EXHIBIT 10.13
Purchase Agreement
Between
FLASH Electronics Inc.
and
SONICWALLs
This purchase agreement is entered into effect as of 9/28/99 between FLASH
Electronics Inc. located at 0000 Xxxxxxxxx Xxxxx, Xxxxxxx, XX 00000 and
SONICWALL located at 0000 Xxxxx Xxxx Xx., Xxxxx Xxxxx, XX 00000.
This agreement is intended to define the basic business agreement between
the two companies. Additional details may be defined in subsequent business
agreement.
Under the agreement FLASH Electronics will provide custom manufacturing
services to SONICWALL. These services include purchasing components, material
management, assembling of printed circuit boards, testing, troubleshooting,
reworks, final assembly, packaging and shipping. The products will be covered by
a 6-month warrantee for workmanship to IPC 610 class 2 standards.
PURCHASE OF MATERIAL
In order for FLASH to purchase material for SONICWALL products
manufacturing, SONICWALL will provide a 3 month hard copy Purchase Order plus a
3 months rolling forecast. This forecast is required to allow sufficient time to
plan and procure material in timely and orderly manner. It is understood that
SONICWALL will be responsible for the costs of the 30 days material inventory,
WIP inventory and unique SONICWALL materials (Enclosure, PWA, etc.,) at Flash
Electronics. SONICWALL will also be liable for material with long leadtimes
provided Flash identifies such items in writing either as an attachment to this
agreement or other mutually acceptable manner. Flash Electronics shall follow
common industry practice to plan and buy in reasonable quantity to protect
lead-time requirements, safety stock, minimum buy quantity and volume discounts
if available.
INVOICING AND PAYMENT
Subject to acceptance of Products and parts within 3 days of receiving,
invoices shall be due and payable thirty (30) days after the date of actual
receipt of the products or parts. Any other applicable discounts or price
reductions shall be referenced on the invoice. Payments past 45 days may be
subject to 1.5% monthly finance charge.
CANCELLATIONS
In the event SONICWALL decides to terminate a purchase order either
actually or constructively (i.e. engineering change resulting in obsolescence.),
SONICWALL liability, in addition to NCNR components, shall include excess or
obsolete safety stock if these items are non-returnable such as open package and
incomplete reel. SONICWALL will reimburse Flash Electronics the restocking
charge or other penalties required by component vendor. SONICWALL will also be
liable for all work in process (WIP). Products in WIP and non-returnable
components will be shipped to SONICWALL 30 days from the date of
cancellation notice.
Page 2 Flash Purchase agreement
RESCHEDULES
SONICWALL shall not cancel nor reschedule the delivery date if it is within 30
days of the original scheduled date. However a 50% adjustment in quantity is
acceptable for increased quantity and 30% adjustment for decreased quantity
between 30 and 60 days of the original scheduled date. A change in total
quantity is acceptable beyond the 60 days delivery window as long as SONICWALL
agrees to buy back the NCNR material in excess of 60 days supply based on the
new schedule. In return, Flash shall purchase from SONICWALL before buying them
from other supplies for future demand.
FREIGHT AND SHIPPING CONTAINERS
Flash will follow SONICWALL instructions in the selection of freight
carrier and to determine shipping priority. SONICWALL shall provide complete
packing instruction and a list packing material. Shipments will be FOB Fremont
billed to SONICWALL freight account. Flash will provide free local pick up and
delivery with company vehicles to SONIC facility within 30 miles distance of the
Flash Fremont facility.
TERMINATION OF THIS CONTRACT
Either party may terminate this agreement, by a written notice to the other
party not less than 180 days prior to the effective date of such termination.
The termination of this agreement shall in no way relieve either party of any
sum of money and liability that have accrued prior to such termination.
By: /s/ Xxxxxxx X. Xxxxxxxx By: /s/ Xxxx Xxxxxxx
-------------------------------- -----------------------------
Printed name: Xxxxxxx X. Xxxxxxxx Printed name: Xxxx Xxxxxxx
---------------------- ------------------
Title: Chief Financial Officer Title: Director of Sales
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Date: 9/29/99 Date: 9/29/99
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