Sample Business Contracts

OEM Purchase Agreement - Netpliance Corp. and Quanta Computer Inc.

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DATED:__ September 10, 1999

                            OEM PURCHASE AGREEMENT
                          BETWEEN NETPLIANCE, INC. AND
                                QUANTA COMPUTER

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


     "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.

     "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.

     "Spare Part(s)" will mean any part, assembly or subassembly of the Product.

     "Delivery" will mean delivery of Products or Spare Parts to a destination
     designated by Netpliance.

     "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.


     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.

DATED:__ September 10, 1999

2.0  DELIVERY (Continued)

     Deliver performance will be measured against the key order milestones, as
          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
          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.

     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

     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.

     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.

     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.

     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.


DATED:__ September 10, 1999

2.0  DELIVERY (Continued)

     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.


     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.


     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.


     6.1  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

          (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.


DATED:__ September 10, 1999


     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.

     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.

     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.

     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.

     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.

     Billbacks by Supplier do not apply to this Agreement.


DATED:__ September 10, 1999


     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.


     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.


     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.

     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.

                             Upside     Downside
          0-2 Weeks          Fixed       Fixed
          3-4 Weeks           25%         10%
          5-6 Weeks           45%         30%
          7-12 Weeks          75%         50%
          13 Weeks +         100%        100%

     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.


DATED:__ September 10, 1999


     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.

     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.


     Supplier and Netpliance have the option to terminate this Agreement and/or
     any Order, in whole or in part, in the event that:

          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.

          Either party will have all or a substantial portion of its capital
          stock or assets expropriated by any government.

          Either party will be dissolved or liquidated or have a petition for
          dissolution or liquidation filed with respect to it.

          Either party will be subject to property attachment or court
          injunction or court order, which substantially and negatively affects
          its operations.

          Either party will be unlikely to fulfill its obligations under this
          Agreement because of significant changes of its assets, credit, or
          business position; or

          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


DATED:__ September 10, 1999

11.0 TERMINATION (Continued)

     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.

     If Netpliance terminates this Agreement for any of the reasons in
     Subsection 11.1 Supplier will:

          Immediately cease all assembly operation and production required by
          Netpliance Orders issued under this Agreement.

          Deliver all completed Products manufactured pursuant to Netpliance
          Order instructions;

          Return, at Netpliance's expense, all loaned or leased equipment
          provided to Supplier by Netpliance under this Agreement;

          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.

     If Supplier terminates this Agreement for any of the reasons in Subsection
     11.1 Netpliance will:

          Pay Supplier for all the delivered products including the due payment.
          All Product delivered at that time must be based on Order Releases

          Pay Supplier for any material liabilities based on the cancellation
          Terms in Section 10.


     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


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.


     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.


     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.

     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


     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.

     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.


     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.


DATED:__ September 10, 1999


     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.


     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.

     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.

     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.


     The terms and conditions with respect to quality, inspection and acceptance
     are set forth in Attachment E.


     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.


DATED:__ September 10, 1999


     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:

     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.


     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.


     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.


     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.


DATED:__ September 10, 1999


     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.


     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.


     25.1    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


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.


     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
     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.


DATED:__ September 10, 1999


     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

     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.


     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


     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.


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

NETPLIANCE                         SUPPLIER

By:___________________________     By:________________________________

Title:________________________     Title:_____________________________

Date:_________________________     Date:______________________________

By:___________________________     By:________________________________

Title:________________________     Title:_____________________________

Date: ________________________     Date:______________________________


DATED:__ September 10, 1999

                                 ATTACHMENT A

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

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

Sept       Oct       Nov       Dec       Jan       Feb       Mar
[*]        [*]       [*]       [*]       [*]       [*]       [*]



DATED:__ September 10, 1999

                                 ATTACHMENT C
                            PACKAGING SPECIFICATION

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


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.

DATED:__ September 10, 1999

                                 ATTACHMENT D
                           ACCEPTANCE TEST PROCEDURE

To be mutually agreed and completed within 30 days of Agreement being signed.

DATED:__ September 10, 1999

                                 ATTACHMENT E
                             QUALITY REQUIREMENTS

To be mutually agreed and completed within 30 days of agreement being signed.

DATED:__ September 10, 1999

                                 ATTACHMENT F
                           EQUIPMENT LOAN AGREEMENT

To be mutually agreed and completed within 30 days of agreement being signed.

DATED:__ September 10, 1999

                                 ATTACHMENT G

To be mutually agreed and completed within 30 days of agreement being signed.

DATED:__ September 10, 1999

                                 ATTACHMENT H
                      PAYMENT TERMS FOR 1ST 30,000 UNITS



DATED:__ September 10, 1999

                                 ATTACHMENT I
                         MATERIAL LIABILITY GUIDELINES

To be mutually agreed and completed within 30 days of agreement being signed.