1. ACCEPTANCE. These Terms and Conditions of Purchase (these “Terms and Conditions”) shall be incorporated as part of, and shall apply to, Buyer’s purchase of goods and/or services under each Purchase Order (an “Order”) that references and incorporates these Terms and Conditions. Seller’s acceptance of an Order shall be deemed to occur upon the earlier of: (a) Seller’s signing and returning the acknowledgment copy of the Order, or (b) Seller’s commencement of manufacturing or shipment of goods or performance of services under the Order. Seller’s acceptance of the Order is expressly limited to these Terms and Conditions. Any additional and/or conflicting terms and conditions in any bid, quotation, proposal, offer of sale, acknowledgement or other document issued or provided by Seller are hereby specifically rejected unless they are expressly accepted in writing and signed by an officer of Buyer. Upon acceptance, the Order constitutes the entire agreement of Buyer and Seller with respect to the goods and/or services described therein, and there are no agreements or understandings, express or implied, except as may be explicitly set forth in the Order. Trade usage and course of dealing or performance shall not be employed to vary, explain or supplement these Terms and Conditions. Any reference on the face of the Order to any bid, quotation, proposal, offer of sale or other document is deemed to be limited to the description of the goods and shall not affect or modify these Terms and Conditions.
2. DELIVERY SCHEDULE AND FORCE MAJEURE. Buyer requires 100% on-time deliveries and, therefore, time is of the essence of the Order. Seller, however, shall not anticipate delivery by purchasing materials or manufacturing goods in excess of what is reasonably required to meet Buyer’s delivery schedule. Goods received by Buyer in advance of such schedule may, at Buyer’s option, (a) be returned at Seller’s risk of loss and expense, or (b) be accepted, with payment withheld until the date payment would have been due had the goods been delivered as scheduled. Buyer shall have no liability to Seller for Buyer’s delay in performing, or failure to perform, any of its obligations under the Order to the extent such failure arises out of or relates to causes or events beyond Buyer’s control.
3. INSPECTION AND REMEDIES. (a) Buyer (or Buyer’s customer, including any governmental agency) shall have the right, but not the obligation, to inspect goods and services at times and places designated by Buyer before, during or after delivery or performance. If an inspection takes place at the premises of Seller or its suppliers, Seller shall provide, at Seller’s expense, all reasonable facilities and assistance to such inspectors. Seller shall maintain a test and inspection system acceptable to Buyer. (b) If Buyer determines that any goods provided or services performed under the Order are defective or fail to conform to the requirements of the Order (including, but not limited to, Seller’s warranties and covenants under these Terms and Conditions), Buyer may reject or revoke acceptance of such goods or services and may: (i) terminate all or any part of the Order (as provided hereunder); (ii) repair or return such goods to Seller for repair or replacement (at Seller’s risk of loss and expense of unpacking, examining, repacking, reshipping and/or repairing); or (iii) retain such goods or services and receive from Seller, or deduct from the price, an amount reasonably determined by Buyer to be the difference between the agreed-upon price and the actual value of such goods or services to Buyer. In addition to any other remedies available to Buyer under the Order, at law or in equity, Seller shall be liable for any indirect, special, consequential, incidental and punitive damages of Buyer arising from or otherwise related to the Order, Seller’s performance thereunder or any goods delivered or services performed thereunder.
4. WARRANTIES. (a) Seller represents and warrants with respect to goods and services provided under the Order that: (i) upon delivery, Buyer will have clear title, free of all Liens (as defined in section 15); (ii) there are and will be no claims of third parties of any nature whatsoever arising out of or related to the goods and/or services; (iii) all goods (including, but not limited to, hardware, software, firmware and systems consisting of goods working together) and services will be new and in strict conformance with the specifications, drawings, samples, designs or other descriptions furnished to or by Buyer, and will be merchantable, of good quality and workmanship, free from defects in material, design and workmanship, and fit for Buyer’s particular purpose; (iv) all services will be performed in a thorough and workmanlike manner in accordance with the requirements of the Order; (v) prices charged herein are as low as any net price now given by Seller to any other customer for similar goods or services, and if, at any time during performance of the Order, Seller quotes lower prices to any person or entity for similar goods or services, such lower net prices will, from that time, be substituted for the prices contained herein; and (vi) neither the manufacture, performance, delivery, license, purchase, sale nor use of the goods or services covered by the Order will constitute an Infringement (as defined in section 8). (b) These warranties shall extend to Buyer and to customers and users of Buyer’s goods or services. (c) The warranty period shall be the longest term provided by applicable Law and shall commence on the date of Buyer’s acceptance of the goods or services. A new warranty period shall commence from the date of acceptance of any repair or replacement of goods, or reperformance of services, that are defective or that otherwise fail to conform to the requirements of the Order. (d) Seller’s warranties shall survive inspection, acceptance and payment and shall be in addition to any other warranties of Seller, whether oral or written, express, statutory or implied. (e) Remedies for breach of these warranties are cumulative and shall include those provided under these Terms and Conditions and any available at law or in equity.
5. TERMINATION. (a) Buyer may terminate all or any part of its purchases under the Order, without liability to Seller: (i) if Seller fails to deliver goods or perform services within the time and in the quantities and quality required by Buyer or to give adequate assurances requested by Buyer; (ii) if Seller breaches any of these Terms and Conditions (including, but not limited to, Seller’s warranties and covenants); (iii) if Seller fails to make progress so as to endanger timely and proper performance of the Order and cure such failure within 10 days (or any shorter period that is commercially reasonable under the circumstances) after notice from Buyer; or (iv) if Seller 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 Seller, a receiver for Seller is appointed or applied for or an assignment for the benefit of creditors is made by Seller. In addition to obtaining a refund or credit and any other remedies provided herein or available at law or in equity, Buyer may, upon such termination, purchase substitute goods or services elsewhere, on such terms as Buyer deems appropriate, and charge Seller with any excess costs and losses incurred by Buyer. (b) Buyer may terminate all or any part of the Order for convenience, in which case: (i) Seller shall, as directed by Buyer, cease work and deliver to Buyer all satisfactorily completed goods or materials and work in process; and (ii) Buyer shall pay to Seller reasonable, documented termination charges solely limited to the costs of materials, goods and labor that are incurred prior to Seller’s knowledge of such termination, provided that Seller takes reasonable steps to mitigate its damages. (c) To the extent not terminated by Buyer, Seller shall continue performance under the Order. (d) Any termination under section 5(a) adjudged to be wrongful shall be deemed to be a termination for convenience under section 5(b), but with Buyer having the right to avail itself of all of its remedies under the Order, at law or in equity.
6. LIMITATION OF LIABILITY. Buyer shall not be liable for any indirect, special, consequential, incidental or punitive damages arising out of or related to the Order, including, but not limited to, any termination, rejection or revocation of acceptance of all or any part of the Order. In no event shall Buyer’s liability hereunder exceed the purchase price set forth in the Order.
7. INDEMNITY AND INSURANCE. Seller shall defend, indemnify and hold Buyer and its directors, officers, employees, customers, affiliates, agents, contractors, successors and assigns harmless for, from and against any and all claims, liabilities losses, damages, actions, costs and expenses (including, but not limited to, attorneys’ fees) (collectively, “Losses”) in connection with (a) any breach by Seller of its warranties, covenants or obligations hereunder; (b) any injury (including, but not limited to, death), property damage or economic loss arising out of or related to (i) defective or nonconforming goods or services supplied by Seller under the Order, or (ii) acts or omissions of Seller or its officers, employees, affiliates, agents, subcontractors or assigns in providing goods or performing services (including, but not limited to, services performed at Buyer’s or a customer’s premises or using Buyer’s property), except to the extent resulting from Buyer’s negligence, regardless of whether any such Losses arise in tort, negligence, contract, warranty, strict liability or otherwise. Seller shall provide worker’s compensation, commercial general liability, automobile, public liability and property damage insurance in amounts and coverages sufficient to satisfy all claims hereunder. Each such policy shall name Buyer as an additional insured, shall be endorsed to be primary to any coverage provided by Buyer and shall contain a waiver of any subrogation rights against Buyer.
8. INTELLECTUAL PROPERTY INFRINGEMENT. In the case of any infringement or contributory infringement of a patent, trademark, copyright or other proprietary interest by reason of the manufacture, performance, delivery, license, purchase, sale or use of the goods supplied or services performed under the Order (each, an “Infringement”), Seller shall, at its sole expense, obtain for Buyer a perpetual, royalty-free license with respect to such item, or shall replace, modify or reperform the Infringing goods or services in a manner satisfactory to Buyer, so as to avoid the Infringement without any degradation in performance. Such obligations shall apply regardless of whether Buyer furnishes any portion of the design or specifies materials or manufacturing processes used by Seller.
9. COMPLIANCE WITH LAWS. (a) In providing goods or services under the Order, Seller shall comply with any and all applicable federal, state, local, and international laws, regulations, ordinances, executive orders, rules, orders, standards, conventions, directives and treaties (“Laws”), including, but not limited to, those relating to (i) design, manufacture, performance, transportation, sale, advertising, distribution, exportation, importation, labeling, packaging, certification or approval of the goods or services, or (ii) employment discrimination, hours and conditions of employment, occupational health and safety, wages, environmental matters, product safety, motor vehicle safety, corrupt or deceptive practices, boycotts, antitrust, consumer products or government subcontracting. (b) At Buyer’s request, Seller shall certify in writing Seller’s compliance with all applicable Laws. Seller’s invoices shall contain Seller’s certification that the goods purchased thereunder have not been produced, and will not be produced, in violation of any of the provisions of the Fair Labor Standards Act of 1938. At or prior to the time of delivery of goods to Buyer, Seller also shall provide, at no cost to Buyer, all pertinent Material Safety Data Sheets, as specified by federal Occupational Safety and Health Administration requirements, in an electronic format that Buyer can manipulate, edit and print.
10. CHANGES. Buyer may, at any time, make changes to the Order, including, but not limited to, changes to the quantity, delivery time or place, shipping or packing method or any drawings, specifications or designs. If such a change causes a material increase or decrease in the cost of, or the time required for, performance of the Order, Seller shall notify Buyer in writing immediately. Any claim by Seller for an adjustment in time for performance or price must be asserted in writing within 10 days after the date of notification of a change. No change shall be binding on Buyer unless agreed upon, in writing, by an officer of Buyer.
11. BUYER’S PROPERTY AND INFORMATION. All tools, dies, molds, templates, equipment, specifications, data, drawings, designs, software or materials furnished by Buyer to Seller or paid for by Buyer, including replacements and materials attached thereto, shall remain and be marked as the personal property of Buyer. Such items shall be separately stored and insured by Seller, and Seller assumes all risk of loss and liability arising out of or related to such items, until the items are returned to Buyer. These items shall be used by Seller only for filling the Order and are subject to immediate removal, at Buyer’s written request, with each item to be delivered (at Seller’s expense) in its original condition, reasonable wear and tear excepted. Seller shall provide to Buyer, without restriction on use or disclosure, all information and documents that Seller has, develops or acquires related to goods delivered or services performed under the Order. Such information and documents shall be deemed to be “works for hire” and shall be the property of Buyer, with Buyer having a right of use for any purpose, without liability to Seller. All information and documents Buyer may have disclosed or may disclose to Seller in connection with goods delivered or services performed under the Order shall be deemed confidential and proprietary and shall not be disclosed or used by Seller without the prior written consent of an officer of Buyer.
12. PRICES, INVOICES, AND SET-OFF. Unless the Order expressly provides otherwise, all prices are: (a) firm and not subject to increase or additional charges during the performance of the Order; (b) in U.S. dollars and F.C.A. Buyer’s facility (with risk of loss and title passing to Buyer at that location); and (c) inclusive of all freight, duty and taxes other than sales or use taxes Seller is required by Law to collect from Buyer. Such sales or use taxes shall not be included in Seller’s invoice if Buyer indicates that the goods or services ordered are exempt from such taxes. Applicable taxes shall be separately stated on Seller’s invoice. Seller shall deliver duplicate invoices to Buyer immediately upon shipment of goods or completion of services. Invoices shall be paid based on the later of the date of Buyer’s receipt of conforming goods and services or Buyer’s specified delivery date, and not on the basis of Seller’s invoice date. All purchases are on open account to be paid by Buyer’s check. Buyer shall be entitled to set off any amount owing at any time from Seller to Buyer or its affiliates against any amount payable at any time by Buyer under the Order.
13. PACKING, MARKING AND SHIPMENT. Seller shall suitably pack, mark and ship goods in accordance with the instructions of Buyer and the requirements of the carrier transporting such goods and shall assure delivery free of damage and deterioration. Buyer shall not be charged for packing, marking or shipping unless separately itemized on the face of the Order. Buyer’s Purchase Order Number must appear on the container, the packing list, invoice and correspondence relating to the Order. Two copies of the packing list (which provides the quantity and description of the goods contained therein) shall be placed within the container.
14. SUBCONTRACTORS. Seller may not, without Buyer’s prior written consent in each instance, engage any person or entity as a subcontractor to perform any of Seller’s obligations under the Order. Any approved subcontractor must: (a) comply with these Terms and Conditions to the extent applicable to the obligations to be performed by the subcontractor; (ii) acknowledge and agree that it may look only to Seller for payment for the performance of such obligations; and (iii) to the maximum extent permitted by Law, waive any and all claims for payment against Buyer. Seller is and shall remain liable for any and all acts and omissions of its subcontractors to the same degree that Seller is liable for its own acts and omissions.
15. CLAIMS AND LIENS. (a) If (i) any laborers’, materialmen’s or mechanics’ lien or other claim is filed for or on account of the goods or services (each, a “Lien”), and (ii) Seller neither causes such Lien to be released and discharged, nor files a bond in lieu of such Lien, within 10 days after the filing of such Lien, Buyer shall have the right (but not the obligation) to take any action available to it for the purpose of procuring a release of such Lien including, but not limited to, the payment of all sums necessary to obtain the release of such Lien. (b) Buyer may, at its option, (i) deduct from amounts due to Seller under the Order all costs ands expenses, including, but not limited to, investigation costs, legal fees and disbursements, incurred by Buyer in taking such action, or (ii) require immediate cash reimbursement from Seller.
16. RESOLUTION OF DISPUTES. If a dispute arises out of or relates to the Order, or the breach thereof, and if the dispute cannot be settled through negotiation, the parties agree first, upon the written request of either party, to endeavor in good faith to resolve the dispute by mediation which, unless the parties mutually agree otherwise, shall be administered by the American Arbitration Association under its Commercial Mediation Procedures. The parties shall share the mediator’s fee and any filing fees equally. Disputes not resolved by mediation shall be decided by binding arbitration which, unless the parties mutually agree otherwise, shall be administered by the American Arbitration Association under its Commercial Arbitration Rules. The arbitrator(s) shall not render any award or decision inconsistent with these Terms and Conditions. The prevailing party shall be entitled to an award of reasonable attorneys’ fees and costs of the arbitration. The award entered by the arbitrator(s) shall be final, and judgment may be entered upon it in any court having jurisdiction thereon. This section shall not preclude the parties from seeking provisional remedies in aid of arbitration from a court of appropriate jurisdiction. Any mediation or binding arbitration, unless the parties mutually agree otherwise, shall be conducted in Carrollton, Texas. Jurisdiction and venue for all other purposes shall be Dallas County, Texas.
17. MISCELLANEOUS. (a) In the event that a court of competent jurisdiction holds any provision of the Order to be invalid, illegal or unenforceable in any respect, such holding shall not affect or impair the validity, legality or enforceability of any of the remaining provisions contained herein. (b) The Order shall be binding upon and enforceable only by the parties, their respective successors and permitted assigns. Seller may not assign, transfer or subcontract any interest in or obligation under the Order without the prior written consent of an officer of Buyer. (c) No waiver of any provision of or default under this Order or failure to insist on strict performance under this Order shall affect the right of Buyer thereafter to enforce such provision or to exercise any right or remedy in the event of any other default, whether or not similar. (d) The provisions of sections 4, 5, 6, 7, 8, 9, 11, 12, 14, 15, 16 and 17 shall survive any termination of the Order and Seller’s performance thereof.