<PAGE>
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON MARCH 9, 2000
REGISTRATION NO. 333-93545
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
---------------
AMENDMENT NO. 6
TO
FORM S-1
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
---------------
NETPLIANCE, INC.
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
DELAWARE 7370 77-0463167
_______________________ ___________________ _______________________
(STATE OR OTHER (PRIMARY STANDARD (I.R.S. EMPLOYER
JURISDICTION OF INDUSTRIAL IDENTIFICATION NUMBER)
INCORPORATION OR CLASSIFICATION
ORGANIZATION) CODE NUMBER)
7600A NORTH CAPITAL OF TEXAS HIGHWAY
AUSTIN, TEXAS 78731
(512) 493-8300
(ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER, INCLUDING AREA CODE, OF
REGISTRANT'S PRINCIPAL EXECUTIVE OFFICES)
---------------
JAMES E. CAHILL
VICE PRESIDENT AND GENERAL COUNSEL
NETPLIANCE, INC.
7600A NORTH CAPITAL OF TEXAS HIGHWAY
AUSTIN, TEXAS 78731
(512) 493-8300
(NAME, ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER, INCLUDING AREA CODE,
OF AGENT FOR SERVICE)
---------------
Copies to:
ROSS CLAYTON MULFORD PAUL R. TOBIAS
J. WILLIAM WILSON WILSON SONSINI GOODRICH &
HUGHES & LUCE, L.L.P. ROSATI
111 CONGRESS AVENUE, SUITE 900 8911 CAPITAL OF TEXAS HIGHWAY
AUSTIN, TEXAS 78701 AUSTIN, TEXAS 78759
(512) 482-6800 (512) 338-5400
APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC:
As soon as practicable after the effective date of this Registration
Statement.
If any of the securities being registered on this Form are to be offered on
a delayed or continuous basis pursuant to Rule 145 under the Securities Act of
1933, check the following box. [_]
If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the following
box and list the Securities Act registration number of the earlier effective
registration statement for the same offering. [_]
If this Form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act, check the following box and list the Securities Act
registration number of the earlier effective registration statement for the
same offering. [_]
If this Form is a post-effective amendment filed pursuant to Rule 462(d)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. [_]
If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box. [_]
The Registrant hereby amends this Registration Statement on such date or
dates as may be necessary to delay its effective date until the Registrant
shall file a further amendment which specifically states that this
Registration Statement shall thereafter become effective in accordance with
Section 8(a) of the Securities Act of 1933, as amended, or until the
Registration Statement shall become effective on such date as the Securities
and Exchange Commission, acting pursuant to such Section 8(a), may determine.
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<PAGE>
EXPLANATORY NOTE
The purpose of this Amendment No. 6 to the Registration Statement is solely
to amend Exhibits 10.1 and 10.2 to the Registration Statement, as set forth
below in Item 16(a) of Part II.
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 13. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION.
The following table sets forth the expenses to be incurred by the Registrant
in connection with the issuance and distribution of the securities being
registered.
<TABLE>
<S> <C>
Securities and Exchange Commission Registration Fee............ $ 26,400
National Association of Securities Dealers, Inc. Filing Fee.... 12,575
Printing and Mailing Expenses.................................. 240,000
Accounting Fees and Expenses................................... 225,000
Legal Fees and Expenses........................................ 450,000
Blue Sky Fees and Expenses..................................... 5,000
Registrar and Transfer Agent Fees.............................. 10,000
Miscellaneous Expenses......................................... 31,025
----------
Total.......................................................... $1,000,000
==========
</TABLE>
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* To follow.
All of the above fees and expenses, except the Securities and Exchange
Commission registration fee and the National Association of Securities Dealers,
Inc. filing fee, represent estimates only.
ITEM 14. INDEMNIFICATION OF DIRECTORS AND OFFICERS
Section 145 of the General Corporation Law of the State of Delaware (the
"DGCL") provides that a corporation may indemnify any person, including any
officer or director, who is, or is threatened to be made, party to any
threatened, pending or completed legal action, suit or proceeding, whether
civil, criminal, administrative or investigative (other than an action by or in
the right of such corporation), by reason of the fact that such person was an
officer, director, employee or agent of such corporation, or is or was serving
at the request of such corporation as a director, officer, employee or agent of
another corporation. The indemnity may include expenses (including attorneys'
fees), judgments, fines and amounts paid in settlement actually and reasonably
incurred by such person in connection with such action, suit or proceeding,
provided such officer, director, employee or agent acted in good faith and in a
manner he reasonably believed to be in or not opposed to the corporation's best
interests and, for criminal proceedings, had no reasonable cause to believe
that his conduct was unlawful. A Delaware corporation may indemnify officers
and directors in an action by or in the right of the corporation under the same
conditions, except that no indemnification is permitted without judicial
approval if the officer or director is adjudged to be liable to the
corporation. Where an officer or director is successful on the merits or
otherwise in the defense of any action referred to above, the corporation must
indemnify him against the expenses which such officer or director actually and
reasonably incurred.
The Certificate of Incorporation of the Registrant provides that no director
of the Registrant will be personally liable to the Company or its stockholders
for monetary damages for breach of fiduciary duty as a director, except to the
extent such exemption from liability or limitation thereof is not permitted
under the DGCL as currently in effect or as the same may hereafter be amended.
Pursuant to Section 102(b)(7) of the DGCL the Certificate of Incorporation of
the Registrant eliminates such liability, except for liabilities related to
breach of duty of loyalty, actions not in good faith and certain other
liabilities.
The Registrant has a directors' and officers' liability insurance policy.
The Bylaws of the Registrant provide for indemnification of the officers and
directors of the Company to the fullest extent permitted by the applicable law.
In addition, the Company will enter into an indemnification agreement with each
of its
II-1
<PAGE>
directors, pursuant to which they will be entitled to advances for the costs of
defending actions against them in addition to that provided by the
indemnification provisions in the Certificate of Incorporation or the Company's
officers' and directors' insurance policy.
The form of Underwriting Agreement attached hereto as Exhibit 1.1, which
provides for, among other things, the Registrant's sale to the Underwriters of
the securities being registered herein, will obligate the Underwriters to
indemnify the Registrant and Registrant's officers and directors against
certain liabilities under the Securities Act of 1933.
ITEM 15. RECENT SALES OF UNREGISTERED SECURITIES
Since our formation, we have issued and sold the following securities (as
adjusted for a three-for-one stock split effective immediately prior to the
effectiveness of this Registration Statement).
(a) In January 1999, we issued 3,000 shares of common stock at $0.17 per
share in order to initially capitalize the Registrant as required by state law.
(b) Also in January 1999, we issued 14,400,000 shares of common stock at
$0.02 per share, for an aggregate purchase price of $240,000, to our founders.
3,981,060 of these shares were subsequently redeemed and reissued to investors
in April 1999 as described in (d) below.
(c) Also in January 1999, we issued an aggregate of 350,000 shares of Series
A preferred stock at $5.71 per share for an aggregate purchase price of
$2,000,000 to one of our founders.
(d) From February 1999 through April 1999, we issued an aggregate of
4,431,066 shares of Common Stock at $0.19 per share for an aggregate purchase
price of $841,902 to 21 investors.
(e) In May and July 1999, we issued an aggregate of 185,714 shares of Series
A preferred stock at $42.00 per share for an aggregate purchase price of
$7,800,000 to one of our founders.
(f) In July 1999, we issued 120,000 shares of common stock at $1.19 per
share for an aggregate purchase price of $142,800 to one investor in connection
with his employment with us.
(g) In July and August 1999, we issued an aggregate of 3,526,065 shares of
common stock at $1.40 per share for an aggregate purchase price of $4,936,491
to 24 investors.
(h) In September 1999, we issued 122,933 shares of Series A preferred stock
at $60.00 per share for an aggregate purchase price of $7,375,980 to 30
investors.
(i) In October 1999, we issued 116,666 shares of Series B preferred stock at
$60.00 per share for an aggregate purchase price of $7,000,000 to one investor
and entered into an agreement to put, prior to December 31, 1999, 66,668 shares
of Series C preferred stock at $90.00 per share to that investor and one of our
founders. We also issued 90,000 shares of common stock to the director
nominated by the Series B preferred stock purchaser at a purchase price of
$1.70 per share in October 1999.
(j) In November 1999, we issued 300,000 shares of common stock at $1.70 for
an aggregate purchase price of $510,000 to one investor in connection with his
employment with us.
(k) In December 1999, we issued an aggregate of 66,668 shares of Series C
preferred stock to the investor in Series B preferred stock and one of our
founders pursuant to the October agreement, at $90.00 per share, for an
aggregate purchase price of $6,000,000.
(l) On December 22, 1999, we entered into irrevocable commitments to sell an
aggregate of 1,430,000 shares of Series D preferred stock for an aggregate
purchase price of $28,600,000 to eight investors and granted a warrant to
purchase 600,000 shares of our common stock to one of those investors. In
January 2000, we issued the 1,430,000 shares of Series D preferred stock.
(m) On February 7, 2000, we issued 1,127,675 shares of our Series E
preferred stock for an aggregate purchase price of $33,830,250 to four
investors. The issuance of 933,334 shares of Series E preferred stock was
exempt from the registration requirements of the Securities Act by virtue of
Regulation S promulgated thereunder.
II-2
<PAGE>
From our inception to February 24, 2000, we granted options to purchase an
aggregate of 8,303,445 shares of common stock to our directors, executive
officers, employees and consultants pursuant to our stock option plan. To date
we have issued 57,375 shares of our common stock upon exercise of outstanding
options.
None of the foregoing transactions involved any public offering, and we
believe that each transaction was exempt from the registration requirements of
the Securities Act by virtue of Section 4(2) thereof, Regulation D promulgated
thereunder or Rule 701 pursuant to compensatory benefit plans and contracts
relating to compensation as provided under such Rule 701. The recipients in
each such transaction represented their intention to acquire the securities for
investment only and not with a view to or for sale in connection with any
distribution thereof, and appropriate legends were affixed to the share
certificates and instruments issued in such transactions. All recipients had
adequate access, through their relationships with us, to information about
Netpliance, Inc.
ITEM 16. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES
(a) Exhibits
<TABLE>
<C> <C> <S>
1.1 ** Form of Underwriting Agreement among Netpliance and the
Underwriters.
3.1 ** Certificate of Incorporation of Netpliance.
3.2 ** Bylaws of Netpliance.
4.1 ** Specimen Certificate for Common Stock.
4.2 ** Amended and Restated Rights Agreement among Netpliance and
Watershed Capital L.L.P. and John F. McHale dated as of December
3, 1999.
4.3 ** Amended and Restated Series D and Series E Rights Agreement among
Netpliance and the purchasers of Series D and Series E preferred
stock dated February 7, 2000.
5 * Opinion of Hughes & Luce, L.L.P. as to the validity of the shares
of Common Stock of Netpliance being registered.
10.1 + Internetworking Agreement by and between GTE Internetworking
Incorporated and Netpliance dated as of May 30, 1999, as amended.
10.2 + OEM Purchase Agreement by and between Netpliance and Quanta
Computer dated as of August 15, 1999.
10.3 ** Sublease Agreement by and between Netpliance and Powershift
Venures, L.L.C. dated June 15, 1999.
10.4 ** Office Lease by and between Netpliance and SV Bull Creek Limited
Partnership dated February 16, 2000.
10.5 ** Netpliance's Amended and Restated 1999 Stock Option and
Restricted Stock Plan.
10.6 ** Netpliance's Employee Stock Purchase Plan.
10.7 ** Employment Agreement by and between Netpliance and Kent A. Savage
dated February 1, 1999.
10.8 ** Employment Agreement by and between Netpliance and Kenneth A.
Kalinoski dated February 1, 1999.
10.9 ** Form of Indemnity Agreement between Netpliance and its Directors
and Officers.
10.10 ** Voting Agreement among Netpliance, U S WEST Internet Ventures,
Inc., John F. McHale and Kent A. Savage dated December 22, 1999.
21 There are no principal subsidiaries of Netpliance, Inc.
23.1 ** Consent of KPMG LLP.
23.2 * Consent of Hughes & Luce, L.L.P.
23.3 ** Consent of International Data Corporation.
24.1 ** Power of Attorney (included in this Registration Statement).
24.2 ** Power of Attorney of Joseph R. Zell.
27.1 ** Financial Data Schedule.
</TABLE>
II-3
<PAGE>
- ---------------------
* To be filed by amendment.
** Previously filed
+ Portions of this exhibit have been omitted pursuant to a request for
confidential treatment. The omitted information has been filed separately
with the Securities Exchange Commission.
(b) Financial Statements filed as part of this Registration Statement are
listed in the Index to Financial Statements on page F-1.
Item 17. Undertakings
(a) The Registrant hereby undertakes to provide to the underwriters at the
closing specified in the Underwriting Agreement certificates in such
denominations and registered in such names as required by the underwriters to
permit prompt delivery to each purchaser.
(b) Insofar as indemnification for liabilities arising under the Securities
Act of 1933 may be permitted to directors, officers and controlling persons of
the Registrant pursuant to the provisions described under Item 14 or otherwise,
the Registrant has been advised that in the opinion of the Securities and
Exchange Commission such indemnification is against public policy as expressed
in the Act and is, therefore, unenforceable. In the event that a claim for
indemnification against such liabilities (other than the payment by the
Registrant of expenses incurred or paid by a director, officer or controlling
person of the Registrant in the successful defense of action, suit or
proceeding) is asserted by such director, officer or controlling person in
connection with the securities being registered, the Registrant will, unless in
the opinion of its counsel the matter has been settled by controlling
precedent, submit to a court of appropriate jurisdiction the question whether
such indemnification by it is against public policy as expressed in the Act and
will be governed by the final adjudication of such issue.
(c) The undersigned Registrant hereby undertakes that:
(1) for the purposes of determining any liability under the Securities
Act of 1933, the information omitted from the form of prospectus filed as
part of this registration statement in reliance upon Rule 430A and
contained in a form of prospectus filed by the Registrant pursuant to Rule
424(b)(1) or (4) or 497(h) under the Securities Act shall be deemed to be
part of this registration statement as of the time it was declared
effective.
(2) for the purpose of determining any liability under the Securities
Act of 1933, each post-effective amendment that contains a form of
prospectus shall be deemed to be a new registration statement relating to
the securities offered therein, and the offering of such securities at that
time shall be deemed to be the initial bona fide offering thereof.
II-4
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the registrant
has duly caused this Registration Statement to be signed on its behalf by the
undersigned, thereunto duly authorized, in the City of Austin, State of Texas,
on March 9, 2000.
NETPLIANCE, INC.
/s/ Kent A. Savage
By: _________________________________
Kent A. Savage
President and Chief Executive
Officer
/s/ Barbara A. Kaczynski
By: _________________________________
Barbara A. Kaczynski
Chief Financial Officer
POWER OF ATTORNEY
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed below by the following persons in the
capacities and on the date(s) indicated.
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
--------- ----- ----
<S> <C> <C>
* Chairman of the Board March 9, 2000
____________________________________
John F. McHale
/s/ Kent A. Savage President and Chief March 9, 2000
____________________________________ Executive Officer and
Kent A. Savage Director (Principal
Executive Officer)
/s/ Barbara A. Kaczynski Chief Financial Officer March 9, 2000
____________________________________ (Principal Financial
Barbara A. Kaczynski Officer)
/s/ M. David Hampton Treasurer and Controller March 9, 2000
____________________________________ (Principal Accounting
M. David Hampton Officer)
* Director and Secretary March 9, 2000
____________________________________
Paul S. Zito
* Director March 9, 2000
____________________________________
Michael R. Corboy
</TABLE>
II-5
<PAGE>
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
--------- ----- ----
<S> <C> <C>
* Director March 9, 2000
____________________________________
David S. Lundeen
* Director March 9, 2000
____________________________________
James M. Mansour
* Director March 9, 2000
____________________________________
Steven G. Papermaster
* Director March 9, 2000
____________________________________
Kevin Denuccio
* Director March 9, 2000
____________________________________
Joseph R. Zell
* Director March 9, 2000
____________________________________
Grant A. Dove
</TABLE>
/s/ Kent A. Savage
* By __________________________
Kent A. Savage
Attorney-in-Fact
Pursuant to Power of Attorney
II-6
<PAGE>
Exhibit Index
<TABLE>
<CAPTION>
Exhibit
Number
<C> <S>
1.1 ** Form of Underwriting Agreement among Netpliance and the Underwriters.
3.1 ** Certificate of Incorporation of the Company.
3.2 ** Bylaws of the Company.
4.1 ** Specimen Certificate for Common Stock.
4.2 ** Amended and Restated Rights Agreement among Netpliance and Watershed
Capital L.L.P. and John F. McHale dated as of December 3, 1999.
(Previously filed as exhibit 10.6)
4.3 ** Amended and Restated Series D and Series E Rights Agreement among
Netpliance and the purchasers of Series D and Series E preferred
stock dated February 7, 2000.
5 * Opinion of Hughes & Luce, L.L.P. as to the validity of the shares of
Common Stock of the Company being registered.
10.1 + Internetworking Agreement by and between GTE Internetworking
Incorporated and Netpliance dated as of May 30, 1999.
10.2 + OEM Purchase Agreement by and between Netpliance and Quanta Computer
dated as of August 15, 1999.
10.3 ** Sublease Agreement by and between Netpliance and Powershift Ventures,
L.L.C. dated June 15, 1999.
10.4 ** Office Lease by and between Netpliance and SV Bull Creek Limited
Partnership dated February 16, 2000.
10.5 ** Netpliance's Amended and Restated 1999 Stock Option and Restricted
Stock Plan.
10.6 ** Netpliance's Employee Stock Purchase Plan.
10.7 ** Employment Agreement by and between Netpliance and Kent A. Savage
dated February 1, 1999.
10.8 ** Employment Agreement by and between Netpliance and Kenneth A.
Kalinoski dated February 1, 1999.
10.9 ** Form of Indemnity Agreement between Netpliance and its Directors and
Officers.
10.10 ** Voting Agreement among Netpliance, U S WEST Internet Ventures, Inc.,
John F. McHale and Kent A. Savage dated December 22, 1999.
21 There are no principal subsidiaries of Netpliance, Inc.
23.1 ** Consent of KPMG LLP.
23.2 * Consent of Hughes & Luce, L.L.P. (included in the opinion filed
herewith as Exhibit 5).
23.3 ** Consent of International Data Corporation.
24.1 ** Power of Attorney (included in this Registration Statement).
24.2 ** Power of Attorney of Joseph R. Zell.
27.1 ** Financial Data Schedule.
</TABLE>
- ---------------------
* To be filed by amendment.
** Previously filed.
+ Portions of this exhibit have been omitted pursuant to a request for
confidential treatment. The omitted information has been filed separately
with the Securities Exchange Commission.
<PAGE>
Exhibit 10.1
Master Agreement
GTE Internetworking Services
___________________________
I N T E R N E T W O R K I N G Rev. February 19, 1998
POWERED BY BBN
This Master Agreement between GTE Internet Incorporated ("us") and the Customer
Identified below ("you") includes the attached Service Schedules and service
Quotations (collectively "Schedules") together with any additional Schedules
mutually agreed in writing in the future.
1. Services. We will provide you the Internetworking services ("Services")
specified in the Schedule(s). Our commencement of providing any of the Services
shall constitute our acceptance of this Master Agreement.
2. Prices. Prices are stated in the Schedules and are guaranteed for the Term
stated in the Schedules. If any of the Services are on a month-to-month basis,
we will give you at least 30 days notice of a price change. In addition, you
are responsible for applicable taxes, tariffs, telecommunications, surcharges or
other governmental charges due on account of the Services.
3. Payment. Unless otherwise stated in a Schedule, we will invoice you
monthly. You agree to pay within 30 days from receipt of invoice. For overdue
invoices, you will pay interest of 1.5% for each month or part of a month (or
the maximum allowed by law, whichever is less).
4. Our Responsibility. We are responsible for providing the Services by
qualified personnel in a professional manner. WE DISCLAIM ALL OTHER WARRANTIES,
EXPRESS OR IMPLIED, INCLUDING THE WARRANTIES OF MERCHANTABILITY AND FITNESS FOR
A PARTICULAR PURPOSE.
5. Your Responsibility. You are responsible for the manner in which you use
the Services, including the maintenance and security of your data, computer
network and other facilities; your choice of equipment, software and online
content; and all other matters related to how you use the Services. Unless
expressly permitted by a Schedule or separate reseller agreement with us, you
shall not resell Services, or access to Services, directly or indirectly to
third parties.
6. Indemnification. We will indemnify you for damages, costs and attorneys
fees you incur from any claim that our design of the Services infringes any U.S.
patent, copyright, trademark, trade secret or other intellectual property right.
You will indemnify us for damages, costs and attorneys fees we incur from any
claim arising from your manner of using of the Services, your combination of the
Services with other products or services not provided by us, or your
modification of the Services. The indemnifying party shall conduct the defense
and shall have control of the litigation; the other party shall give prompt
notice of claims and shall cooperate in defending against the claim. THE
PARTIES DISCLAIM THE IMPLIED WARRANTY OF NON-INFRINGEMENT, RELYING INSTEAD ON
THE TERMS OF THIS SECTION.
7. IP Addresses. Upon expiration, cancellation or termination of the Agreement
or applicable Schedule, you shall relinquish any IP addresses or address blocks
to you by us.
8. Acknowledgment. You agree that we may include your name in listings of our
customers.
9. Compliance with Laws. You shall not use or permit your end users to use the
Services in ways that violate laws of our acceptable use policy which is
published on our web site at http://www.bbn.com/zup, infringe the rights of
others, or interfere with users of our network or other networks. For example,
you shall not distribute chain letters or unsolicited bulk electronic mail
("spamming"); propagate computer worms or viruses; use a false identity; attempt
to gain unauthorized entry to any site or network; distribute child pornography,
obscenity or defamatory material over the Internet; or infringe copyrights,
trademarks or other intellectual property rights. You further agree to comply
with U.S. export laws concerning the transmission of technical data and other
regulated materials via the services.
10. Termination. Either party may terminate or cancel this Agreement if the
other fails to cure a material breach of the Agreement within 30 days after
receiving written notice of the breach. We reserve the right, but assume no
obligation, to suspend performance immediately if you are more than 30 days
overdue in payments or if, in our reasonable judgment, you have violated Section
9.
11. Limitation of Liability. EXCEPT FOR (A) INDEMNIFICATIONS PURSUANT TO
SECTION 6, (B) BREACH OF ANY CONFIDENTIALITY OBLIGATIONS STATED IN A SERVICE
SCHEDULE, AND (C) BREACHES BY YOU OF LICENSE TERMS APPLICABLE TO GTE-PROVIDED
SOFTWARE. NEITHER PARTY (NOR ITS SUPPLIERS OR CUSTOMERS) SHALL BE LIABLE TO THE
OTHER PARTY FOR PUNITIVE, SPECIAL, CONSEQUENTIAL, INCIDENTAL OR INDIRECT DAMAGES
INCLUDING WITHOUT LIMITATION, LOST PROFITS OR LOSS OR DAMAGE TO DATA ARISING OUT
OF THE USE OR INABILITY TO USE SERVICES, EVEN IF THE PARTY HAS BEEN ADVISED OF
THE POSSIBILITY OF SUCH DAMAGES.
12. Limitation of Damages. OUR AGGREGATE LIABILITY TO YOU RELATING TO OR
ARISING OUT OF THIS AGREEMENT, WHETHER IN CONTRACT, TORT OR OTHERWISE, SHALL NOT
EXCEED (a) THE TOTAL AMOUNTS PAID BY YOU TO US FOR THE SERVICE IN QUESTION
DURING THE ONE-YEAR PERIOD IMMEDIATELY PRECEDING THE EVENT WHICH GAVE RISE TO
YOUR CLAIMS OR (b) $100,000, WHICHEVER IS LESS.
13. Miscellaneous. The terms and conditions of this Agreement supersede all
previous agreements, proposals or representations related to the Services.
Except for assignments to GTE affiliates, neither party may assign this
Agreement without prior written consent of the other party. This Agreement
shall be governed by the substantive laws of the Commonwealth of Massachusetts.
Any changes to this Agreement, or any additional or different terms in your
purchase orders, acknowledgments or other documents, will not be effective
unless expressly agreed to in writing by us.
Please sign below to indicate your understanding and acceptance
of the terms of this Agreement.
Company (Type or Print Full Customer Name:____________________________________
Signature:____________________________________________ Date:__________________
Print Name:__________________________________________Title:___________________
- -------------------
[* Confidential Treatment Requested] = information omitted pursuant to a
confidential treatment request. The omitted information has been filed
separately with the Securities and Exchange Commission.
<PAGE>
GTE Service Schedule
___________________________ DiaLinx Service
I N T E R N E T W O R K I N G
POWERED BY BBN (Global Access by U.S. Based Customers)
Version 2T - January, 1999
This Service Schedule is part of and is governed by the Master Agreement for
Internetworking Services ("Master Agreement"). The terms and conditions of the
Master Agreement are incorporated herein by reference.
1. Covered Services. We will provide you with the DiaLinx(TM) Basic Services
and Enhanced Services ("DiaLinx Service") indicated in the applicable GTE
Internetworking Service Quotation ("Quotation") which is attached hereto or
which we may provide to you in the future for additional DiaLinx Service. The
term of the Service Period is one year or longer, as selected by you, and the
corresponding fees are described in the Quotation. Our commencement of
providing DiaLinx Services to you under the Quotation shall constitute our
acceptance of the Agreement in respect of such DiaLinx Service.
2. Service Description. DiaLinx Service provides you with dial-up Internet
access service. Further details of the DiaLinx Service are set forth in the
applicable Service Description. Service Descriptions are available from your
GTE sales representative.
3. Renewal. We encourage you to contact us, via email to: [email protected]
-------------------
prior to the expiration of the then-current Service Period to renew the DiaLinx
Service for an additional term of one (1) year or greater. If the Service
Period expires before it has been renewed in writing, then we may continue to
provide you with the DiaLinx Service on a month-to-month basis, at our then-
current undiscounted list prices, until the Service Period has been renewed in
writing.
4. Minimum Customer Commitment. You agree to the Minimum Customer
Commitment(s) for each period as set forth in the Quotation. You agree that you
are obligated to pay the greater of your actual usage or the Minimum Customer
Commitment for the applicable period.
5. Third Party Access. Subject to the terms and conditions of this Service
Schedule, you have the non-exclusive right to authorize access to DiaLinx
Services to your employees and/or to any third party (including the right to
sell such DiaLinx Service). You agree that if you offer DiaLinx Service other
than to your bona fide employees, you will do so only pursuant to a binding
agreement incorporating terms substantially similar to those stated in Section
14 (Mandatory Flow-down Terms) of this Service Schedule.
6. Responsibility for End Users. You agree to be responsible for all billing
and collection from end users and that you will pay us on a timely basis,
regardless of whether you collect payment from end users. You agree to be
responsible for all communications to and business relations with end users.
You shall be responsible for providing all technical and business support
related to DiaLinx Service access for end users, including but not limited to
responding to inquiries and questions, hot-line support, problem resolution,
providing system configuration, installation and support, as applicable and
other such services and shall maintain an organization which is highly trained
and qualified to provide such support. You are responsible for authenticating
and authorizing access by your end users to DiaLinx Service. Unless you have
purchased optional RADIUS hosting services from us, you shall install, operate,
and maintain a dedicated RADIUS server meeting the RADIUS specifications
published in Internet RFC 2138 and 2139 and all published derivative RFSs. Our
RADIUS server will prompt each end user for the end user's identification and
password, and poll your RADIUS server for access information. Unless otherwise
provided for in the Quotation, we will support only one authentication realm
(e.g. companyname.com).
7. Equipment and Telephone Service. You are solely responsible for obtaining
and providing the telephone services and user modems necessary to access DiaLinx
Service. In no event will we be responsible for end user telephone charges.
8. Network Access Availability. ACCESS TO THE DIALINX NETWORK CANNOT BE
GUARANTEED TO YOU OR YOUR END USERS. END USERS MAY BE UNABLE TO ACCESS THE
DIALINX SERVICE AT ANY TIME AND DISCONNECTIONS MAY OCCUR FROM TIME TO TIME. YOU
AGREE THAT WE WILL NOT BE LIABLE FOR ANY DAMAGES THAT YOU OR YOUR END USERS MAY
INCUR ARISING OUT OF THE USE OR INABILITY TO USE THE DIALINX SERVICE. THIS
DISCLAIMER IS IN ADDITION TO, NOT INSTEAD OF, THE DISCLAIMER, LIMITATION OF
LIABILITY AND LIMITATION OF DAMAGES CONTAINED IN THE MASTER AGREEMENT.
9. Regulatory Charges. We shall flow through to you any local exchange carrier
(LEC) price changes (i) that are attributable to changes in Federal or state
regulation, or (ii) for Federally regulated services that are treated as
exogenous regulatory cost changes by the Federal Communications Commission (the
"FCC") under its price caps regulations as defined in the FCC Rules. 47 C.F.R.
Section 61.45. For purposes of this paragraph, price changes attributable to
changes in regulation include, but are not necessarily limited to, price changes
reflecting total or partial elimination of any enhanced services provider
exemption from payment of interexchange access charges or any regulatory
decision which results in application of multiple Subscriber Line Charges to
ISDN Primary Rate interface circuits or channelized T1 circuits.
10. Compliance with Laws and Content Responsibility. You shall not use or
permit the DiaLinx Service to be used (i) in violation of any applicable export
laws (including without limitation any U.S. export laws); (ii) in violation of
any applicable national, state, or local laws or regulations, including without
limitation any laws governing the import of the DiaLinx Service, or governing
the content which may be available via the DiaLinx Service; (iii) in violation
of our acceptable use policy which is published on our web site at
http://www.bbn.com/sup/; or (iv) in ways that infringe the rights of others, or
- -----------------------
interfere with other users of our network or other networks. For example, you
shall not distribute chain letter or unsolicited bulk electronic mail
("spamming"); propagate computer worms or viruses; use a false identity; attempt
to gain unauthorized entry to any site or network; distribute child pornography,
obscenity or defamatory material over the Internet; or infringe copyrights,
trademarks or other intellectual property rights. We reserve the right to
suspend or terminate the DiaLinx Service (or any portion thereof) without notice
in the event that we believe that your use (or any of your end user's use) of
the DiaLinx Service may be in violation of this section. You acknowledge that
we have no control over or liability for the actions of local jurisdictions
which may restrict or block the DiaLinx Service.
11. Currency and Taxes. All payments shall be in U.S. Dollars. You are
responsible for the payment of all taxes (including without limitation
applicable VAT or withholding taxes but excluding taxes based solely on our net
income), import duties, or other applicable telecommunications or regulatory
fees (collectively, "Taxes"). You shall not deduct any such Taxes from the
amounts owed to us. In the
<PAGE>
GTE Service Schedule
___________________________ DiaLinx Service
I N T E R N E T W O R K I N G
POWERED BY BBN (Global Access by U.S. Based Customers)
Version 2T - January, 1999
event you are required to withhold Taxes from any payment due to us, then the
amount of such payment shall be automatically increased to totally offset such
Taxes, so that the amount actually remitted to us, net of all Taxes, equals the
amount invoiced or otherwise due.
12. Disputes. Any dispute arising out of or in connection with the DiaLinx
Service in a country other than the United States, shall be referred to and
finally resolved by arbitration in accordance with the Rules of the
International Chamber of Commerce then in force; provided, however, that either
party may, at its sole discretion, seek injunctive relief in the courts of any
jurisdiction as may be necessary and appropriate to protect its proprietary or
confidential information. The language used in the arbitral proceedings, and
the governing language of this agreement, shall be English. Unless otherwise
mutually agreed upon in writing by the parties, the site of the arbitration
shall be Boston, Massachusetts, U.S.A. Judgment upon the award of the
arbitration may be entered in any court having jurisdiction thereof.
13. Governing Law. The governing law in any dispute shall be the substantive
law of the Commonwealth of Massachusetts, U.S.A. without regard to conflicts of
law. The parties expressly agree that the U.N. Convention on Contracts for the
International Sale of Goods shall not apply to the Agreement.
14. Local Access Numbers. We expect the DiaLinx network to change over time in
order to meet the needs of our customers. We reserve the right to add to,
delete or change the dial-in access numbers associated with a specified service
category from time to time. You will be notified of changes to the DiaLinx
network or access numbers via periodic e-mail updates.
We may periodically add additional dial up access service categories as the
DiaLinx network evolves. These additional services and respective prices will
be made available on an ongoing basis, via e-mail updates notifying you of the
additional service. Use of such additional services by you or your end users
will be deemed your acceptance of the updated service and pricing. For a
current list of services, pricing, and dial up access numbers associated with
each service, please consult our Web page as listed in your DiaLinx Service
Description or contact your GTE Internetworking representative.
15. Mandatory Flow-down Terms. You agree to include terms substantially
similar to the following minimum terms in legally binding agreements with end
users who are not your bona fide employees. For the purpose of this section,
"Network Services Supplier" shall mean us. "Company" shall mean you. "User"
shall mean the non-employee end user, and "Network" shall mean the dial-up
network operated and maintained by us; and "Services" shall mean the DiaLinx
Service:
No Right of Resale. User may not resell or redistribute any Services.
- ------------------
Content Responsibility. User understands that neither Company nor its Network
- ----------------------
Services Supplier is responsible for the content of the transmissions which may
pass through the Network. User agrees that it will NOT use the Services in ways
that violate laws, infringe the rights of others, or interfere with the users,
services, or equipment of other networks. For example, you shall not distribute
unsolicited advertising, chain letters, or commercial electronic mail
("spamming"); propagate computer worms or viruses; attempt to gain unauthorized
entry to other computers, data or networks; distribute child pornography,
obscenity, or defamatory material over the Internet; or infringe copyrights,
trademarks, or other intellectual property rights.
Warranty and Liability Limitations. COMPANY DOES NOT WARRANT THAT THE SERVICES
- ----------------------------------
WILL BE AVAILABLE ON A SPECIFIED DATE OR TIME OR THAT THE NETWORK WILL HAVE THE
CAPACITY TO MEET THE DEMAND OF END USERS DURING SPECIFIC HOURS. USER MAY BE
UNABLE TO ACCESS THE NETWORK AT ANY TIME, AND DISCONNECTION FROM THE NETWORK MAY
OCCUR FROM TIME TO TIME. NEITHER COMPANY NOR ITS NETWORK SERVICES SUPPLIER WILL
BE LIABLE FOR UNAUTHORIZED ACCESS TO COMPANY'S OR USER'S TRANSMISSION FACILITIES
OR PREMISES EQUIPMENT OR FOR UNAUTHORIZED ACCESS TO OR ALTERATION, THEFT OR
DESTRUCTION OF USER'S DATA FILES, PROGRAMS, PROCEDURES OR INFORMATION THROUGH
ACCIDENT, FRAUDULENT MEANS OR DEVICES, OR ANY OTHER METHOD, REGARDLESS OF
WHETHER SUCH DAMAGE OCCURS AS A RESULT OF COMPANY'S OR ITS NETWORK SERVICE
SUPPLIER'S NEGLIGENCE. IN NO EVENT WILL COMPANY OR ITS NETWORK SERVICES
SUPPLIERS BE LIABLE FOR ANY DAMAGES, INCLUDING BUT NOT LIMITED TO LOSS OF DATA,
LOSS OF REVENUE OR PROFITS, OR FOR ANY OTHER SPECIAL, INCIDENTAL, INDIRECT OR
CONSEQUENTIAL DAMAGES, ARISING OUT OF OR IN CONNECTION WITH THE USE OF OR
INABILITY TO USE SERVICES OR PRODUCTS PROVIDED HEREUNDER.
Please sign below to indicate your understanding and acceptance of the terms
of this Service Schedule.
Company (Type or Print Full Customer Name:____________________________________
Signature:____________________________________________ Date:__________________
Print Name:__________________________________________Title:___________________
<PAGE>
GTE Quotation
___________________________ DiaLinx Services (Version 2.1)
I N T E R N E T W O R K I N G
POWERED BY BBN
Quotation for DiaLinx Service - Netpliance
- --------------------------------------------------------------------------------
TO: Netpliance Quote Date: 05-27-99
Quote Valid to: 06-27-99
Quote Number: Netp052799
Quotation for DiaLinx Service
This Quotation is for DiaLinx Service Version 2.1, and sets forth the pricing
and volume commitments agreed to under the Service Schedule for DiaLinx
Services.
1. Recital: For ease of understanding, this section highlights the general
elements of pricing and commitments:
1.1 Network Access. You will be billed for each user who may access
the GTE Internetworking DiaLinx network ("Network"). Several
pricing options are available to you regarding user usage. These
options include [* Confidential Treatment Requested]
1.2 Minimum Customer Commitment: In return for volume discounts
(inherent in the prices stated below), you have agreed to use a
minimum dollar volume of network access in each month of the
agreement ("Minimum Customer Commitment") for each pricing
realm. In the event that network access charges for a given
realm do not meet the Minimum Customer Commitment, you will be
billed for this minimum amount.
1.4 Surcharge: You will be billed additional charges for user's use
of the International or 800 or 888 dial access.
2. Territory: The Territory for Network access shall be the Global DiaLinx
Network.
3. Commencement Date: The Commencement Date is the day on which you or a
user first connect to the Network, whichever is earlier.
4. Service Period: The Service Period shall be [* Confidential Treatment
Requested] plus an initial period consisting of one (1) partial calendar
month. Month zero (0) means the partial calendar month beginning on the
Commencement Date. Month one (1) means the full calendar month
immediately following the Commencement Date, etc.
5. Minimum Customer Commitment: During the Service Period, in return for
discounts inherent in the pricing outlined herein, you have agreed to use a
minimum dollar volume of network access in each month of the agreement ("Minimum
Customer Commitment") for each pricing realm (as described in Section 6). In the
event that Network access charges for a given pricing realm do not meet the
Minimum Customer Commitment you will be billed for the difference between the
amount actually charged within the given month and the Minimum Customer
Commitment.
[* Confidential Treatment Requested]
<PAGE>
6. Rates and Charges: You have the following pricing options available for
your users. A user is defined as a unique login ID. We reserve the right to
prohibit multiple concurrent network sessions using the same login ID.
U.S. Local Dial Access:
[* Confidential Treatment Requested]
6.1 800/888 Surcharge: In addition to any other applicable charges, access to
the Network via the U.S. 800/888 or Canadian 800/888 dial-up numbers will
incur an additional charge per hour per user. Access via the U.S. 800/888
dial-up numbers will incur [* Confidential Treatment Requested] per user
for access via the Canadian-US 800/888 dial-up numbers.
6.2 ISDN Surcharge: Access via ISDN will be charged in accordance with the
applicable realm pricing. [* Confidential Treatment Requested]
6.3 International Surcharges: In addition to any other applicable charges,
access by to the Network via any Dialinx International Access Number will
incur an additional charge per hour per user as detailed in the
International Rate table below.
International users will be billed a monthly International use for each
month that a user accesses the DiaLinx International network, (much
like a cellular phone "roaming fee"). If an individual user does not
access the DiaLinx International network in any given month, no fee
will be applied. Use of the Canadian 800/888 service is not a part of
the DiaLinx International network.
[* Confidential Treatment Requested]
A list of dial-in access numbers associated with each DiaLinx International
zone can be found at http://www.bbn.com/support/docs/intpops.xls. GTE
Internetworking expects the DiaLinx network to change over time in order
to meet the changing needs of our customers. We reserve the right to add
to, delete or change the dial-in access number associated with a specified
zone from time to time.
<PAGE>
GTE Quotation
___________________________ DiaLinx Services (Version 2.1)
I N T E R N E T W O R K I N G
POWERED BY BBN
All Network connect time is rounded up to the next highest minute and billed in
one minute increments. Invoices are issued monthly and due net thirty (30)
days. All pricing is listed as U.S. dollars.
7. Basic Services - Recurring Fees:
-------------------------------
7.1 Network Access: You will be charged for Network Access, which, for
--------------
each calendar month, shall be the greater of either (A) or (B) for
each pricing realm:
(A) Access charges due in accordance with Section 6, above;
OR
(B) Minimum Monthly Customer Commitment, as set in Section 5 forth
above.
7.2 Service Level Assurance: GTEI will provide nationwide 24 hour busy
-----------------------
free dial of >95% per month, as measured by Inverse Network
Technology. Should GTEI fail to meet this metric consistently through
a calendar quarter, GTEI will issue a 1% credit on each subsequent
monthly bill for each 1% below the 95% threshold."
GTEI will adhere to the escalation procedures as stated in the
document "Working with Customer Care: An Authorized Technical
Contracts Guide". Including the ability to escalate open issues to the
effected departments VP's within 24 hrs through the assigned
XPressLane contact.
8. Enhanced Services - One Time and Recurring Fees: In addition to the fees
-----------------------------------------------
for Basic Services under section 7, you will be charged for optional
Enhanced Services as set forth below:
None Selected.
Please sign below to indicate your understanding and acceptance of the terms
of this Quotation.
Company (Type or Print Full Customer Name:____________________________________
Signature:____________________________________________ Date:__________________
Print Name:__________________________________________Title:___________________
<PAGE>
GTE
COMMUNICATIONS
CORPORATION
AMENDMENT NO. 1
TO
MASTER AGREEMENT FOR INTERNETWORKING SERVICES
The Master Agreement for Internetworking Services (Agreement), including the
Service Schedule - DiaLinx Service (DiaLinx Schedule) between GTE Communications
Corporation (We) and NetPliance (You) is hereby modified as set forth below. To
the extent that there are any conflicts between the terms of this Amendment No.
1 and the terms of the Agreement, including the DiaLinx Schedule, this Amendment
No. 1 shall control.
Agreement
- ---------
1. Section 10 Termination. The last sentence in Section 10 is deleted and
replaced with the following provisions: "We reserve the right, but assume
no obligation, to suspend performance if you are more than 30 days overdue
in payments or if, in our reasonable judgment, you have violated Section 9,
provided, however, we will not suspend performance unless you have failed
to cure such delinquency or violation within 5 business days after
receiving written notification from us, identifying the amount overdue
and/or explaining the basis of your Section 9 violation. Notwithstanding
the foregoing, we reserve the right to suspend performance immediately for
Section 9 violations if required to do so by law enforcement or regulatory
authorities."
DiaLinx Schedule
- ----------------
1. Section 4 Minimum Customer Commitment & Billing.
Add as new last sentence. Cancellation Charge. After a Service
-------------------
Quote is accepted by GTE, Customer may cancel all or a portion of the
Services described therein if Customer provides written notification
thereof to GTE at least 60 days prior to the effective date of
cancellation. In such case, Customer shall pay to GTE all charges for
Service provided through the effective date of such cancellation plus a
cancellation charge determined as follows: (i) if such cancellation
becomes effective prior to completion of the first year of the initial
term, then the cancellation charge shall be an amount equal to the balance
of the monthly charges for Service (then in effect at the time of
cancellation) for such canceled Service that otherwise would have become
due for the unexpired portion of the first year of such term plus fifty
percent (50%) of the balance of such monthly charges for Service for the
remainder of such term beyond the first year; (ii) if cancellation becomes
effective after completion of the first year of the initial term, before
any renewal of this Agreement occurs, then the cancellation charge shall be
an amount equal to fifty percent (50%) of the balance of the
<PAGE>
monthly charges for Service (then in effect at the time of cancellation)
for such canceled Service that otherwise would have become due for the
unexpired portion of the initial term; and (iii) if such cancellation
becomes effective prior to completion of any renewal term, then the
cancellation charge shall be an amount equal to the balance of the monthly
charges for Service (then in effect at the time of cancellation) for such
canceled Service that otherwise would have become due for the unexpired
portion of the renewal term. In the event monthly charges for Service are
not fixed, monthly charges for Service shall be the average charges for
usage of Services over the three calendar months prior to GTE's receipt of
notice of cancellation.
2. Section 8 Network Access Availability. The third sentence in Section 8,
beginning in line 5, is modified by adding the following provision after
-----
the word "damages" in the third sentence thereof: ("Except as set forth in
---------------------------------------------------------------------------
the attached Service Quotation").
---------------------------------
3. Section 9 Regulatory Changes. The following provision is added after the
end of the first sentence of this Section: "If allowed by the applicable
Federal or State regulations, and if such price changes are wholly in the
control of us, we will provide you with 30 days advance written notice
before imposing any such price changes."
4. Section 10 Compliance with Laws and Content Responsibility. The third
sentence in Section 10, beginning in line 16, is deleted and replaced with
the following provisions: "We reserve the right to suspend or terminate
the DiaLinx Service (or any portion thereof) in the event that we believe
that your use (or any of your end user's use) of the DiaLinx Service may be
in violation of this section, provided, however, we will not suspend or
terminate the DiaLinx Service unless you have failed to cure a violation
within 5 business days after receiving written notification from us,
explaining the basis of your violation. Notwithstanding the foregoing, we
reserve the right to suspend or terminate the DiaLinx Service immediately
for violations of this section if required to do so by law enforcement or
regulatory authorities."
Each individual executing this Amendment No. 1 for and on behalf of a party
represents that he or she if fully authorized to do so.
GTE Communications Corporation NetPliance
By: By:
---------------------------- -----------------------------
Name: Name:
-------------------------- ---------------------------
Title: Title:
------------------------- --------------------------
<PAGE>
Netpliance/Quanta
AGREEMENT #NP1
DATED:__ September 10, 1999
EXHIBIT 10.2
OEM PURCHASE AGREEMENT
BETWEEN NETPLIANCE, INC. AND
QUANTA COMPUTER
FOR NETPLIANCE INTERNET PERSONAL ACCESS DEVICE
This Agreement is made effective as of the August 15, 1999 by and between
Netpliance Corporation, 7600A N. Capital of Texas Highway, Austin, Texas, U.S.A
and Quanta Computer, Incorporated having its principal place of business at No.
188. Wen Hwa 2nd Rd., Kuei Shan Hsiang, Tao Yuan Shien, Taiwan, R.O.C.
(hereinafter referred to as "Supplier"), which shall include Supplier's
subsidiaries.
1.0 DEFINITIONS
1.1
"Subsidiary" will mean a corporation, company, or other entity more than
fifty percent (50%) of whose outstanding shares of securities (representing
the right other than as affected by events of default, to vote for the
election of directors or other managing authority) are now or hereafter
owned or controlled, directly or indirectly, by a party hereto. But such
corporation, company, or entity will be deemed to be a subsidiary only so
long as such ownership or control exists.
1.2
"Product(s)" will mean Internet Personal Access Devices and Assemblies;
Part Numbers as described in the Attachment A set forth in this Agreement,
or such other Part Number, which may be subsequently assigned by Netpliance
Order or Order alteration.
1.3
"Spare Part(s)" will mean any part, assembly or subassembly of the Product.
1.4
"Delivery" will mean delivery of Products or Spare Parts to a destination
designated by Netpliance.
1.5
"Billback" will mean any re-invoicing or changes to increase the price paid
for products by Supplier that are the result of Netpliance failure to
purchase certain quantities of products.
2.0 DELIVERY
2.1
Supplier will deliver product to Netpliance's Designated Destination based
on the requested delivery date advised on the Order release. Supplier
shall not deliver the product more than 5 days early or 0 days late, based
on the requested delivery date without prior approval from Netpliance. If
there is a specific delivery date request, on before or after a certain
date, Supplier commits to deliver on that specific date. If deliveries are
made without Netpliance prior approval, Netpliance may elect to delay
receipt or passage of title until the requested delivery date or return the
Product at Supplier's expense. In any event, payment shall be based upon
the requested delivery date advised on the Order Release or actual delivery
date, whichever is later. Supplier will be responsible for management of
the logistics carrier and will ensure that the carrier is committed to
delivery 100% of the product to the end customer within 72 hrs from pick up
at Suppliers facility.
- -------------------
[* Confidential Treatment Requested] = information omitted pursuant to a
confidential treatment request. The omitted information has been filed
separately with the Securities and Exchange Commission.
<PAGE>
Netpliance/Quanta
AGREEMENT #NP1
DATED:__ September 10, 1999
2.0 DELIVERY (Continued)
2.1
Deliver performance will be measured against the key order milestones, as
follows:
D0 - Netpliance releases Order to Supplier (cut off time 6pm Central
Time Standard, 8am Taiwan Time)
D1 - Supplier receives and confirms Order (day difference due to time
zones)
D2 - Supplier Ships Order (logistics carrier cut off at 11 am)
Supplier commits to shipping 90% of the systems on day two (D2) and the
remaining 10% by day three (D3) if order is receive day is D1. Performance
will be reviewed after the initial 3 months shipments.
2.2
Supplier shall not deliver any Product without an Order Release from
Netpliance, without prior written authorization. Shipments made without
Order Release or prior written authorization are subject to return or
delayed receipt by Netpliance, at its own discretion. Netpliance may
return all or any portion of such shipments; or, delay receipt of all or
any portion of such shipments. In any event, payment shall be due based
upon the date of actual delivery date or scheduled delivery, whichever is
later.
2.3
Supplier is expected to maintain a one hundred (100%) percent on-time
delivery per Section 2.1. Supplier shall notify Netpliance immediately of
any anticipated late deliveries and any impending plant or facilities
shutdown for any reason, including vacation, tool repair, labor
difficulties, or government order. In the event Supplier is delinquent on
delivering product to Netpliance in accordance with a mutually agreed upon
delivery schedule, for reasons other than Force Majeure, Supplier shall
deliver Product to Netpliance in the most expeditious manner possible. In
this regard, Supplier agrees to cooperate by taking extraordinary measures
at Suppliers expense to minimize any delivery delays which shall include
but is not limited to expedited manufacture, expenditure of premiums for
parts, expenditure of premium labor cost and the payment of premium
transportation costs associated with the delivery of the Product.
2.4
Netpliance will release Orders to Supplier based on actual receipts of
Customer Orders. Upon release of an order from Netpliance, Supplier will
ship the product to the designated destination based on the schedule
described in Section 2.1. If product is needed at the destination at a
different time, Netpliance will notify the supplier upon Order Release.
With the exception of late delivery by Supplier, Netpliance will pay for
the actual additional freight cost associated with the expedited shipment.
2.5
Unless otherwise set forth in the Order, title and risk of loss will pass
to Netpliance upon Supplier's delivery to Netpliance's designated
destination. Supplier will be responsible for the management of the
logistics carrier and will be responsible for the product until it arrives
at the designated destination.
2.6
In the event of a shortage or shortages in allocated quantities of
components, common to Supplier's other product lines and utilized in the
manufacture of the Product, Supplier agrees to allocate components to
Netpliance, based on the proportional share of Netpliance prior three (3)
months of shipments.
2
<PAGE>
Netpliance/Quanta
AGREEMENT #NP1
DATED:__ September 10, 1999
2.0 DELIVERY (Continued)
2.7
If Supplier does not or will not be able to deliver an Order on time,
Netpliance shall have the right to cancel the delinquent product without
liability. If Netpliance agrees to accept the product, Supplier will pay
all expedite costs. In the event of a price change, Netpliance will pay
the lower cost.
3.0 TERM
The initial Term of this Agreement will commence on August 15, 1999 and
expire on August 15, 2002. Thereafter, Netpliance will have the option to
renew this Agreement for periods of one (1) year each, upon 30 days prior
written notice to the supplier.
4.0 STATEMENT OF WORK
Supplier agrees to sell and Netpliance agrees to purchase the Products in
accordance with the terms and conditions of this Agreement. Supplier will
build and deliver to Netpliance only that quantity of Products ordered by
Netpliance Order Releases.
Supplier will provide all parts, labor, and materials necessary to perform
Supplier's obligations hereunder. Netpliance may request, subject to
mutually agreeable adjustment of price, that Supplier purchase specific
material or parts for the manufacture or assembly of the Product. The
foregoing notwithstanding, Supplier agrees to manufacture and assemble
Products in accordance with the Specifications detailed in Attachment A of
this Agreement.
5.0 CONTINGENCY PLANS
Supplier will develop and implement contingency plans in order to ensure
Netpliance an effective and efficient continuity of supply on the Product
and all components thereof. The parties will negotiate the specific
details of such plans in good faith within forty-five (45) days after
execution of this Agreement.
6.0 ORDERS
6.1 Forecast.
Netpliance agrees to provide a (13) thirteen-week Order forecast to
Supplier on a weekly basis to allow Supplier to support the planning and
purchase of material to lead-time. In addition, a (6) six-month rolling
forecast will be provided for reference only. The (6) six-month rolling
forecast if for planning purposes only, and shall not be construed as a
guarantee or a minimum purchase amount. Netpliance makes no commitment
with respect to the amount of Products to be purchased under the Agreement.
6.2 Order Release.
Products will only be shipped by Supplier after receipt of an Order Release
from Netpliance. Such Order Releases will be subject to the terms and
conditions of the Agreement, and will contain, at a minimum, the following
information:
(i) Product description, including quantity of Products ordered;
(ii) Desired shipping date and delivery location (in most cases the
end-user address);
(iii) Method of shipment and designated carrier; if different from
current logistics carrier
6.3 Freight
All Orders shall ship complete and freight pre-paid unless Netpliance
authorizes otherwise. Freight invoices will be paid monthly after receipt
of invoice, based on fax.
3
<PAGE>
Netpliance/Quanta
AGREEMENT #NP1
DATED:__ September 10, 1999
7.0 PRICE AND PAYMENT
7.1
With exception to the payment terms, as set forth in Attachment H, the unit
price to be paid by Netpliance for Products hereunder will be expressed in
U.S. dollars and negotiated monthly with agreement to be reached at least
five (5) days prior to the first day of the following month; otherwise,
prices will remain constant during the following month. Quoted prices will
remain firm for the deliveries shipped from Supplier on the first calendar
day through the last calendar day of the applicable month unless otherwise
mutually agreed.
7.2
With exception to the payment terms, as set forth in Attachment H,
referencing the initial product shipments, Supplier will invoice
Netpliance, upon receipt of Product at Netpliances' designated destination.
For the first 90 days, of the Term, the Payment Terms shall be net 30 days
from receipt of invoice by Netpliance. The payment performance will be
reviewed monthly. One Hundred and Eighty (180) days after 1st Shipment the
parties will review the payment history to determine whether payment terms
may be extended to net 45 days from receipt of invoice.
7.3
Notwithstanding Subsection 7.1, Netpliance may elect to negotiate a new
Price during any given month on the basis of market place conditions that
significantly decrease the market price for the Product or similar items.
The negotiated Price will be agreed to by both parties and incorporated
into this Agreement. Supplier and Netpliance will mutually agree on an
effective date for the new price to be implemented.
7.4
Supplier warrants that the prices specified in this Agreement do not and at
all times shall not, exceed Supplier's price to any other customer during
the term of this Agreement for a substantially similar product in
substantially similar volumes, and under commercial terms and conditions
similar to those of this Agreement. In the event that Supplier should sell
or offer to sell Products to customers other than Netpliance at prices
lower than those agreed Supplier shall: 1) notify Netpliance in writing
within five (5) days of the offer or sale (such notice shall include the
price, quantity, payment terms, and other material conditions allowing for
such lower price), and 2) make available to Netpliance the option to
purchase Product at such lower price under the same terms as those offered
to other customers.
7.5
Supplier shall offer Netpliance pricing that equivalent to or below those
offered to the Supplier's other customers for similar products and/or
components. Supplier shall, whenever possible, combine purchases of
similar components to obtain best market pricing and provide Netpliance
with this pricing. Should the Supplier fail to offer such pricing to
Netpliance, Netpliance reserves the right to audit Suppliers' records and
seek adjustments for Price variances, when appropriate. Should Supplier
fail to offer such pricing to Netpliance, Netpliance reserves the right to
terminate this agreement without consequence.
7.6
Billbacks by Supplier do not apply to this Agreement.
4
<PAGE>
Netpliance/Quanta
AGREEMENT #NP1
DATED:__ September 10, 1999
8.0 PACKAGING
Supplier will package each Product according to the Netpliance Packaging
Specification Guidelines as set forth as an Attachment C to this Agreement.
In packaging Products, Supplier will also take any additional steps needed
to ensure maximum protection from damage due to rough handling and other
hazards which might occur during transit.
9.0 RECORDS AND AUDIT
Supplier will maintain complete and accurate accounting records, in a form
in accordance with generally acceptable accounting practices, to
substantiate Supplier's charges hereunder. Such records, related to
Supplier's obligations under this Agreement, will include material cost,
tooling invoices and material component invoices. Supplier will retain
such records for a period of three (3) years from the date of final payment
hereunder. Netpliance will have access to such records for purposes of
audit, during normal business hours, for the three-(3) years following
final payment hereunder. Netpliance will provide at least one (1) week
notification to Supplier for Audit.
10.0 ORDER CANCELLATIONS AND RESCHEDULING
10.1
Netpliance may cancel Order(s) or any portions thereof for any reason by
notifying Supplier in writing prior to the scheduled Delivery date on the
purchase order(s) in compliance with the flexibility terms shown below.
Cancellation will be effective upon Supplier's receipt of the written
cancellation notice from Netpliance, or thereafter upon the date specified
in such cancellation notice. Supplier will cease work on affected Order(s)
in accordance with the cancellation notice. Netpliance will have no
liability for canceled Orders other than as set forth in Subsection 10.2.
10.2
Flexibility Terms, Supplier and Netpliance will use the following table as
a guideline for the reschedule and cancellation of an Order. However, in
the event of a reschedule or cancellation request, Supplier agrees to make
best efforts to redirect, return or resell the components to minimize
Netpliance's liabilities. Certain market conditions (e.g. worldwide
allocation) that do not allow Supplier to meet the agreed guidelines, will
be taken into consideration and both Netpliance and Supplier will mutually
agree to new guidelines/schedule.
<TABLE>
<CAPTION>
Upside Downside
<S> <C> <C>
0-2 Weeks Fixed Fixed
3-4 Weeks 25% 10%
5-6 Weeks 45% 30%
7-12 Weeks 75% 50%
13 Weeks + 100% 100%
</TABLE>
Supplier agrees to purchase material to actual lead times in support of the
forecast. Supplier will minimize on-hand inventories according to actual
lead times and forecasted demand. Supplier will ensure it will have enough
material to support the forecast provided from Netpliance, in accordance
with the Flexibility Terms above. In the event of reschedules and/or
cancellations of deliveries by Netpliance, exceeding the agreed to
Flexibility Terms, material held by the Supplier for more than 30 days may
be charged an inventory holding fee. The inventory handing fee will be
assessed in the form of interest, at .8% per month, based on the actual
amount of excess material inventory on-hand beginning on day 31. Supplier
agrees to notify Netpliance immediately of any potential excess inventory
and Netpliance and Supplier will review the complete list monthly.
5
<PAGE>
Netpliance/Quanta
AGREEMENT #NP1
DATED:__ September 10, 1999
10.0 ORDER CANCELLATIONS AND RESCHEDULING (Continued)
10.3
In the event of a cancellation under Subsection 10.1, Supplier shall make
every effort to utilize all work in process to minimize cancellations
costs. Subject to the foregoing, Netpliance will pay Supplier for the
actual materials cost incurred by Supplier pursuant to cancelled Orders
prior to the effective date of the cancellation, and Supplier will deliver
to Netpliance all completed Products, assemblies in process, and all
components procured on account of subject Orders. In the event of a
cancellation, Netpliance and Supplier will use the material liability
guidelines in Attachment I. The actual liability will be based on actual
lead-times for the purchase of material at that time. Any material
procured outside of lead-time without prior consent from Netpliance, will
be the sole responsibility of Supplier. Prior to payment, Netpliance may
audit Supplier's records at reasonable times or require Supplier to provide
reasonable documentation and invoices to substantiate any and all charges
to Netpliance under this Section.
10.4
Supplier will immediately notify Netpliance if and when, for any reason,
Supplier is unable or refuses to perform its obligations under this
Agreement or Order(s) issued hereunder. Such obligations include, but are
not limited to the delivery schedules set forth in Netpliance Orders, the
Product Specifications, and the Supplier Quality Assurance Requirements.
If for any reason other than "Force Major", Supplier is unable or refuses
to continue delivering products as required by Netpliance Order(s) or if
Supplier is otherwise in default of this Agreement and fails to correct
such default within ten (10) days of Netpliance's written notice,
Netpliance will have the right to cancel Order(s) or portions thereof by
written notice. If Netpliance cancels Orders under this Subsection 10.4,
Netpliance 's only obligation is to pay for Products already delivered at
the time of Netpliance cancellation notice. Netpliance may, at its sole
option, purchase from Supplier's supplier materials or parts already
acquired by Supplier, or committed to Supplier from its supplier(s) for the
manufacture of Products or Spare Parts.
11.0 TERMINATION
11.1
Supplier and Netpliance have the option to terminate this Agreement and/or
any Order, in whole or in part, in the event that:
11.1.1
Either party becomes insolvent, file, or have filed against it a
petition in bankruptcy or undergo reorganization pursuant to a
petition in bankruptcy filed with respect to it.
11.1.2
Either party will have all or a substantial portion of its capital
stock or assets expropriated by any government.
11.1.3
Either party will be dissolved or liquidated or have a petition for
dissolution or liquidation filed with respect to it.
11.1.4
Either party will be subject to property attachment or court
injunction or court order, which substantially and negatively affects
its operations.
11.1.5
Either party will be unlikely to fulfill its obligations under this
Agreement because of significant changes of its assets, credit, or
business position; or
11.1.6
Either party defaults or breaches any material provision of this
Agreement and does not remedy the default or breach within thirty (30)
days after written notice by the other party
6
<PAGE>
Netpliance/Quanta
AGREEMENT #NP1
DATED:__ September 10, 1999
11.0 TERMINATION (Continued)
11.2
If any event in Subsection 11.1 occurs, either party will have the right to
file a security interest in such property or to invoke any other legal or
equitable remedy available to protect its interest in the property.
11.3
If Netpliance terminates this Agreement for any of the reasons in
Subsection 11.1 Supplier will:
11.3.1
Immediately cease all assembly operation and production required by
Netpliance Orders issued under this Agreement.
11.3.2
Deliver all completed Products manufactured pursuant to Netpliance
Order instructions;
11.3.3
Return, at Netpliance's expense, all loaned or leased equipment
provided to Supplier by Netpliance under this Agreement;
11.3.4
Prepare and submit to Netpliance an itemization of all partially
completed Products, assemblies in process, and parts inventories
(including parts, which Supplier is committed to purchase from its
subSuppliers) which are allocated to the Netpliance Orders placed
under this Agreement. Netpliance will pay Supplier the price agreed
with Netpliance for the current month for the completed Products
delivered pursuant to Subsection 11.3.2. Netpliance may, at its sole
option, elect to purchase any or all of those items identified under
Subsection 11.3.4, however, Netpliance will not be obligated to
purchase any such items and will bear no cost or liability with regard
to any items it elects not to purchase. If Netpliance elects to
purchase any items in Subsection 11.3.4, the parties will negotiate in
good faith a reasonable price for such items, however, such negotiated
prices shall not exceed the amount established by the cancellation
schedule in Subsection 10.2.
11.4
If Supplier terminates this Agreement for any of the reasons in Subsection
11.1 Netpliance will:
11.4.1
Pay Supplier for all the delivered products including the due payment.
All Product delivered at that time must be based on Order Releases
only.
11.4.2
Pay Supplier for any material liabilities based on the cancellation
Terms in Section 10.
12.0 TEST EQUIPMENT
12.1
In the event Netpliance considers it necessary to insure quality assurance
requirements are met, the parties agree that at Netpliance 's sole
discretion, Netpliance may consign test equipment for functional
verification of the Product(s) at Supplier's location, subject to the terms
and conditions of the Equipment Loan Agreement, as set forth in Attachment
F of this Agreement. In this event, Supplier will provide all reasonable
assistance requested by Netpliance in the development and installation of
the test equipment. The test equipment will only be utilized by Supplier
to verify functional operation of the Products purchased by Netpliance.
Netpliance will assist Supplier in installing and calibrating the test
equipment
7
<PAGE>
Netpliance/Quanta
AGREEMENT #NP1
DATED:__ September 10, 1999
and will provide operator training and maintenance instructions, if
requested. Supplier will thereafter maintain the test equipment utilizing
Netpliance provided spare parts.
12.0 TEST EQUIPMENT (CONTINUED)
12.2
Nothing contained herein will limit Supplier's obligation to supply
Products that meet the requirements of the Supplier Quality Assurance
Requirements and the Product Specification, as set forth in Attachment A
and E of this Agreement.
13.0 MARKETING RIGHTS WARRANTY
13.1
Supplier warrants that it has the unrestricted worldwide right to
manufacture, sell, and deliver to Netpliance the Product and Spare Parts
that are the subject of this Agreement. Further, Supplier hereby warrants
that it is under no restriction, and that it will not assume or assert any
such restriction, which would prevent Netpliance and its Subsidiaries from
marketing the Product and Spare Parts, anywhere in the world.
13.2
Nothing in this Agreement will limit the right of Netpliance to develop,
have developed, procure and/or market Products or services now or in the
future which may be competitive with those which are the subject of this
Agreement.
14.0 EXCLUSIVITY
14.1
Supplier will grant Netpliance a (6) six-month exclusivity on products
covered by this agreement, from the date of first production shipments
based on order releases. Exclusivity under this agreement will extend to
all customizations which were developed by or for Netpliance, including
mechanical (including ornamentation and design), electrical and
firmware/software assemblies of the delivered products. After a (6) six-
month period, nothing in the Agreement shall be construed as limiting
Supplier's right to sell derivative products but such right shall not
extend to including mechanical (including ornamentation and design), and
software assemblies of the delivered products. Supplier shall have no
right to sell or otherwise provide the Software and/or Customizations to
any third party without written consent of Netpliance.
14.2
Nothing in the Agreement shall be construed as creating an exclusive
purchase arrangement or requirements contract between Netpliance and
Supplier. Netpliance shall have the right to obtain similar products from
any other manufacturer.
15.0 MANUFACTURING RIGHTS
15.1
Netpliance shall own all rights to the Product hardware and software
created by the Supplier specifically for Netpliance. To the extent that
Netpliance does not own the rights to the Product hardware and software,
the Supplier grants to Netpliance all rights necessary for Netpliance to
produce, manufacture and/or have manufactured quantities of such Product
for distribution by Netpliance. Supplier shall provide to Netpliance
access to and use of all items that are necessary and/or useful in the
manufacture of the Products for distribution by Netpliance, including but
not limited to, Suppliers drawings, software, Bill of Materials, Processes,
Tools and vendor Lists, to enable Netpliance to manufacture and/or have
manufactured Products for distribution by Netpliance.
8
<PAGE>
Netpliance/Quanta
AGREEMENT #NP1
DATED:__ September 10, 1999
15.0 MANUFACTURING RIGHTS (Continued)
15.2
If Supplier fails to perform its obligations as set forth in this Agreement
Netpliance will have the right to manufacture or have manufactured the
Products at its discretion. Supplier hereby grants to Netpliance a license
under trade secrets, copyrights and patents to access and use all of
Suppliers drawings, bill of material and vendors to make and have made
Products and create improvements to the Products.
16.0 ENGINEERING CHANGES
16.1
Supplier may make Engineering changes to the Product or Spare Parts, or to
the production processes used in their manufacture, which would affect the
performance, reliability, safety, serviceability, appearance, dimensions,
tolerances, firmware/software, or composition of bills of material(s) or
material sources thereof in accordance with subsections 16.2 and 16.3.
16.2
Supplier will notify Netpliance of any Engineering Change proposed to be
made by Supplier to the Product, and will supply a written description of
the expected effect of the Engineering Change on the Product, including its
effect on price, performance, reliability, capability, and serviceability.
Netpliance may elect to evaluate parts and/or designs specified as part of
the proposed change. Netpliance agrees to approve or disapprove Supplier
proposed changes within no more than sixty (60) days of receipt of a
written request. Netpliance shall acknowledge receipt of Supplier's
proposed change within seven (7) days of receipt. Supplier will not change
or modify the Product or Spare Parts without Netpliance prior written
approval. Netpliance and Supplier will make best efforts to expedite the
turn around on the proposed changes.
16.3
Netpliance may request, in writing, that Supplier incorporate an
Engineering Change into the Product, and Supplier will provide to
Netpliance its written proposal within ten (10) calendar days after
Netpliance's request. Supplier's proposal will state the cost savings or
increase, if any, expected to be created by the Engineering Change, and the
effect on the performance, reliability, safety, appearance, dimensions,
tolerances, composition of bills of material, and serviceability of the
Product. If Netpliance requests Supplier to incorporate an Engineering
Change into the Product, the product Specification and Price will be
amended as required. Supplier will not unreasonably refuse to incorporate
Netpliance Engineering Changes into the Product.
17.0 INSPECTION AND ACCEPTANCE
The terms and conditions with respect to quality, inspection and acceptance
are set forth in Attachment E.
18.0 APPLICABLE APPROVALS
Supplier will be responsible for obtaining the certifications and approvals
specified in the Product Specification set forth in Attachment A to this
Agreement. Supplier will submit to sufficient proof of the approvals and
will affix on the appropriate area of each Product a label stating such
approvals if required. Supplier will perform all acts necessary to
maintain these approvals, certifications, and listings while this Agreement
is in effect.
9
<PAGE>
Netpliance/Quanta
AGREEMENT #NP1
DATED:__ September 10, 1999
19.0 PRODUCT WARRANTY
In addition to the terms and conditions set forth in Attachment G with
respect to Product Warranty, Spare Parts Support and Service Support, the
following terms and conditions shall apply:
19.1
Supplier warrants that title to all Products delivered to Netpliance and to
Netpliance Customers by Supplier shall be free and clear of all liens,
encumbrances, security interests or other claims and that for a period of
fifteen (15) months beginning on the date of receipt at Netpliance or
Netpliances' designated destination, hereunder conform in every respect to
all specifications which are part of this Agreement and will be free from
defects in material and workmanship under normal use and operation.
Supplier will pass on all remaining material warranties provided by
Supplier's subcontractors to Netpliance.
19.2 Epidemic Failure
In addition to the foregoing warranty, Supplier warrants the Product
against epidemic failure. An epidemic failure shall mean a Product field
failure exhibiting the same root cause symptom and resulting in a two (2)
percent or greater failure of Netpliance Customer delivered Product during
a ninety-(90) day period. In the event of epidemic failure, Supplier shall
establish within two (2) days notice by Netpliance of such failure a
mutually agreed upon emergency procedure to resolve and replace all
defective Products. Any and all costs associated with the emergency
procedure are to be borne by Supplier. Supplier also agrees to inform
Netpliance in writing of any other epidemic failure occurring in products
sold to Supplier's other OEM customers and Supplier shall take whatever
steps are reasonably necessary to prevent or correct Netpliance Products
from such failure.
20.0 REPLACEMENT PRODUCTS
If, during any Term of this Agreement, Supplier develops and markets a
product that is a replacement for the Product to be provided hereunder,
Supplier agrees to sell said product to Netpliance at Netpliances' option,
for a price to be negotiated between the parties. Both parties also agree
that all appropriate provisions of this Agreement will apply to any such
replacement product. Nonetheless, Supplier agrees to continue to make the
original product available to Netpliance through the end of the last Term
of this Agreement.
21.0 SPARE PARTS
Supplier agrees to sell Spare Parts to Netpliance at a reasonable price and
lead-time until the end of three (3) years after the last Term of this
Agreement expires or is terminated. Supplier should notify Netpliance
immediately when any components are coming to end of life. Supplier should
provide an alternative component at that time to ensure availability of
material for the three (3) year period.
22.0 PRODUCT REPAIR
Supplier agrees to provide Product repair service to Netpliance at a
reasonable price and lead time until the end of five (5) years after the
last Term of this Agreement expires or is terminated, pursuant to terms and
conditions substantially similar to those set forth in the Product Repair
Service Agreement, as set forth in Attachment G to this Agreement.
10
<PAGE>
Netpliance/Quanta
AGREEMENT #NP1
DATED:__ September 10, 1999
23.0 INTELLECTUAL PROPERTY
23.1 Patent and Copyright Indemnification
Supplier at its own expense, will settle or defend and pay any damages,
costs, attorney's fees, and fines resulting from all proceedings, threats
of proceedings, or claims against Netpliance, its Subsidiaries, and
respective customers by any third party for infringement or alleged
infringement by the products furnished under this Agreement or any part or
use thereof of patents (including utility models and registered designs)
and copyright in any country of the world and U.S. mask works. In meeting
its obligation hereunder, Supplier may procure for Netpliance the right to
continue to market the Products or Supplier may modify the products to be
non-infringing so long as the modified Products meets Netpliance
specifications. In the event the foregoing are deemed impractical by
Supplier and the product(s) continued use is enjoined, Supplier will buy
the Product(s) back from Netpliance at the original purchase price paid by
Netpliance. Supplier's obligations under this Section shall not extend to
any infringement caused solely by a mandatory design change requested by
Netpliance if Supplier's unchanged products do not infringe or allegedly
infringe the patent or copyright in question.
23.2 Trademarks
Any other provisions of this Agreement notwithstanding, neither party
hereto shall have the right to use the trademarks, trade names, or product
names of the other party (including those of Subsidiaries) directly or
indirectly in connection with any product, promotion or publication without
the prior written approval of the other party; provided, however, that
either party may use the other parties trademarks, trade names, and/or
product names to the extent permitted by law and customs regarding their
usage by the general public.
24.0 CONFIDENTIAL INFORMATION
All Netpliance Confidential Information disclosed to Supplier, the results
of Supplier's work and the data deliverable to Netpliance under this
Agreement will be treated by Supplier as Netpliance Confidential
Information pursuant to the provisions of the Non Disclosure Agreement
dated April 16th, 1999 which is incorporated herein by reference.
25.0 GENERAL PROVISIONS
25.1 Communications
All communications between Netpliance and Supplier will be carried out
through the Netpliance and Supplier designated representatives.
25.2 Notice
Any legal notice required or permitted to be made or given to either party
hereto pursuant to this Agreement shall be sufficiently made or given on
the date of mailing if sent to such party by certified mail, postage
prepaid, to a party hereto at its address set forth below, or to such other
party as it shall designate by written notice given to the other party.
For Kent Savage
Netpliance Corporation
7600A Capital of Texas Highway
Austin, Texas 78731
For Supplier: Ted Lu
Quanta Computer Inc.
No. 188, Wen Hwa 2nd Rd.,
Kuei Shan Hsiang,
Tao Yuan Shien,
Taiwan, R.O.C
11
<PAGE>
Netpliance/Quanta
AGREEMENT #NP1
DATED:__ September 10, 1999
25.0 GENERAL PROVISIONS (Continued)
25.3 Taxes
Supplier will be responsible for and pay all taxes imposed on supplier,
except sales, use or similar taxes. Netpliance will be responsible for any
applicable sales, use or similar tax, except Netpliance will have no
liability for any tax for which Netpliance has an appropriate resale or
other tax exemption.
25.4 Assignment
No right or interest in this Agreement will be assigned by either party
without the express written permission of the other, and no delegation of
any obligation of Supplier will be made without prior written permission.
25.5 Liability
Supplier is responsible for the acts of its employees. Supplier will
indemnify and save Netpliance harmless from and against any and all suits
or claims of liability and/or property damage arising from the acts of
Supplier, its subSuppliers or anyone directly or indirectly employed by
Supplier arising out of, or in connection with, Supplier's performance
under this Agreement.
UNDER NO CIRCUMSTANCES WILL EITHER PARTY BE LIABLE FOR SPECIAL, INDIRECT,
INCIDENTAL, OR CONSEQUENTIAL DAMAGES, INCLUDING LOST REVENUE OR LOST
PROFITS HEREUNDER, EVEN IF ADVISED OF THE POSSIBILITY THEREOF.
25.6 Supplier's Employees Deemed not Netpliance's
Both parties agree that Supplier is retained as an independent Supplier and
in no event will employees or agents hired by Supplier be or be considered
employees of Netpliance. Matters governing the terms and conditions of
employment of Supplier's employees are entirely within the control of
Supplier. Netpliance will have no right to control any of the actions of
the employees of Supplier. Supplier's matters such as work schedules, wage
rates, withholding income taxes, disability benefits or the manner and
means through which the work under this Agreement will be accomplished are
entirely within the discretion of Supplier.
25.7 Survival from This Agreement
The rights and obligations of the Sections and Attachments entitled
"RECORDS", "MARKETING RIGHTS WARRANTY," "PRODUCT WARRANTY," "INTELLECTUAL
PROPERTY," "CONFIDENTIAL INFORMATION," "Liability," "Attorneys' Fees,"
"Survival From this Agreement," "Public Disclosure," "Forum," "Spare Parts
Agreement," "Product Repair Agreement," and all terms and conditions of
this Agreement as they apply to any outstanding Orders issued hereunder
will survive and continue after any expiration, cancellation, or
termination of this Agreement and will bind the parties and their legal
representatives, successors, heirs, and assigns.
25.8 Force Majeure
Neither Supplier nor Netpliance will be considered in default or liable for
any delay or failure to perform any provision of this Agreement if such
delay or failure arises directly or indirectly out of an act of nature,
acts of the public enemy, freight embargoes, strikes, quarantine
restrictions, unusually severe weather conditions, insurrection, riot, and
other such causes beyond the control of the party responsible for the delay
of failure to perform, provided the affected party notifies the other party
within fifteen (15) calendar days of the occurrence.
25.9 Compliance with Governmental Legal Requirements
Supplier agrees to comply and do all things necessary to enable Netpliance
to comply with all applicable federal, state and local laws, regulations,
and ordinances including but not limited to the regulations of the U.S.
Government relating to the export of technical data insofar as they relate
to the activities to be performed under this Agreement. Supplier agrees to
obtain the required government documents and approvals prior to the export
or re-export of any technical data disclosed to it or the direct product
related thereto.
12
<PAGE>
Netpliance/Quanta
AGREEMENT #NP1
DATED:__ September 10, 1999
25.0 GENERAL PROVISIONS (CONTINUED)
25.10 Public Disclosure
Supplier agrees not to disclose the fact that Supplier has furnished or
contracted to furnish to Netpliance the products and services hereunder, or
the terms and conditions of this Agreement without the express written
consent of Netpliance, except as may be required by law or governmental
rule or regulation, or to establish Supplier's rights under this Agreement;
provided, however, that if Supplier's seeks to disclose for reasons not
requiring Netpliance's consent, Supplier will limit the disclosure to the
extent required, will allow Supplier to review this information disclosed
and will apply, where available, for confidentiality, protective orders and
the like. Any review by Netpliance under this Section will not be
construed to make Netpliance responsible for the content of the disclosure.
Supplier will remain solely responsible for such contents.
25.11 Section Headings
Headings used in this Agreement are for reference purposes only and are not
intended to be a part of or to affect the meaning or interpretation of this
Agreement.
25.12 Order of Precedence
In the event of an inconsistency in the various documents, which govern the
parties' performance, the order of precedence will be:
i) This Agreement
ii) The Confidential Disclosure Agreement
iii) Attachments to this Agreement
iv) The face side of the Order
v) The reverse side of the Order.
25.13 Attorney's Fees
If one party brings suit against the other party, for any cause whatsoever,
and the other party is finally adjudicated not to have liability, the party
bringing suit agrees to pay the other party's reasonable attorneys' fees
and other costs of litigation.
25.14 Waiver
Failure by Netpliance to insist upon strict conformance to any term herein,
or in Orders issued hereunder, or failure by Netpliance in the event of a
breach or default, shall not be construed as a consent or waiver of that
breach or default or any subsequent breach or default of the same or of any
other term contained herein.
26.0 APPLICABLE LAW
This Agreement will be interpreted in accordance with the substantive and
procedural law of the State of Texas, except its conflicts of law
provisions. Both Netpliance and Supplier consent to Texas State Court
jurisdiction.
27.0 ENTIRE AGREEMENT
Together with Attachments A through I and Non Disclosure Agreement dated
April 16th, 1999, this Agreement and Order(s) issued from time to time
hereunder will constitute the entire Agreement of the parties respecting
the subject matter hereof and will supersede all previous communications
and understanding, either written or oral, between the parties relative to
the subject matter hereof and will supersede all previous communications
and understandings, either written or oral, between the parties relative to
the subject matter hereof.
This Agreement may only be amended by express written agreement signed by
authorized representatives of both parties.
If any provision of this Agreement is held to be illegal, invalid, or
unenforceable, the legality, validity, and enforceability of the remaining
provisions will not be affected or impaired.
13
<PAGE>
Netpliance/Quanta
AGREEMENT #NP1
DATED:__ September 10, 1999
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed
by their duly authorized representatives as of the day and year first set forth
above.
NETPLIANCE SUPPLIER
By:___________________________ By:________________________________
Title:________________________ Title:_____________________________
Date:_________________________ Date:______________________________
By:___________________________ By:________________________________
Title:________________________ Title:_____________________________
Date: ________________________ Date:______________________________
14
<PAGE>
Netpliance/Quanta
AGREEMENT #NP1
DATED:__ September 10, 1999
ATTACHMENT A
PRODUCT DEFINITION/INVENTORY CLASSIFICATION
A1. Product Definition for Internet Personal Access Device (Netpliance Model
NP 1000)
Reference documentation
1) Quanta Computer, Inc., IA1 Engineering Specification, Revision 1B,
Release Date 7/21/1999
2) Darfon Electronics, Proposal to Quanta/Netpliance, dated July 9, 1999
3) ActionTec, Specifications of V.90/K56flex Controller-based Modem
Module: LF560LKQ, Dated 7/10/99
The Netpliance Model NP1000 system, as shipped from the supplier consists of:
. NP 1000 System Unit
. PS2 Keyboard with integrated pointing device
. 19Volt, 1.84 Amp wall-mount AC Adapter
. RJ-11 Modem Cable
. Netpliance User Manual
. Netpliance Quick Setup Guide
<PAGE>
Netpliance/Quanta
AGREEMENT #NP1
DATED:__ September 10, 1999
ATTACHMENT B
PROJECTED DELIVERY SCHEDULE
This projected worldwide delivery schedule will be an estimate of the monthly
quantities, which are forecasted by. The first Term of the Agreement will
include one year's Deliveries.
Monthly Demand
Forecast
<TABLE>
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[*] CONFIDENTIAL TREATMENT REQUESTED
<PAGE>
Netpliance/Quanta
AGREEMENT #NP1
DATED:__ September 10, 1999
ATTACHMENT C
PACKAGING SPECIFICATION
C1. UNIT PACK COMPONENTS
The components to be packaged for shipment of the Netpliance NP1000 device,
referenced in Attachment A, Section A1, shall consist of:
. NP 1000 System Unit
. PS2 Keyboard with integrated pointing device
. 19 Volt, 1.84 Amp, wall-mount AC Adapter
. RJ-11 Modem Cable
. Netpliance User Manual
. Netpliance Quick Setup Guide
C2. PACKAGING DESIGN AND CERTIFICATION
Supplier will design and test individual unit packaging, capable of single unit
shipments of the unit pack components in C1, the meets or exceeds the
requirements of the Association of Transport Packaging (ISTA); ISTA 2 Series,
version 2A. Supplier will test all packaging with the ISTA 2A procedures and
demonstrate compliance.
Supplier warrants all packaging materials are free of CFC's.
<PAGE>
Netpliance/Quanta
AGREEMENT #NP1
DATED:__ September 10, 1999
ATTACHMENT D
ACCEPTANCE TEST PROCEDURE
To be mutually agreed and completed within 30 days of Agreement being signed.
<PAGE>
Netpliance/Quanta
AGREEMENT #NP1
DATED:__ September 10, 1999
ATTACHMENT E
QUALITY REQUIREMENTS
To be mutually agreed and completed within 30 days of agreement being signed.
<PAGE>
Netpliance/Quanta
AGREEMENT #NP1
DATED:__ September 10, 1999
ATTACHMENT F
EQUIPMENT LOAN AGREEMENT
To be mutually agreed and completed within 30 days of agreement being signed.
<PAGE>
Netpliance/Quanta
AGREEMENT #NP1
DATED:__ September 10, 1999
ATTACHMENT G
PRODUCT REPAIR SERVICE AGREEMENT
To be mutually agreed and completed within 30 days of agreement being signed.
<PAGE>
Netpliance/Quanta
AGREEMENT #NP1
DATED:__ September 10, 1999
ATTACHMENT H
PAYMENT TERMS FOR [* Confidential Treatment Requested]
Netpliance and Supplier have agreed for [* Confidential Treatment Requested]
the following payment terms will apply
- - Net 7 Days Payment, from receipt of invoice [* Confidential Treatment
Requested]
To be reviewed in Oct
Balance of the COGS uplifted by [* Confidential Treatment Requested]
First payment on the residual COGS due 30 days after shipment;
Netpliance has the option to pay-off the balance due on these units at
any given time;
- - No Letter of Credit, waived
- - Pricing to be agreed 5 days prior to 1st day of next month
- - Invoice Price shall not exceed [* Confidential Treatment Requested]
- - Resell of any excess inventory by end of year
If Netpliance, fails to purchase and ship [* Confidential Treatment
Requested] by end of 1999, calendar year and there is substantial excess
at the Supplier, the Supplier has the right to sell the completed
products or components to a third party, upon written notification from
Netpliance.
<PAGE>
Netpliance/Quanta
AGREEMENT #NP1
DATED:__ September 10, 1999
ATTACHMENT I
MATERIAL LIABILITY GUIDELINES
To be mutually agreed and completed within 30 days of agreement being signed.
