle Dashed/Solid Lines
CHINA
DIM040859 5 Watt Connector/Receptacle Solid Lines
DIM040860 15 Watt Connector/Receptacle Solid Lines
DIM040869 25 Watt Connector/Receptacle Solid Lines
DIM040870 35 Watt Connector/Receptacle Solid Lines
EUROPE
000213889 5 Watt Connector/Receptacle (Revised)
000188958 15,25,35 Watt Connector/Receptacle
INDIA
TBD 5 Watt Connector Solid Lines
TBD 5 Watt Receptacle Solid Lines
TBD 15 Watt Connector Solid Lines
TBD 15 Watt Receptacle Solid Lines
TBD 25 Watt Connector Solid Lines
A-6
TBD 25 Watt Receptacle Solid Lines
TBD 35 Watt Connector Solid Lines
TBD 35 Watt Receptacle Solid Lines
ISRAEL
39540 5-35 Watt Connector/Receptacle Dashed/Solid
JAPAN
2004-023,370 5 Watt Connector Dashed/Solid Lines
2004-023,371 5 Watt Receptacle Dashed/Solid Lines
2004-023,377 15 Watt Connector Dashed/Solid Lines
2004-023,378 15 Watt Receptacle Dashed/Solid Lines
2004-023,379 25 Watt Connector Dashed/Solid Lines
2004-023,381 25 Watt Receptacle Dashed/Solid Lines
2004-023,383 35 Watt Connector Dashed/Solid Lines
2004-023,384 35 Watt Receptacle Dashed/Solid Lines
NORWAY
TBD 5-35 Watt Connector/Receptacle
RUSSIA
2004502018 5-35 Watt Connectors - Solid Lines
2004502019 5-35 Watt Receptacle - Solid Lines
SOUTH AFRICA
2004/1001 5 Watt Connector Dashed/Solid Lines
2004/1000 5 Watt Receptacle Dashed/Solid Lines
2004/1003 15 Watt Connector Dashed/Solid Lines
2004/1002 15 Watt Receptacle Dashed/Solid Lines
A-7
<s>
2004/1005 25 Watt Connector Dashed/Solid Lines
2004/1004 25 Watt Receptacle Dashed/Solid Lines
2004/1007 35 Watt Connector Dashed/Solid Lines
2004/1006 35 Watt Receptacle Dashed/Solid Lines
SOUTH KOREA
30-2004-0023709 5 Watt Connector Dashed Lines
30-2004-0023710 5 Watt Receptacle Dashed Lines
30-2004-0023711 15 Watt Connector Dashed Lines
30-2004-0023712 15 Watt Receptacle Dashed Lines
30-2004-0023713 25 Watt Connector Dashed Lines
30-2004-0023714 25 Watt Receptacle Dashed Lines
30-2004-0023715 35 Watt Connector Dashed Lines
30-2004-0023716 35 Watt Receptacle Dashed Lines
TAIWAN
93304600 5 Watt Connector Dashed/Solid Lines
93304601 5 Watt Receptacle Dashed/Solid Lines
93304602 15 Watt Connector Dashed/Solid Lines
93304603 15 Watt Receptacle Dashed/Solid Lines
93304604 25 Watt Connector Dashed/Solid Lines
93304605 25 Watt Receptacle Dashed/Solid Lines
93304606 35 Watt Connector Dashed/Solid Lines
93304607 35 Watt Receptacle Dashed/Solid Lines
A-8
EXHIBIT B
ITIP PRODUCTS
1. Low-Power (70 watts or less) combination AC/DC power adapters for cell
phones, digital cameras, MP3 players, game boys, DVD players, and other
electronic devices (the "Squirt" and "Squirt Derivative"), but not for use
with Portable Computers.
2. Low-Power (70 watts or less) cigarette lighter adapters (CLA) for cell
phones, digital cameras, MP3 players, game boys, DVD players, and other
electronic devices, but not for use with Portable Computers.
3. Low-Power (70 watts or less) mobile AC power adapters for cell phones,
digital cameras, MP3 players, game boys, DVD players, and other electronic
devices, but not for use with Portable Computers.
4. Dual Power.
5. iTips (i.e., tips) for the above power products or any other iTip
Products.
COMPUTER PRODUCTS
1. 65 watt, 70 watt, 90 watt, 120 watt, 130 watt, and other power versions of
Mobility's combinations AC/DC universal power adapters (i.e., Juice or
Everywhere Power) for Portable Computers with simultaneous charging of a
secondary device.
2. 65 watt, 70 watt, 90 watt, 120 watt, 130 watt, and other power versions of
Mobility's AC universal power adapters (ICE or wall power) for Portable
Computers with simultaneous charging of a secondary device.
3. 65 watt, 70 watt, 90 watt, 120 watt, 130 watt, and other power versions of
Mobility's DC universal power adapters (power extender or auto power) for
Portable Computers with simultaneous charging of a secondary device.
4. Any tip or iTip for any of the above products.
B-1
EXHIBIT C
EXCLUDED CUSTOMERS FOR COMPUTER PRODUCTS
[*]
- --------------------------------------------------------------------------------
* Confidential information on this page has been omitted and filed separately
with the Securities and Exchange Commission pursuant to a Confidential Treatment
Request.
C-1
EXHIBIT D
EXISTING MOBILITY SALES POLICIES
The following summarizes the standard policies adhered to by the Mobility
Electronics, Inc. ("Mobility") sales force and sales agents acting on behalf of
Mobility sales management.
These policies are continually under review and subject to amendment as deemed
necessary for the effective management of new and existing sales opportunities.
Approval for deviation from the following policies is available only from
Mobility sales management and must be in written documented form.
SALES POLICIES
PAYMENT TERMS
NET 30 DAYS. EXCEPTIONS WILL BE CONSIDERED BY MOBILITY'S CONTROLLER AND/OR
CREDIT MANAGER ON A CASE BY CASE BASIS.
CREDIT LIMITS
POTENTIAL NEW CUSTOMERS MUST SUBMIT A CREDIT APPLICATION. DETERMINATION OF
CREDIT LIMIT WILL BE MADE BY MOBILITY'S CREDIT MANAGER.
MARKETING DEVELOPMENT FUNDS
PROPOSALS FOR ECONOMICALLY JUSTIFIED MARKET DEVELOPMENT FUNDS WILL BE
CONSIDERED ON A CASE BY CASE BASIS. ALL SUCH PROGRAMS REQUIRE PRIOR
APPROVAL FROM MOBILITY MANAGEMENT.
POWER PRODUCT BRANDING
POWER PRODUCTS MUST CONTAIN "ITIP" COMPATIBLE BRANDING, IN ACCORDANCE WITH
MOBILITY'S BRANDING GUIDELINES. LICENSE TO UTILIZE "IGO" BRANDING
AVAILABLE UPON TERMS AGREEABLE TO MOBILITY MANAGEMENT. ALL PACKAGING AND
BRANDING MUST COMPLY WITH MOBILITY TRADEMARK USAGE GUIDELINES AND REQUIRES
MOBILITY PRIOR WRITTEN REVIEW AND APPROVAL.
PRICING QUOTATIONS
SEE MOBILITY PRICING MATRIX FOR CUSTOMER DEFINITIONS AND PRICING TIERS.
ALL PRICE QUOTES MUST COMPLY WITH THIS PRICE STRUCTURE, UNLESS PRIOR
WRITTEN APPROVAL IS OBTAINED FROM MOBILITY. THE PRICING MATRIX IS
CONFIDENTIAL AND CANNOT BE DISCLOSED TO ANY THIRD PARTY; PROVIDED,
HOWEVER, IF NECESSARY TO MAKE A SALE, THE SPECIFIC PRICING TIER
INFORMATION CAN BE SHARED WITH A CUSTOMER (BUT ONLY THE PRICING WITH
RESPECT TO THE APPLICABLE CUSTOMER TIER).
D-1
ORDER SUBMISSION AND ACCEPTANCE
VERBAL ORDERS ARE NOT ACCEPTABLE. FACSIMILE, MAIL OR ELECTRONIC SUBMISSION
REQUIRED FOR ALL ORDERS.
ALL ORDERS REQUIRE MOBILITY'S PRIOR WRITTEN ACCEPTANCE.
MOBILITY ELECTRONICS
17800 NORTH PERIMETER DRIVE, SUITE 200
SCOTTSDALE, AZ 85255
FAX 480-281-7742
EMAIL - BSTECH@MOBL.COM, ANEWBY@MOBL.COM OR MEAGLESPIRIT@MOBL.COM
LEAD-TIME FOR ORDER SHIPMENT
CUSTOMER MUST PROVIDE MOBILITY WITH A 16-WEEK ROLLING FORECAST FOR
PLANNING PURPOSES ONLY.
ORDER LEAD-TIME FOR "DERIVATIVE" PRODUCTS (DIFFERENT CABLES, TIPS,
PACKAGING, ETC) IS 16-WEEKS.
ORDER LEAD-TIME FOR REPLENISHMENT OF EXISTING PRODUCTS (NO CHANGES) IS 12
WEEKS.
ORDER CANCELLATION AND RE-SCHEDULING
FACSIMILE, MAIL OR ELECTRONIC SUBMISSION REQUIRED FOR ALL ORDER
CANCELLATIONS AND RE-SCHEDULED DELIVERY DATES.
MOBILITY ELECTRONICS
17800 NORTH PERIMETER DRIVE, SUITE 200
SCOTTSDALE, AZ 85255
FAX 480-281-7742
EMAIL - BSTECH@MOBL.COM, ANEWBY@MOBL.COM OR MEAGLESPIRIT@MOBL.COM
D-2
OPEN PURCHASE ORDERS MAY BE MODIFIED UPON WRITTEN NOTICE PER THE FOLLOWING
SCHEDULE:
BEFORE INCREASE DECREASE CANCEL RESCHEDULE
SHIPMENT
--------------- -------- -------- ------ ----------
31-60 DAYS 15% 15% 0% 50% (UP TO 60 DAYS)
61-90 DAYS 50% 50% 25% 100% (UP TO 60DAYS)
90+ DAYS 100% 100% 100%
CANCELLED ORDERS WILL NOT RELEASE CUSTOMER FROM LONG LEAD-TIME COMPONENTS
(DEFINED AS BEYOND 60 DAYS LEAD-TIME FOR ANY GIVEN COMPONENT).
SHIPPING TERMS
FOB POINT OF MANUFACTURE, UNLESS OTHERWISE APPROVED BY MOBILITY IN
WRITING.
RETURNS
DEFECTIVE MATERIALS ARE RETURNABLE FOR CREDIT UPON VERIFICATION OF FAILURE
BY MOBILITY ELECTRONICS OR AUTHORIZED 3RD PARTY TESTING PARTY. CREDIT
PROVIDED UPON FAILURE VERIFICATION. NON-DEFECTIVE MATERIALS WILL BE
RETURNED TO CUSTOMER AND CUSTOMER WILL BE CHARGED FOR REPACKING, HANDLING,
SORTING AND TESTING OF THE NON-DEFECTIVE MATERIALS.
WARRANTY
SEE SPECIFIC PRODUCT FOR APPLICABLE WARRANTY.
RETURN MATERIAL AUTHORIZATION (RMA)
FACSIMILE, MAIL OR ELECTRONIC SUBMISSION REQUIRED FOR ALL RMA REQUESTS.
MOBILITY ELECTRONICS
17800 NORTH PERIMETER DRIVE, SUITE 200
SCOTTSDALE, AZ 85255
FAX 480-281-7742
EMAIL - BSTECH@MOBL.COM, ANEWBY@MOBL.COM OR MEAGLESPIRIT@MOBL.COM
UPON RECEIPT AND ACCEPTANCE, MOBILITY ELECTRONICS WILL PROVIDE CUSTOMER
WITH RMA NUMBER AND SHIPPING INSTRUCTIONS.
D-3
EXHIBIT E
TRANSITION PLAN
During the "Transition Period," as defined below, RadioShack Corporation
("RadioShack") shall purchase the following products (the "Listed Products")
from Mobility at the following prices for re-sale exclusively through the
RadioShack Channels:
PRODUCT TRANSITION PRICE COMMENT
- ------- ---------------- -------
[*] [*] [*]
[*] [*] [*]
[*] [*] [*]
[*] [*] [*]
[*] [*] [*]
[*] [*] [*]
[*] [*] [*]
"Transition Period" shall mean the period between March 31, 2005 and the
earlier of (a) December 31, 2005 and (b) the date on which RadioShack's iTips
Product Commission, as defined in and pursuant to that certain Sales
Representative Agreement between RadioShack and Mobility dated as of March 31,
2005 (the "iTip Sales Rep Agreement"), equals or exceeds, on a pro forma basis,
the following: (i) the number of units of above Listed Products sold by
RadioShack for a calendar quarter, multiplied by (ii) the cost of the above
Listed Products to RadioShack per Mobility's most favorable pricing for retail
customers purchasing similar volumes minus the cost of the above Listed Products
at the costs listed above.
[*].
No iTips Product Commission will be paid by Mobility to RadioShack or
Sales Rep on sales of the above Listed Products to RadioShack until the
Transition Period expires.
- --------------------------------------------------------------------------------
* Confidential information on this page has been omitted and filed separately
with the Securities and Exchange Commission pursuant to a Confidential Treatment
Request.
E-1