Terms and Conditions of Purchase
1. ORDER AND ORDER ACCEPTANCE.
The purchase order attached to or referencing these Terms and Conditions of Purchase is referred to as the "Order." Buyer agrees to buy and Seller agrees to sell, the materials and services, hereinafter referred to "Products", in accordance with the Order and these Terms and Conditions of Purchase. The Order, together with these Terms and Conditions of Purchase, represent the entire agreement between the Buyer and the Seller (together referred to as the "Parties"). Seller's acceptance of the Order will be deemed to occur either through commencement of performance or through providing an Order acknowledgment. Additional or different terms contained in Seller's acknowledgment or any other documentation of Seller not specifically referenced on the face of the Order or accepted in writing by Buyer shall be void and of no effect. Notwithstanding the foregoing, terms on the face of the Order shall prevail over any conflicting terms herein. None of any past practice, industry standards, course of dealing or usage of trade shall constitute a modification of any term or condition contained herein and shall not be deemed to add any term not contained herein.
2. CHANGES.A. CHANGES TO PRODUCTS. Seller may not discontinue the Products or change or allow to be changed material specifications, materials of manufacture, sources of supply, manufacturing process, test methods or manufacturing location without advanced written notice to Buyer and Buyer's written acceptance thereof. Seller may not discontinue the Products until the later of 12 months after receipt by Buyer of notice of discontinuance by Seller, or the time period required by Buyer to transition to alternate supply. B. CHANGES TO ORDER. No modifications to the Order will be valid unless agreed to in writing by Buyer. Buyer may change the Order at any time by written notice to Seller and Seller shall comply with such change notice. If changes directed by Buyer result in an increase or decrease in Seller's cost or in the time for performance, an equitable adjustment in the price and time will be made by the Parties through written agreement, provided a request for adjustment is made by Seller within two (2) business days after receipt of such change notice. Upon notice to Seller, Buyer may deduct from the amount due to Seller under the Order either damages for any breach of the Order or amounts otherwise due to Buyer from Seller with respect to other orders issued by Buyer to Seller, irrespective of whether the deduction is related to the Products covered by the Order. 3. DELIVERIES.
Time is of the essence for deliveries under this Order. Buyer may terminate without penalty, this Order, in whole or in part, if delivery is not made as required with respect to time, quantity, quality or otherwise. In the event of delay by Seller in the delivery of Products to be used by Buyer in the production of Buyer's goods, liquidated damages may apply.
In addition to all warranties implied in fact or at law, (including the implied warranties of merchantability and fitness for a particular purpose), Seller expressly represents and warrants that all Products furnished shall be free from all liens and encumbrances, design defects, defects in materials and workmanship, and conform strictly to all specifications and requirements of the Order. If there is a breach of this warranty, Buyer, at Buyer's sole discretion, in addition to any other rights it may have, may return nonconforming Products, at Seller's expense, for repair, replacement, refund and/or credit or Buyer may elect to make the appropriate repairs and charge Seller the cost of such repairs. Refund or credit amounts shall include the price of the Product plus the amount of any costs associated with uninstalling or otherwise isolating the nonconforming Product. All warranties are for the benefit of Buyer and its customers, and shall survive acceptance, payment, subsequent use and/or resale or other disposition of the Products.
5. INSPECTION AND ACCEPTANCE OF PRODUCT.
Prior to acceptance, all Products are subject to inspection and, at Buyer's discretion, testing by Buyer. Payment for Products shall not constitute final acceptance. Buyer's failure to inspect Products will not relieve Seller from responsibility for such Products to the extent they do not conform to specifications, nor will it impose any liabilities on Buyer. Acceptance of any items shall not be deemed to alter or affect Buyer's rights or the Seller's obligations under Section 4 [WARRANTY]. Buyer shall have the right of access to any of the Seller's locations as may be necessary to allow review of the Seller's progress in manufacturing the Products and/or to verify that the Product is being manufactured to conform to the specifications.
Seller agrees to obtain and keep in effect, with an insurance company reasonably acceptable to the Buyer, commercial general liability insurance with broad form coverage including product liability, completed operations, and blanket contractual coverage including the liabilities the Seller assumes hereunder with a per occurrence and annual aggregate limit of not less than $5,000,000. If required by Buyer, Seller agrees to name Buyer as an additional insured and to provide a waiver of subrogation by the Insurer in favor of the Buyer. If this purchase order includes the performance of any labor for any work at the premises of Buyer, the Seller agrees, (a) to procure, at its own expense and keep in full force and effect worker's compensation insurance as required by any state in which the work is to be performed, and employers liability or stop gap employers liability insurance with limits of $1,000,000, and at the Buyers request to have listed on such workers compensation and employers liability insurance the Buyer as an alternate employer; (b) to procure and maintain automobile liability with minimum limits of $2,000,000 combined single limit; (c) to procure and maintain insurance for ongoing and completed operations insurance coverage for bodily injury and property damage including resulting loss of use and blanket contractual coverage, with minimum limits of at least $5,000,000 annual per occurrence and in aggregate, and name the Buyer as an additional insured for both on-going and completed operations insurance, and provide for a waiver of subrogation in favor of Buyer by the insurer; (d) if requested by the Buyer additional insurance to support the obligations of the Seller that may be specific to the labor including but not limited to professional insurance or environmental liability insurance. Seller shall provide Buyer with insurance certificates evidencing such insurance, which certificates shall provide that such coverages may not be materially changed or canceled without 30 days prior written notice to Buyer. The above liability limits can be met through the use of primary and/or excess insurance. If any labor or service does not involve work on Buyer's premises then the insurance for workers compensation in above section (a) and auto insurance in above section (b) will not apply.
Seller agrees to indemnify, defend and hold harmless Buyer, its officers, agents, employees and its vendees ("Indemnitees"), from and against any and all demands, claims, suits, damages, loss, liability, cost or expense of any character ("Damages") for or on account of any injury, death or damages sustained by any person, and for damage to property, arising under any legal theory with respect to any goods or services provided hereunder, except only where such injury, death or damage is caused by or results from the sole negligence of Buyer.
Seller shall not subcontract the performance of any of its obligations under the Order without the prior written consent of Seller. In the event Buyer approves of such subcontract and allows Seller to engage the services of a third party to perform some of all of Seller's obligations under this Order, Seller agrees to enter into a written agreement with the third party that obligates the third party to be bound by and to comply with all the conditions set forth herein. At Buyer's request, Seller shall provide Buyer with a copy of such written agreement. 9. BUYER'S PROPERTY.
Buyer's property includes, without limitation, all information, designs, tooling, equipment, patterns, drawings, specifications, know-how, concepts, ideas, inventions (whether or not patentable), patents, patent applications, techniques, processes, developments, improvements, rights in other tangible and intangible assets of a proprietary nature, all reproductions thereof and any other property furnished to Seller by Buyer, either directly or indirectly, or paid for by Buyer (collectively, "Buyer's Property"). All Buyer's Property is deemed to be proprietary and/or confidential and shall be and remain the sole and exclusive property of Buyer.Unless otherwise agreed to in writing by Buyer, Seller shall use Buyer's Property only for the purpose of fulfilling Buyer's Orders. Seller shall not reproduce, disclose to any third party, or use such Buyer's Property in the production, manufacture or design of any items for any other purchaser or for the manufacture of quantities of the Products other than those specified by Buyer.Seller shall clearly label all of Buyer's Property as being the property of Buyer. Seller shall not release, relocate or dispose of Buyer's Property to any third party without the prior, express, written permission of Buyer. Buyer's Property is subject to immediate removal from Seller's facility at Buyer's sole discretion. Seller shall not unreasonably withhold access to its facility from Buyer for timely removal of Buyer's Property. Buyer grants no license or other right to Seller in Buyer Property, whether now owned or hereafter created. 10. TOOLING.
Unless otherwise agreed in a separate writing between Buyer and Seller, any and all tooling, equipment, dies and fixtures (collectively, the "Tooling") acquired and/or used in manufacturing of the Products shall be and remain the property of Buyer. Seller's payment of tooling charges shall not be construed to grant, convey, or transfer to Seller any ownership rights in or to the Tooling. During the time Buyer's Tooling is in Seller's possession, Seller shall be responsible for routine maintenance of Buyer's Tooling. All Tooling either furnished by or the ownership of which has been specifically transferred to Seller in writing ("Seller's Tooling") shall be and remain the property of Seller.
11. INTELLECTUAL PROPERTY INDEMNIFICATION.
With respect to the Products provided hereunder, Seller shall indemnify and hold harmless Buyer, its affiliates, subsidiaries, agents, directors, officers, and employees, and each subsequent purchaser and customer, from any losses, costs, damages, and liabilities, including without limitation, any attorney's fees, court costs and fines, arising from any potential or actual claim, suit, injunction, action, proceeding, or investigation alleging infringement or violation of any Intellectual Property rights or license.Seller shall not be liable for any claim solely based on Seller's compliance with any specification created by the Buyer, unless: (i) Seller could have complied with Buyer's specification using a solution that was non-infringing; (ii) the specification was derived from, or provided by Seller; or (iii) Seller knew or should have known of a claim or potential claim and did not promptly notify Buyer in writing. 12. PRICE.
Except as otherwise set forth on this Order, the price includes all fees to meet the requirements of the Order and all applicable sales, use and other taxes, and duties. The price to be paid for the Products or services covered by the Order shall in no event exceed the applicable maximum price, if any, established by any government regulation, and any provision or condition of the Order which is in violation of any such regulation shall be of no effect. Seller warrants that the price for the Products identified in the Order is equal to or less than the lowest price offered by Seller to any of its customers for comparable items in comparable quantities.
A. TERMINATION FOR DEFAULT.In the event either Party defaults with respect to any provision of the Order, including without limitation, provisions of these Terms and Conditions, or files or has filed against it a petition for bankruptcy, or suffers the appointment of a receiver or trustee of its business or properties by reason of insolvency or liquidation (each an "Event of Default"), the non-defaulting Party shall have the right to terminate the Order if such Event of Default is not cured by the defaulting Party within thirty (30) days after receipt of written notice of such Event of Default from the non-defaulting Party. In such event, a non-defaulting Party shall have the right to seek any and all remedies available under the Order and under applicable law.B. TERMINATION FOR CONVENIENCE.Buyer may terminate this Order in whole or in part at any time by written notice to Seller. Upon receipt of such notice or at the time specified therein, if any, Seller shall immediately discontinue all work under the Order. Seller shall incur no further costs of performance and shall terminate all related orders and subcontracts given by Seller for performance. If made exclusively for Buyer, Seller will then deliver and Buyer, upon testing and acceptance, will pay the original Order price for all Products then fully completed and ready for delivery, provided there is an open Order from Buyer for such quantity of the Product. If there are any raw materials or components, or unfinished Products exclusive to Buyer that cannot be otherwise used in Seller's business, Buyer and Seller will negotiate in good faith to reach an agreement on any compensation from Buyer to Seller as a result of the termination. If a dispute arises with respect to any amount claimed by Seller, a final settlement value shall be determined from an audit of Seller's books and records by a certified public accountant selected by Seller and approved by Buyer. For the avoidance of doubt, in the event Buyer terminates this Order in whole or in part, pursuant to this Section 13(B), Buyer shall not be liable to Seller for any raw materials, components or unfinished Products that Seller can otherwise use in Seller's business and shall not be liable for any raw materials, components or unfinished Products that were obtained or manufactured without a firm Order from Buyer. In no event shall Buyer be liable for any loss of profit or for any incidental, indirect or consequential damages or losses incurred by Seller as a result of such termination. 14. BUSINESS INTERRUPTION.
If an actual or potential labor dispute, material shortages or other condition occurs that delays or threatens to delay Seller's performance under this Order, Seller shall immediately give notice thereof to Buyer. Such notice shall include all relevant information with respect to such delay, including actions being taken to overcome or minimize the delay.
15. FORCE MAJEURE.
Delay in or failure to carry out the duties imposed upon either Party under these Terms and Conditions shall not be deemed an Event of Default if such delay or failure results from causes beyond the reasonable control of the Party claiming relief hereunder, including, without limitation, fire, explosion, epidemic, cyclone, flood, drought, declared or undeclared war, revolution, civil commotion, terrorism or acts of public enemies, blockage or embargo, or by reason of law, proclamation, ordinance, demand, or requirement of any governmental or ruling authority. Each Party shall notify the other in writing of the cause of such delay, and the expected period of such delay within three (3) days after the beginning thereof. In the case of delays impacting Seller's performance under the Order, Buyer reserves the right to terminate the Order at its discretion.
16. GOVERNMENT CONTRACTS.
When provisions are required to be included in a contract as a result of requirements of a government or government agency, it will be noted on the Order, and the applicable referenced clauses shall be included in the Order. Seller will also ensure that such provisions are included in subcontracts required in connection with the Order.
Neither the Order nor any rights or obligations herein may be assigned by Seller.
18. COMPLIANCE WITH LAWS.
Seller shall comply, and shall cause all Products to comply with all applicable federal, state and local laws, rules, regulations, standards and orders. Seller agrees to defend, indemnify and hold Buyer harmless for any loss, damage, fine, penalty or any expense whatsoever as a result of Seller's failure to comply with this Section.
19. ANTI-CORRUPTION AND ANTI-BRIBERY.
Seller will not participate in any corrupt practices and will ensure that Seller's officers, employees, subsidiaries and related companies do not participate in any corrupt practices in relation to the Order or the business relationship contemplated hereunder. In addition, Seller will take reasonable steps to ensure that Seller's agents, joint ventures and consortium partners, subcontractors, suppliers and consultants do not participate in any corrupt practices in relation to the Order or the business relationship contemplated hereunder.
Any information disclosed by Buyer to Seller incident to the performance of the Order, including but not limited to, information related to pricing, volumes or the financial terms of the Order and the existence of the Order itself is disclosed in confidence for the sole and exclusive use of Seller. Seller shall not publish or otherwise disclose such information without the express written consent of Buyer.
21. GOVERNING LAW.
The Order shall be construed, interpreted and controlled by the laws of the State of North Carolina, and all claims arising out of or related to the Parties' relationship created by this Order, whether in contract, tort or otherwise, shall be governed and decided pursuant to the laws of the State of North Carolina. Seller agrees to subject itself to the courts of said jurisdiction and that such venue shall be exclusive regarding disputes arising out of this Order. The Parties agree that the provisions of the United Nations Convention on Contracts for International Sale of Goods shall not apply to any transaction covered by the Order or these Terms and Conditions of Purchase.
Should any part of the Order be deemed invalid by court of law, it shall not constitute an invalidation of any other part of the Order, which shall otherwise remain in effect. Additionally, Buyer's failure to insist on performance of any of the terms or conditions herein or to exercise any right or privilege or Buyer's waiver of any breach hereunder shall not thereafter waive any other terms, conditions, rights or privileges, or any subsequent breaches of the same term.
The following clauses survive in perpetuity after the cancellation, termination, completion or expiration of this Order: 4. Warranty; 7. Indemnity; 9. Buyer's Property; 10. Tooling; 11. Intellectual Property Indemnification; 13. Termination; 18. Compliance with Laws; 20. Confidentiality; 21. Governing Law; and 23. Survival.
24. USE OF BUYER'S NAME.
Seller shall not in any advertising, sales promotion materials, press releases or any other publicity matters use the name, logo(s), images or representations of Buyer, Buyer's parent, any affiliate or subsidiary of Buyer or any variation thereof or language from which the connection of said names may be implied without Buyer's prior written approval.
25. AUDIT RIGHTS.
For any reason determined by Buyer, including, without limitation, quality control and pricing, Buyer may inspect Seller's manufacturing facilities as well as review and copy, upon its request, any and all books, records and information of Seller relating to the Products provided hereunder. Seller shall maintain the books, records and information (including but not limited to production and quality records) relating to the Products provided hereunder for a minimum of ten (10) years after delivery and acceptance of items, unless a longer period is specified by a clause on the face hereof.
26. TRADE COMPLIANCE.
With respect to any articles or technical information disclosed or provided to Seller pursuant to the Order: A. EXPORT CONTROLS.(i) Seller acknowledges that certain products, software, and technical data or services (which includes information regarding design, assembly, testing, repair, maintenance or modification to Buyer products and technologies) provided pursuant to the Order may be subject to United States export control laws and regulations. Seller agrees that any services provided and the use, transfer or re-export of such items or technical data must be authorized by the appropriate U.S. Government agency. Seller agrees to comply with all applicable U.S. export and re-export control laws and regulations and any local export regulations, specifically including, but not limited to, the requirements of the Arms Export Control Act, 22 U.S.C. §2751 et seq., the International Traffic in Arms Regulation ("ITAR"), 22 C. F. R. §120 et seq.; the Export Administration Act, 50 U.S.C. app. 2401-2420, including the Export Administration Regulations ("EAR"), 15C.F.R.§730-774; and the Foreign Asset Control Regulations ("FACR"), 31 C.F.R. §500-599, including the requirement for obtaining any export or re-export license or agreement, if applicable. Without limiting the foregoing, the Seller agrees that it will not transfer any products or information it receives from Buyer that constitutes an export of controlled items, data, or services, to include transfer to a foreign national employed by or associated with, or under contract to the Seller, without the authority of an applicable export license or agreement, or applicable exemption or exception.(ii) Seller agrees to notify Buyer if any information or items the Seller provides or discloses is restricted by U.S. or local export laws or regulations.(iii) Seller shall immediately notify Buyer if it is, or becomes, listed on any country's Denied Parties List, Debarred Parties List, or other such government issued lists or if Seller's export privileges are otherwise denied, suspended or revoked in whole or in part by any U.S. or non U.S. Government entity or agency.(iv) Seller understands that certain of its activities undertaken on behalf of Buyer may require U.S. companies to register with the Department of State, Directorate of Defense Trade Controls ("DDTC") pursuant to the ITAR 22 C.F.R.§122, as a person engaged in the exporting or manufacturing (whether exporting or not) of defense articles or furnishing defense services. Seller herein represents that it is registered with DDTC, as may be required for activities involving ITAR-Controlled Buyer parts/projects. Proof of such registration will be provided to Buyer upon request. If the Seller is not a U.S. company or does not reside in the U.S., then the Seller must be registered as may be required under its local export regulations. If Seller is a Canadian company, Seller shall be registered in Canada by the Canadian Federal or Provincial government authorities (i.e. "Canadian registered person"). Seller will immediately notify Buyer if said registration and/or other required authorization are revoked, expired or invalidated for any reason, and to immediately cease any activity on behalf of Buyer involving the transfer of defense articles, including technical data, or defense services (ITAR-Controlled).B. CUSTOMS/IMPORT CONTROLS.(i) U.S. Customs Regulations. Seller, by accepting the Order, covenants and agrees that Seller and its employees, agents, independent contractors and sellers have fully complied with any and all country of origin and other requirements established by the Bureau of Customs and Border Protection (U.S. Customs Regulations, 19. C.F.R. §140-199) and related agencies and all similar requirements of other applicable jurisdictions, for all merchandise sold to Buyer by Seller pursuant to this Order. Seller shall provide Buyer (or its designated representative) with such information pertaining to the manufacture of the merchandise covered by this Order as Buyer may request from time to time in order to verify Seller's compliance with the provisions of this section.(ii) Country of Origin (COO) Marking. As required in the U.S. Customs Regulations 19 CFR §134, every article of non-U.S. origin (or its container) that is imported into the United States shall be marked in English in a conspicuous place in as legible, indelibly and permanently as the nature of the article (or container) will permit, in such a manner as to indicate country of origin to an ultimate purchaser in the United States, unless excepted by law. All commercial invoices accompanying shipments imported into the U.S. must clearly state the actual country of origin of each article, in a manner that is both accurate and that reflects the actual country of origin marking applied to the article or its container. If not marked upon arrival to the U.S., all additional marking expenses, fines or penalties will be billed to and payable by the Seller.(iii) Buyer Provided Materials. Buyer may provide the Seller with Buyer owned materials, such as, raw materials, equipment, tooling, forgings, molds, etc. (collectively, "Buyer Provided Materials") in support of the Order. Buyer will provide the Buyer Provided Materials to the Seller under INCO Terms as designated on the Order. Seller will be responsible for the import customs formalities required to enter the goods into the country of destination (Seller's country). All Buyer Provided Materials that are returned to Buyer will be FCA (shipper's dock or port of export). Seller will be responsible for the export formalities in the local country to clear the goods for export. Buyer will complete all customs formalities in the U.S. for the export of materials provided to the Seller and for the return/import of materials by the Seller.(iv) Free Trade Agreements. Seller will provide Buyer with supporting Free Trade Agreement Certificates or other such written Free Trade Certification Statements on a shipment-by-shipment basis, for all products that qualify under Free Trade Agreements. In addition, Buyer may request annual ("blanket") Free Trade Agreement Certificates or other such written certification from the Seller. Seller will advise Buyer of any change-in-fact that may occur related to Free Trade Agreement certifications previously issued to Buyer.(v) Trade Compliance Affidavit ("TCA"). Buyer may require the Seller to respond to a Trade Compliance Affidavit request. Seller will complete a TCA and provide the requested trade compliance data (HTS, ECCN, COO, etc.) to Buyer. Seller will advise Buyer of any change-in-fact that occurs for any TCA issued to Buyer.(vi) Dutiable Assists. Buyer may furnish Buyer Provided Materials to a Seller that may be considered dutiable assists associated with production of articles that will be imported into the United States. If the Seller is the Importer of Record into the U.S., the values of such "assists" must be declared to U.S. Customs and Border Protection upon entry, to arrive at the appropriate customs value. Dutiable assists provided by Buyer are the responsibility of the Importer of Record to properly declare to U.S. Customs upon entry.(vii) Importer Security Filing. Seller agrees to comply with Importer Security Filing ("ISF") Requirements as found in 19 C.F.R. Part 149 of the United States Customs Regulations, including providing security filing information to Buyer in the manner prescribed by the Regulation and within the time period of fourteen (14) days prior to the Seller's ex- factory date for each shipment. If the Seller defaults with regard to any ISF obligation, Seller shall reimburse Buyer for any damages incurred by Buyer as a result of such default, including, without limitation, any damages assessed by Buyer's customers and any fines, fees, penalties and liquidated damages that United States Customs and Border Protection may impose on Buyer.