CONFIDENTIAL TREATMENT The registrant is
requesting confidential treatment of Schedules A
and B to this Exclusive Supply Agreement, in
their entirety. The non-public information
contained in Schedules A and B has been filed
with the Securities and Exchange Commission.
EXHIBIT 10.2
EXCLUSIVE SUPPLY AGREEMENT
THIS
AGREEMENT is made and entered into as of the 20th day of
December,
2001, by and between Source Technologies,
Inc., a North Carolina corporation
with offices at 2910 Whitehall Park Drive,
Charlotte, NC 28273 ("STI") and
AccuPoll, Inc., a Delaware corporation with
offices at 4440 Von Karman Avenue
Suite 125, Newport Beach, CA 92660
("API").
WHEREAS,
STI is engaged in the business of designing, developing,
marketing, integrating, distributing and
selling, inter alia, desktop digital
laser printing technology, toner cartridges
and integrated voting technology
solutions; and
WHEREAS,
API desires to have specially manufactured for its exclusive
use
a version of STI's product described as
follows: AccuPoll electronic voting
hardware solution and toner cartridges (the
"Products"); and
WHEREAS,
API desires to purchase Products exclusively from STI for
resale
and distribution in the Territory, and STI
is willing to sell Products
exclusively to API, all upon the terms and
subject to the conditions set forth
in this Agreement;
NOW,
THEREFORE, for and in consideration of the premises and the
mutual
covenants and agreements contained herein,
and other good and valuable
consideration, the receipt and sufficiency
of which are hereby acknowledged, the
parties hereto agree as follows:
1. Definitions.
(a)
Products shall mean the integrated AccuPoll hardware described
more
fully in the STI AccuPoll Specification set
forth in Schedule A herein as
amended, any subsequent specifications
applicable to the Products (the
"Specifications") and any improvements to
such Products made during the term of
this Agreement, which Products comprises a
printer, touch screen, computer
processing unit, integrated case, power
supply and all related control software
to be used in conjunction with the AccuPoll
software.
(b)
Pre-Existing Intellectual Property shall mean all intellectual
property worldwide including, but not
limited to, all discoveries, inventions,
designs, formulae, algorithms, processes,
software, technical information, data,
test results, apparatus and methods,
whether or not patentable, and all patents,
copyrights, trade marks, mask works, trade
secrets, know-how and all other forms
of intellectual property which are owned or
controlled by either party prior to
this Agreement, or contemporaneously with
this Agreement but not arising from
the performance of work under this
Agreement.
(c)
Developed Intellectual Property" shall mean all intellectual
property
worldwide, including but not limited to,
all discoveries, inventions, designs,
formulae, algorithms, processes, software,
technical information, data, test
results, apparatus and methods, whether or
not patentable, and all patents,
copyrights, trade marks, mask works, trade
secrets, know-how and all
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other forms of intellectual property
conceived or first-reduced to practice or
made during the performance of work under
this Agreement.
(d) Work
performed by STI shall include the research and development
pursuant to the Specifications for the
development of the Products.
(e) Field
shall mean voting and elections systems worldwide.
2. Exclusivity.
(a) Upon
the terms and subject to the conditions contained herein, STI
hereby agrees to manufacture and sell to
API such quantities of Products
pursuant to the specifications set forth in
Schedule A to this Agreement (the
"Specifications") as API shall require for
use and resale solely in the Field.
(b) API
acknowledges and agrees that it shall acquire such Products
exclusively from STI and that it will use
and resell the Products solely in the
Field. If STI is unable to produce and
deliver on time the required quantity of
Products, API may obtain Products from
another supplier.
(c)
Nothing herein shall preclude STI from selling or otherwise
providing
printers or printer-based solutions with
different specifications or
customizations, to any other third party,
government or businesses, including
for use or sale in the Field.
3. Purchase of Products.
(a) STI
shall sell Products to API at the prices set forth on Schedule
B,
which may be amended from time to time at
STI's sole discretion, upon sixty (60)
days after written notice thereof is given
to API.
(b) The
Product prices are exclusive of all taxes and all insurance,
freight, transportation, portage and
similar charges and expenses, each of which
shall be the sole responsibility of API,
and each of which will be added to
STI's invoices as a separate charge to be
paid by API.
(c) All
orders shall be placed by API in the form of a written purchase
order.
(d) All
sales are final; except for warranty returns, no returns shall
be
allowed. Due to the exclusive nature of
this Agreement and the unique
specifications for the Products, API
acknowledges that the Products are
customized goods sold by STI are unique to
API and its customers and could not
be resold by STI. If API wrongfully rejects
or revokes acceptance of such
Products or any part of them, or fails to
purchase Products for which it has
caused manufacturing to be commenced or raw
materials to be procured, STI shall
invoice API, and may hold the goods and
materials at API's risk and maintain an
action for the price.
2
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(e) Lead
time for purchases shall be set forth on Purchase Orders to be
submitted by API as mutually agreed. To the
extent practical, all Products shall
be produced on a made-to-order basis; to
meet other production schedules,
however, STI may, but shall not be required
to, build a finished goods
inventory, in which case no storage charges
shall apply (API may, however,
specifically request manufacture and
storage of larger quantities, which shall
be charged in accordance with STI's then
current storage formula; billing will
be upon delivery into storage in such
instance, unless STI and API elect a
different alternative). API shall endeavor
to provide forecasts of requirements,
and of spikes or troughs in demand. STI
shall rely upon API's forecasts in
obtaining raw materials, and API shall
compensate STI for all finished goods,
dedicated raw materials or work in process
manufactured or purchased as a result
of such forecasts (not to exceed a
one-month supply, unless API shall have
forecast a larger amount), after 12 months
have passed from manufacture of any
goods or purchase of any raw materials.
4. Payment. Commercially reasonable Payment
Terms for all Products will be set
forth on Purchase Orders to be issued by
API and will be not dissimilar to
standard STI Payment Terms which are net 30
days cash upon receipt of invoice,
F.O.B. shipping point, freight collect or
freight prepaid and added to the
invoice, unless otherwise agreed in a joint
writing. Invoices not paid within 30
days of invoice date are subject to late
fees at 1.5% per month or the highest
rate allowed by law (if lower). Payments
shall be tendered without deduction or
offset.
5. Warranty.
(a)
