EXHIBIT 10.14
NOTE: PORTIONS OF THIS EXHIBIT INDICATED BY "[***]" ARE SUBJECT TO A
CONFIDENTIAL TREATMENT REQUEST, AND HAVE BEEN OMITTED FROM THIS EXHIBIT.
COMPLETE, UNREDACTED COPIES OF THIS EXHIBIT HAVE BEEN FILED WITH THE SECURITIES
AND EXCHANGE COMMISSION AS PART OF THIS COMPANY'S CONFIDENTIAL TREATMENT
REQUEST.
PURCHASE AGREEMENT
THIS PURCHASE AGREEMENT (this "Agreement") is made this 26th day of
December 2001 by and between Directed Electronics, Inc., a California
Corporation located at One Viper Way, Vista, California ("DIRECTED") and Nutek
Corporation, a Taiwan Corporation located at 5F, Xx. 0 Xxxxx 0, Xxxx 00,
Xxx-Xxxxx Xxxx, Xxxxx-Xxxx Xxxx, Xxxxxx, Xxxxxx ("SUPPLIER").
1. DEFINITIONS
The following terms shall have the following meanings under this
Agreement:
1.1 "Documentation" means schematics, designs, drawings, manuals
(including without limitation installation manuals, owner's manuals and service
manuals), models, photographs, plans, renderings, samples, schematics, sketches,
specifications and any other written and tangible materials provided by DIRECTED
or developed by SUPPLIER in connection with this Agreement.
1.2 "Products" means those products identified on Schedule 1 attached
hereto, and the pans and components thereof, manufactured by SUPPLIER and sold
to DIRECTED pursuant to this Agreement. The Products covered by this Agreement
may be changed from time to time upon the written consent of both parties.
1.3 "Specifications" means the descriptive material itemizing the
functional and operational requirements of the Products and such other technical
specifications, drawings and other material used in the development of the
Product. The Specifications covered by this Agreement may be changed from time
to time upon the written consent of both parties,
1.4 "Trademarks" means those trademarks or trade names owned or used by
DIRECTED or its affiliates, and designated by DIRECTED in its sole discretion
for use in connection with the Products.
1.5 "Vendor Requirements" means the packaging, marking and shipping
requirements as expressly described in DIRECTED ELECTRONICS, INC.'s Vendor
Requirements package attached to this Agreement as Schedule 4 and fully
incorporated herein.
1.6 "Customer" means any corporation, company, partnership, individual, or
other entity that purchases products the same or similar to the Product, either
directly or indirectly, from SUPPLIER.
2. MANUFACTURE AND SUPPLY OF PRODUCTS
2.1 Sales and Forecasting. SUPPLIER agrees to manufacture the Products to
conform to the Specifications, and to sell the Products to DIRECTED in
accordance with the terms and conditions of this Agreement. Specific quantities
of Products shall be ordered by DIRECTED for purchase by the placement of a
purchase order issued by DIRECTED. DIRECTED shall provide to SUPPLIER continuous
rolling updated 3 month forecasts of anticipated production need with the first
month of the 3 months being an actual purchase order and the following two
months representing anticipated future Product needs. DIRECTED reserves the
right to adjust the rolling updated forecast by [***] of the original forecast.
DIRECTED shall only be obligation to purchase Products that are incorporated
into the continuous rolling 3-month forecast.
2.2 Competitive Sales. SUPPLIER shall not sell the Products to any party
except DIRECTED, or those parties listed in Schedule 5, fully incorporated
herein and to be provided by SUPPLIER before the execution of this Agreement,
without DIRECTED'S prior written consent, which consent may be withheld in
DIRECTED'S sole and absolute discretion. DIRECTED shall not be restricted as to
its sale or use of the Products purchased hereunder including, without
limitation, worldwide marketing to any end user or remarketed, and use by
DIRECTED for its benefit or for the benefit of others.
[***] - CERTAIN INFORMATION ON THIS PAGE HAS BEEN OMITTED AND FILED SEPARATELY
WITH THE SECURITIES AND EXCHANGE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN
REQUESTED WITH RESPECT TO THE OMITTED PORTIONS.
2.3 Right to Second Source. DIRECTED shall have the Right, at its sole and
absolute discretion, to acquire at any time Product that is the same, similar or
related to the Products from any other source. If Directed exercises it right
under this section, SUPPLIER shall transfer the Directed owned injection mold
and artwork to DIRECTED'S assigned source in 30 days. Directed will pay all
freight.
2.4 Licensing Right. Notwithstanding any other right in section 2.3,
DIRECTED or its designated second source shall have the right to a World Wide,
royalty free, non-exclusive, non-transferable license from SUPPLIER to make, use
and sell all intellectual property incorporated into the Product including but
not limited to, patent, proprietary design, trade secret, proprietary process or
software code incorporated into the Product and owned by SUPPLIER in the event
of SUPPLIER'S:
(a) Failure to provide the Product within thirty (30) days after the
scheduled delivery date due to any natural disaster or war
(b) Failure to maintain quality or service standards after a change in
the ownership of sixty percent (60%) or more of the SUPPLIER.
The license under this section 2.4 shall extend only to Product produced for
DIRECTED.
2.5 SUPPLIER agrees to provide to DIRECTED, for storage at a secure
facility locate off site and away from DIRECTED'S normal place of business, a
copy of all proprietary software, including any revisions, modifications or
updates which is incorporated into the Product or newly designed Product.
DIRECTED will have no licensing rights or ownership interest in the proprietary
software and agrees not to use the proprietary software under any condition
except under the terms set out in section 2.4 of this Agreement. SUPPLIER and
its affiliates are the exclusive owners of all right, title and interest in and
to the proprietary rights associated with or arising from the proprietary
software.
3. ORDERS
3.1 Placement. DIRECTED may place firm purchase orders for the delivery of
Products by SUPPLIER. Each purchase order shall specify quantities and a
delivery date of not less than sixty (60) days following the date of the
purchase order. Notwithstanding the foregoing, if DIRECTED specifies an
accelerated delivery date in any purchase order, SUPPLIER will use its best
efforts to meet such accelerated date, but DIRECTED cannot cancel those orders,
even if the SUPPLIER cannot meet the accelerated delivery date.
3.2 Acceptance. SUPPLIER shall accept and acknowledge all purchase orders
that are placed by DIRECTED in conformance with the terms of this Agreement
within three (3) business days, Any purchase order not placed in conformance
with the terms of this Agreement must be rejected by written notice from
SUPPLIER to DIRECTED within three (3) business clays after receipt of such
purchase order. In the event that SUPPLIER uses a form of acknowledgment that
conflicts in any way with this Agreement or DIRECTED's form of purchase order,
the terms of this Agreement and DIRECTED's purchase order shall be controlling.
4. PAYMENT TERMS
4.1 Prices. The total purchase prices for the Products are set forth in
Schedule 2 attached hereto. Prices for the Products may not be [***] by
SUPPLIER, and then only provided that SUPPLIER notifies DIRECTED and negotiates
for a mutually agreeable price at least [***] before any change. SUPPLIER
understands that DIRECTED expects [***] on all Products that are relatively
unchanged in design over the prior year. SUPPLIER agrees to use its BEST EFFORTS
to reduce Product cost over time.
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[***] - CERTAIN INFORMATION ON THIS PAGE HAS BEEN OMITTED AND FILED SEPARATELY
WITH THE SECURITIES AND EXCHANGE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN
REQUESTED WITH RESPECT TO THE OMITTED PORTIONS.
4.2 Xxxx of Materials (BOM). SUPPLIER agrees to provide DIRECTED with
complete Xxxx of Materials (BOM), list of component suppliers and
sub-contractors for each of the products set forth in Schedule 1. Upon request
by DIRECTED, SUPPLIER will provide [***] part for each of the products set forth
in Schedule 1, or for Product under a request for quote.
4.3 Payment. Payment for each shipment of Products shall be in accordance
with the payment schedule fully incorporated herein as Schedule 3. All payments
shall be made in United States Dollars.
4.4 Taxes and Duties. Directed shall be responsible for the payment of all
taxes and duties associated with the importation of the Product into the United
States.
5. DELIVERY
5.1 Shipment. SUPPLIER will ship the Products F.O.B. Country of Origin at
DIRECTED's cost. Title to the Products and risk of loss or damage shall pass
from SUPPLIER to DIRECTED upon delivery of the Products to DIRECTED's preferred
shippers as set forth and listed in DIRECTED's Vendor Requirements as set forth
in Schedule 4, or other shipper specified by DIRECTED.
5.2 Acceptance. DIRECTED shall have the right to conduct an incoming
inspection and shall have forty-five (45) days after delivery to notify SUPPLIER
in writing whether some or all of the Products are rejected. Any Product not
rejected within this forty-five (45) day period shall be deemed accepted. In the
event DIRECTED rejects Products, DIRECTED shall provide a detailed explanation
therefore, and SUPPLIER may inspect the rejected Products at DIRECTED's
premises, replace the rejected Products, or require the return of the rejected
Products, freight collect. Rejected Products shall be repaired or replaced at
SUPPLIER'S expense, including return freight to DIRECTED. The AQL standards are
MIL-105D Level II, Major 1.0, Minor 2.5.
5.3 Rescheduling. DIRECTED may request a rework of Product or a changes in
delivery dates appearing in its purchase orders at no charge provided written
notice of such change is received by SUPPLIER not less than thirty (30) days
prior to the scheduled delivery date to which the change pertains.
5.4 Cancellations. SUPPLIER shall receive the cancellation of any purchase
order not less than sixty (60) days prior to the scheduled delivery date.
DIRECTED shall pay twenty (20) percent of FOB cost if the order is cancelled
between (30-59) days. No cancellation will be accepted for less than 30 days
prior to delivery date.
5.5 Late Shipments. SUPPLIER shall ship all products on the dates as
specified in section 3.1 or 5.3. Shipments are considered late if Products is
not delivered to DIRECTED's preferred shippers within twenty (20) day of the
confirmed delivery date as specified in section 3.1 or 5.3. SUPPLIER will be
responsible for all airfreight charges incurred for the shipment of Product
resulting from late shipments (Directed will, however, only request air freight
on such 'late' shipments where absolutely necessary.) SUPPLIER will not be
responsible for the late shipments caused by the parts that DIRECTED cannot
provide thirty (30) days before the delivery date. DIRECTED shall be responsible
for all airfreight charges incurred for the shipment of Product that is not
considered a late shipment and a request for air shipment is made by DIRECTED.
6. INTELLECTUAL PROPERTY
6.1 Trademark License. SUPPLIER shall have no right, title or interest in
any DIRECTED name, trade name, or trademark, registered or not, anywhere in the
World. SUPPLIER's sole privilege under this Agreement is a non-exclusive,
limited license to sell Product to DIRECTED, some of which bear in whole or in
part trademarks owned by DIRECTED. Upon the termination or expiration of this
Agreement, SUPPLIER's limited privilege to sell Products using such trademarks
shall immediately cease. Any trademarks used in the course of this Agreement
must be reviewed and approved in advance, in writing, by DIRECTED.
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[***] - CERTAIN INFORMATION ON THIS PAGE HAS BEEN OMITTED AND FILED SEPARATELY
WITH THE SECURITIES AND EXCHANGE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN
REQUESTED WITH RESPECT TO THE OMITTED PORTIONS.
6.2 Trademark Use. SUPPLIER shall affix the Trademarks on all Products
manufactured pursuant to this Agreement, and packaging therefore, in a manner as
specified by DIRECTED. SUPPLIER shall not use the Trademarks in any manner
inconsistent with the instructions of DIRECTED nor on any products except as
manufactured pursuant to this Agreement. Upon the expiration or termination of
this Agreement, SUPPLIER shall immediately discontinue the use of the
Trademarks, and thereafter shall not use the Trademarks, or marks or names
confusingly similar thereto, directly or indirectly in connection with its
business or that of its affiliates or principals, During the term of this
Agreement, SUPPLIER will promptly notify DIRECTED in the event that it learns of
any infringement or unauthorized use of the Trademarks by any person.
6.3 Proprietary Designs and Information. SUPPLIER agrees that all
proprietary designs anti information, related to all Products manufactured
pursuant to this Agreement, that are provided to SUPPLIER by DIRECTED shall only
be used in the manufacturing of said Product for DIRECTED exclusively, SUPPLIER
shall not use proprietary designs or information for the benefit on any other of
SUPPLIER's Customers.
7. RIGHTS IN DATA
7.1 Ownership of Proprietary Rights. DIRECTED and its affiliates are the
exclusive owners of all right, rifle and interest in and to the proprietary
rights associated with or arising from the Products.
7.2 Ownership of Documentation. The Documentation shall remain the
exclusive property of DIRECTED and its affiliates and shall he protected from
disclosure in accordance with the provisions of Article 12 of this Agreement.
Upon expiration or termination of this Agreement, the Documentation (including
all copies thereof) shall be promptly returned to DIRECTED.
8. WARRANTY
8.1 General Warranty. SUPPLIER warrants that all Products (i) will conform
to the Specifications. (ii) will comply with approved products, and (iii) will
be free from defects in material and workmanship, for a period of [***] from
delivery date from supplier. The foregoing warranty shall not apply to any
batteries, sirens, or failure and malfunction which results from any of the
following events (if applicable):
(a) Improper design of a Product by DIRECTED;
(b) Components, parts or materials supplied by DIRECTED and used in
the Product;
(c) Improper installation, maintenance, operation or use of a
Product;
(d) Any modification of a Product performed without SUPPLIER's
written approval.
8.2 Repair or Replacement. SUPPLIER will either repair or replace any
Product that is in breach of the foregoing warranty. Shipment to SUPPLIER shall
be at SUPPLIER's expense. Directed shall buy Cargo Marine Insurance to cover the
damages during shipping
8.3 Optional Credit. In lieu of all individual warranty claims, if
SUPPLIER will not repair or place any product that is in breach of the foregoing
warranty, SUPPLIER may designate a [***] issued as a seperate credit once per
quarter. DIRECTED will monitor the reject rate and lot defectives [***] or more
failure of the same Product type with the same manufacturing date) and negotiate
an adjustment of the discount amount accordingly with SUPPLIER.
9. QUALITY ASSURANCE
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9.1 Quality Certification. Because DIRECTED seeks to continuously improve
the quality of our products and the level of service to our customers DIRECTED
requires SUPPLIER to maintain a documented quality procedure. SUPPLIER
represents that it maintains a documented quality assurance procedure in
accordance with QS 9000 and/or ISO 9000 quality assurance standards. SUPPLIER
agrees to submit to DIRECTED its documented quality procedure for review.
SUPPLIER agrees to, at its own expense, maintain certification under ISO 9000
and/or QS 9000 quality assurance programs.
9.2 SUPPLIER's Inspection. SUPPLIER shall inspect the Products before
delivery to assure compliance with the Specifications. SUPPLIER shall not
deliver any Products that fail such inspection. Upon request by DIRECTED,
SUPPLIER shall provide the record of such finished goods inspection.
9.3 Traceability. If the nature of the Product so requires SUPPLIER agrees
to give each Product a unique serial number which shall be recorded for purposes
of defect and warranty traceability, and SUPPLIER shall maintain a record
keeping system with such data and provide DIRECTED with access to such data as
necessary.
9.4 Changes. If any change in the design, material or manufacturing
process for the Products (whether or not requested by DIRECTED) causes the
Products to be of materially different quality from prior shipments, SUPPLIER
shall submit those changes to DIRECTED for approval.
9.5 Facility Inspection. SUPPLIER shall from time to time permit DIRECTED
or its agent to inspect the facilities, conditions regarding quality assurance,
records and documents of SUPPLIER relating to the Products, and of SUPPLIER's
suppliers and subcontractors, in order for DIRECTED to determine whether the
Products are being manufactured under appropriate quality controls; provided,
however, that such inspections will be conducted during normal working hours
with prior notification to SUPPLIER. Any information disclosed to or observed by
DIRECTED or its agent during such inspections shall be deemed to be proprietary
information within the meaning of and subject to the provisions of Article 10 of
this Agreement.
9.6 Abnormalities. SUPPLIER and DIRECTED shall promptly notify each other
of any abnormalities with respect to the Products or the manufacturing process
relating to the Products if SUPPLIER or DIRECTED believes such abnormalities
materially affect the quality or function of the Products. In such case,
SUPPLIER shall promptly report to DIRECTED any determination made as to the root
cause of the abnormality and the countermeasures taken by SUPPLIER in response
thereto.
9.7 Meetings. SUPPLIER and DIRECTED shall meet periodically and from time
to time when necessary during each year of the term of this Agreement to discuss
quality assurance and product improvement matters and various other aspects of
their business relationship.
10. CONFIDENTIALITY
Each party has executed in association with this Agreement a reciprocal
non-disclosure agreement, said reciprocal non-disclosure agreement is fully
incorporated herein, and shall remain in full force and effect throughout the
term of this agreement.
11. TERMS AND TERMINATION
11.1 Term. This Agreement shall have an initial term of five (5) years
from the date hereof and shall thereafter be automatically renewed for
successive one (1) year terms unless notice of termination is given by DIRECTED
to SUPPLIER at least sixty (60) days PRIOR TO THE TERMINATION date of the
initial term or any renewal term, or unless earlier TERMINATED UNDER Section
11.2 or Section 11.3.
11.2 Termination for Default. In the event that either of the parties
defaults in the performance of any of the terms, conditions, obligations,
undertakings, covenants, or liabilities set forth in this Agreement, the other
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party shall give the defaulting party notice of such default. In the event the
defaulting party has not remedied the default within thirty (30) days following
notice thereof, the party giving notice may immediately terminate this Agreement
by providing the defaulting party with written notice of termination.
11.3 Automatic Termination. This Agreement shall terminate immediately
upon written notice by DIRECTED in the event bat SUPPLIER ceases to carry on its
business, SUPPLIER becomes the subject of any proceedings under any state,
federal or other jurisdictional law for the relief of debtors, SUPPLIER
otherwise becomes insolvent or bankrupt, SUPPLIER makes an assignment for the
benefit of creditors, or upon the appointment of a receiver for SUPPLIER or the
reorganization of SUPPLIER for the benefit of creditors.
11.4 Effect of Termination. The termination of this Agreement shall not
relieve either party from its obligations, which have accrued pursuant to the
provisions of this Agreement, or release either party from any obligations that
have been incurred as a result of operations conducted under this Agreement. In
any event, the rights and obligations of Articles 6, 7, 8 and 10, and Sections
12.6 and 12.8 shall survive the expiration or termination of this Agreement.
11.5 Repurchase of Inventory. Upon termination of this Agreement, DIRECTED
shall have the right, but not the obligation, to purchase SUPPLIER's current
inventory of the Products. During a thirty (30) day period following the
termination of this Agreement, SUPPLIER shall permit DIRECTED to enter onto
SUPPLIER's premises to inspect SUPPLIER's current inventory of the Products.
Within fifteen (15) days following such inspection, DIRECTED shall have the
right to purchase any or all of such inventory. Such purchase shall be pursuant
to all of the terms and conditions of this Agreement.
11.6 Transfer of Tooling. Upon termination of this Agreement, DIRECTED
shall have the right to transfer any and all tooling and proprietary shop
equipment owned by Directed. DIRECTED will be obligated to pay SUPPLIER the fair
cost for packing tooling and equipment transferred. However, DIRECTED shall have
the right to transfer at no cost any and all tooling related to the Product.
12. MISCELLANEOUS
12.1 Relationship of Parties. This Agreement does not create the
relationship of principal and agent between SUPPLIER and DIRECTED nor shall it
be construed as creating any form of legal arrangement which would impose
liability upon one party for the act or omission of the other party.
12.2 Notices. All notices, requests, demands and other communications
hereunder shall be in writing and shall be delivered personally or mailed by
registered or certified mail, return receipt requested, or delivered by
overnight air courier guaranteeing next clay delivery, to the following
addresses:
If to SUPPLIER: President
NUTEK, Inc.
0X, Xx. 0, Xxxxx 0, Xxxx 00
Xxx-Xxxxx Xxxx
Xxxxx-Xxxx Xxxx
Xxxxxx, Xxxxxx
If to DIRECTED: CEO
DIRECTED ELECTRONICS, INC.
Xxx Xxxxx Xxx
Xxxxx, Xxxxxxxxxx 00000
Xxxxxx Xxxxxx of America
Either party may change its address upon notice given to the other party in the
foregoing manner. The notices shall be effective three (3) days after received
by the other party.
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12.3 Severability. If any provision of this Agreement shaft be determined
by a court of competent jurisdiction to be invalid, illegal, or unenforceable,
the validity, legality and enforceability of the remaining provisions shall not
in any way be affected or impaired thereby.
12.4 Entire Agreement. This Agreement (including any schedules attached
hereto) contains the entire agreement of the parties with respect to the
Products to be furnished hereunder (except for any additional terms or
conditions which may be contained in any purchase order which may be issued by
DIRECTED pursuant to this Agreement). Any modification or amendment of any term
or provision of this Agreement shall not be valid or binding unless the same is
in writing and signed by each party hereto.
12.5 Assignment. Neither party shall assign any of its rights or
obligations under this Agreement without the prior written consent of the other
party, which consent may be withheld at the other party's sole and absolute
discretion; provided, however, that DIRECTED may assign its rights and
obligations hereunder to its affiliates or to any successor, person or entity,
whether arising by merger, transfer of assets, sale of stock, operation or law
or otherwise, or without the need for any consent by SUPPLIER. This Agreement
shall be binding upon and shall inure to the benefit of the legal successors and
assigns of the parties hereto.
12.6 Governing Law and Venue. This Agreement shall be governed by and
construed in accordance with the laws of the State of California, including the
provisions of the Uniform Commercial Code as adopted in the State of California,
and not the Convention for the International Sale of Goods. The parties agree
that any litigation relating directly or indirectly to this Agreement must be
brought before a court of competent jurisdiction within the State of California.
12.7 Waivers. No waiver of any of the terms or conditions of this
Agreement by either party shall be valid or binding unless the same is in
writing and signed by an authorized officer of the waiving party. A waiver by
either party of a breach of any of the provisions of this Agreement shall not be
construed as a waiver of any further breach of the same provision or of any
other provision of this Agreement.
12.8 Attorneys' Fees. In the event that any action at law or in equity is
brought to enforce or interpret the provisions of this Agreement, the prevailing
party shall be entitled to a reasonable attorneys' fee which may be set by the
Court in the same action or in a separate action brought for that purpose, in
addition to any other relief to which the prevailing party may be entitled.
12.9 Heading. Headings used in this Agreement are for the purposes of
convenience only and shall not affect the legal interpretation of this
Agreement.
12.10 Draftsmanship. This Agreement shall be deemed jointly drafted and no
ambiguities, duties or obligations shall be resolved against the defter party.
12.11 Counterparts and Electronic Signatures. This Agreement may be
executed in one or more counterparts, each of which shall be deemed an original
but all of which together will constitute one and the same instrument. This
Agreement may be executed by facsimile or other "electronic signature" (as
defined in the Electronic Signatures in Global and National Commerce Act of
2000) in a manner agreed upon by the parties.
IN WITNESS WHEREOF, the parties have executed this Agreement as of the
date set forth above.
DIRECTED ELECTRONICS, INC. NUTEK, INC.
By: /s/ Xxxxx X. Xxxxxxx By: /s/ Xxxxxxx Xxxx
------------------------ -----------------
Xxxxx X. Xxxxxxx Xxxxxxx Xxxx
President and CEO President and CEO
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[***] - CERTAIN INFORMATION ON THIS PAGE HAS BEEN OMITTED AND FILED SEPARATELY
WITH THE SECURITIES AND EXCHANGE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN
REQUESTED WITH RESPECT TO THE OMITTED PORTIONS.
Nutek
Schedule 1
Products
________
[***]
[***] - CERTAIN INFORMATION ON THIS PAGE HAS BEEN OMITTED AND FILED SEPARATELY
WITH THE SECURITIES AND EXCHANGE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN
REQUESTED WITH RESPECT TO THE OMITTED PORTIONS.
Nutek
Schedule 2
________________________________________________________________________________
Part# Description Cost
_____ ___________ ____
________________________________________________________________________________
[***]
[***] - CERTAIN INFORMATION ON THIS PAGE HAS BEEN OMITTED AND FILED SEPARATELY
WITH THE SECURITIES AND EXCHANGE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN
REQUESTED WITH RESPECT TO THE OMITTED PORTIONS.
Nutek
Schedule 3
________________________________________________________________________________
Month Product Date of Wire
Shipped from Taiwan Transfer to Nutek
___________________ _________________
________________________________________________________________________________
January [***]
February [***]
March [***]
April [***]
May [***]
June [***]
July [***]
August [***]
September [***]
October [***]
November [***]
December [***]
DIRECTED ELECTRONICS INC.
Vendor Requirements
DIRECTED ELECTRONICS INC.
XXX XXXXX XXX
XXXXX, XX 00000
TEL: 000 000-0000
FAX: 000 000-0000
WEBSITE: XXX.XXXXXXXX.XXX
CONTENTS
VENDOR PACKAGING REQUIREMENTS.......................................... 3
VENDOR MARKING REQUIREMENTS
- Master Carton Markings..................................... 3
- Date Code Markings......................................... 3
- Master Carton Label Samples................................ 3-4
- Bar coding: UPC-A Type ................................... 4-5
- UPC Bar Code Label Requirements............................ 5
- Bar Code Label Samples..................................... 5
GENERAL SHIPPING REQUIREMENTS.......................................... 5
- Preferred Carriers......................................... 6-7
GRAPHICS DEPARTMENT VENDOR REQUIREMENTS QUESTIONNAIRE.................. 8
CONTACTS............................................................... 9
INITIAL 2 NUTEK SCHEDULE 4
VENDOR REQUIREMENTS
X_______ CONFIDENTIAL
X
VENDOR PACKAGING REQUIREMENTS
- All products must be packaged to conform with good packaging
procedures that will prevent damage during shipping.
- All products must be packed in recyclable corrugated cartons with a
minimum burst strength of 125 PSI.
- Proper packing material must be used to ensure adequate protection
of product.
- Maximum master carton is not to exceed 45 LBS.
- Mixing product into the same master carton is not acceptable; each
product must be packaged in its own master carton.
- Palletized product must be shipped on 40"x48" pallets and must not
exceed an overhang of 1" on all sides, and pallet must be
shrink-wrapped.
DIRECTED'S inability to collect loss and damaged claims from the carriers due to
poor packaging will result in such losses being claimed against the vendor and
the charges deducted from the invoice.
VENDOR MARKING REQUIREMENTS
MASTER CARTON MARKINGS
Master carton markings can be affixed by label or printed directly on the master
carton. Handwritten markings are not acceptable. Minimum overall size of
markings is to be no less than 3" x 5" in size. Information should be no smaller
than 36-point size (1/2") and be printed in a BOLD font style. Carton marking
should be on two sides of the carton (adjacent sides preferred).
If labels are used, assure that they are a non-removable style of label to
prevent lifting and peeling off during transit.
Information required on the Master Carton:
- DIRECTED'S part number and revision letter (revision letter to
appear in parenthesis) example 455T(B).
- Quantity of item in carton, including unit of measure (pcs., pks.,
pairs)
- Date Code
- Country of Origin
- Purchase Order Number
- Carton Count, i.e., 1/5, 2/5, 3/5, etc.
INITIAL 3 NUTEK SCHEDULE 4
VENDOR REQUIREMENTS
X_______ CONFIDENTIAL
X
DATE CODE MARKINGS
- DIRECTED'S date code system consists of two digits (unless otherwise
specified for DIRECTED'S customer specifics, i.e., GM). The first
digit represents the year and the second represents the month.
- The date code must represent the month and year you have
manufactured the product (unless otherwise pre-approved by
DIRECTED'S Packaging/QA Representative).
- At a minimum the date code must appear on the master carton and the
product. Audi products require date code on packaging/gift boxes.
Example of a typical DIRECTED date code (2G). 2002 is represented by the 2 and
July is represented by the G:
YEAR IDENTIFICATION MONTH IDENTIFICATION
------------------- --------------------
2001 = 1 January = A July = G
2002 = 2 February = B August = H
2003 = 3 March = C September = I (Except for GMSPO product)
2004 = 4 April = D October = J
2005 = 5 May = E November = K
June = F December = L
MASTER CARTON LABEL SAMPLE
DEI P/N: XXXXX (X)
QTY: 24 PCS D/C: 1A
C/NO: 5 OF 7 PO#: XXXXX
COUNTRY OF ORIGIN
MASTER CARTON LABEL SAMPLE STYLE B 7A 4/81 (FILE: B-MCSAMPLE)
INITIAL 4 NUTEK SCHEDULE 4
VENDOR REQUIREMENTS
X_______ CONFIDENTIAL
X
BAR CODING: UPC-A TYPE (unless otherwise specified on xxxx of material)
- UPC bar code must appear on all gift boxes and/or packaging
materials and must be scanable. Human-readable number and check
digit must be printed under the bar code.
- UPC bar code is normally distributed with DIRECTED'S artwork/film.
If there is no artwork/film, then a white label made with
non-removable adhesive will be required on the packaging (unless
otherwise pre-approved by packaging/QA representative).
- The UPC bar code is issued by packing/QA and will also appear on the
printed xxxx of materials (BOM).
UPC BAR CODE LABEL REQUIREMENTS
- Label size preferred is 1" x 3" (unless otherwise pre-approved by
packaging/QA representative).
- Must include "COUNTRY OF ORIGIN"
- DIRECTED'S full part number including revision letter in
parenthesis.
- DIRECTED'S description of part number and date code (if date is on
the product, then it is not required on the label).
- Human-Readable number and check digit to be printed under the bar
code symbol.
UPC BAR CODE LABEL SAMPLE
(Label style A&B, for your reference)
Directed Made in
Electronics Inc. Country of Origin
DEI PART #
DESCRIPTION AND DATE CODE
(BAR CODE)
INITIAL 5 NUTEK SCHEDULE 4
VENDOR REQUIREMENTS
X_______ CONFIDENTIAL
X
[***] - CERTAIN INFORMATION ON THIS PAGE HAS BEEN OMITTED AND FILED SEPARATELY
WITH THE SECURITIES AND EXCHANGE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN
REQUESTED WITH RESPECT TO THE OMITTED PORTIONS.
GENERAL SHIPPING REQUIREMENTS
- DIRECTED is a certified QS-9000 company and it is a requirement of
ours that vendors meet a 100% on time delivery performance
- Vendor is required to notify DIRECTED no less than three days in
advance of shipments with a faxed or email shipping advise.
- Vendor is required to use DIRECTED specified freight carrier (unless
otherwise instructed by DIRECTED)
- For shipments coming into DIRECTED from overseas, it is required
that original documents are sent to DIRECTED no less than one week
after departure
- All cartons must arrive with proper markings as described in the
marking requirements section along with carton count, i.e., 1/5,
2/5, 3/5, etc.
- Each shipment must be accompanied with a detailed packing slip.
PREFERRED CARRIERS
CONTAINER FREIGHT
Area of Service Carrier Contact Information
--------------- ------- -------------------
Taiwan [***] [***]
Hong Kong [***] [***]
Korea [***] [***]
Philippines Will Advise
INITIAL 6 NUTEK SCHEDULE 4
VENDOR REQUIREMENTS
X_______ CONFIDENTIAL
X
[***] - CERTAIN INFORMATION ON THIS PAGE HAS BEEN OMITTED AND FILED SEPARATELY
WITH THE SECURITIES AND EXCHANGE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN
REQUESTED WITH RESPECT TO THE OMITTED PORTIONS.
LCL FREIGHT
Area of Service Carrier Contact Information
--------------- ------- -------------------
Taiwan [***] [***]
Hong Kong [***] [***]
Korea [***] [***]
Philippines Will Advise
AIR FREIGHT
Area of Service Carrier Contact Information
--------------- ------- -------------------
Taiwan [***] [***]
Hong Kong [***] [***]
Korea [***] [***]
Philippines Will Advise
INITIAL 7 NUTEK SCHEDULE 4
VENDOR REQUIREMENTS
X_______ CONFIDENTIAL
X
GRAPHICS DEPARTMENT VENDOR REQUIREMENTS QUESTIONNAIRE
1. What are your film specifications?
Film Positive (xxxx one)
Film Negative
Read right emulsion side up (xxxx one)
Read right emulsion side down
2. Can the vendor double burn plates?
---------------------------------
3. Can the vendor do white text knock outs?
----------------------------
4. Vendor maximum line screen.
----------------------------------------
5. What type of proofs do you provide for our approval of printed
materials?
---------------------------------------------------------
6. Can vendor make film directly from files provided by DIRECTED?
--------------------------------------------------------------------
7. Does the vendor's PC have the capability to open graphics files?
--------------------------------------------------------------------
8. What kind of computerized system does the vendor have?
--------------------------------------------------------------------
9. What graphics software is the vendor able to use? (Please list all
with versions)
--------------------------------------------------------------------
10. Please list which version of QuarkXpress and Photoshop vendor is
using.
--------------------------------------------------------------------
11. Does vendor have type 1 postscript fonts?
---------------------------
12. Can vendors computerized systems accept 80mb files?
-----------------
13. Can vendor computer systems receive files via FTP, and what are the
file size limits?
--------------------------------------------------------------------
14. Can vendor computers receive files as email attachments and what are
the file size limits?
--------------------------------------------------------------------
INITIAL 8 NUTEK SCHEDULE 4
VENDOR REQUIREMENTS
X_______ CONFIDENTIAL
X
[***] - CERTAIN INFORMATION ON THIS PAGE HAS BEEN OMITTED AND FILED SEPARATELY
WITH THE SECURITIES AND EXCHANGE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN
REQUESTED WITH RESPECT TO THE OMITTED PORTIONS.
CONTACTS:
[***]
[***]
[***]
[***]
[***]
[***]
PRODUCT DEVELOPMENT
[***]
[***]
[***]
INITIAL 9 NUTEK SCHEDULE 4
VENDOR REQUIREMENTS
X_______ CONFIDENTIAL
X
NUTEK
SCHEDULE 5
Not Applicable
