| 1. Acceptance; Entire Agreement:
This Agreement and any purchase orders issued
thereunder constitute Buyer’s offer
to purchase from Seller. BUYER EXPRESSLY
REJECTS ANY PROVISIONS ADDITIONAL TO OR
DIFFERENT THAN THE TERMS HEREOF THAT MAY
APPEAR IN SELLER’S QUOTATION, ACKNOWLEDEMENT,
CONFIRMATION, INVOICE OR IN ANY OTHER PRIOR
OR LATER COMMUNICATION FROM SELLER TO BUYER
UNLESS SUCH PROVISION IS EXPRESSLY AGREED
TO BY BUYER IN A WRITING SIGNED BY BUYER.
Seller’s commencement of performance
hereunder with the consent of Buyer shall
in all cases constitute Seller’s unqualified
and unconditional acceptance of the terms
and conditions of Buyer’s offer. This
Agreement shall supersede all prior negotiations,
discussions, and dealings and shall constitute
the entire agreement between Buyer and Seller.
No change, modification, rescission, discharge,
abandonment, or waiver of these terms and
conditions shall be binding upon the Buyer
unless made in writing and signed on its
behalf by a duly authorized representative
of Buyer. No conditions, custom, usage of
trade, course of dealing or performance,
understanding or agreement purporting to
modify, vary, explain, or supplement these
terms and conditions shall be binding unless
hereafter made in writing and signed by
the party to be bound. Mistakes in prices,
discounts, specifications, delivery schedules
or other terms and any noticeable discrepancies
in quantities or sizes are to be reported
immediately by Seller to Buyer and Seller
shall immediately remedy such mistakes by
refunding incorrect charges to Buyer or
correcting such other discrepancies, unless
otherwise directed by Buyer.
2. Delivery; Inspection; Rejected Products;
TIME IS OF THE ESSENCE. If delivery of the
Products called for by a delivery order
is not expected to be made on time, Seller
will notify the applicable Buyer and will
take all reasonable steps at its own cost
to expedite delivery; provided however,
Buyer reserves the right, without liability,
in addition to its other rights and remedies,
to cancel the applicable delivery order
by notice to Seller and arrange for completion
and/or purchase of substitute items elsewhere
and to charge Seller with any loss or additional
costs or expenses incurred. Notwithstanding
the terms of shipment the risk of loss of
the Products shall remain with Seller until
actual delivery of such Products to Buyer.
Seller shall obtain Buyer’s prior
written approval for partial shipments prior
to shipment. All materials shall be suitably
packed, marked, loaded and shipped in accordance
with the requirements of common carriers.
Damage to any material not so packed will
be charged to Seller. All excess transportation
charges resulting from Seller’s failure
to follow any routing instructions provided
by Buyer shall be for Seller’s account.
No charge shall be made by Seller for packing,
boxing, drayage, loading or storage unless
otherwise stated herein. Any Product furnished
and the time and manner of delivery thereof
must comply precisely with the terms of
this Agreement and purchase order. Any failure
to so conform constitutes a substantial
impairment of the value of the whole order
and shall entitle Buyer, at its sole option,
to cancel all or any part of this Agreement
and purchase order and to return to Seller
any Products previously delivered to Buyer,
without right in Seller to cure such failure
and Seller shall pay all transportation
charges for the delivery to Buyer and any
return to Seller and Buyer, at its sole
discretion, may obtain replacement Products
from another supplier. Should the cost of
such replacement Products exceed the agreed
upon price for such Products between Buyer
and Seller, Seller shall reimburse Buyer
for the additional cost or Buyer will off-set
such costs against amounts owed to Seller.
The Products shall be subject to inspection
and testing by Buyer before and after receipt.
If after delivery, Buyer finds any of the
Products to be defective in material or
workmanship, or otherwise not in exact conformity
with any warranty, specifications or the
requirements hereof, Buyer, in addition
to any other rights which it may have under
warranties or otherwise, may, at its sole
election, reject and return such Products
at Seller’s expense. Products rejected
and returned shall not be replaced by Seller
without prior written authorization by Buyer,
and Buyer, at its sole discretion, may obtain
replacement Products from another supplier.
Should the cost of such replacement Products
exceed the agreed upon price for such Products
between Buyer and Seller, Seller shall reimburse
Buyer for the additional cost or Buyer will
off-set such costs against amounts owed
to Seller. Products or equipment rejected
or not purchased by Buyer which utilize
or carry any logo, insignia, name, trade
name, trademark, trade dress, symbol, decorative
sign, evidence of inspection or other related
markings of Buyer or any of its related
entities shall have the same removed, not
obliterated, prior to any sale, use or disposition,
if such sale or disposition is permitted
by Buyer. Payment for any Products prior
to inspection shall not constitute their
acceptance by Buyer.
3. Prices; Taxes: If Buyer can purchase
products of comparable quality at a lower
delivered cost than the delivered cost of
the Products then in effect hereunder, and
Buyer gives Seller written notice thereof,
Buyer may purchase such products, unless
within fifteen (15) days of receipt by Seller
of such notice Seller shall meet such lower
delivered cost for an equal quantity of
Products thereafter sold hereunder. Any
quantity so purchased from another source
shall be deducted from Buyer’s obligation
hereunder, but this Agreement shall otherwise
remain unaffected. Any cash discount normally
provided by Seller to any buyer shall apply
to the Products. If at any time during the
Term of this Agreement, Seller offers to
sell comparable quantities of similar products
at a price lower than Seller’s price
to Buyer, or upon other terms more favorable
to a buyer than the terms hereof, Seller
shall promptly notify Buyer thereof and
offer such lower price or such other more
favorable terms to Buyer during the period
in which such lower price or such other
more favorable terms are in effect. Unless
otherwise provided herein, Seller shall
pay, defend and hold Buyer harmless from
the assessments or imposition of any excise,
use or other tax (however designated) upon
the production, sale, delivery or use of
the Products to the extent such assessments
or impositions are required or not forbidden
by law to be borne by Seller.
4. Terms of Payment; Set-Off: Unless otherwise
specified in this Agreement, terms of payment
shall be net the 30th day following the
date of the receipt of the Products or invoice
by Buyer, whichever occurs last. If more
than one payment is required to be made
hereunder, Buyer may in its sole discretion,
retain up to 10% of any or all installments
until completion of the performance due
hereunder, at which time the retained sums,
less any sums deducted as a set-off or recoupment
will be paid to Seller. If the terms granted
herein contain any discount, the time for
earning any such discount shall be computed
from the later of the scheduled delivery
date or the date an acceptable invoice is
received. Payment is deemed made for purposes
of earning the discount on the date of mailing
of Buyer’s check. Buyer reserves the
right at all times to set off any amount
owing at any time to Seller or any affiliate
of Seller. Any charges prepaid by Seller
on behalf of Buyer pursuant to this Agreement
for which reimbursement is sought must be
separately stated on the invoice and supported
by appropriate receipts furnished to Buyer.
5. Warranty: Seller warrants that, for
a period of one (1) year from the date a
Product is delivered to the Buyer ordering
such Product, such Product when used in
a proper and normal manner, will be free
from any defects in material and workmanship,
in conformity with any applicable specifications,
and title to such Products shall be unencumbered.
Payment for Products will not constitute
approval or acceptance of goods or services
by Buyer; Buyer’s right of inspection
will survive payment. Buyer reserves the
right to return, at Seller’s expense
any defective or nonconforming Products
or shipments received contrary to this Agreement.
If requested by Buyer, Seller will correct
or replace at Seller’s expense the
defective or nonconforming Products within
ten (10) days after delivery to Seller,
and all costs incurred in transporting the
Products from the Buyer to Seller and return
shipment to the Buyer will be borne by Seller.
This warranty will then continue as to the
corrected or replaced Products for one (1)
years after the date of delivery of the
corrected or replaced Products to Buyer.
Alternatively, Buyer may repair or correct
the defective or nonconforming goods at
Seller’s expense. Rejected or nonconforming
Products will not be deemed delivered on-time
unless corrected or replaced Products are
delivered within the on-time period applicable
to the order.
6. Inspections: Upon forty-eight (48) hours
notice, Seller shall allow authorized representatives
of Buyer (i) to inspect Seller’s facilities
and records at any time during normal business
hours, and (ii) to make finished Products
or raw material audits and prepare analytical
data for quality control purposes with the
assistance of Seller’s personnel.
Seller shall not require Buyer’s representatives
to sign any documents prior to entering
such facilities, and Seller agrees that
any such documents shall be void.
7. Compliance with Applicable Laws: Seller
represents, warrants and covenants that
all of the Products, merchandise, and materials
delivered and/or services rendered hereunder
will be and will have been produced and/or
provided in compliance with all applicable
laws, rules, regulations, orders and other
requirements of federal, state and local
governments and agencies thereof, and that
Seller, Seller’s business and all
property used therein do and will comply
with all applicable laws, rules, regulations,
orders and other requirements of federal,
state and local governments and agencies
thereof; including without limitation, all
provisions of the U.S. Fair Labor Standards
Act of 1938, as amended, and Subparagraphs
1 through 7 of Section 202 of Executive
Order11246 and the applicable provisions
of 41 C.F.R. Chapter 60, the texts of which
are hereby incorporated by reference. If
any of the Products are purchased for incorporation
into products sold under a government contract
or subcontract, the terms required to be
inserted by that contract or subcontract
shall be deemed to apply to this order.
All certification requirements specified
in such government contract or subcontract
or of which the Seller has knowledge shall
be complied with. Seller agrees to furnish
Buyer a certificate of compliance with any
such laws and certification requirements
in such form as may be requested by Buyer.
Seller shall, at its sole cost, secure and
maintain all necessary licenses, permits,
authorizations or other approvals required
for the operation of Seller’s business
or any property used therein, or as necessary
for Seller’s performance hereunder.
Seller shall immediately notify Buyer in
the event that Seller is not in compliance
with any provision of this Section.
8. Intellectual Property: Seller warrants
that the Products and the sale and use of
them will not infringe any Unites States
or foreign patents, trademarks, trade dress,
copyrights, trade secrets or any other form
of intellectual property, and Seller acknowledges
that Buyer’s patents, trademarks,
trade dress, copyrights, trade secrets or
any other form of intellectual property
that Buyer provides to Seller are Buyer’s
exclusive property and Seller disclaims
all rights in same. Where payment is made
for experimental, developmental, or research
work, as such, to be performed in accordance
with special requirements of the Buyer,
seller agrees to disclose and on request
to assign to Buyer each invention, property
right, confidential process or know-how,
and trade secret resulting therefrom or
other form of intellectual property and
Seller shall disclaim all rights in same.
All drawings, art work, special products,
materials, information or data furnished
by Buyer are Buyer’s exclusive property,
shall be used by seller only for Buyer’s
work, shall be deemed Buyer’s Proprietary
Information as defined in Section 17 below,
and shall be kept confidential, pursuant
to the terms of Section 17, and shall be
returned promptly at Buyer’s request.
Buyer will market, distribute and/or sell
the products under its own trademark and
trade name. Buyer has the right to use any
of Seller’s marks, names, other trade
identities, copyrighted works or other intellectual
property, to the extent that Seller has
incorporated such property in or used such
property in the manufacture of the Products
supplied by Seller to Buyer.
9. Indemnity: Seller will indemnify and
hold harmless Buyer and their respective
successors and assigns against any and all
suits, losses, damages, liabilities, costs
and expenses (including reasonable attorneys’
fees and other costs of defending any action)
(“Losses”) which such parties
may sustain or incur in connection with
(a) a breach of any representation, warranty
or undertaking made by Seller in this Agreement
or such parties’ enforcement of this
Agreement, (b) as a result of any suit,
claim or demand based upon any legal theory;
including, without limitation, negligence,
breach of warranty or strict liability in
tort in connection with the manufacture
of the Products by Seller as provided in
this Agreement, except to the extent caused
by the gross negligence or willful misconduct
of the applicable Buyer, or (c), as a result
of any suit, claim or demand under any environmental,
health or safety laws, rules, regulations
or requirements, including without limitation,
the Comprehensive Environmental Response
Compensation Liability Act, 42 U.S.C. §9601
et seq, as amended, in connection with the
manufacture, transportation, storage, use
or disposal of the Products or of raw materials
by Seller. If Seller’s performance
requires Seller, its employees, agents or
representatives to perform services or labor
in the plants or on the premises of Buyer,
its agents, customers, or users, Seller
agrees to indemnify and hold harmless Buyer
against all suits, losses, claims, damages,
liabilities, costs and expenses for injury
or damage to person, including death, or
property arising out of such performance,
except to the extent caused by the gross
negligence or willful misconduct of the
Buyer. Seller agrees that it will, when
requested and given reasonable notice of
the pendency of any such suits, claims or
demands, assume the defense of Buyer and
their respective successors and assigns
against any such suits, claims or demands.
10. Insurance: seller agrees to carry insurance
covering product liability and general liability
in amounts of not less than $2,000,000.00
per occurrence. All such policies shall
provide for at least thirty (30) days prior
written notice, to Buyer, of cancellation,
non-renewal or material change in the terms
and conditions of coverage and name Buyer
as an additional named insured. At Buyer’s
request, Seller will provide Buyer with
a certificate or certificates of insurance
evidencing such coverage. In the event Seller
ceases to carry adequate insurance that
names Buyer as an additional insured, Buyer
may immediately cancel this Agreement or
any outstanding purchase order by giving
Seller written notice of Buyer’s election
to cancel.
11. Force Majeure: Buyer and Seller shall
not be liable for any delay or failure of
performance due solely to strikes, lockouts
or other labor disputes, fires, acts of
God or other causes beyond the affected
party’s reasonable control; provided,
the affected party shall have given notice
to the non-affected party of any such cause
for delay or anticipated delay promptly
following the commencement thereof and shall
have used the affected party’s best
efforts to make or accept deliveries, as
the case may be, as expeditiously as possible.
If Buyer believes that the delay or anticipated
delay in Seller’s deliveries may impair
Buyer’s ability to meet its production
schedules or may otherwise interfere with
buyer’s operations and such delay
may last for a period of time that exceeds
(10) days, Buyer may at its option, and
without liability to Seller, immediately
terminate this Agreement or any outstanding
purchase order. In the event of a shortage,
Seller agrees to allocate its total available
supply of Products among Buyer and Seller’s
other customers, if applicable, on a fair
and equitable basis.
12. Cancellation, Termination and Suspension:
Buyer reserves the right to cancel all or
any part of the undelivered portion of a
purchase order if Seller does not make deliveries
as specified, time being of the essence
of this Agreement, or if, in Buyer’s
opinion the Products are causing or may
potentially cause adverse publicity to Buyer
or harm Buyer’s reputation. This Agreement
may be terminated by Buyer or by Seller
at any time immediately upon written notice
in the event of the other party’s
material breach of any term or provision
of this Agreement or upon the occurrence
of any of the following events:
(a) such other party makes an assignment
for the benefit of creditors, or is subject
to any voluntary or involuntary provincial
or federal receivership, insolvency or bankruptcy
proceedings, or becomes unable, or admits
in writing its inability, to meet its obligations
as they mature;
(b) the cancellation, suspension or other
revocation of licenses, permits or authorizations
necessary for such other party to conduct
its business in accordance with this Agreement;
(c) such other party makes any materially
false or misleading statement, representation
or claim;
(d) such other party fails to prosecute
the work so as to endanger performances
of this Agreement;
(e) dissolution or liquidation of such other
party;
and/or
(f) such other party’s failure to
pay any indebtedness which is due and payable
and which failure is not remedied within
30 days following notice.
Buyer will not be responsible for any specific
cancellation fees or charges. Notwithstanding
anything to the contrary in this Agreement,
upon termination, cancellation or expiration
of this Agreement, Seller shall immediately
cease use of any of Buyer’s intellectual
property, trade secrets and formula(e) and
shall have no further right to use the same.
If this Agreement is cancelled due to an
event caused by the seller or resulting
from the Seller’s acts or omissions,
Buyer may complete Seller’s performance
by such reasonable means as Buyer determines,
and Seller shall be responsible for, and
shall indemnify buyer against any damages
and reasonable costs, including, without
limitation, attorneys’ fees, incurred
by Buyer as a result thereof. Any amounts
due Seller for Products, goods, work and
other items delivered or provided by seller
in full compliance with the terms of this
Agreement prior to such event shall be subject
to set-off of Buyer’s additional costs
of completing this Agreement and other damages
incurred by Buyer as a result of Seller’s
actions or omissions. Buyer reserves the
right, from time to time, upon written notice
to Seller to suspend and reinstate execution
of the whole or any part of this Agreement
without invalidating any provision of this
Agreement.
13. Supply Protection: In order to ensure
continued supply of Products to Buyer, Seller
agrees to work closely with Buyer in the
event of a work stoppage at Seller’s
facilities. Prior to the expiration of any
labor contract affecting Seller’s
ability to supply Products, Seller at its
expense will fabricate and locate in an
area that will not be affected by any labor
disruption an inventory of finished Products
equivalent to the typical consumption (based
on a weekly average derived from the prior
twelve (12) months) of one (1) month. In
addition, Seller will assist Buyer in locating
and evaluating competent suppliers to ensure
continued supply during work stoppage. In
the event Seller breaches this Section,
and Buyer elects to purchase Products from
a third party, Buyer may deduct from payment
of any future invoice(s) from Seller any
differences between the third party purchase
price and what such Buyer would have had
to pay for such Products under this Agreement
during such period.
14. Availability of Parts: Seller shall
make available to Buyer repair parts for
all Products furnished under this Agreement
for a period of five (5) years. Seller shall
give one (1) year prior written notice to
Buyer in the event Seller will be unable
to supply such parts or to obtain another
source of supply for Buyer in accordance
with this Agreement. Seller’s inability
to provide such parts shall be a default
of this Agreement. Without waiving any of
its rights or remedies under this Agreement
or by law Buyer may, at its sole option,
allow Seller to provide buyer with drawings
required to either manufacture or buy such
parts and technical information or any other
rights Seller may have so that Buyer can
manufacture or obtain such parts from other
sources. The technical information shall
include, by example and not by way of limitation:
(a) manufacturing drawings and specification
of raw materials and components comprising
such parts;
(b) manufacturing drawings and specifications
covering special tooling and the operation
thereof;
(c) a detailed list of all commercially
available parts and components purchased
by Seller on the open market disclosing
the part number, name and location of the
supplier and price lists, for the purchase
thereof; and
(d) in-depth test specifications and procedures
describing the methods of testing and repairing
the material.
15. Electronic Data Interchange; Seller
agrees to provide Electronic Data Interchange
at the request of Buyer, if such data exists.
16. Survival: The terms of Sections 5,
7, 8, 9, 14, 17 and 22 of this Exhibit shall
survive the termination, cancellation or
expiration of this Agreement.
17. Proprietary Information: All information
that is furnished by one party to another
party pursuant to this Agreement (”Proprietary
Information”) will be subject to the
following restrictions. Each party agrees
that it will use all Proprietary Information
enclosed to it by the others only in the
manner contemplated in this Agreement, and
for no other purpose, disclosing Proprietary
Information only to those of its officers,
employees, agents, independent contractors
or advisors (“representatives”)
as will be directly concerned with performance
under this Agreement, and provided such
representatives do not disclose any Proprietary
Information to any third party and have
agreed in writing to keep such Proprietary
Information confidential in accordance with
this Section. Except as provided above,
each party agrees that it will not disclose
Proprietary Information to any other person
or entity without the express, prior written
consent of the other parties. Each party
agrees that it will protect the confidentiality
of Proprietary Information with the same
degree of care with which it protects its
own proprietary information and will return
all copies (in any medium recorded) of Proprietary
Information to the disclosing partly immediately
upon written request. The parties agree
that Proprietary Information shall be considered
commercial secrets qualified for protection
under applicable law. The parties shall
have no obligation to protect the confidentiality
of Proprietary Information that: (a) can
be demonstrated to have been known to the
receiving party prior to the execution of
this Agreement and was not acquired, directly
or indirectly, from the disclosing party
or from a third party under a continuing
obligation of confidentiality; (b) can be
demonstrated to have been in the public
domain as of the date of this Agreement
through no fault of the receiving party;
or (c) can be demonstrated to have been
independently developed by personnel of
the receiving party who had no substantive
knowledge of the Proprietary Information.
The provisions of this Section shall not
apply to the disclosure of Proprietary Information
to any government, any agency or department
thereof, or any stock exchange to the extent
required by law, any relevant stock exchange
rules, provided that the party being required
or requested to make such disclosure shall
immediately notify the other party of such
requirement and the terms thereof prior
to such disclosure so that an appropriate
protective agreement or order may be sought
or other arrangement put in place prior
to the disclosure of the Proprietary Information.
The other parties shall have the right to
petition the agency, department or stock
exchange concerned regarding such disclosure
and to seek confidential treatment of any
Proprietary Information to be disclosed
on such terms as such party shall, in its
sole discretion, determine. The foregoing
obligations will survive termination of
this Agreement and will remain binding on
each party, its respective affiliates, successors
and assigns forever. This Agreement is designated
as Proprietary Information subject to this
Section.
18. Proprietary Products: Any items ordered
by Buyer which are not standard products
of the Seller previously offered for general
sale by the Seller are considered proprietary
to Buyer. These include but are not limited
to any items with a Buyer P/N beginning
with the number 7. Seller will not sell
any of these items to anyone other than
Buyer without specific prior written agreement
from the Buyer.
19. Financial Information: Should Buyer
have concerns about Seller’s financial
condition and/or ability to supply hereunder,
Seller shall supply information requested
by Buyer which Buyer feels is necessary
to address said concerns.
20. Consignment: Upon receipt of the consignment
materials, Buyer will verify the correctness
of the quantities and insure the material
is properly identified as belonging to Seller.
Buyer will draw from the consigned inventory
as needed and on the first working day of
each month, will take a physical inventory
of the material left in the consigned inventory
and provide this information to Seller.
Seller will then invoice Buyer for the material
used by Buyer during the previous month.
Seller will retain title to the material
until it is withdrawn from the consigned
inventory by Buyer, at which time title
will pass to Buyer. Buyer will be liable
for any loss, damage or deterioration of
material while on Buyer’s property
except to the extent such loss, damage or
deterioration arises out of the act or failure
to act on the part of Seller or its agents,
employees, or representatives. Seller’s
auditors will be provided access and assistance
by Buyer for the purposes of verification
of consigned inventory on a reasonable basis.
Seller shall insure that the level of the
consigned inventory maintained is consistent
with Buyer’s forecasted consumption.
Any inventory which is consigned to Buyer
and has become obsolete will be immediately
returned to Seller. Transportation costs
of the obsolete inventory will be borne
by Buyer.
21. Changes: Buyer reserves the right from
time to time, to change any specifications,
drawings, delivery dates, quantities and
items covered by this Agreement. If such
change would materially affect the price
or delivery date, Buyer and Seller shall
mutually agree upon an equitable adjustment
in the price and/or delivery date to reflect
the effect of such change; provided Seller
shall have notified Buyer in writing of
any claim for such adjustment within thirty
(30) days from the date of such notice from
Buyer. Seller shall not suspend performance
of this Agreement while Buyer and Seller
are in the process of making such changes
and any related adjustments. No substitutions
shall be made without the prior written
approval of Buyer. Seller agrees that it
will not make any process or manufacturing
changes which might affect the performance,
characteristics, reliability or life of
the Products without prior written approval
of Buyer.
22. Import / Customs: Seller shall provide
reasonable assistance, at no charge to Buyer,
in securing customs clearance and authorizations
for the Products.
23. Choice of Law; Venue; Miscellaneous:
This Agreement shall be governed by the
laws of the State of California applicable
to contracts to be formed and fully performed
within the State of California, without
giving effect to the choice or conflicts
of law provisions thereof. All suits arising
from or concerning this Agreement or any
purchase order issued hereunder shall be
filed in the Superior Court of San Diego
County, California, or the United States
District Court for the Southern District
of California, and in no other place; provided
that, in Buyer’s sole discretion,
such action may be heard in some other place
designated by Buyer (if necessary to acquire
jurisdiction over third persons) so that
disputes can be resolved in one action.
Seller hereby irrevocably consents to the
jurisdiction of such court or courts and
agrees to appear in any such action upon
written notice thereof. Nothing contained
in this Agreement will be construed to create
a partnership or joint venture among the
parties. Seller shall not assign or subcontract
any of its rights, interests or obligations
hereunder without the prior written consent
of Buyer. The paragraph headings herein
are for convenience only and form no part
of this Agreement. If any part of this Agreement
shall be held to be illegal, void or unenforceable,
the remaining portions shall remain in full
force and effect. The failure of Buyer to
insist in any one or more instances, upon
the performance of any of the terms, covenants
or conditions of this Agreement, or to exercise
any right hereunder shall not be construed
as a waiver or relinquishment of any of
the other terms and conditions of this Agreement
nor the right to enforce the future exercise
of any other rights herein.
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Terms
Terms & Conditions