DATE 3/5/2003 Exhibit 10.58
SUPPLIER AGREEMENT
WAL-MART STORES, INC.
DIRECT IMPORTS (U.S.)
Corporate Office
Bentonville, AR 72716
(501) 273-4000
THIS AGREEMENT IS A LEGALLY BINDING DOCUMENT BETWEEN WAL-MART (PURCHASER), AND
SUPPLIER. THE PARTIES HERETO AGREE TO BE BOUND BY ALL TERMS AND CONDITIONS
HEREIN. HOWEVER, THIS SUPPLIER AGREEMENT AND OTHER TERMS, CONDITIONS AND
STANDARDS INCORPORATED HEREIN DO NOT CREATE AN OBLIGATION FOR PURCHASER TO
PURCHASE MERCHANDISE OR OTHER GOODS.
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TO BE COMPLETED BY PURCHASER: HOST Supplier No. Dept. Seq.
Effective Date [ ] [ ] [ ] [ ] [ ] [ ] [ ] [ ] [ ]
PC Supplier No.
[ ] [ ] [ ] [ ] [ ] [ ] [ ] [ ] [ ]
[X] WAL-MART [X] EXISTING SUPPLIER
[ ] SAM'S CLUB [ ] NEW SUPPLIER
CATEGORY
[ ] SUPERCENTER [ ] UPDATE DEPARTMENT: 10 TLE
[ ] OTHER [ ] NEW SEQ. BUYER: DANIEL SAEVA Ext.
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GENERAL SUPPLIER INFORMATION:
PURCHASER RESERVES THE RIGHT TO REMIT TO THE PARTY TO WHOM THE PURCHASE ORDER IS ISSUED.
LEGAL ADDRESS OF SUPPLIER: ADDRESS TO SEND PURCHASE ORDERS:
Supplier Name ROCKFORD CORPORATION Supplier Name ROCKFORD CORP
Address 600 S. ROCKFORD DRIVE Attention JIM SANDO
City TEMPE State AZ Country 85281 USA Address 600 S. ROCKFORD DR.
Factor Name: City TEMPE State AZ Country 85281 USA
Supplier Also Doing Business As: Address for use by delivery services other than regular mail,
(Attach a list to this Agreement if space below is insufficient) If not already shown in the purchase order address above.
ROCKFORD CORP Supplier # 138122-10
Supplier # Phone
ADDRESS OF FACTORY:
Factory Name ARTCO INTN'L ELECTRONICS CO, LTD Phone 480-517-3032
Address Fax: 480-804-8549
City State Country CHINA
IF BENEFICIARY'S ADDRESS IS DIFFERENT FROM ABOVE, EXPLAIN BELOW ADDRESS TO SEND PRICING TICKETS/BAR CODE LABELS:
Beneficiary: ROCKFORD CORP Supplier Name: ROCKFORD CORP
Address: 600 S. ROCKFORD DR Attention: JIM SANDO
City TEMPE State AZ Country USA Address: 600 S. ROCKFORD DR
85281 City TEMPE State AZ Country 85281 USA
Letters of Credit will be issued with Supplier as Beneficiary. If a Beneficiary other than Supplier is indicated, Wal-Mart reserves
the right to issue the purchase order and letter of credit to this other Beneficiary.
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SUPPLIER FINANCIAL INFORMATION
Supplier shall furnish to Purchaser, when submitting this completed agreement, a complete set of current financial statements or
its equivalent.
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NOTICE REGARDING ASSIGNMENT OF ACCOUNTS
The Supplier shall provide Purchaser written notice of an assignment, factoring, or other transfer of its right to receive payments
arising under this agreement 30 days prior to such assignment, factoring, or other transfer taking legal effect. Such written
notice shall include the name and address of assignee/transferee, date assignment is to begin, and terms of the assignment, and
shall be considered delivered upon receipt of such written notice by the Director of the Direct Imports Department. Supplier shall
be allowed to have only one assignment, factoring or transfer legally effective at any one point in time. No multiple assignments,
factorings or transfers by the Supplier shall be permitted. Purchaser shall have the right to take deductions or other set-offs
against any payment assigned, transferred, or factored by the Supplier and Supplier shall defend and indemnify Purchaser against
and hold Purchaser harmless from any and all lawsuits, claims, actions, damages (including reasonable attorneys' fees, court costs,
obligations, liabilities, or liens) arising or imposed in connection with the assignment or transfer or factoring of any account or
right arising thereunder. Supplier also releases and waives any right, claim, or action against Purchaser for amounts due and owing
under this Agreement where Supplier has not complied with the notice requirements of this section. Such notices shall be mailed
directly to: Director of Direct Imports Department, Wal-Mart Stores, Inc., Bentonville, AR USA 72716.
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SHIPPING TERMS
Unless otherwise agreed, all goods shall be shipped Free on Board (FOB) port of export as enumerated in the INCO terms designated
by the International Chamber of Commerce. The Supplier shall deliver the goods on board and Carrier's vessel as designated by the
Purchaser at the named port of shipment on the date or within the period stipulated and in the manner customary at the port.
Supplier shall provide the goods in conformity with the contract of sale and shall obtain at its own risk and expense any export
license or other official authorization and carry out all customs formalities necessary for the exportation of the goods. Supplier
shall pay all costs relating to the goods until such time as they have passed the ship's rail at the named port of shipment and the
costs of customs formalities necessary for exportation as well as all duties, taxes and other official charges payable upon
exportation. Supplier shall also give the Purchaser written notice when the goods have been delivered on board the designated
Carrier's vessel. In the event that goods must be shipped by air due to the Supplier's inability to meet ship dates by ocean
transportation or as specified on the purchase order, the Supplier will be responsible for any and all air freight charges and must
reimburse Purchaser for any and all additional costs incurred as a result. Documentation necessary for payment will not be released
until payment of all such transportation charges is received by Purchaser.
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RETURN POLICY
PURCHASER MUST SPECIFY BELOW THE APPLICABLE RETURN POLICY PROGRAM FOR SUPPLIER.
Supplier will be charged for all returned merchandise regardless if the merchandise has been destroyed, recycled or returned.
Returned merchandise will be shipped freight, prepaid at Supplier's Cost and a 5% handling charge will be incurred. The Supplier
will be responsible for 100% payment of claim by check or wire transfer within 30 days of claim date.
Office Credit#:
ADDRESS TO FORWARD CLAIMS TO: COMMENTS:
JIM SANDO
ROCKFORD CORP
600 S. ROCKFORD DR
TEMPE, AZ 85281
Revised 8/25/99
Page 1 of 8
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Phone #: 480 517 3032
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Fax #: 480 966 3983
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Contact: JIM SANDO
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[X] #1: RETURNED MERCHANDISE TO BE SENT TO U.S. STATESIDE FACILITY:
Returned Merchandise will be sent from the Return Center to the
Supplier, shipped prepaid at Supplier's cost and will include a 5%
handling charge.
Permanent return authorization #WAL-RA is required for shipment.
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ADDRESS TO SHIP RETURNS TO:
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ROCKFORD CORP
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955 N. FIESTA BLVD. #4
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GILBERT, AZ 85233 USA
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Phone #:480 517 3032
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Fax #: 480 966 3983
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Contact: JIM SANDO
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RETURNS HELD AT OUR RETURN CENTERS FOR 10 DAYS AFTER THE REQUEST FOR
RETURN AUTHORIZATION WILL BE DISPOSED OF AT PURCHASER'S DISCRETION.
[ ] #2: RETURNED MERCHANDISE WILL NOT BE SENT TO SUPPLIER:
[ ] Return Center may dispose of returned merchandise through salvage
outlets.
[ ] Return Center must destroy merchandise.
When the Supplier agrees to allow Purchaser to dispose/destroy the
returns. Purchaser cannot retain samples due to the volume of returns
received. If upon presentation of the claim the Supplier requests
samples, Purchaser will make every effort to provide them. Whether or
not the samples are provided, the Supplier is responsible for paying
the claim.
[ ] #3: DEFECTIVE ALLOWANCE: --------% AT NEGOTIATED F.O.B. (BY PURCHASER
APPROVAL ONLY)
The Defective Allowance must be approved by the Purchaser and is based
on historical return rates. The Defective Allowance percentage may vary
from year to year and from department to department. Such rates will be
based on the number of actual shipments received by the Purchaser and
the number of returns received by the Purchaser from its customers. The
cost reflected on the import purchase order is the first cost which
includes the Defective Allowance at a set percentage as indicated above.
Returns will be monitored by Purchaser at store level and will be
tracked during the fiscal year. If the actual number of returns received
by the Purchaser exceed the defective allowance negotiated, a claim will
be filed against the Supplier for the excess amount. If the actual
returns received fall below the defective allowance negotiated, the
unused portion of the allowance will expire and will not be carried over
to the following year. All returns shall remain the property of
Purchaser.
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PAYMENT TERMS
Payment will be made by letter of credit to the Supplier/Beneficiary upon
Purchaser's receipt and approval of all the completed documentation as specified
on the terms and conditions of the letter of credit and purchase order.
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INSURANCE REQUIREMENTS
Supplier's current original Certificate of Insurance with the following
requirements must be attached to this Supplier Agreement. Product Liability
Instruction manual terms incorporated herein. Certificate Holder and Additional
Insured is:
WAL-MART STORES, INC. ITS SUBSIDIARIES & ITS AFFILIATES
702 SW 8th Street
Bentonville, AR 72716-8029
Attn: DIRECT IMPORT DEPARTMENT
1. COMMERCIAL GENERAL LIABILITY Including Contractual:
Products and Completed Operations with Certificate Holder named as
Additional Insured as evidenced by the attached endorsement.
LIMITS: $2,000,000* Per Occurrence
General Liability is on an Occurrence basis. Claim made policy is NOT
acceptable
2. WORKERS' COMPENSATION required if Supplier will be entering any Wal-Mart
premises:
Workers' Compensation STATUTORY
Employer's Liability $1,000,000.
Waiver of Subrogation where permitted by law
1. Notice of Cancellation must be for 30 days
4. Renewals of certificates of insurance must be submitted prior to
expiration of insurance.
5. Questions regarding insurance requirements, contact Risk Management at
(501) 273-6516.
6. If certificate of insurance is incomplete or fails to comply, a Supplier
number will not be assigned and shipments will be held until Supplier is
compliant.
7. Certificate of insurance must be valid at the time of shipment.
8. CONTACT FOR PRODUCT LIABILITY CLAIMS:
NAME: ROCKFORD CORPORATION
ADDRESS: 1000 S. ROCKFORD DR.
CITY AND STATE: TEMPE, AZ 85281
COUNTRY: USA
PHONE: 480 517 3140 FAX: 480 966 3983
INSURING COMPANY: ATLANTIC MUTUAL
*$5,000,000. If determined by Purchaser as a high risk Supplier.
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COMPLIANCE WITH STANDARDS FOR SUPPLIERS
Supplier agrees to comply with the obligations expressed in the "WAL-MART
STORES, INC. STANDARDS FOR SUPPLIERS" attached hereto and incorporated herein as
part of this Supplier Agreement. Purchaser reserves the right to cancel any
outstanding order, refuse and/or return any shipments and otherwise cease to do
business with Supplier in the event Supplier fails to comply with all terms of
said Standards or if Purchaser has reason to believe Supplier has failed to
comply with said Standards.
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WAL-MART INTERACTIVE
Supplier grants Purchaser non-exclusive permission to display and sell our
product on the internet or in-store kiosk via Wal-Mart Interactive. Supplier
understands and acknowledges that all right, title, interest in and to the
images of products prepared in accordance with the Vendor Information Packet and
used by Wal-Mart Interactive are the property of Purchaser. Supplier agrees to
knowingly release and waive any right, claim or action against the Purchaser
with respect to the use of the images of products; however, all trademarks and
logos of the applicable products remain the sole and exclusive property of the
Supplier.
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NOTICE
Any notice permitted or required hereunder shall be in writing and shall be
effectively given if: (a) delivered personally; (b) sent by prepaid courier
service; (c) sent by registered mail or; (d) sent by prepaid telecopier, telex
or other similar means of electronic communication and confirmed by mailing the
original document so sent by prepaid on the same or following day. In the case
of notice to Purchaser: Wal-Mart Stores, Inc. 702 S.W. 8th St. Bentonville, AR
72716 Attn: Director of Direct Imports Department. In case of notice to
Supplier, Purchaser shall notify Supplier at the address indicated above. Or, at
such other address as the party to whom such notice or other communication is
to be given shall have advised the party giving the same in the manner provided
in this section.
Revised 8/25/99
Page 2 of 8
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Any notice or other communication delivered personally or by prepaid courier
service shall be deemed to have been given and received on the day it is so
delivered at such address, provided that if such day is not a Business Day such
notice or other communication shall be deemed to have been given and received on
the next following Business Day. Any notice or other communication sent by
registered mail shall be deemed to have been given and received on the fifth
Business Day following the date of mailing. Any notice or other communication
transmitted by telecopier, telex or other similar form of electronic
communication shall be deemed given and received on the day of its transmission
provided that such day is a Business Day and such transmission is completed
before 5:00 p.m. on such day, failing which such noticed or other communication
shall be deemed given and received on the first Business Day after its
transmission.
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INDEMNIFICATION
Supplier shall protect, defend, hold harmless and indemnify Purchaser from and
against any and all claims, actions, liabilities, losses, costs and expenses,
including attorneys' fees and court costs, even if such claims are groundless,
fraudulent or false, arising out of any actual or alleged infringement of any
patent, trademark or copyright by any merchandise sold to the purchaser
hereunder, or arising out of any actual or alleged death of or injury to any
person, damage to any property, or any other damage or loss, by whomsoever
suffered, resulting or claimed to result in whole or in part from any actual or
alleged defect in such merchandise, whether latent or patent, including actual
or alleged improper construction or design of said merchandise or the failure of
said merchandise to comply with specifications or with any express or implied
warranties of Supplier, or arising out of any actual or alleged violation by
such merchandise, or its manufacturer, possession or use or sales, of any law,
statute or ordinance of any governmental administrative order, rule or
regulation arising out of Supplier's installation of merchandise covered by this
agreement. The duties and obligations of Supplier created hereby shall not be
affected or limited in any way by Purchaser's extension of express or implied
warranties to its customers, except to the extent that any such warranties
expressly extend beyond the scope of Supplier's warranties, express or implied,
to Purchaser. It is further agreed that all duties and obligations of Supplier
set forth in this paragraph shall extend in full force and effect to pallets or
other transport or display devices provided by or at the direction of Supplier.
Supplier warrants that all sales made hereunder are or will be made at not less
than fair value under the United States Antidumping Law (19 U.S.C. Sec. 160 et
seq.), and Supplier will indemnify, defend and hold Purchaser harmless from and
against any costs or expenses (including but not limited to any antidumping
duties which may be imposed) arising out of or in connection with any breach of
this warranty unless restricted by applicable laws. Purchaser may at its
discretion cancel any purchase order in the event the goods purchased become
subject to a notice of suspension of liquidation or a notice of final order by
the U.S. Department of Commerce.
ALL PURCHASES MADE BY PURCHASER SHALL BE CONTROLLED BY THE PURCHASER'S PURCHASE
ORDER "TERMS AND CONDITIONS", WHICH IS ATTACHED AS PART OF THIS AGREEMENT, AND
INCLUDED WITH EACH MANUALLY TRANSMITTED ORDER. ANY DISPUTE, CONTROVERSY OR CLAIM
ARISING OUT OF, RELATING TO, OR IN CONNECTION WITH, THIS CONTRACT, OR THE
BREACH, TERMINATION OR VALIDITY THEREOF, SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF ARKANSAS, EXCLUDING CONFLICT OF LAW
PRINCIPLES. THE UNITED NATIONS CONVENTION ON CONTRACTS FOR THE INTERNATIONAL
SALE OF GOODS ARE EXPRESSLY EXCLUDED. PARTIES AGREE THAT THE EXCLUSIVE
JURISDICTION OF ANY DISPUTE ARISING IN CONNECTION WITH THIS AGREEMENT OR ANY
DISPUTE RELATING TO THE SERVICES OR GOODS PROVIDED HEREUNDER SHALL BE IN THE
STATE AND FEDERAL COURTS OF THE COUNTIES OF BENTON OR WASHINGTON, STATE OF
ARKANSAS. ANY LEGAL ACTION BROUGHT BY SUPPLIER AGAINST PURCHASER WITH RESPECT TO
THIS AGREEMENT SHALL BE FILED IN ONE OF THE ABOVE REFERENCED JURISDICTIONS
WITHIN TWO (2) YEARS AFTER THE CAUSE OF ACTION ARISES. THIS AGREEMENT SHALL BE
EXECUTED IN THE ENGLISH LANGUAGE. IN THE EVENT OF ANY CONFLICT BETWEEN THIS
AGREEMENT AS WRITTEN IN THE ENGLISH LANGUAGE AND ANY TRANSLATION, THIS AGREEMENT
WRITTEN IN ENGLISH SHALL CONTROL. THE PARTIES ACKNOWLEDGE THAT THEY HAVE READ
AND UNDERSTAND THIS CLAUSE AND AGREE WILLINGLY TO ITS TERMS AND CONDITIONS.
LIMITATION OF DAMAGES: IN NO EVENT SHALL PURCHASER BE LIABLE FOR ANY INCIDENTAL
OR CONSEQUENTIAL DAMAGES, INCLUDING WITHOUT LIMITATION, LOSS OF PROFITS OR
BUSINESS, OR OTHER CONSEQUENTIAL DAMAGES (INCLUDING, BUT NOT LIMITED TO DAMAGES
ARISING OUT OF PURCHASER'S CANCELLATION OF ORDERS OR THE TERMINATION OF BUSINESS
RELATIONS WITH SUPPLIER), EVEN IF PURCHASER HAS BEEN ADVISED BY SUPPLIER OF THE
POSSIBILITY OF SUCH DAMAGES.
By the execution of this Agreement, the parties hereto agree that this
Agreement, the Terms and Conditions and the Standards for Suppliers, which are
incorporated herein, constitute the full understanding of the parties, a
complete allocation of risks between them and a complete and exclusive statement
of the terms and conditions of their agreement; and all prior agreements,
negotiations, dealings and understandings, whether written or oral, regarding
the subject matter hereof, are superseded by and merged into this Agreement. Any
changes to this Agreement shall be made in writing and executed by both parties.
Furthermore, in the event of a conflict of terms between the Supplier Agreement
and a Purchase Order, the Supplier Agreement shall be the controlling document.
SUPPLIER
By: Jacqueline M. Mott Date: 03/06/03
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Title: Vice President
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PURCHASER:
By: Date:
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Title:
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[SEAL]
Revised 8/25/99
Page 3 of 8
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PURCHASE ORDER TERMS AND CONDITIONS
1. DEFINITIONS: As used in these Terms and Conditions, "order" shall mean this
Purchase Order and all its attachments, instructions and exhibits; "goods"
shall mean any materials, machinery, equipment, article, item or work
provided for in this order; "Supplier" shall mean the person, firm or
corporation named on the face hereof to whom this order is issued; and
"Purchaser" shall mean the person, firm or corporation named on the face
hereof by whom this order is issued.
2. AGREEMENT: This order sets forth the entire agreement between Supplier and
Purchaser with respect to the sale and purchase of the goods, and it is not
valid unless signed or initiated by an authorized buyer for Purchaser.
Acceptance of this order may be made only by the shipment of the goods in
accordance herewith and ACCEPTANCE IS EXPRESSLY LIMITED TO ALL OF THE TERMS
AND CONDITIONS OF THIS ORDER, INCLUDING ANY AND ALL ATTACHMENTS. Supplier's
invoices, confirmation memorandum or other writing may not vary the terms of
this order. Supplier's failure to comply with each and every term of this
order shall constitute an event of default and shall be grounds for the
exercise by Purchaser of any of the remedies provided for in these Terms and
Conditions.
3. WARRANTIES AND GUARANTEES: By acceptance of this order, Supplier warrants
and guarantees that (a) the goods will comply with all specifications
contained in this order and will be of comparable quality as all samples
delivered to Purchaser, (b) the goods are not adulterated, misbranded,
falsely labeled or advertised, or falsely invoiced within the meaning of any
local, state or federal laws and amendments thereof now in force, (c) the
goods have been labeled, advertised, and invoiced in accordance with the
requirements (if applicable) of the Wool Products Labeling Act of 1939, the
Fur Products Labeling Act and the Textile Fiber Products Identification Act
and any and any all other governmental laws and the respective rules and
regulations thereunder, (d) reasonable and representative tests made in
accordance with the requirements of the Flammable Fabrics Act (if
applicable) show that the goods are not so highly flammable as to be
dangerous when worn by individuals, (e) the goods are properly labeled as to
content as required by applicable Federal Trade Commission Trade Practice
Rules, the Fair Labor Standards Act, the Federal Food, Drug and Cosmetics
Act, the Consumer Product Safety Commission and similar laws, rules and
regulations, (f) the goods ordered herein shall be delivered in good and
undamaged condition and shall, when delivered, be merchantable and fit and
safe for purposes for which the same are intended to be used, including
without limitation, consumer use, (g) the goods do not infringe upon or
violate any patent, copyright, trademark, trade name, trade dress or,
without limitation, any other rights belonging to others, (h) all weight,
measures, sizes, legends or descriptions printed, stamped attached or
otherwise indicated with regard to the goods are true and correct, and
conform and comply with all laws, rules, regulations, ordinances, codes and
or standards relating to said goods of federal, state and local governments,
(i) neither the goods nor the importation is in violation of any other laws,
ordinances, statutes, rules or regulations of the United States or any state
or local government or any subdivisions or agency thereof, (j) all goods and
services sold hereunder or pursuant hereto will be free of any claim of any
nature by any third person and that Supplier will convey clear title thereto
to Purchaser as provided hereunder, and (k) all goods sold hereunder or
pursuant hereto will be of merchantable quality free from all defects in
design, workmanship and materials, and will be fit for the particular
purposes for which they are purchased and that the goods provided will be in
strict accordance with the specifications, samples, drawings, designs or
other requirements including performance specifications approved or adopted
by Purchaser. Any attempt by Supplier to limit, disclaim or restrict any
such warranties or remedies of Purchaser by acknowledgement or otherwise in
accepting or performing this order shall be null, void and ineffective
without Purchaser's written consent.
It shall be within the sole discretion of Purchaser to determine when the
above mentioned warranties and guarantees have been breached. In addition to
the other guarantees and warranties contained in this paragraph, the
warranties of the Uniform Commercial Code are specifically incorporated
herein. Nothing contained in this order shall be deemed a waiver of
warranties implied by law.
4. PROHIBITION AGAINST FORCED LABOR, CHILD LABOR AND TRANS-SHIPMENTS: SUPPLIER
CERTIFIES, REPRESENTS AND WARRANTS THAT THE GOODS PURCHASED PURSUANT TO THIS
AGREEMENT ARE NOT MINED, PRODUCED, MANUFACTURED, ASSEMBLED OR PACKAGED BY
THE USE OF FORCED LABOR, PRISON LABOR OR FORCED OR ILLEGAL CHILD LABOR AND
THAT THE GOODS WERE NOT TRANS-SHIPPED FOR THE PURPOSE OF MISLABELING,
EVADING QUOTA OR COUNTRY OF ORIGIN RESTRICTIONS OR FOR THE PURPOSE OF
AVOIDING COMPLIANCE WITH FORCED LABOR, PRISON LABOR OR CHILD LABOR LAWS. IF
ANY SUPPLIER, MANUFACTURER, SUBCONTRACTOR OR AGENT ON BEHALF OF SUPPLIER
ENGAGES IN THE PRACTICE OF TRANSSHIPMENT OF ANY PURCHASES, PURCHASER MAY, IN
ADDITION TO EXERCISING ITS REMEDIES PROVIDED IN SECTION 5 BELOW, IMMEDIATELY
AND IRREVOCABLY CANCEL THE ORDER AS WELL AS TERMINATE ALL CURRENT AND FUTURE
BUSINESS RELATIONSHIPS WITH THE SUPPLIER, MANUFACTURER, SUBCONTRACTOR,
AND/OR AGENT. IN ADDITION, ALL PARTIES INVOLVED AND ALL INFORMATION OBTAINED
WILL BE TURNED OVER FOR PROSECUTION UNDER APPLICABLE LAWS TO: THE UNITED
STATES CUSTOMS SERVICE, THE APPROPRIATE GOVERNMENTAL AGENCY IN THE COUNTRY
OF ACTUAL PRODUCTION AND THE APPROPRIATE GOVERNMENTAL AGENCY OF THE COUNTRY
FROM WHICH THE TRANSSHIPMENT WAS TO TAKE PLACE.
5. REMEDIES ON BREACH OR DEFAULT: Failure to comply with each and every term of
this order and each guarantee or warranty herein shall be grounds for the
exercise by Purchaser of any one or more of the following remedies:
a) Cancellation of all or any part of this order without notice,
including without limitations the balance of any order received on
installment;
b) Rejection of all or any part of any shipment by Purchaser, which may
return the goods or hold them at Supplier's risk and expense. Purchaser's
right to reject and return or hold goods at Supplier's expense and risk
shall extend to goods covered by this order which are returned by
Purchaser's customers for any reason entitling Purchaser to reject.
Purchaser may, at its option, require Supplier to grant a full refund or
credit to Purchaser of the price actually paid by any customer of Purchaser
for such item in lieu of replacement with respect to any item which
Purchaser is entitled to reject hereunder. Purchaser shall be under no duty
to inspect the goods before resale thereof and notice of rejection shall be
deemed given within a reasonable time if given within a reasonable time
after notice of defects or deficiencies has been given to Purchaser by its
customers. In respect of any goods rightfully rejected by Purchaser, there
shall be charged to Supplier all expenses incurred by Purchaser in (i)
unpacking, examining, repackaging and storing such goods (it being agreed
that in the absence of proof of a higher expense that the Purchaser shall
claim any allowance for each rejection at the rate of 10% of the price for
each rejection made by Purchaser) and (ii) landing and reshipping such
goods;
a) Termination of all current and future business relationships; and/or
b) Withhold payment to the Supplier and thereby entitle Purchaser to
actual and consequential damages and attorneys' fees in connection with such
breach or default;
c) Any damages sustained by breach of default.
When Purchaser has exercised any of the above remedies, Supplier shall not
have the right to make a conforming delivery within the contract time.
Purchaser, at its sole discretion, may elect (1) to extend the delivery
schedule and/or (2) to waive other deficiencies in Supplier's performance in
which case an equitable reduction in the purchase order price may be
negotiated. In the event Supplier for any reason anticipates difficulty in
complying with the required delivery date, or in meeting any of the other
requirements of this order, Supplier shall promptly notify Purchaser in
writing if Supplier does not comply with Purchaser's delivery schedule.
Purchaser may require delivery by fastest way possible and changes resulting
from such premium transportation must be fully prepaid and absorbed by the
Supplier. The rights and remedies of the Purchaser provided in this clause
shall not be exclusive and are in addition to any other rights and remedies
provided by law, including those remedies provided under the Uniform
Commercial Code.
6. INDEMNIFICATION: Supplier shall protect, defend, hold harmless and indemnify
Purchaser from and against any and all claims, actions, liabilities, losses,
costs and expenses, including reasonable attorney fees and costs, even if
such claims are groundless, fraudulent or false, arising out of any actual
or alleged infringement of any patent, trademark, tradedress or copyright by
any merchandise sold to the Purchaser hereunder, or arising out of any
actual or alleged death of or injury to any person, damage to any property,
or any other damage or loss, by whomsoever suffered, resulting or claimed to
result in whole or in part from any actual or alleged defect in such
merchandise whether latent or patent, including actual or alleged improper
construction or design of said merchandise or the failure of said
merchandise to comply with specifications or with any express or implied
warranties of Supplier, or arising out of any actual or alleged violation by
such merchandise, or its manufacturer, possession or use or sales, of any
law, statute or ordinance of any governmental administrative order, rule or
regulation arising out of Supplier's installation of goods covered by this
agreement. The duties and obligations of Supplier created hereby shall not
be affected or limited in any way by Purchaser's extension of express or
implied warranties to its customers, except to the extent that any such
warranties expressly extend beyond the scope of Supplier's warranties,
express or implied, to Purchaser. It is further agreed that all duties and
obligations of Supplier set forth in this paragraph shall extend in full
force and effect to the pallets or other transport or display provided by or
at the direction of Supplier.
7. DELIVERY TIME: THE TIME SPECIFIED HEREIN FOR SHIPMENT OF GOODS IS OF THE
ESSENCE OF THIS AGREEMENT AND FAILURE TO SHIP WITHIN SUCH TIME SHALL BE
CONSIDERED A MATERIAL BREACH OF THIS AGREEMENT AND SUBJECT TO REMEDIES OF
SECTION 5 ABOVE. Supplier agrees to inform
Revised 5/25/00
Page 4 of 8
Purchaser immediately of any failure to ship any part of this order or the
exact goods called for on this order on the shipment date specified.
Acceptance of any goods shipped after the specified shipment date shall not
be construed as a waiver of any of Purchaser's rights resulting from the
late shipment.
8. CANCELLATION: Purchaser may cancel all or any part of this order at any time
prior to shipment. In addition, in the event any place of business or other
premises of Purchaser shall be affected by lockouts, strikes, riots, war,
fire, civil insurrection, flood, earthquake, or any other casualty or cause
beyond Purchaser's control, which might reasonably tend to impede or delay
the reception, handling, inspecting, processing or marketing of the goods
covered by this order by Purchaser, its agents or employees. Purchaser may,
at its option, cancel all or any part of the undelivered order hereunder by
giving written notice to Supplier which notice shall be effective upon
mailing.
9. PRICE GUARANTEES: Prices herein are guaranteed by Supplier against
manufacturer's or Supplier's own price decline and against legitimate
competition until date of shipment. In the event that prior to final
shipment under this order, Supplier sells or offers to sell to others goods
substantially of the same kind as ordered herein at lower prices and/or on
terms more favorable to a third party than those stated in this order, the
prices and/or terms herein shall be deemed automatically revised to equal
the lowest prices and/or most favorable terms at which Supplier shall have
sold or shall have offered such goods and payments shall be made
accordingly. In the event Purchaser shall become entitled to such lower
prices, but shall have made payment at any price in excess thereof, Supplier
shall promptly refund the difference in price to Purchaser. Supplier agrees
to meet the price of legitimate competition. The prices to Purchaser set
forth in this order include all taxes whether or not set forth separately.
If any manufacturer's excise or other similar or different taxes are paid on
the goods described in this order and if such tax, or any part thereof, is
refunded to Supplier, than Supplier shall immediately pay Purchaser the
amount of such refund. In the event that a court or regulatory agency or
body finds that the prices herein are in excess of that allowed by any law
or regulation of any governmental agency, the prices herein shall be
automatically revised to equal a price which is not in violation of said law
or regulations. If Purchaser shall have made payment before it is determined
that there has been a violation, Supplier shall promptly refund an amount of
money equal to the difference between the price paid for the goods and a
price which is not in violation of said regulations.
10. DEBT BALANCE: If Supplier has a Debit Balance with Purchaser, the amount
owed Purchaser will be deducted from the next remittance or a check from
Supplier to clear this amount will be paid within 30 days at the option of
Purchaser. Purchaser reserves the right to charge the Supplier penalties
and interest.
11. ASSIGNMENT: Supplier shall not assign the obligation to perform this order
or any part hereof, and Purchaser shall not be obligated to accept a tender
of performance by any assignee, unless Purchaser shall have previously
expressly consented in writing to such an assignment.
12. VALIDITY: No finding that a part of this order is invalid or unenforceable
shall affect the validity of any other part hereof.
13. CREDIT BALANCE: Supplier agrees that any credit balance will be paid in
cash to Purchaser upon written request.
14. QUALITY ASSURANCE: (a) All goods shall be subject to inspection and test by
the Purchaser and its agents or employees and any governmental agencies to
the extent practicable at any and all times and places including the period
of manufacture and prior to final acceptance by the Purchaser and its
Customer; (b) All inspections and tests on the premises of Supplier or its
supplier shall be performed in such a manner as not to unduly delay the
work; (c) Final acceptance or rejection of the goods shall be made as
promptly as practical after delivery, except as otherwise provided in this
order, but failure to inspect and accept or reject goods or failure to
detect defects by inspection, shall neither relieve Supplier from
responsibility for such goods as are not in accordance with the order
requirements nor impose liabilities on Purchaser therefor; (d) Supplier
shall provide and maintain an inspection and process control system
acceptable to Purchaser covering the goods hereunder. Records of all
inspection work by Supplier shall be kept complete and available to
Purchaser during the performance of this order and for such longer periods
as may be specified in this order.
15. CHANGES: The Purchaser may at any time in writing, make changes to the terms
and conditions of Purchase Order. If any such change causes an increase or
decrease in the cost of, or the time required for the performance of any
work under this contract, an equitable adjustment shall be made in the
contract price or delivery schedule, or both, and the Purchase Order shall
be modified in writing accordingly. Any claim by the Supplier for
adjustment under this clause must be asserted within thirty (30) days from
the date of receipt by the Supplier of the notification of change. Any
change to this order shall be authorized only by a duly executed Purchase
Order Amendment hereto.
16. REJECTIONS: If any of the goods ordered are found at any time to be
defective in design, workmanship or materials, or otherwise not in
conformity or acceptable with the requirements of this order, Purchaser, in
addition to such other rights, remedies and choices as it may have be
contract or by law at its option and sole discretion may (a) reject and
return such goods at Supplier's expense; (b) require Supplier to inspect
the goods and remove and replace nonconforming goods with goods that
conform to this order. If Purchaser elects option (b) above and Supplier
fails to promptly make the necessary inspection, removal and replacement,
Purchaser may at its option inspect and sort the goods. Supplier shall pay
the cost thereof. Furthermore, in the event that any merchandise ordered by
the Purchaser fails to be delivered or, if delivered, is not acceptable to
the Purchaser for any reason and is thereby rejected, the Supplier shall
immediately remove and/or destroy any and all labels and other markings
identifying the merchandise with a tradename, trademark, or patent at the
Suppler's expense.
17. TRANSPORTATION: Unless otherwise agreed, goods covered by this order shall
be shipped Free on Board (FOB) port of exportation as enumerated in the INCO
terms by the International Chamber of Commerce. Supplier shall deliver the
goods on board the Carrier's vessel as designated by the Purchaser at the
named port of shipment on the date or within the period stipulated and in
the manner customary at the port. Supplier shall provide the goods are in
conformity with the contract of sale and shall obtain at its own risk and
expense any export license or other official authorization and carry out all
customs formalities necessary for the exportation of the goods. Supplier
shall pay all costs relating to the goods until such time as they have been
properly delivered at the named port of shipment and the costs of customs
formalities necessary for exportation as well as all duties, taxes and other
official charges payable upon exportation. Supplier shall give the Purchaser
notice when the goods have been delivered on board the designated Carrier's
vessel. Any shipment, unless otherwise authorized, that results in excess
transportation charges must be fully prepaid by the Supplier. Supplier shall
release rail or truck shipments at the lowest released valuation permitted
in the governing tariff or classification. When goods must be shipped by air
due to the Supplier's inability to meet ship dates by ocean transportation
as specified on the purchase order, the Supplier will be responsible for all
air freight charges and must reimburse Purchaser for any and all additional
costs incurred as a result. Purchase order documents will not be released
until payment of charges is received by Purchaser.
18. EXTRA CHARGES: No extra charges of any kind including but not limited to
interest charges, service charges or carrying charges will be allowed
unless specifically agreed to by Purchaser in writing by the Purchaser.
19. CONFIDENTIAL OR PROPRIETARY INFORMATION: (a) Supplier shall not at any
time, during or after the term of this Agreement, disclose to others and
will not take or use for its own purposes or the purpose of others any
trade secrets, confidential information, knowledge, designs, data,
know-how, or any other information considered "confidential" by the
Purchaser. Supplier recognizes that this obligation applies not only to
technical information, designs and marketing, but also to any business
information that Purchaser treats as confidential. (b) Any information that
is not readily available to the public shall be considered to be a trade
secret and confidential. Supplier shall return all items belonging to
Purchaser and all copies of documents containing Purchaser's trade secrets,
confidential information, knowledge, data or know-how in Supplier's
possession or under Supplier's control upon request by the Purchaser or
termination of the Agreement. (c) Any knowledge or information which the
Supplier shall have disclosed or may hereafter disclose to the Purchaser
and which in any way relates to the goods or services covered by this order
and Purchaser's Material Schedule shall not unless otherwise specifically
agreed to in writing by the Purchaser be deemed to be confidential or
proprietary information and shall be acquired by the Purchaser free from any
restrictions (other than a claim for patent infringement), as part of the
consideration for this order. (d) Supplier shall keep confidential any
technical process or economic information derived from drawings,
specifications, and other data furnished by Purchaser in connection with
this order and shall not divulge, export or use directly or indirectly,
such information for the benefit of any other party without obtaining
Purchaser's prior written consent. Except as required for the efficient
performance of this order, Supplier shall not make copies or permit copies
to be made of such drawings, specifications or other data without the prior
written consent of the Purchaser.
20. TERMINATION: Unless otherwise stipulated, the Purchaser may terminate all
or part of this order at any time by written notice to Supplier. Purchaser
may at its discretion cancel any purchase order in the event the goods
purchased become subject to a notice of suspension of liquidation or a
notice of final order by the U.S. Department of Commerce.
Revised 8/25/99
Page 5 of 8
21. INSOLVENCY: If Supplier ceases to conduct its operations in the normal
course of business including inability to meet its obligations as they
mature, or if any proceeding under the bankruptcy or insolvency laws is
brought by or against Supplier or a receiver for Supplier is appointed or
applied for or an assignment for the benefit creditors is made by the
Supplier, Purchaser may terminate this order without liability, except for
deliveries previously made or for goods covered by this order then
completed and subsequently delivered in accordance with the terms of the
order. Supplier shall immediately notify Purchaser of its insolvency or if
it ceases to conduct its operations in the normal course of business
whichever occurs first.
22. WAIVER: No claim or right arising out of a breach of this contract can be
discharged in whole or in part by a waiver or renunciation of the claim or
right unless the waiver or renunciation is supported by consideration and
is in writing signed by the aggrieved party. The failure of Purchaser to
enforce at any time or for any period of time any of the provisions hereof
shall not be construed to be a waiver of such provisions nor the right of
Purchaser thereafter to enforce each and every such provision.
23. ANTIDUMPING: Supplier warrants that all sales made hereunder are or will be
made at not less than fair value under the United States Antidumping Law
(19 U.S.C. Sec. 160 et seq.), and Supplier will indemnify, defend and hold
Purchaser harmless from and against any costs or expenses (including but
not limited to any antidumping duties which may be imposed) arising out of
or in connection with any breach of this warranty unless restricted by
applicable laws.
24. PRODUCT TESTING: Purchaser requires all samples to be tested. All testing
will be conducted by a lab selected by the Purchaser. The Supplier shall be
responsible for all testing charges. Such charges will be billed directly
to the Supplier.
25. DOCUMENTATION: As stated in paragraph 1 of this section, this Supplier must
supply the Purchaser or its agent with all documentation necessary for the
international shipment and U.S. Customs entry of the merchandise. For
wearing apparel and textile shipments, Supplier shall obtain sufficient
quota and necessary export visas for the importation of the merchandise
into the United States. Supplier shall ensure that all export visas reflect
the actual value of the merchandise subject thereto and correspond with the
negotiated prices disclosed in the commercial documents for the goods.
Supplier shall also supply Purchaser with all necessary declarations for
proper entry of the apparel and textile goods. For footwear shipments,
Supplier shall provide Wal-Mart or its agent with completed interim
footwear invoices ("IFI's") and any other information necessary to classify
correctly the footwear. If Supplier fails to supply Purchaser or its agent
with complete proper documentation, Purchaser may at its discretion cancel
the shipment of merchandise. Supplier shall incur all costs pertaining to
the canceled shipment. Supplier agrees to retain all documentation related
to merchandise sold to Purchaser for a period of five (5) years. This
includes, but is not limited to, records relating to the cost of production
of the goods and their components, and company records substantiating
production of the goods at its facility or sub-contractor's facility.
26. FOREIGN CORRUPT PRACTICES ACT: Supplier represents that neither it nor its
agents, employees and affiliates is a political candidate or an employee,
officer, or representative of any government or any agency or other
instrumentality of any government, or of any political party. Supplier
shall inform the Purchaser of any change in such status or representation
immediately. Supplier shall not, directly or indirectly, make any payment
or gift to any employee, officer, or representative of any government or
governmental agency or political party or political candidate or other
instrumentality under circumstances where the payment or gift would
constitute an illegal payment or gratuity under the laws of the United
States or of the laws of the Supplier's country. Violation of such laws
shall be grounds for immediate termination of this Purchase Order.
27. NOTICE. Any notices permitted or required hereunder shall be in writing and
shall be effectively given if: (a) delivered personally; (b) sent by
prepaid courier service; (c) sent by registered mail; or (d) sent by
prepaid telecopier, telex or other similar means of electronic
communication and confirmed by mailing the original document so sent by
prepaid on the same or following day. Notice to Purchaser shall be
addressed as follows: Wal-Mart Stores, Inc. 702 S.W. 8th St. Bentonville,
AR 72716 Attn: Director of Direct Imports Department. Notice to Supplier
shall be addressed to the address as stated on the face of this purchase
order. Any notice or other communication delivered personally or by prepaid
courier service shall be deemed to have been given and received on the day
it is so delivered at such address, provided that if such day is not a
Business Day such notice or other communication shall be deemed to have
been given and received on the next following Business Day. Any notice or
other communication sent by registered mail shall be deemed to have been
given and received on the fifth Business Day following the date of mailing.
Any notice or other communication transmitted by telecopier, telex or other
similar form of electronic communication shall be deemed given and received
on the day of its transmission provided that such day is a Business Day and
such transmission is completed before 5:00 p.m. on such day, failing which
such noticed or other communication shall be deemed given and received on
the first Business Day after its transmission.
28. ENTIRE AGREEMENT: This Purchase Order with such documents as are expressly
incorporated herein by reference, including the Supplier Agreement, is
intended by the parties as a final expression of their agreement with
respect to such terms as are included herein and is intended also as a
complete and exclusive statement of the terms of their agreement. No course
of prior dealings between the parties and no usage of the trade shall be
relevant to determine the meaning of this Agreement.
Revised 8/25/99
Page 6 of 8
Supplier No. 138122 Department No.: 10 Effective Date: 3-7-2003
WAL-MART STORES, INC.
STANDARDS FOR "SUPPLIERS"
Wal-Mart Stores, Inc. ("Wal-Mart") has enjoyed success by adhering to three
basic principles since its founding in 1962. The FIRST PRINCIPLE is the concept
of providing value and service to our customers by offering quality merchandise
at low prices every day. Wal-Mart has built the relationship with its customers
on this basis, and we believe it is a fundamental reason for the Company's rapid
growth and success. The SECOND PRINCIPLE is corporate dedication to a
partnership between the Company's associates (employees), ownership and
management. This concept is extended to Wal-Mart's Suppliers who have increased
their business as Wal-Mart has grown. The THIRD PRINCIPLE is a commitment by
Wal-Mart to the communities in which stores and distribution centers are
located.
Wal-Mart strives to conduct its business in a manner that reflects these three
basic principles and the resultant fundamental values. Each of our Suppliers,
including our Suppliers outside the United States, are expected to conform to
those principles and values and to assure compliance in all contracting,
subcontracting or other relationships.
Since Wal-Mart believes that the conduct of its Suppliers can be transferred to
Wal-Mart and affect its reputation, Wal-Mart requires that its Suppliers conform
to standards of business practices which are consistent with the three
principles described above. More specifically, Wal-Mart requires conformity from
its Suppliers with the following standards, and hereby reserves the right to
make periodic, unannounced inspections of Supplier Partner's facilities to
satisfy itself of Supplier's compliance with these standards:
1. COMPLIANCE WITH APPLICABLE LAWS
All Suppliers shall comply with the legal requirements and standards of
their Industry under the national laws of the countries in which the
Suppliers are doing business, including the labor and employment laws of
those countries, and any applicable U.S. laws. Should the legal
requirements and standards of the industry conflict, Suppliers must, at a
minimum, be in compliance with the legal requirements of the country in
which the products are manufactured. If, however, the industry standards
exceed the country's legal requirements, Wal-Mart will favor Suppliers who
meet such industry standards. Suppliers shall comply with all requirements
of all applicable governmental agencies, Necessary invoices and required
documentation must be provided in compliance with the applicable law.
Suppliers shall warrant to Wal-Mart that no merchandise sold to Wal-Mart
infringes the patents, trademarks or copyrights of others and shall provide
to Wal-Mart all necessary licenses for selling merchandise sold to Wal-Mart
which is under license from a third party. All merchandise shall be
accurately marked or labeled with its country of origin in compliance with
applicable laws and including those of the country of manufacture. All
shipments of merchandise will be accompanied by the requisite documentation
issued by the proper governmental authorities, including but not limited to
Form A's, import licenses, quota allocations and visas and shall comply
with orderly marketing agreements, voluntary restraint agreements and other
such agreements in accordance with applicable law. The commercial invoice
shall, in English and in any other language deemed appropriate, accurately
describe all the merchandise contained in the shipment, identify the
country of origin of each article contained in the shipment, and shall list
all payments, whether direct or indirect, to be made for the merchandise,
including, but not limited to any assets, selling commissions or royalty
payments. Backup documentation, and any Wal-Mart required changes to any
documentation, will be provided by Suppliers promptly. Failure to supply
complete and accurate information may result in cancellation or rejection
of the goods.
2. EMPLOYMENT
Wal-Mart is a success because its associates are considered "partners" and
a strong level of teamwork has developed within the Company. Wal-Mart
expects the spirit of its commitment to be reflected by its Suppliers with
respect to their employees. At a minimum, Wal-Mart expects its Suppliers to
meet the following terms and conditions of employment:
COMPENSATION
Suppliers shall fairly compensate their employees by providing wages
and benefits which are in compliance with the national laws of the
countries in which the Suppliers are doing business or which are
consistent with the prevailing local standards in the countries in
which the Suppliers are doing business, if the prevailing local
standards are higher, Suppliers shall fully comply with the wage and
hour provisions of the Fair Labor Standards Act, if applicable, and
shall use only subcontractors who comply with this law, if applicable.
HOURS OF LABOR
Suppliers shall maintain reasonable employee work hours in compliance
with local standards and applicable national laws of the countries in
which the Suppliers are doing business. Employees shall not work more
hours in one week than allowable under applicable law, and shall be
properly compensated for overtime work. We favor Suppliers who comply
with the statutory requirements for working hours for employees and we
will not use suppliers who, on a regularly scheduled basis, require
employees to work in excess of the statutory requirements without
proper compensation as required by applicable law. Employees should be
permitted reasonable days off (which we as at least one day off for
every seven-day period) and leave privileges.
FORCED LABOR/PRISON LABOR
Forced or prison labor will not be tolerated by Wal-Mart. Suppliers
shall maintain employment on a voluntary basis. Wal-Mart will not
accept products from Suppliers who utilize in any manner forced labor
or prison labor in the manufacture or in their contracting,
subcontracting or other relationships for the manufacture of their
products.
CHILD LABOR
Wal-Mart will not tolerate the use of child labor in the manufacture
of products it sells. Wal-Mart will not accept products from Suppliers
that utilize in any manner child labor in their contracting,
subcontracting or other relationships for the manufacture of their
products. No person shall be employed at an age younger than 15 (or 14
where the law of the country of manufacture allows) or younger than
the age for completing compulsory education in the country of
manufacture where such age is higher than 15.
DISCRIMINATION/HUMAN RIGHTS
Wal-Mart recognizes that cultural differences exist and different
standards apply in various countries, however, we believe that all
terms and conditions of employment should be based on an individual's
ability to do the job, not on the basis of personal characteristics or
beliefs. Wal-Mart favors Suppliers who have a social and political
commitment to basic principles of human rights and who do not
discriminate against their employees in hiring practices or any other
term or condition of work, on the basis of race, color, national
origin, gender, religion, disability, or other similar factors.
3. WORKPLACE ENVIRONMENT
Wal-Mart maintains a safe, clean, healthy and productive environment for
its associates and expects the same from its Suppliers. Suppliers shall
furnish employees with safe and healthy working conditions. Factories
working on Wal-Mart merchandise shall provide adequate medical facilities,
fire exits and safely equipment, well lighted and comfortable workstations,
clean restrooms, and adequate living quarters where necessary. Workers
should be adequately trained to perform their jobs safely.
Wal-Mart will not do business with any Supplier that provides an unhealthy
or hazardous work environment or which utilizes mental or physical
disciplinary practices.
4. CONCERN FOR THE ENVIRONMENT
We believe it is our role to be a leader in protecting our environment. We
encourage our customers and associates to always Reduce, Reuse, and
Recycle. We also encourage our Suppliers to reduce excess packaging and to
use recycled and non-toxic materials whenever possible. We will favor
Suppliers who share our commitment to the environment.
5. "BUY AMERICAN" COMMITMENT
Revised 8/25/99
Page 7 of 8
Wal-Mart has a strong commitment to buy as much merchandise made in the
United States as feasible. Suppliers are encouraged to buy as many
materials and components from United States sources as possible and
communicate this information to Wal-Mart. Further, Suppliers are encouraged
to establish U.S. manufacturing operations.
6. REGULAR INSPECTION AND CERTIFICATION BY SUPPLIERS
Supplier shall designate, on a copy of the Wal-Mart Supplier Inspection and
Certification Form, one or more of its officers to inspect each of its
facilities which produces merchandise sold to Wal-Mart. Such inspections
shall be done on at least a quarterly basis to insure compliance with the
standards, terms and conditions set forth herein. The Supplier Officer
designated to perform such inspections shall certify to Wal-Mart following
each inspection (i) that he or she performed such inspection, and (ii) that
the results reflected on such compliance inspection form are true and
correct.
All charges raised to the inspection and certification of such facilities
shall be paid fully by the Supplier. Supplier shall maintain the completed
Inspection and Certification Forms on file at each facility and shall make
the forms readily accessible to Wal-Mart, its agents or employees when
requested. Any Supplier which fails or refuses to comply with these
standards is subject to immediate cancellation of any and all outstanding
orders, refusal or return of any shipment, and termination of its business
relationship with Wal-Mart.
7. RIGHT OF INSPECTION
To further assure proper implementation of and compliance with the
standards set forth herein, Wal-Mart or a third party designated by
Wal-Mart will undertake affirmative measures, such as on-site inspection of
production facilities, to implement and monitor said standards. Any
Supplier which fails or refuses to comply with these standards is subject
to immediate cancellation of any and all outstanding orders, refuse or
return any shipment, and otherwise cease doing business with Wal-Mart.
8. CONFIDENTIALITY
Supplier shall not at any time, during or after the term of this Agreement,
disclose to others and will not take or use for its own purposes or the
purpose of others any trade secrets, confidential information, knowledge,
designs, data, know-how, or any other information considered logically as
"confidential." Supplier recognizes that this obligation applies not only
to technical information, designs and marketing, but also to any business
information that Wal-Mart treats as confidential. Any information that is
not readily available to the public shall be considered to be a trade
secret and confidential. Upon termination of this Agreement, for any cause,
Supplier shall return all items belonging to Wal-Mart and all copies of
documents containing Wal-Mart's trade secrets, confidential information,
knowledge, data or know-how in Supplier's possession or under Supplier's
control.
9. WAL-MART GIFT AND GRATUITY POLICY
Wal-Mart Stores, Inc. has a very strict policy which forbids and prohibits
the solicitation, offering or acceptance of any gifts, gratuities or any
form of "pay off" or facilitation fee as a condition of doing business with
Wal-Mart; as a form of gratitude, or as an attempt to gain favor or accept
merchandise or services at a lesser degree than what was agreed. Wal-Mart
believes in delivering and receiving only the total quantity agreed.
Any Supplier, factory or manufacturer who violates such policy by offering
or accepting any form of gift or gratuity to any associate, employee, agent
or affiliate of Wal-Mart Stores, Inc. will be subject to all loss of
existing and future business, regardless of whether the gift or gratuity
was accepted. In addition, a Supplier, factory or manufacturer who violates
such policy, will be reported to the appropriate governmental authorities
of the Supplier's respective and affiliated countries.
Failure to report such information will result in severe action against
such Supplier, trading company or factory including but not limited to
termination of all existing and future business relationships and monetary
damages.
A copy of these Standards for Suppliers shall be posted in a location visible
to all employees at all facilities that manufacture products for Wal-Mart
Stores, Inc.
Any person with knowledge of a violation of any of these standards by a Supplier
or a Wal-Mart associate should call 1-800-WM-ETHIC (1-800-863-8442) (in
countries other than the United States, dial AT&T's U.S.A. Direct Number first)
or write to: Wal-Mart Stores, Inc., Business Ethics Committee, 702 SW 8th St.,
Bentonville, AR 72716-8095.
As an officer of ROCKFORD CORPORATION, a supplier of Wal-Mart, I have read the
principles and terms described in this document and understand my company's
business relationship with Wal-Mart is based upon said company being in full
compliance with these principles and terms. I further understand that failure
by a Supplier to abide by any of the terms and conditions stated herein may
result in the immediate cancellation by Wal-Mart of all outstanding orders with
that Supplier and refusal by Wal-Mart to continue to do business in any manner
with said Supplier. I am signing this statement, as a corporate representative
of ROCKFORD CORP, to acknowledge, accept and agree to abide by the standards,
terms and conditions set forth in this Memorandum of Understanding between my
company and Wal-Mart. I hereby affirm that all actions, legal and corporate, to
make this Agreement binding and enforceable against ROCKFORD CORP. have been
completed.
SUPPLIER COMPANY NAME,
ADDRESS, TELEPHONE AND FAX NUMBER Signature: /s/ Jacqueline M. Mott
ROCKFORD CORPORATION Typed Name: Jacqueline M. Mott
600 S. ROCKFORD DRIVE Title: Vice President
TEMPE AZ 85281
480-517-3032
480-966-3983
(SEAL)
Revised 8/25/99
Page 8 of 8