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EXHIBIT 10.8
PURCHASE AGREEMENT
This is a purchase agreement effective 8/23/99 between Apex
Industries, Inc., 3808 North Sullivan, Bldg 14, Spokane, WA 99216
(hereinafter "Seller") and Exhaust Technologies, 230 North
Division, Spokane, WA 99201 (hereinafter "Buyer"), intending to
be legally bound.
I. SCOPE OF WORK
The Seller agrees to supply and the Buyer agrees to purchase
and take delivery of 10,000 each Exhaust Turbolator(R) assemblies
per drawing TRB-0 Rev 0 dated 8/20/99.
Each Turbolator(R) assembly incorporates the following parts:
Anchor Pin Dwg TRB-1, Rev 0, dated 7/21/99
Baffle Dwg TRB-2, Rev 0, dated 7/26/99
Baffle Pivot Dwg TRB-3, Rev 0, dated 7/25/99
Sleeve Dwg TRB-4, Rev 0, dated 7/21/99
Brad Dwg TRB-5, Rev 0, dated 7/21/99
T-Link Dwg TRB-6, Rev 0, dated 7/25/99
Outer (3") Tube Dwg TRB-7, Rev 0, dated 8/30/99
2 1/4" Tube Dwg TRB-8, Rev 0, dated 7/23/99
Spring No drawing, provided by Buyer
Packaging:
Pricing herein is based on packaging each finished Turbolator(R)
assembly unit in a plastic sleeve, and inserting the sleeve into
a generic 12-pack fiberboard carton. Seller reserves the right to
adjust the price if any additional or different packaging
requirements are requested.
11. DELIVERY SCHEDULE
Seller agrees to supply and Buyer agrees to purchase and
take delivery of assemblies covered by this purchase agreement on
the following schedule:
10/18/99 2500 each assemblies
11/1/99 2500 each assemblies
11/15/99 2500 each assemblies
11/29/99 2500 each assemblies
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III. ITEMS FOR PAYMENT
1. Steel Tubing
Buyer agrees to pay the Seller 100% of the actual cost of
the non-stocked steel tubing which Seller orders to fabricate
these 10,000 Turbolator(R) assemblies. This tubing consists of
approximately:
* 5150 ft of 2 1/4" OD, 409 Stainless Steel Tubing @$2.28/ft
* 6563 ft of 3" OD 304 Stainless Steel Tubing, Polished and
Buffed @$3.17/ft.
Actual quantity of tubing which will be delivered is subject to
the producing steel mill's manufacturing and shipping tolerance.
(Estimated amount of this one-time payment is approximately
$32,547.)
Buyer agrees to remit to the Seller the, actual invoice
amount for this steel tubing immediately upon receipt of the
tubing at the steel distributors warehouse. Seller shall support
their invoice to the Buyer by attaching a copy of the actual
itemized invoice from the steel supplier. Payment shall be due
at the Seller's site within 24 hours after presentation of the
Seller's invoice.
2. Tooling Cost
The Buyer agrees to pay the Seller $28,500 for dedicated
tooling necessary to fabricate the parts covered by this purchase
order. Payment shall be made as follows: $14,250 due 8/23/99;
$14,250 due upon delivery of first article to the Buyer
(currently estimated to be 9/29/99.) Payment shall be due at
Seller's site within 24 hours after presentation of Seller's
invoice.
Tooling shall be the property of the Buyer. The Buyer
agrees that this tooling shall not be removed from the Seller's
site until after completion of the initial 10,000 Turbolator(R)
Assemblies covered by this purchase agreement. Any required
maintenance on tools shall be the responsibility of the Seller
until the initial 10,000 Turbolator(R) assemblies covered by this
agreement have been delivered. Any necessary maintenance on these
tools after delivery of the initial 10,000 assemblies shall be
subject to mutual agreement by Buyer and Seller at the time such
maintenance becomes necessary.
3. Outsourced Machined Parts
The following parts will be fabricated by machine shops
outside APEX:
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Anchor Pin Dwg TRB-1, Rev 0, dated 7/21/99,
Baffle Pivot Dwg TRB-3, Rev 0, dated 7/25/99
Sleeve Dwg TRB-4, Rev 0, dated 7/21/99
Brad Dwg TRB-5, Rev 0, dated 7/21/99
The springs required to produce the 10,000 Turbolator(R)
assemblies covered by, this purchase agreement will be provided
by the Buyer at no cost.
The lot price for the quantity of the four other outsourced
items required to fabricate 10,000 Turbolator(R) assemblies (see
above, in Section III-3) is $16,300. The Buyer agrees to pay the
Seller $16,300 in one lump sum payment when these outsourced
parts are delivered to the Seller. Payment shall be due at the
Seller's site 24 hours after presentation of the Sellers' invoice
covering these outsourced parts.
4. Turbolator Assembly Units
Buyer agrees to pay the Seller $12.39 for each Turbolator(R)
assembly shipped (FOB APEX dock, Spokane, WA, 1%-10-Net 30
Terms). Assemblies will be shipped in lot quantities of 2500
assemblies and a separate invoice shall be issued for each
2500-assembly lot. Payment for each 2500-assembly lot shall be
due at the Seller's site within 30 days after presentation of the
Seller's invoice.
IV. SPECIFICATION CHANGES
Prices herein are based on the drawings incorporated into
this agreement (attached). Specification changes to these
attached documents are subject to mutual agreement. Seller
reserves the right to adjust the price and revise the delivery
schedule if specifications change.
V. SCHEDULE CHANGES
Schedules set forth in section 11 (Schedule) are firm. Any
expediting or delays of the schedule which deviate from that set
forth in section II (Schedule) are subject to mutual agreement of
Buyer and Seller. Failing such agreement, the schedule in Section
11 shall prevail.
VI. LETTER OF CREDIT
On or before 4:30 PM on Monday, August 23, the Buyer agrees,
to deliver to the Seller a certified Letter of Credit in the
amount of at least $80,000 which shall guarantee payment to the
Seller under the terms of this purchase agreement for the
following items for payment:
Item 1 Steel Tubing Actual Invoice Amount On Receipt at
(estimated $32,547) Steel Warehouse
Item 2 Tooling $14,250 8/23/99
$14,250 Delivery -
1st Article
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Item 3 Outsourced
Parts $16,800 Receipt of
Parts at
Seller's
Shop
Should this Certified Letter of Credit not be received at the
Seller's site by 4:30 PM on Monday, August 23, Seller reserves
the right to cancel any outstanding purchase orders for steel
tubing, tooling, and outsourced parts covered by this agreement
without further liability or obligation to the Buyer.
VII. PAYMENTS
All prices in this agreement are in U.S. Dollars, Payment
shall be deemed to be made when checks are actually received at
the Seller's site at 3808 North Sullivan Road, Bldg 14, Spokane,
WA 99216.
VIII. TRANSPORTATION
Prices are FOB Seller's Dock, Spokane, WA. Transportation
costs shall be for Buyer's account. The Seller shall make freight
arrangements as a convenience to the Buyer if so directed by the
Buyer.
IX. CANCELLATION
Because materials for this job are unique and exclusive to
this product alone, and because machinery and technical resources
have been specifically committed for the purpose of this special
job, this initial order for 10,000 units is not subject to
cancellation.
X. WARRANTY
Seller warrants that the assemblies delivered under this
purchase agreement comply with all specifications in the drawings
incorporated into this agreement and that assemblies are free
from defects in materials and workmanship.
Design and engineering of this assembly was performed
exclusively by the Buyer. Seller shall have no responsibility for
the performance of the assembly or the fitness of the assembly
for a particular purpose except that assemblies shall fully
comply with the specifications on the drawings incorporated into
this agreement and shall are free from defects in materials and
workmanship. No other warranties express or implied shall be
applicable to this agreement.
XI. CHANGES TO THIS AGREEMENT
All changes to this agreement shall be made exclusively in
writing and must be signed by both Buyer and Seller to be valid.
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XII. DOCUMENTS INCORPORATED INTO THIS PURCHASE AGREEMENT
Drawing TRB-ASSY, Rev 0, dated 8/20/99
Drawing TRB 1, Rev 0, dated 7/21/99
Drawing TRB 5, Rev 0, dated 7/21/99
Drawing TRB 2, Rev 0, dated 7/26/99
Drawing TRB 6, Rev 0, dated 7/25/99
Drawing TRB 3, Rev 0, dated 7/25/99
Drawing TRB 7, Rev 0, dated 8/30/99
Drawing TRB 4, Rev 0, dated 7/21/99
Drawing TRB 8, Rev 0, dated 7/23/99
XII. ACCEPTANCE AND AGREEMENT
By affixing their signatures below, Buyer and Seller agree
to all specifications, scope of work, payment schedules, and
other terms and conditions set forth herein.
______________________________ _____________________________
Matthew S. Matthews, President Robert E. Sterling; President
APEX Industries, Inc Exhaust Technologies
______________________________ _____________________________
Date Date
Witnessed by:
______________________________ _____________________________
Date Date
