WELLEX
THIS PURCHASE AGREEMENT is entered into as of this 7th day of August-1997, by
and between Wellex CORPORATION, a California corporation, whose principal place
of business is located at 00000 X. Xxxxxxx Xxxx., Xxxxxxx XX 00000 (hereinafter
referred to as ("Manufacturer") and, U. S. Wireless Data Inc. a Colorado (state
whether a corporation, partnership or proprietorship), and if a corporation,
incorporated under the laws of the State of Colorado having its principal.
office at 0000 Xxxxxxxxxxxx Xx. #000, Xxxxx Xxxxx, XX 00000 (hereinafter
referred to as "PURCHASER").
1. TERM
----
This Agreement shall become effective on the date hereof and the body
of the AGREEMENT shall nominally be in effect for one year; however,
MANUFACTURER, reserves the right to automatically extend the term of
the AGREEMENT, unless notified in writing by PURCHASER. Prior to
anniversary. dates, MANUFACTURER will provide revised volume pricing
for the next year.
2. SPECIFICATION COMMENTS
----------------------
All items covered under this Agreement shall be in accordance with
Purchaser's specifications AND drawings and approval.
3. SHIPPING
--------
All shipments shall be made by Wellex,-, F.O.B. Manufacturer's
manufacturing- facility in California.
4. PAYMENT TERMS
-------------
Net 30 days from date of invoice.
5. COMMODITY LIST
--------------
Items listed in Attachment A may be added to or deleted from, providing such
additions or deletions meet all of the terms and conditions of this contract.
6. REQUIREMENT FOR PURCHASING
--------------------------
All purchase orders issued shall contain the following information:
a) PURCHASER'S part number, description and revision level of product to
be shipped.
b) The delivery or completion schedule.
c) The unit price.
7. PURCHASE ORDERS/FORECASTS
-------------------------
a) PURCHASER will provide to MANUFACTURER firm purchase orders for a minimum
of three (3) months in advance of delivery, Further, Purchaser, will
provide to MANUFACTURER an additional six (6) month forecast to be updated
monthly, MANUFACTURER, will purchase materials per purchase order and
forecast based on lead-times, minimum buys, and inventory class buy
policy. PURCHASER is responsible for material purchased in case of
schedule reduction or cancellation.
b) PURCHASER reserves the right to reschedule deliveries on orders that are
due sixty (60) days or more, from the date such change notice is given to
MANUFACTURER. If such reschedule represents a delay in shipment, the
reschedule cannot be for more than sixty (60) days from the original
delivery date and PURCHASER will be responsible for a one percent (1%) per
month carrying charge on, material acquired pursuant to the original
delivery date that MANUFACTURER cannot mitigate.
If such reschedule represents an acceleration or increase, MANUFACTURER will
make best effort to meet the request, subject to material and capacity
availability. Any extra or unrecoverable costs incurred to meet the Request will
be the liability of PURCHASER.
c) PURCHASER may cancel any order scheduled for delivery more than ninety
(90) days from the date such cancellation notice is given to Manufacturer.
Upon cancellation, Purchaser is liable to Manufacturer for' all material
and return charges plus handling charges acquired pursuant to Paragraph I
for canceled or non-returnable products.,
Notwithstanding PURCHASER'S liability, MANUFACTURER, will attempt to mitigate
any such liability. Any costs incurred to make such mitigation are the liability
of the PURCHASER and will be reviewed and approved by the PURCHASER prior to
their incurrance.
8. WARRANTY
--------
(a) MANUFACTURER. Warrants that the PRODUCT sold hereunder will be free
from defects in material and workmanship according to IPC-61O
Workmanship Standards. Wellex Corporation for a period of ninety (90)
days from the date of shipment Of PURCHASER, provided that. (i)
MANUFACTURER is notified in writing by PURCHASER within thirty (30)
days after Purchaser's discovery of such failure or (ii) the defective
PRODUCT is returned to MANUFACTURER no longer than ten (10) days
following the last day of the warranty period. MANUFACTURER shall
include serial numbers and/or date stamps, as designated by PURCHASER,
on each PRODUCT to facilitate warranty tracking. PURCHASER shall
forward defective product to MANUFACTURER freight prepaid, and
MANUFACTURER will make best effort to return the repaired or replaced
product freight prepaid by MANUFACTURER to PURCHASER no later than
thirty (30) days from the date MANUFACTURER receives the defective
PRODUCT.
(b) The foregoing warranty shall not be valid if the PRODUCT or component
parts have been subjected to abuse, misuse, accident, alteration,
neglect, unauthorized repair or installation. MANUFACTURER shall make
the final determination as to the existence or cause of any alleged
defect.
(c) The foregoing warranty provisions set forth the MANUFACTURER'S sole
liability and the Purchaser's exclusive remedies for claims (except as
to title) based on defects in, or failure of, any PRODUCT sold
hereunder when the claim is based in warranty, Upon the expiration of
the applicable warranty for any PRODUCT sold hereunder, all such
liability shall terminate.
(b) The above warranty periods shall not be extended by the repair or
replacement of PRODUCT pursuant to any of the above warranties. The
above warranties shall apply to PURCHASER, its successors, assigns and
those who purchase or use said PRODUCT. PURCHASER shall deal directly
with MANUFACTURER for returns and repairs.
(e) EXCEPT AS HFREIN ABOVE PROVIDED, THE FOREGOING WARRANTIES ARE
EXCLUSIVF AND IN LIEU OF ALL OTHER WARRANTIES, EXPRESS OR IMPLIED, OR
STATUTORY, INCLUDING THE IMPLIED WARRANTY OF MERCHANTABILITY OR FITNESS
FOR A PARTICULAR PURPOSE.
9. DELIVERY
--------
a:) Product shall be delivered to PURCHASER in accordance with required
delivery dates as specified on PURCHASER'S purchase orders that have
been agreed to by MANUFACTURER.
b) Upon learning of any potential delays, MANUFACTURER will immediately
notify PURCHASER in writing as to the cause and extent of such delay.
10. TERMINATION
-----------
a) For Cause -- This Agreement may be terminated by either party at any
time upon the occurrence of any one or more of the following Events of
Default:
(1) failure of the other party: a) to perform pursuant to the terms
and conditions of this Agreement; and b) to me such performance
deficiency within sixty (60) days after receiving written notice
thereof given by the aggrieved party;
(2) the entering into or filing, by the other party of a petition,
arrangement or proceeding seeking an order for relief under the
bankruptcy laws of the United States, a receivership for any of
the assets of the other party; a composition with or assignment
for the benefit of its creditors; a readjustment of debt or the
dissolution or liquidation of the other party;
(3) or the insolvency of the other party.
b) For Convenience - Either party may terminate this Agreement for convenience
upon ninety (90) day written notice to the other party. If Manufacturer
doesn't have sufficient material to cover material leadtime, MANUFACTURER'S
notice to PURCHASER must be at least as far in advance as the longest
leadtime item.
Upon termination, PURCHASER shall be liable for any material acquired plus
handling charge pursuant to purchase orders minimum buys and long lead
items purchased to forecast. Any such material shall be shipped promptly to
PURCHASER upon termination and shall be subject to the then-current pricing
and payment terms PURCHASER shall also be liable for any unamoritized
investment incurred by MANUFACTURER at the time of termination, as
specified on Attachment B.
11. INSPECTION
----------
a) Source Inspection
Upon request from PURCHASER, MANUFACTURER agrees to allow PURCHASER'S
source inspector to inspect and review the work being performed under this
Agreement, including materials and supplies being used. However, shipments
will not be delayed if PURCHASER fails to effect such source inspection.
Source inspection does not constitute acceptance. Final acceptance shall be
at PURCHASER'S facility.
11.
a) Source Inspection (continued)
PURCHASER shall have ten (10) days, after actual receipt of the goods,
within which to inspect prior to PURCHASER'S acceptance thereof.
PURCHASER'S acceptance of each type of Goods shall be based on PURCHASER'S
standard test procedures for such Goods, including the Goods satisfying the
AQL established by PURCHASER.
b) Approved Manufacturers
In the course of purchasing component parts on behalf of PURCHASER,
MANUFACTURER must follow PURCHASER'S Approved Vendors List for all
component parts. If MANUFACTURER offers alternative to PURCHASER'S AVL, the
alternative must be approved in writing by PURCHASER prior to any
production at MANUFACTURER'S facility.
12. ENGINEERING CHANGE ORDERS
-------------------------
It is recognized that from time to time MANUFACTURER will be asked to
implement ECOS. The following delineates the proper procedures,
a) PURCHASER to notify MANUFACTURER in writing of proposed ECO. This
notification should include the documentation of the change to
effectively support MANUFACTURER'S investigation of the impact of
this proposal.
b) Upon notice of a change, MANUFACTURER'S will make best effort to
review all costs impacted within one (1) week. All cost impacts
and material availability issues will be mutually reviewed and
agreed to with PURCHASER prior to implementation.
c) Emergency ECOs will be immediately implemented at PURCHASER'S
request.
d) PURCHASER will be liable for costs associated with emergency ECO
implementation.
13. CONFIDENTIALITY
---------------
Both parties acknowledge that, by reason of their relationship, they, may have
access to certain information and materials concerning the other's business,
plans, and products (including, but not limited to, information and materials
contained in technical data provided to the other party) which is confidential
and of substantial value to the other party, which value would be impaired if
such information were disclosed to third parties. Both parties agree that they
shall not use in any way, for their own account or the account of any third
party, nor disclose to any third party, any such confidential information which
is revealed to it by the other party hereto,
13. CONFIDENTIALITY (continued)
--------------- -----------
without written authorization from the other party. Each party will take every
reasonable precaution to protect the confidentiality of such information
consistent with the efforts exercised by it with respect to its own Confidential
information. Each party shall advise the other if it considers any particular
information or materials to be confidential. This provision shall survive
termination of this Agreement.
14. INDEMNIFICATION
---------------
Each party shall indemnify and defend the other party against all claims, suits,
losses, expenses and liabilities for bodily injury, personal injury, death and
property damage directly or indirectly caused by any Products or through the
intentional acts or negligence of a party or of any person for whose actions
said party, is legally liable. Both parties shall carry and maintain liability
insurance coverage to satisfactorily cover its obligations under this Agreement.
15. COMPLIANCE WITH APPLICABLE LAWS
-------------------------------
Manufacture has been, and shall continue to be, in material compliance with the
provisions of all applicable federal, state and local laws, regulations, rules
and ordinances applicable to the transactions governed by this Agreement.
16. FORCE MAJEURE
-------------
In the event that performance by either party of its obligations under this
Agreement is prevented due to any Act of God, fire, casualty, flood,
earthquake, war, strike, lockout, epidemic, destruction of production
facilities, riot, insurrection, material unavailability, or any other cause
beyond the reasonable control of the party, invoking this section and if such
party shall give prompt written notice to the other party its performance
shall be excused, and the time or the performance shall be, extended for the
period of delay or inability to perform due to such occurrences.
17. MISCELLANEOUS
-------------
a) Severability - In the event that one or more of the provision, or
parts thereof, contained in the Agreement shall for any reason be
held to be invalid, illegal, or unenforceable by a court of
competent jurisdiction, the same shall not invalidate or
otherwise affect any other provision in the Agreement, and the
Agreement shall be construed as if such invalid, illegal or
unenforceable provision had never been contained therein.
17. MISCELLANEOUS (continued)
------------- -----------
b) Entire Agreement: Modification - The Agreement constitutes the
entire and exclusive statement by PURCHASER and ,MANUFACTURER
of the terms of their agreement, notwithstanding any additional
or different terms that may be contained in any quotation,
acknowledgment, confirmation, purchase order, invoice or other
form of PURCHASER or MANUFACTURER. All prior and contemporaneous
proposals, negotiations. representations and agreements are
merged in the Agreement. These terms of the Agreement may not be
altered, modified, superseded, amended or rescinded and no
additional terms shall become a part of the Agreement, except
pursuant to a writing specifically referencing the Agreement and
signed by a representative of the party against whom enforcement
is sought.
c) Notice - Unless otherwise specified in the Agreement, all notices
and other communications permitted or required by the provisions
of those documents shall be in writing and shall be mailed,
telecopied, telegraphed, telexed or delivered to the other party
at the address set forth below (or at such other address as
either party shall designate in writing to the other party during
the term of this Agreement) and shall be effective and deemed
received-. i) if mailed, when actually received; ii) if
telecopied, when actually received; iii) if telegraphed, when
actually received; iv) if telexed, when dispatched; or v) if
personally delivered, when delivered. Each notice to MANUFACTURER
or PURCHASER shall be addressed, until notice of change thereof,
as follows:
i) If intended for MANUFACTURER, to:
Wellex Corporation
00000 X. Xxxxxxx Xxxx
Xxxxxxx, XX 00000
ii) If intended for PURCHASER, to:
U. S. Wireless Data Inc.
0000 Xxxxxxxxxxxx Xx. # 000
Xxxxx Xxxxx, Xxxxxxxx 00000
d) Assignment- This Agreement shall not be assignable by either
party without the prior written consent of the other party.
e) Waiver - No failure or delay on the part of either party hereto
in exercising any right or remedy under the Agreement shall
operate as a waiver thereof; nor shall any single or partial
exercise of any such right or remedy, No provision of the
Agreement may be waived except in writing signed by the party
granting such waiver.
17. MISCELLANEOUS (continued)
------------- -----------
f) Governing Law: Interpretation - The Agreement shall be governed
by and construed in accordance with the laws of the State of
California. Acceptance or acquiescence in a course of performance
rendered under the Agreement shall not be relevant to determining
the meaning of the Agreement, even though the accepting or
acquiescing party had knowledge of the nature of the performance
and an opportunity for objection. No course of prior dealing
between the parties and usage of the trade shall be relevant to
supplement or explain any terms used in the Agreement.
g) Consequential Damages - In no event shall PURCHASER or
MANUFACTURER be liable for any special, incidental or
consequential damages including without limitations loss of
profits, even if advised of the possibility thereof
18. PRICING
-------
1. Prices and commitments for Products sold under this Agreement
are defined in Attachment A.
2. Every three (3) months, PURCHASER and MANUFACTURER will review
the actual volume purchased. If actual volume purchased, is >10%
less of the annualized volume assumptions in Attachment A,
prices will be increased to the actual lower volume purchased
and be effective retroactively.
1
3. Notwithstanding Part 2 of this section, if significant
fluctuations occur at any time in the material cost of components
required under this Agreement, PURCHASER and MANUFACTURER will
review the impact of such fluctuations and mutually agree to any
pricing changes arising therefrom. (Significant fluctuation is
defined to mean +/- 3% of the quoted Xxxx of Material cost.)
19. RETURN MATERIAL AUTHORIZATION
-----------------------------
If product is found to be defective per Section 8 or 11 of this Agreement,
PURCHASER will notify MANUFACTURER and MANUFACTURER will provide a Return
Material Authorization number prior to PURCHASER returning the Product.
MANUFACTURER will make best effort to provide an RMA number within forty eight
(48) hours.
20. Notwithstanding Xxxxxxxxx 00, XXXXXXXXX and MANUFACTURER will jointly work
towards process improvements in the following areas:
Total Price
Quality
Cycle Time
On-time Delivery
Design improvements on manufacturability, quality and price PURCHASER and
MANUFACTURER will meet every three (3) to six (6) months to review current
worldwide material prices for high dollar components and make changes with
mutual agreement to procurement strategy to achieve best total pricing.
Accepted for Accepted for
U.S. Wireless Data, Inc. Wellex Corporation
By: /s/ Xxxx X. Xxxxx By: /s/ Xxxxxx Xxx/Xxxxx Xxx
--------------------- ----------------------------
Print: Xxxx X. Xxxxx Print: Xxxxxx Xxx/Xxxxx Xxx
Title: CEO Title: Director/President & CEO
Date: 9/26/97 Date: 9/20/97
