Associated Air Center Terms and Conditions of Purchase of Goods
CONTENTS
02. Terms and Conditions
03. Dispute Resolution
04. Packaging Requirements
05. Transportation
06. Anticipation Of Delivery Schedule
07. Delay And Default
08. Purchaser's Property
09. Changes
10. Seller's Information
11. Assignment and Change in Ownership
12. Set-Off
13. Work on Purchaser's Or Its Customer's Premises
14. Inspection
15. Record Retention Requirements
16. State Sales Tax
17. Release Of Information
18. Parts Compliance And Materials Test Certification
19. Nondiscrimination In Employment
20. Intellectual Property Indemnity
21. Standard Terms Of Settlement
22. Export And International Traffic-In-Arms Regulations
23. Environmental Matters
24. Classified Information
25. Termination For Convenience
26. Warranty
27. Security Interest
28. Offset Requirements
29. Time
30. Reserved
31. Reserved
32. Bar Code Shipping Label
33. Materials Scheduling
34. Seller's Representations and Indemnification
35. Waiver
36. Severability
37. Gratuities
38. Access To Purchaser's Computer Systems
39. Citizenship Status
40. Reserved
41. Removals and Replacements
42. Excluded Goods and Services
43. Governing Law
44. Seller Security and Crisis Management Policy
APPENDICES
I. International Orders Supplement
BASIC TERMS AND CONDITIONS
1. DEFINITIONS
As used throughout this purchase order, the following terms shall have the meanings set forth below.(a) "PURCHASER" means the party contracting with Seller for Goods and/or services and identified as the purchasing entity on the face of the purchase order.
(b) "GOVERNMENT" means the United States of America or any department or agency thereof.
(c) "PRIME CONTRACT" means a contract which is defined in the schedule of this purchase order and under which this purchase order is made.
(d) "SELLER" means the party contracting to perform the work hereunder.
(e) "SUBCONTRACT," unless provided otherwise in this purchase order, means all contracts placed by the Seller or lower tier subcontractors for the specific purpose of performing any portion of the work under this purchase order, and includes, but is not limited to purchase orders and changes, or modifications thereto.
(f) "FAR" means the Federal Acquisition Regulations.
(g) "FAR SUPPLEMENT" means authorized supplements to the FAR, including the DOD FAR Supplement (DFARS).
(h) "Goods" means the product supplied by Seller under this purchase order, including without limitations all components, raw materials, and intermediate assemblies thereof.
2. TERMS AND CONDITIONS:
(a) Either Seller's written acknowledgement or Seller's full or partial performance under this purchase order, whichever occurs first, will constitute acceptance of all terms and conditions contained herein. Any acceptance of this purchaser order is limited to acceptance of the express terms of the offer set forth in this purchase order. Any proposal for additional or different terms or any attempt by Seller to vary in any degree any of the terms of this offer in Seller's acceptance or acknowledgement is hereby objected to and rejected, but such proposal shall not operate as a rejection of this offer unless such variances are in the terms of the description, quantity, price, or delivery schedule of the Goods but shall be deemed a material alteration thereof, and this offer shall be deemed accepted by the Seller without said additional or different terms. If this purchase order shall be deemed an acceptance of a prior offer by Seller, such acceptance is limited to the express terms set forth in this purchase order.(b) Seller shall be compensated for all Goods delivered by Seller in strict conformance with the purchase order in the manner and in the amount ("Lump Sum") specified on the purchase order. The Lump Sum can only be changed by written change order as set forth in section 24.
(c) Contractor shall compute its employees' wages and withhold applicable federal, state and local taxes, and federal social security payments. Contractor shall remit its employee withholdings to the proper government authorities and make employer contributions for FICA and federal and state unemployment insurance payments.
3. DISPUTE RESOLUTION:
(a) Except as specifically provided for in paragraph (H) below, the parties intend to forsake litigation and resolve with finality any and all disputes arising under or related to this purchase order exclusively by the process identified in this article. This article shall remain effective in the event that a petition in bankruptcy is filed by or against a party to this purchase order, or if a party makes an assignment for the benefit of creditors, or if any other insolvency proceeding is commenced against a party. Invocation of this paragraph shall not relieve either party of any obligation, right or duty of performance arising under or related to this purchase order.(b) Any and all disputes, controversies or claims arising under or relating to this purchase order or the breach, termination or invalidation thereof shall upon written notice, be referred to a senior management representative from each of the parties who will confer in good faith to attempt to resolve the matter. The party sending the first written notice (the "initial notice") shall (1) set forth in detail all of its claims or issues in dispute and (2) designate its representative. The other party shall have 5 business days to designate its representative and add any other issues or claims for resolution not identified in the initial notice. The representatives shall have 30 days from the date of the initial notice to resolve the issues identified in the notices. If the representatives are unable to resolve the matter, either party may refer the matter to administered mediation through the American Arbitration Association ("AAA") in Phoenix, Arizona. Such mediation shall be started within 30 days from the date of referral, and the mediation process must be concluded within 30 days from the start date.
(c) If the dispute or claim is not fully resolved pursuant to paragraph (B), either party may after 90 days, but not later than 120 days from the date of the initial notice, make a written demand for binding arbitration to be administered by the AAA by one arbitrator in accordance with its commercial arbitration rules, and judgment on the award rendered by the arbitrator may be entered in any court of competent jurisdiction. A party's failure to make a timely demand for arbitration shall result in the forfeiture of all the claims and issues that party identified in its written notice.
(d) The arbitration proceedings shall be conducted in Phoenix, Arizona, and the purchase order shall be interpreted and applied in accordance with the laws of the state of Arizona without regard to Arizona's choice of law provisions. Each party will be permitted to take the deposition of one individual, limited to no longer than four hours. No other discovery shall be conducted except by the written agreement of both parties. All fees and expenses of the arbitration shall be shared equally by the parties. However, each party shall bear the expense of its own counsel, experts, witnesses, and preparation and presentation of proofs. The arbitrator shall have no authority to award punitive or other damages beyond the prevailing party's actual damages and shall not, in any event, make any ruling, finding, or award that does not conform to the terms and conditions of the purchase order. The arbitration award shall be in writing and shall specify the factual and legal basis for the award. The right to appeal the award shall be governed by Arizona law, and any such appeal shall be brought in a court of competent jurisdiction located in Phoenix, Arizona.
(e) Either party may at any time, without inconsistency with this purchase order, seek from a court of general jurisdiction located in Phoenix, Arizona, any equitable, interim or provisional relief only to avoid irreparable injury.
(f) The parties intend all statements made and documents provided or exchanged in connection with this dispute resolution process to be confidential and neither party shall disclose the existence or content of the dispute or claim, or the results of any dispute resolution process, to third parties other than outside counsel, except with the prior written consent of the other party or pursuant to legal process.
(g) The parties may by written mutual consent agree to dates and times other than those set forth in this article.
(h) The provisions of this article shall not modify or displace the procedures specified in Article 25, Termination for Convenience. In addition, this article shall not apply to and will not bar litigation regarding any claims related to a party's proprietary or intellectual property rights.
4. PACKAGING REQUIREMENTS:
Packaging requirements are contained in this purchase order.5. TRANSPORTATION:
(a) Unless otherwise stipulated on the face of this purchase order, Goods covered by this purchase order shall be shipped "F.O.B Destination," as defined by the Arizona Uniform Commercial Code ("AZUCC"). Transportation charges must be prepaid by Seller. In any event, title to said Goods shall pass to Purchaser on the title passage date (earlier of the Manufacturing Required Date (MRD) or the use date, unless Goods are delinquent to the MRD, in which case title passage shall occur upon arrival of such Goods at the specified delivery location).(b) No charges for transportation will be paid by the Purchaser. Any shipment must be fully prepaid by Seller. If Seller does not comply with the stated delivery schedule, Purchaser may, in addition to any other right which Purchaser may have, require delivery by fastest way. The charges resulting from this mode of transportation must be fully prepaid by Seller and the full cost of the shipment must be absorbed by Seller.
6. ANTICIPATION OF DELIVERY SCHEDULE:
Unless otherwise agreed to in writing, Seller shall not make material commitments or production arrangements in excess of the amount or in advance of the time necessary to meet firm delivery schedules and those planned schedules that are within lead time.7. DELAY AND DEFAULT:
In the event Seller for any reason anticipates any difficulty in complying with the required delivery date, or in meeting any of the other requirements of this purchase order, Seller shall promptly notify Purchaser in writing. In the event of non-delivery, breach, or any other default by Seller, Purchaser's rights will be as specified in the Arizona Uniform Commercial Code.8. PURCHASER'S PROPERTY:
(a) All tangible and intangible property, including, but not limited to tools, tool drawings, materials, drawings, computer software, documents or data of every description furnished to Seller by Purchaser or specifically paid for in whole or in part by Purchaser, and any replacement thereof, or any materials affixed or attached thereto, shall be and remain the personal property of Purchaser, and, unless otherwise agreed to in writing by Purchaser, shall be used by Seller solely to render services or provide products to Purchaser. Such property, and whenever practical each individual item thereof, shall be plainly marked or otherwise adequately identified by Seller as being the property of Purchaser or Purchaser's designee, and shall be safely stored separate and apart from Seller's property. Seller shall not substitute any property for Purchaser's property and shall not use such property except in filling Purchaser's purchase orders. Such property while in Seller's custody or control shall be held at Seller's risk and shall be insured by Seller for replacement cost with loss payable to Purchaser. Such property shall be subject to removal at Purchaser's written request, in which event Seller shall prepare such property for shipment and shall deliver it as directed by Purchaser in the same condition as originally received by Seller, reasonable wear and tear excepted, all at Seller's expense.(b) Purchaser hereby grants Seller a license to use the drawings, specifications (including Purchaser's "S" specifications) , computer software, and other data (hereinafter collectively referred to as "Data") furnished or paid for by Purchaser hereunder for the sole purpose of performing this purchase order for Purchaser. All Data is the property of Purchaser and shall not be used, disclosed to others or reproduced for any purpose, including, but not limited to, the design, manufacture or repair of parts or to obtain FAA or other government approval to do so; provided; however, Seller may provide Data furnished or paid for by Purchaser hereunder to Seller's contractors for the sole purpose of enabling Seller's contractors to assist Seller in performing this purchase order for Purchaser and on condition that Seller's contractors agree in writing for Purchaser's benefit to the terms of paragraphs 8 and 10 and Appendix III hereof. This license is nonassignable, and this license is terminable with or without cause by Purchaser at any time. All Data furnished or paid for by Purchaser shall be deemed to be proprietary property to Purchaser, whether or not it is marked with any restrictive legend.
(c) Purchaser shall have the right to audit all pertinent books and records of Seller, and to make reasonable inspections of Seller's facilities.
(d) In the event Seller, without Purchaser's prior written consent and authorization, designs or manufactures for sale to any person or entity other than Purchaser any hardware that is substantially similar to or can replace or repair a part manufactured for or by Purchaser, or obtains FAA or other governmental approval for such hardware or repair, Seller, in any adjudication involving or relating to Purchaser's Data, shall be required to establish by clear and convincing evidence that neither Seller nor any of its employees, contractors or agents used in whole or in part, directly or indirectly any of Purchaser's Data in such design or manufacture or in obtaining FAA or other governmental approval with respect to such hardware or repair.
(e) In the event Seller is notified by Purchaser that Goods ordered under this purchase order are patented, Seller agrees to mark such Goods with any patent numbers or other markings designated by Purchaser, including updates to such numbers or markings.
9. CHANGES:
(a) Purchaser at any time shall have the right to make changes in the quantities, specifications or delivery schedule. Any such change which has a significant impact shall entitle either Seller or Purchaser to an equitable adjustment. However, no additional charge will be allowed unless authorized by Purchaser's written amendment to this purchase order. Information, such as technical direction or guidance provided to Seller by representatives of the Purchaser in connection with the Seller's performance of this purchase order, shall not be construed either as a change within the meaning of this provision or as direction to proceed outside the scope of this purchase order.If Seller considers that the conduct of any of Purchaser's employees has constituted a change hereunder, Seller shall notify Purchaser immediately in writing as to the nature of the change and its effect on Seller's performance including delivery schedule and the amount to be paid to Seller. In any event, the maximum liability of the Purchaser for obsolescence, scrappage, and/or rework resulting from any change shall be limited to the value of the materials and parts in process at the time of the change, to the extent that such parts are within Seller's normal manufacturing cycle required to meet the established delivery schedule.
(b) Changes in delivery schedules will be communicated to the Supplier via the purchase order which will be mailed to the Supplier or transmitted via Electronic means
(c) Nothing in this Article 9, including any disagreement with Purchaser as to the equitable adjustment to be made, shall excuse Seller from proceeding with the purchase order as changed.
10. SELLER'S INFORMATION:
Notwithstanding any document marking to the contrary, any knowledge or information which Seller has disclosed or may hereafter disclose to Purchaser incident to the placing and filling of this purchase order shall not be deemed to be confidential or proprietary information and accordingly Purchaser shall not be liable for any use or disclosure thereof .11. ASSIGNMENT AND CHANGE IN OWNERSHIP:
(a) Any assignment of this purchase order or any interest therein without the advance written consent of Purchaser, shall be void.(b) If a third party submits a solicited or unsolicited offer to Seller that would result in a Change of Ownership or Control of Seller, as defined below, Seller shall give notice of such offer to Purchaser as early as commercially practical following Seller's receipt of the offer. The notice shall include the identity of the offeror, the date and time of the offer and the conditions of the offer. Before Seller accepts the offer, it shall give Purchaser an opportunity, within a reasonable time, to advise Seller of its objection to the offer. If, despite Purchaser's objections, the Change in Ownership or Control to the third party occurs, Purchaser has the right at its discretion to terminate this order for default under Article 7 and at no cost to Purchaser. In the event of such termination, Seller agrees to render full cooperation to Purchaser in order to minimize disruption to the Purchaser's program. In lieu of termination, Purchaser may require Seller to provide adequate assurance of performance, including, but not limited to the institution of special controls regarding the protection of Purchaser's proprietary information.
For purposes of this sub-paragraph b, the term "Change in Ownership or Control" shall mean any of the following: i) the sale of equity shares controlling 20% or more of the voting rights in Seller, ii) the sale, lease, transfer or other disposition of substantially all of the assets of Seller or Seller's parent, iii) a merger, reorganization, consolidation, share exchange, recapitalization, business combination, liquidation or dissolution or similar transaction, iv) a tender offer or exchange offer for any of the outstanding shares of capital stock of Seller, v) a sale by Seller of the assets relating to the product Seller produces or will produce for Purchaser or vi) any public disclosure of a proposal or plan or intention to do any of the foregoing.
12. SET-OFF:
Purchaser shall be entitled to set off any amount owing from Seller to any of Purchaser's affiliated companies against any amount payable under this order.13. WORK ON PURCHASER'S OR ITS CUSTOMER'S PREMISES:
If Seller's work under this purchase order involves operations by Seller on the premises of Purchaser or one of its customers, then:(a) Seller shall comply with all of Purchaser's safety and security procedures and shall take all necessary precautions to prevent the occurrence of any injury to person or property during the progress of such work. Seller shall maintain such public liability, property damage and employees liability and compensation insurance as will protect Purchaser from said risks and from any claims under any applicable workers' compensation and occupational disease acts, and upon Purchaser's request provide Purchaser proof of such insurance.
(b) Seller agrees that all of its employees whom may require access to Purchaser's or its customer's premises to perform work pursuant to this order shall be tested and certified (in writing) to be free from illegal or unauthorized drugs prior to being assigned to perform such work, including but not limited to: cannabinoid metabolites (marijuana) opiate derivatives (heroin, morphine, codeine) cocaine metabolites (benzoylecgonine, ecgonine) amphetamines (methamphatimines) phencyclidine.
In addition, such drug tests shall include screening for prescription drug use. In the event Seller's employee acknowledges use of prescription drugs, or if the drug screening results are positive for prescription drug use, Seller shall not assign such employee to perform work pursuant to any order unless, (1) Seller confirms that there are corresponding documented medical authorizations for use of such prescription drugs; and (2) Seller determines, using appropriately qualified resources, that the employee is fit to perform the work under any order and free of any impairment that would prevent the employee from performing competent and safe work under any order.
(c) Seller's employees shall be retested and recertified to be free of these unauthorized drugs after a six (6) month absence from performing work on Purchaser's or its customer's premises.
(d) Seller shall comply with any and all federal, state, or local anti-drug, alcohol abuse and /or drug testing statutes or regulations for any of its employees who may be covered by such statutes or regulations. Seller shall have, retain, and be able to provide to Purchaser, upon request, an approved drug and alcohol misuse prevention plan.
(e) Seller shall conduct a criminal convictions records investigation of its employees before they are assigned to work on any order that requires the employee to enter Purchaser's premises or the premises of a customer of Purchaser. Criminal Convictions Records Investigation shall consist of a records search (documented by a written report retained by the Seller of the results of such search) by the appropriate law enforcement or other local or state agency in each location in which the employee has resided and worked in at least the five years preceding the date of the criminal conviction records investigation. Purchaser reserves the right, at its discretion, to request from Seller documentation of the completion of a criminal convictions records investigation for any employee assigned to work on Purchaser's or its customer's premises. Seller's failure to have completed a criminal convictions investigation of any of its employees in accordance with this clause shall be grounds for immediate expulsion of the Seller and its employees from Purchaser's or its customer's premises and Purchaser shall have the right to terminate all orders for default.
(f) Seller shall not assign any person to perform work on Purchaser's or its customer's premises that has been:
(i) convicted of murder; manslaughter; kidnapping; rape; sexual battery or gross sexual imposition; domestic violence; assault; arson; robbery; burglary; theft; embezzlement; fraud; drug possession, manufacturing or trafficking.
(ii) Seller shall not assign any person convicted as an adult of any felony, convicted of more than one misdemeanor in the previous two years, or convicted of more than five misdemeanors in the previous five years to perform work on Purchaser's or its customer's premises.
(g) Purchaser may require Seller's employees, before entering Purchaser's or its customer's premises, to complete a criminal convictions questionnaire. In the event that Purchaser has grounds to believe that an employee of Seller has falsified the criminal convictions questionnaire in any way, such person shall not perform work on Purchaser's or its customer's premises.
(h) Seller shall include this clause "Drug Testing and Security Checks" in any subcontract placed pursuant to a Purchaser order with a subcontractor who will perform work on Purchaser's premises.
14. INSPECTION:
All Goods or services including, but not limited to, engineering and design/development work, shall strictly comply with all applicable specifications and shall be subject to inspection and test by Purchaser and its customer at all times and places, including the period of manufacture.(a) If any inspection or test is made on the premises of Seller or its supplier, Seller, without additional charge, shall provide all reasonable facilities and assistance for the safety and convenience of the inspectors in the performance of their duties. All inspections and tests on the premises of Seller or its supplier shall be performed in such a manner as not to unduly delay the work.
(b) Purchaser's failure to inspect and accept or reject Goods or services shall neither relieve Seller from responsibility for such Goods or services as are not in accordance with the purchase order requirements nor impose liabilities on Purchaser therefor. The inspection or test of any item by Purchaser shall not relieve Seller from any responsibility regarding defects or other failures to meet purchase order requirements which may be discovered subsequently.
(c) For engine components and other ancillary components, Seller shall provide and maintain quality control, inspection, and process control systems acceptable to Purchaser and its customer in accordance with Purchaser's then current supplier quality product requirements, as applicable. Records of all inspection work by Seller shall be kept complete and available to Purchaser and its customer.
15. RECORD RETENTION REQUIREMENTS:
Seller shall maintain for four (4) years purchase order files for supplies, equipment, material, or services including supporting documentation and back-up files including, but not limited to, invoices and memoranda, e.g., memoranda of negotiations showing the principal elements of price negotiations. Product acceptance records, including inspection records, material certifications, and acceptance test records, shall be retained in accordance Purchaser's then current supplier quality specification requirements.16. STATE SALES TAX:
Purchaser may have authority to purchase tangible personal property without payment of tax at the time of purchase. If so, Purchaser shall advise Seller in writing and Purchaser agrees to maintain adequate records of all purchases and pay tax on all taxable items directly to the appropriate tax agency.17. RELEASE OF INFORMATION:
No public release of information regarding this purchase order shall be made without the prior written approval of Purchaser. Purchaser's written approval, if granted, will be subject to Purchaser's prime contract.18. PARTS COMPLIANCE AND MATERIALS TEST CERTIFICATION:
By acceptance of purchase order, Seller certifies that, except as specifically reported by Seller to Purchaser in accordance with Purchaser's reporting requirements, Goods supplied shall strictly conform to all requirements of this purchase order, or as modified pursuant to the "Changes" clause, and that objective evidence* of strict conformance with quality specifications is in place or on file as required by purchase order and available for examination by Purchaser.*"OBJECTIVE QUALITY EVIDENCE" shall mean any statement of fact pertaining to the quality of a product or service based on observations, measurements or tests which can be fully verified. Evidence must be expressed in terms of specific quality requirements or characteristics. These characteristics are identified in drawings, specifications, and other documents which describe the item, process, or procedure.
19. NONDISCRIMINATION IN EMPLOYMENT:
Seller will not discriminate against any employee or applicant for employment because of race, religion, color, sex, age, physical handicap or national origin. Seller shall comply with Executive Order 11246, which is incorporated by reference.20. INTELLECTUAL PROPERTY INDEMNITY:
Seller shall indemnify and save Purchaser and its customers harmless from and against any expense or liability, including costs, fees and damages, arising out of any claim, suit or proceeding that the manufacture or furnishing of Goods and/or services under this purchase order, or the use of such Goods (without modification or further combination) or sales of such Goods constitutes infringement of any patent, trade secret or copyright. If an injunction should issue, Seller shall procure for Purchaser and its customers the rights to continue using said Goods, or modify them in a manner acceptable to Purchaser so they become non-infringing, or with the written approval of Purchaser, remove said Goods and refund the purchase price.21. STANDARD TERMS OF SETTLEMENT:
Subject to the early payment terms described in this clause, Purchaser shall issue payment to supplier in accordance with its standard terms of settlement -- net (payment of the un-discounted invoice amount) sixty ("60") days. Settlement may be paperless. Seller must provide banking information to establish Electronic Funds Transfer ("EFT") for U.S. suppliers and wire transfer for non-U.S. suppliers.For purposes of this article, the number of days within which Purchaser shall issue payment for invoices shall be counted as follows:
(a) for receivable material: from the latest of (a)the required date as identified on the purchase order , (b) the material received date as identified in Purchaser's system, or (c)the invoice date; and,
(b) for non-receivable material and/or services: from the invoice date; invoices for services must be dated no earlier than the last day of the period of time during which services that are the subject of the invoice were provided.
22. EXPORT AND INTERNATIONAL TRAFFIC-IN-ARMS REGULATIONS:
Seller agrees to comply with all export regulations and the international traffic-in-arms regulations (ITAR) including, but not limited to, Parts 122 entitled "Registration of Manufacturer and Exporter" and 130 entitled "Political Contributions, Fees and Commissions."If Seller intends to conduct work for Purchaser in a foreign country, including but not limited to the use of Seller's own facility outside of the U.S. or the use of a foreign affiliate or unrelated subcontractor, Seller must provide advance written notification to Purchaser. Seller is responsible for compliance with applicable export control laws and regulations and for obtaining all export control licenses required by law or requested by Purchaser
23. ENVIRONMENTAL MATTERS:
(a) HAZARDOUS SUBSTANCES. Seller warrants that except as specified on the face of the purchase order, none of the chemical substances constituting or contained in the Good(s) sold or otherwise transferred to Purchaser under this order are "hazardous substances" as defined in the Comprehensive, Environmental Response, Compensation and Liability Act (CERCLA), and Seller agrees to supply Purchaser with any and all required material data safety sheets.(b) ASBESTOS. Seller agrees to provide Goods which are free of asbestos unless Seller has notified Purchaser in advance and has obtained Purchaser's prior written consent to the use of asbestos. Seller agrees to include this clause in any subcontracts issued hereunder. If Seller intends to rely upon any drawing which requires or permits the use of asbestos, written notice to, and approval by, the Purchaser must be obtained prior to such use.
(c) USE OF CADMIUM. Unless specifically defined as a requirement by Purchaser engineering drawings or specifications, the use of cadmium plating or nickel cadmium plating is strictly prohibited in the manufacture of this Good. The use of cadmium plating or nickel cadmium plating is strictly prohibited on all tooling, fixturing, and test equipment that is used for manufacturing, assembly, test, or material handling of the Good unless Seller has notified Purchaser in advance and has obtained its prior written consent to such use. Approval shall not be granted where there is a potential for Seller's Good to come into contact with titanium containing items.
(d) OZONE DEPLETING SUBSTANCES("ODS'S"). Seller agrees to comply with the U.S. Clean Air Act amendments of 1990 regarding warning statements on Goods manufactured with ODS'S, products containing ODS'S, and containers containing ODS'S. The need for warning statements, the specific wording of statements, and the placement of statements shall be in accord with requirements of the U.S. Environmental Protection Agency Implementing Regulations. Any usage of Class I ODS'S is subject to evaluation and approval of Purchaser.
Seller will eliminate the use of Class I ODS'S to the maximum extent possible. Any usage of class I ODS'S which cannot be eliminated is subject to evaluation and approval by the Purchaser. Seller will notify Purchaser of any such use of Class I ODS'S which cannot be eliminated and will provide Purchaser with any requested information which may be required in order to complete the evaluation and approval of the continued usage.
(e) REPRESENTATIONS AND WARRANTIES. Seller represents and warrants that it shall perform all activities related to its manufacturing processes in compliance with all applicable federal, state and local environmental, health and safety laws and regulations.
Seller represents and warrants that it will use best efforts to prevent and minimize accidental releases of hazardous substances or constituents to the environment, as well as prevent and minimize risk of endangerment to human health or the environment from any manufacturing process.
Seller represents and warrants that in the event of a release or spill, it will use best efforts to mitigate actual or potential impacts to the environment or human health.
(f) ENVIRONMENTAL CLAIMS. Seller agrees to indemnify, release, defend and hold harmless Purchaser, its directors, officers, employees, agents, representatives, successors and assigns, whether acting in the course of their employment or otherwise, against any and all suits, actions, or proceedings, at law or in equity, and from any and all claims, demands, losses, judgments, damages, costs, expenses, or liabilities resulting from: (1) death or injury to any person, including officers and employees of Seller and those of Purchaser, arising out of or in any way connected with Seller's failure to comply with this Article 23, (2) damage to any property, real or personal, including property of Seller and that of Purchaser, arising out of or in any way connected with Seller's failure to comply with this Article 23, (3) any and all pre-existing conditions of real or personal property of Seller, or (4) any failure to comply with any federal, state or local environmental, health, or safety requirements. Seller agrees to include this clause in any subcontracts issued hereunder.
(g) MATERIAL OWNERSHIP. Seller and Purchaser agree that at all times prior to delivery and acceptance by Purchaser of the Goods, all raw materials, wastes and work-in-progress shall remain the property of Seller, except as otherwise provided herein.
(h) WASTE MANAGEMENT. Seller shall be directly and solely responsible for managing all wastes associated with its manufacturing process. Seller shall manage any and all such wastes in compliance with applicable federal, state and local laws and regulations.
(i) WASTE DISPOSAL CERTIFICATIONS. Seller agrees to generate and maintain detailed records certifying the proper disposal of all wastes associated with its manufacturing process, including wastes generated from the remediation or cleanup of any releases, leaks or spills. Such records will include the names and addresses of any treatment, storage or disposal facility receiving such wastes, the amount of waste received, and the dates of shipment and receipt. Seller shall maintain all records relating to environmental compliance and waste disposal.
(j) PROCESS FLOW DIAGRAM AND MATERIAL BALANCE. Where Seller is relying upon Purchaser engineering drawings to provide Goods, upon request by Purchaser, Seller agrees to make available to Purchaser detailed process flow diagrams for its manufacturing processes, identifying unit quantities of raw material and associated waste. The process flow diagram will contain a material balance for the processes and will indicate the ultimate fate of each raw material or associated waste.
(k) NOTIFICATION OF SIGNIFICANT EVENTS. Seller agrees to notify Purchaser in writing within five days after learning of any significant event involving any of its manufacturing or other processes that may affect Seller's ability to comply with its obligations under this purchase order, including but not limited to, any spill, leak or release to the environment which also requires notification to a state or federal agency, including, but not limited to: (A) the date of release; (B) the quantity and type of material released;(C) efforts to clean up the material released; and (D) efforts to mitigate impacts from the release. Notices shall be provided to Purchaser, Attn: Environmental Health & Safety Representative, at Purchaser's address as shown on the face of the order.
(l) HAZARDOUS MATERIAL IDENTIFICATION. Seller shall identify hazardous materials contained in items delivered to Purchaser, provide Material Safety Data Sheets (MSDS) for such Goods, and, where applicable, comply with the OSHA Hazard Communication Standard, 29 CFR 1910.1200 ("HAZCOM). For each such material, identification shall reference the stock or part number of the delivered Good. Hazardous materials include, but are not limited to, materials embedded in a delivered Good in such a manner as to present a potential for personal injury or harm or property damage in the course of normal use, repair, accidents or disposal. All MSDS forms and hazard warning labels required under this section and HAZCOM shall be provided to Purchaser, Attn: Environmental Health & Safety Representative, at Purchaser's address as shown on the face of the order.;
(m) SELLER COMPETENCE. Seller represents and warrants that it possesses the facilities skills, knowledge and expertise to handle and provide the Goods and/or services specified herein in a safe and responsible manner, and that all persons, including any subcontractors, involved in handling any materials processed or provided for under this purchase order t will be shown any MSDS associated with such materials and be advised of its safe and proper use and handling.
24. CLASSIFIED INFORMATION:
Upon completion of work by Seller under this order, Seller shall return to Purchaser all classified information furnished by Purchaser in connection herewith, including all reproductions thereof, then in Seller's possession or control, and Seller shall surrender classified information or materials developed by Seller in connection with this order, unless the information has been destroyed or the retention of the information is authorized in writing by Purchaser.25. TERMINATION FOR CONVENIENCE:
Purchaser, by written notice, may terminate this purchase order, in whole or in part, when it is in the Purchaser's interest to do so. The Purchaser shall terminate by delivery to Seller of a notice of termination specifying the extent of termination and the effective date.(a) After receipt of a notice of termination, and except as directed by Purchaser, Seller shall immediately: (1) stop work as directed in the notice; (2) place no further subcontracts or orders for materials, services, or facilities, except as necessary to complete the continued portion of the purchase order; and (3) terminate all Subcontracts to the extent they relate to work terminated. After termination, Seller shall submit a final termination settlement to Purchaser in the form and in the manner prescribed by Purchaser.,
(b) In the event that Purchaser wrongfully terminates this purchase order for default, in whole or in part, such termination becomes a Termination for Convenience under this Article 25.
(c) Seller agrees to waive any claim when a reduction in the quantity on order has an order value which is under $1,000.00.
(d) When a change in requirements results in a quantity reduction those quantities will be deleted from the delivery schedules on the basis that any quantity with incurred cost will be consumed by future deliveries. Should the quantity with incurred cost not be consumed, this Article 25 applies.
26. WARRANTY:
(a) Seller warrants to Purchaser that goods will be new and of best quality, unless otherwise expressly permitted by the purchase order, that the goods are free from defect, and that the goods are in strict compliance with the purchase order. Goods not conforming strictly to the purchase order, including the delivery schedule, may be deemed by Purchaser to be defective.(b) The Seller represents and warrants that the payment terms and delivery schedule specified in the purchase order are reasonable based on its review of the purchase order, which, even if incomplete, is sufficient to establish the nature and complexity of the goods and services set forth therein. Seller expressly waives any claim or defense that late or incomplete performance arises out of a misapprehension or mistake regarding the scope, nature, specifications or complexity of the purchase order.
27. SECURITY INTEREST:
In the event items will be bailed to Seller or progress payments will be made, Seller hereby grants Purchaser a security interest in equipment, machinery, contract rights, inventory, goods, merchandise and raw materials, whether now existing or hereafter arising, and any replacements, improvements, substitutions, attachments, accessories and accessions thereto or thereon provided by Purchaser or purchased by Seller with progress payments or advances made by Purchaser and to be used by Seller in manufacturing products ordered by Purchaser under this purchase order. Seller agrees to execute and deliver all documents requested by Purchaser to protect and maintain Purchaser's security interest.28. OFFSET REQUIREMENTS:
Seller recognizes, as part of this purchase order, that Purchaser may incur international offset and/or revenue sharing obligations which could involve Goods placed under this purchase order. Should any quantity of a Good or Goods placed hereunder become necessary to support such other agreements during the term of this purchase order, Purchaser reserves the right to remove that portion from this purchase order. Any adjustment in forecasted or firm quantities will be pursuant to the Article 9, changes. No adjustment in firm released quantity or schedules will be made within a twelve (12) month delivery period after notification or lead time away, whichever is longer, as a result of this Article 28.29. TIME:
Unless otherwise provided, Contract Time is the period of time, including authorized adjustments, set forth in the purchase order for the completion of services or the delivery of Goods by the Seller. Unless otherwise specifically defined, the term "day" shall mean calendar day. Time is of the essence. By executing the purchase order, the Seller confirms that the Contract Time is a reasonable period for performance of the purchase order.30. RESERVED
31. RESERVED
32. BAR CODE SHIPPING LABEL:
Upon Purchaser's request, all shipment containers for Goods to be delivered hereunder shall be labeled in accordance with Purchaser's bar code shipping label instructions. Seller shall submit example labels for approval within 60 days of said request. Seller shall designate an individual responsible for compliance with said instructions and shall act as Seller's contact for issues concerning bar code labels.33. MATERIALS SCHEDULING.
Upon Purchaser's request, Seller shall work with Purchaser to implement pull production, bin stocking and/or kitting for hardware supplied by Seller. Seller shall provide commitments to Purchaser's schedule within 72 hours of a change in Purchaser's production schedule. If Seller is unable to meet Purchaser's schedule, Seller shall immediately notify Purchaser in advance for proper reconciliation.34. SELLER'S REPRESENTATIONS AND INDEMNIFICATION:
Seller represents, warrants, certifies and covenants that it shall perform all activities required under this purchase order in compliance with all applicable international, national, state and local laws, including, but not limited to environmental, health and safety laws and regulations.(a) Goods supplied under this purchase order may be exported worldwide, including countries that prohibit the importation of goods manufactured with child labor or forced, indenture or convict labor. Seller represents, warrants, certifies and covenants that no Goods supplied under this purchase order have been or will be produced using forced, indentured or convict labor, or the labor of persons in violation of the minimum working age laws of the country of manufacture, or in violation of minimum wage, hour of service or overtime laws of the country of manufacture.
(b) If Purchaser determines any of Seller's representations, warranties, certifications or covenants hereunder to be untrue, Purchaser shall have the right to terminate this purchase order without further compensation to Seller, and Seller shall defend, indemnify and hold harmless Purchaser and all of its directors, officers, employees, agents and representatives ("Indemnified Party") from and against all claims, losses, loss of use, damages, attorney's fees, actions, liability, demands, judgments, costs and expenses arising from Seller's untrue representations, warranties, certifications and covenants or Seller's failure otherwise to comply with the terms of this purchase order. An Indemnified Party shall have the right to participate in the selection of counsel and Seller shall not enter into any settlement agreement that contains any admission of liability on the part of Purchaser.
(c) From time to time, at Purchaser's request, Seller shall provide certificates to Purchaser in form and substance acceptable to Purchaser relating to the requirements of this paragraph 34. Seller shall permit Purchaser or its representatives to have reasonable access to the site where work under this order is performed to assess 1) Seller's work quality and compliance with Purchaser's specifications and 2) Seller's compliance with its representations, warranties, certifications and covenants hereunder.
35. WAIVER
Purchaser's failure to insist on performance of any of the terms or conditions herein or to exercise any right or privilege or Purchaser's waiver of any breach hereunder shall not thereafter waive any other terms, conditions, or privileges, whether of the same or similar type.36. SERVERABILITY:
If any provisions of these terms and conditions or any part hereof is invalid, unlawful or incapable of being enforced by reason of any rule of law or public policy, all conditions and provisions which can be given effect without such invalid, unlawful or unenforceable provision shall, nevertheless, remain in full force and effect.37. GRATUITIES:
Any officers, employees or agents of Purchaser, the U.S. Government, or Purchaser's customers, are prohibited from soliciting or accepting entertainment, gifts, gratuities, compensation or favors from Seller. Seller shall at all times comply with the requirements of this policy. When Seller has reasonable grounds to believe that a violation of this gratuity policy by Seller or Purchaser's representatives may have occurred, Seller shall promptly report the potential violation to Purchaser orally and in writing. For violation of this Article 37 by Seller, this purchase order may be terminated in whole or in part. Purchaser may also require Seller to provide proof that it has implemented internal management controls sufficient to prevent future violations. These rights and remedies of Purchaser are not exclusive and are in addition to any other rights and remedies provided to Purchaser under this purchase order or by law.38. ACCESS TO PURCHASER'S COMPUTER SYSTEMS:
Access to Purchaser's computer systems by Seller's personnel shall include only those persons identified on Purchaser's systems security statement and who have been issued a systems user ID. Purchaser reserves the right to, at any time, verify the citizenship status of all Seller personnel who have access to Purchaser's computer systems. Such access shall be limited by Purchaser to those systems, which in Purchaser's sole discretion, are required for the Seller's personnel to perform assigned work and shall be valid until such access is revoked or surrendered. Such access shall be surrendered by Seller's personnel upon Purchaser's request or upon removal or reassignment by Seller.39. CITIZENSHIP STATUS:
Only U.S. Citizens, permanent resident aliens or those aliens authorized to be employed in the U.S. shall be permitted to work on Purchaser's purchase orders. Seller must notify Purchaser prior to disclosure by Seller of Purchaser technical data to non-U.S. persons, or the assignment by Seller of non-U.S. persons to the involved work to enable Purchaser to review the technical scope and assure any necessary export authorizations are in place. Seller certifies to Purchaser that it has verified that each individual assigned to work on any order hereunder is legally entitled to work in the U.S. and has preserved such records as required by the Immigration and Naturalization Service.40. RESERVED.
41. REMOVALS AND REPLACEMENTS:
Seller agrees that, not withstanding the provisions of any warranties, expressed or otherwise, negotiated with respect to Goods purchased from Seller by Purchaser or Purchaser's customers, Seller shall reimburse for labor and material cost including Overhead and General and Administrative ( G&A) expense reasonably incurred by Purchaser in connection with:(a) The unscheduled removal and/or replacement of such Goods or components thereof from a higher level assemble due to failure of such Goods to conform to requirements of this purchase order or defective material, workmanship, or design; or
(b) Any such removal of said Goods at Seller's request; or
(c) Any such removal of said Goods required due to any previously required changes to said Goods which Seller has failed to incorporate.
This remedy is not exclusive and shall not be in lieu of any other remedy available at law, in equity or under this purchase order.
42. EXCLUDED GOODS AND SERVICES:
The United States of America prohibits the importation of Goods or services from the following countries: Cuba, Iran, Iraq, Libya, North Korea, territory of Afghanistan controlled by the Taliban, and Yugoslavia (Serbia and Montenegro). No Goods or services from the aforementioned prohibited countries may be used directly or indirectly in the design, manufacture, test, or other methods of providing any of the items (whether Goods, services, or otherwise) covered by this purchase order. Such list can change from time to time and it is Seller's responsibility to ensure compliance with such list at all times. Current information can be obtained by accessing the Internet at URL http://www.treas.gov/ofac/43. GOVERNING LAW.
This purchase order shall be governed by the laws of the state of Arizona, notwithstanding its conflicts of laws rules.44. SUPPLIER SECURITY AND CRISIS MANAGEMENT POLICY:
Seller shall have and comply with a company security and crisis management policy. Upon Purchaser's request, Seller shall provide Purchaser a copy thereof. Seller shall revise and maintain the policy proactively, and as may be requested by Purchaser, in anticipation of security and crisis risks relevant to the Seller's business. Seller's policy, at a minimum, shall identify, and require the taking, by Seller's management and employees, of the measures necessary to do the following:(a) provide for the physical security of the people working on Seller's premises and others working for or on behalf of Seller;
(b) provide for the physical security of Seller's facilities and physical assets related to the performance of work, including, in particular, the protection of Seller's mission critical equipment and assets;
(c) protect from the loss of, misappropriation of, corruption of, and/or other damage to software related to the performance of work;
(d) protect from the loss of, misappropriation of, corruption of, and/or other damage to Purchaser's and Seller's drawings, technical data, and other proprietary information related to the performance of work;
(e) provide for the prompt recovery -- including through preparation, adoption, and maintenance of a disaster recovery plan -- of facilities, physical assets, software, drawings, technical data, other intellectual property, and the Seller's business operations in the event of a security breach, incident, crisis or other disruption of Seller's ability to use the necessary facilities, physical assets, software, drawings, technical data, or other intellectual property or to continue operations.
Purchaser reserves the right to inspect Seller's policy and to conduct on-site audits of Seller's facility and practices to determine whether Seller's policy and Seller's implementation of the policy are reasonably sufficient to protect Purchaser's interests. If Purchaser reasonably determines that Seller's policy and/or policy implementation is/are insufficient to protect Purchaser's property and interests, Purchaser may give Seller notice of such determination. Upon receiving such notice, Seller shall have forty-five (45) days thereafter to make the policy changes and take the implementation actions reasonably requested by Purchaser. Seller's failure to take such actions shall give Purchaser the right to terminate this purchase order immediately without further compensation to Seller.
APPENDIX I
INTERNATIONAL ORDERS
IF SELLER IS LOCATED OUTSIDE OF THE UNITED STATES, THE PRECEEDING TERMS AND CONDITIONS ARE MODIFIED AS FOLLOWS:
1. ARTICLE 3, "DISPUTE RESOLUTION" IS DELETED AND REPLACED WITH THE FOLLOWING: "DISPUTE RESOLUTION. This purchase order shall be interpreted in accordance with the laws of the State of Arizona, U.S.A. without regard to Arizona's choice of law provisions. Except as otherwise provided, the United Nations Convention on Contracts for the International Sale of Goods is not applicable to this purchase order. All disputes arising in connection with this purchase order shall be finally settled under the rules of conciliation and arbitration of the International Chamber of Commerce by one or more arbitrators appointed in accordance with the said rules. The arbitration shall be held in Phoenix, Arizona, and any arbitrator's award shall not exceed actual compensatory damages."
2. ARTICLE 5, TRANSPORTATION. Is modified to replace the first two sentences of sub-paragraph (a) with the following language: "Goods covered by this purchase order shall be shipped in accordance with ICC Incoterms, 2000 edition. The applicable shipping and delivery incoterms will be specified on the face of this purchase order.
3. ARTICLE 7, "DELAY AND DEFAULT". The reference to the Uniform Commercial Code is changed to refer to "Article 45 of the United Nations Convention on Contracts for the International Sale of Goods."
4. ARTICLE 16, "STATE SALES TAX," is deleted.
5. ARTICLE 19, "NONDISCRIMINATION IN EMPLOYMENT", IS DELETED.
6. ARTICLE 39, "CITIZENSHIP STATUS," is deleted and replaced with the following: "For data export purposes, only citizens of the country in which the Seller is located shall be permitted to work on Purchaser's orders without prior written approval from Purchaser. .
8. ENGLISH LANGUAGE. Except as the parties may otherwise agree, this purchase order, data, notices, shipping invoices, correspondence and other writings shall be written in the English language. In the event of any inconsistency between any terms of this purchase order and any translation thereof into another language, the English language meaning shall control.
9. ANTI-DUMPING. Seller warrants that all sales made hereunder are or will be made at not less than fair value under the United States anti-dumping law (19 U.S.C. sec 1673 et. Seq.), and Seller will indemnify, defend and hold Purchaser harmless from and against any costs or expenses (including but not limited to any anti-dumping duties which may be imposed) arising out of or in connection with any breach of this warranty
10. IMPORTER OF RECORD.
(a) If Seller is importer of record, Seller agrees that Purchaser will not be a party to the importation of the Goods; that the transaction(s) represented by this purchase order will be consummated subsequent to importation; that Seller will neither cause nor permit Purchaser's name to be shown as "importer of record" on any customs declaration; and that, if the Goods must be returned to Seller, Seller agrees to be U.S. exporter and to comply with all applicable export regulations.
(b) If Purchaser is the importer of record, Seller shall ship the Goods to the port of entry as advised by Purchaser and show proper broker notification on all shipping waybills. Any additional transportation or clearance charges incurred by Purchaser due to non-adherence to this clause will be the responsibility of Seller.
(c) Regardless of which party is the importer of record, Seller's shipping cartons and documentation must meet all U.S. customs country of origin marking and invoicing requirements. Seller will be responsible for any fines or liabilities resulting from insufficient, improper or negligent invoicing or marking of shipments.
11. U.S. EXPORTER. If Seller is the U.S. exporter for any U.S. origin bailed or purchased material required by Seller to complete this purchase order, Seller shall be responsible for obtaining any required export license, authorizing a U.S. freight forwarder, and complying with U.S. export administration regulations/international traffic-in-arms regulations. If the Seller requests the Purchaser to export the materials, the Purchaser shall be responsible for procuring the export license, utilizing its duly authorized freight forwarder, and complying with U.S. export administration regulations/international traffic-in-arms regulations.
12. DRAWBACK: If Seller is an importer of record, upon request and where applicable, Seller will provide Purchaser customs form 7543 entitled "Certificate of Delivery" properly executed.
13. RESERVED.
14. TSCA WARRANTY. Regardless of which party is the importer of record, Seller will be responsible for complying with the import restrictions contained in section 13 of the Toxic Substance Control Act (TSCA) 15 U.S.C. 2601 et seq., providing the appropriate TSCA certification required under 19 CFR 12.121, and any fines or liabilities resulting from breaches of this section.
15. Intellectual Property and Export Licenses: In connection with the performance of any work under this purchase order, Seller, at its own cost, shall be responsible for: (1) determining whether, and the extent to which, any foreign or U.S. Government-funded intellectual property that was not provided by Purchaser will be used; (2) if any such foreign or U.S. Government-funded intellectual property will be used, obtaining, on behalf of Purchaser, a license under which the foreign or U.S. Government shall grant to Purchaser the unlimited right to use such intellectual property; (3) determining whether, and the extent to which, export licenses are required for export of all deliverables, whether tangible or intangible, under this purchase order from Seller's country to Purchaser; (4) obtaining the required export license.
All of Purchaser's obligations under this purchase order are conditional upon the issuance of intellectual property and/or export licenses by the foreign or U.S. Government granting Purchaser the right to use such foreign or U.S. Government-funded intellectual property and/or to export from Seller's country all deliverables, whether tangible or intangible under this purchase order.