TERMS & CONDITIONS
ACCEPTANCE
Seller has read and understands this contract and agrees that Seller’s written acceptance or commencement of any work or services under this contract shall constitute Seller’s acceptance of these terms and conditions only.
TITLE OR RISK OF LOSS
Title or risk of loss is the responsibility of Seller until goods are received at FOB point specified on the face of the purchase order, then transfers to Buyer responsibility. If no shipping terms are set forth on the face of the purchase order the terms shall be deemed to be FOB Buyer’s requested delivery location.
TERMINATION FOR CONVENIENCE
Buyer may terminate before delivery; by written or verbal notice; If Seller specially manufactured goods, Buyer must pay for what is done and un-saleable to others, given a reasonable price provided by Seller and not exceeding the original contract price. In addition to any other rights of Buyer to terminate this contract, Buyer may, at its option, immediately terminate all or any part of this contract, at any time and for any reason, by giving written notice to Seller. Upon such termination, Buyer shall pay to Seller the following amounts without duplication: (a) the contract price for all goods or services that have been completed in accordance with this contract and not previously paid for; and (b) the actual costs of work-in-process and raw materials incurred by Seller in furnishing the goods or services under this contract to the extent such costs are reasonable in amount and are properly allocable or apportionable under generally accepted accounting principles to the terminated portion of this contract; less, however, the sum of the reasonable value or cost (whichever is higher) of any goods or materials used or sold by Seller with Buyer’s written consent, and the cost of any damaged or destroyed goods or material. Buyer will make no payments for finished goods, services, work-in-process or raw materials fabricated or procured by Seller in amounts in excess of those authorized in delivery releases nor for any undelivered goods that are in Seller’s standard stock or that are readily marketable. Payments made under this Paragraph shall not exceed the aggregate price payable by Buyer for finished goods or services that would be produced or performed by Seller under delivery or release schedules outstanding at the date of termination. Except as provided in this Paragraph, Buyer shall not be liable for and shall not be required to make payments to Seller, directly or on account of claims by Seller’s subcontractors, for loss of anticipated profit, unabsorbed overhead, interest on claims, product development and engineering costs, facilities and equipment rearrangement costs or rental, unamortized depreciation costs, or general and administrative burden charges from termination of this contract. Within 60 days from the effective date of termination, Seller shall submit a comprehensive termination claim to Buyer, with sufficient supporting data to permit Buyer’s audit, and shall thereafter promptly furnish such supplemental and supporting information as Buyer shall request. Buyer or its agents shall have the right to audit and examine all books, records, facilities, work, material, inventories and other items relating to any termination claim of Seller.]
INSPECTION
Buyer has no obligation to inspect goods; Any inspection by Seller is without obligation to Buyer; If Buyer rejects goods as nonconforming, the quantities under contract are automatically reduced unless Buyer otherwise notifies Seller; Seller will not replace reduced quantities without a new contract or schedule from Buyer; Buyer holds nonconforming goods, Seller must provide written instructions within 10 days or Buyer may charge Seller for storage and handling or to dispose of goods without liability to Seller; Payment of goods shall not constitute acceptance, limit or impair Buyer’s right to assert any legal or equitable remedy, or relieve Seller’s responsibility for latent defects.
DELAYS
Delivery Schedules: Time is of the essence, and deliveries shall be made both in quantities and at times specified in Buyer’s delivery schedules. Buyer is not required to pay for quantities in excess of delivery schedule. Buyer may change the rate of scheduled shipments or directs temporary suspension of scheduled shipments, neither of which shall entitle Seller to a modification of the price for goods or services covered by this contract. Where quantities and/or delivery schedules are not specified, Seller shall deliver goods in such quantities and times as Buyer may direct in subsequent releases.
Premium Shipments: If Seller fails to meet delivery requirements and Buyer requires a more expeditious method of delivery, Seller must comply and is solely responsible for the cost of the alternate delivery method.
Shipping and Billing: Seller agrees to pack, mark, ship, and route goods per Buyer’s requirements and include any shipping receipts and Bills of Lading. Seller must have proper information on all paperwork and mark packages so that they are easily identifiable. Seller agrees to accept payment by billed invoice (pay on receipt) unless an invoice is requested by Buyer or agree to electronic funds transfer. Buyer may withhold payment pending receipt of evidence satisfactory to Buyer of the absence of any liens, encumbrances and claims on the goods or services.
GOVERNMENT, SAFETY, AND ENVIRONMENTAL REGULATIONS
Purchased material in part manufacture will satisfy governmental constraints on restricted, toxic, and hazardous material; and environmental, electrical, and electromagnetic considerations applicable to the country of manufacture and sale.
EQUAL EMPLOYMENT OPPORTUNITY
Seller represents that with respect to the production of the articles and/or the performance of the services covered by this invoice it has fully complied with any and all current rules, regulations, and relevant orders of the secretary of labor in respect of, including but not limited to, the Equal Employment Opportunity Act.
MODIFICATIONS
No modifications are binding unless in writing by Buyer or its agent; Usage of trade, course of performance, and course of dealing cannot supplement or modify this PO; Buyer reserves the right and Seller agrees to accept any reasonable changes to this PO, including changes to packaging, testing, destinations, specifications, designs, and delivery schedules, but changes are authorized only by Buyer’s written instruction; If any instruction affects price or delivery, Seller will notify Buyer immediately and equitable adjustments will be agreed upon in a written amendment to this PO; Buyer’s a) failure to insist on strict performance, b) failure or delay to exercise any right or remedy provided herein or by law or properly notify Seller in event of breach c) acceptance of or payment for goods hereunder or d) approval of any design will not release Seller from any warranties or obligations of this PO and will not be deemed a waiver of any right of Buyer to insist upon strict performance of any of its rights or remedies as to any prior or subsequent default, nor will any purported oral modification or rescission of this PO by Buyer operate as a waiver of any term or condition.
SET-OFF
In addition to any right of setoff or recoupment provided by law, all amounts due to Seller shall be considered net of indebtedness of Seller and its affiliates/subsidiaries to Buyer and its affiliates/subsidiaries; and Buyer shall have the right to set off against or to recoup from any amounts due to Seller and its affiliates/subsidiaries from Buyer and its affiliates/subsidiaries.
QMS REQUIREMENTS
Seller agrees to meet Buyer’s Quality Management System requirements.
WARRANTY
Seller warrants and guarantees that the goods and/or services covered by this contract conform to the specifications, drawings, samples, or descriptions furnished to or by Buyer, and will be merchantable, of good material and workmanship and free from defect. Seller acknowledges that it knows of Buyer’s intended use and guarantees that goods covered in this contract that have been selected, designed, manufactured, or assembled by Seller based upon Buyer’s stated use will be fit and sufficient for purpose intended. The warranty period shall be provided by applicable law, except if Buyer’s warranty to its customers is longer, the longer period will apply.
INSOLVENCY
Buyer may terminate this contract without liability in any of these events: a) insolvency of the Seller; b) voluntary petition of bankruptcy filed by the Seller; c) filing of involuntary bankruptcy against the Seller; d) appointment of a receiver or trustee for Seller; or e) execution of an assignment for the benefit of creditors by Seller. Seller shall reimburse Buyer for all costs incurred by Buyer in connection with any of the foregoing, including, but not limited to, all legal and/or or other professional fees.
TERMINATION FOR BREACH OR NONPERFORMANCE
Buyer reserves the right to terminate this contract without liability to Seller, if Seller: a) repudiates or breaches any of the terms of this contract, including Seller’s warranties; b) fails to perform services or deliver goods as specified by Buyer; c)fails to make progress so as to endanger timely and proper completion of services or delivery of goods, and does not correct such failure or breach within 10 days (or such shorter period of time if commercially reasonable under the circumstances) after receipt of written notice from Buyer specifying such failure or breach.
INTELLECTUAL PROPERTY
Seller agrees: (a) to defend, hold harmless and indemnify Buyer, its successors and customers against any claims of infringement (including patent, trademark, copyright, industrial design right, or other proprietary right, or misuse or misappropriation of trade secret) and resulting damages and expenses (including attorney’s and other professional fees) arising in any way in relation to the goods or services contracted, including such claims where Seller has provided only part of the goods or services; Seller expressly waives any claim against Buyer that such infringement arose out of compliance with Buyer’s specification; (b) that Buyer or Buyer’s subcontractor has the right to repair, reconstruct, or rebuild the specific goods delivered under this contract without payment of any royalty to Seller; (c) that parts manufactured based on Buyer’s drawings and/or specifications may not be used for its own use or sold to third parties without Buyer’s express written authorization; and (d) to the extent that this contract is issued for the creation of copyrightable works, the works shall be considered “works made for hire;” to the extent that the works do not qualify as “works made for hire,” Seller hereby assigns to Buyer all right, title and interest in all copyrights and moral rights therein.
INSURANCE
Seller shall maintain insurance coverage with carriers acceptable to Buyer (in predetermined amounts specified). Seller shall give Buyer a certificate of insurance setting forth the amounts, coverage, and limits, policy numbers and dates of expiration within 10 days of Buyer’s request. Buyer must be given 30 day notice prior to termination of insurance coverage or reduction in amounts. Seller’s purchase of insurance shall not release Seller of its obligations or liabilities under this contract. In the event of Seller’s breach of this provision, Buyer shall have the right to cancel the undelivered portion of goods or services covered by this contract and shall not be required to make further payment except for that of which is conforming and delivered.
SELLER’S PROPERTY
Unless otherwise agreed to by Buyer, Seller at its expense shall keep in good condition and replace when necessary all machinery, equipment, tools, etc. necessary for the production of goods. Buyer at its expense shall be responsible for any cost of changes to Seller’s property necessary to make design and specification changes authorized by Buyer. Seller shall be responsible for insurance coverage for its replacement value of property. Buyer has an irrevocable option to take possession of and title to Seller’s property that is special for the production of the goods upon payment to Seller of its net book value less any amounts that Buyer previously paid to Seller for cost of such items provided. This option shall not apply if Seller’s property is used to produce standard stock sold by Seller to others and such sale is not prohibited by this or any other agreement between Buyer and Seller.
BUYER’S PROPERTY
All supplies, materials, tools, jigs, dies, gauges, fixtures, molds, patterns, equipment and other items furnished by Buyer to Seller to perform this contract or for which Seller has been reimbursed by Buyer, shall be and remain the property of the Buyer and held by Seller on a bailment basis. Unless otherwise agreed, Seller at its expense keeps in good condition or replaces Buyer’s property. Seller bears the risk of loss or damage for full replacement value to Buyer’s property. Property shall be properly housed and maintained by Seller at its expense and shall not be used for any purpose other than the performance of this contract. Seller shall mark property with Buyer’s name and shall not be commingled with property of the Seller or with that of a third person, and shall not be moved from premise without Buyer’s approval. Seller must insure Buyer’s property at its full replacement value. Buyer has the right to enter Seller’s premise at all reasonable times to inspect such property and records with respect thereto. Upon request, Buyer’s property must be released by Seller per Buyer’s requirements and Buyer shall pay to Seller the reasonable costs of delivery. When permitted by law, Seller waives any lien or other rights that might have otherwise been on Buyer’s property for work performed.
CUSTOMS; EXPORT CONTROLS
Credits or benefits resulting or arising from this contract, including trade credits, export credits or the refund of duties, taxes or fees, shall belong to Buyer. Seller shall provide Buyer with written documentation enabling Buyer to receive such credits as well as to fulfill its customs related obligations, origin marking, or labeling requirements. Export licenses, certificates, written declarations, or authorizations necessary for timely and proper export of the goods, and documents to secure preferential tariff treatment, shall be responsibility of the Seller unless otherwise indicated in this contract. In which case Seller provides information enabling Buyer to obtain necessary documentation. Seller shall provide any such licenses, certificates, written declarations, or authorizations only after it has determined solely by Seller that the representations contained therein are correct and in accordance with applicable laws and regulations. If such representations are incorrect, Seller will indemnify, defend, and hold Buyer harmless from any and all fines, penalties, taxes, damages, costs or expenses (including attorney and consultant fees and expenses) Buyer may incur. Seller shall undertake such arrangements as are necessary for the goods to be covered by any duty deferral or free trade zone program of the country of import.
CONFIDENTIALITY
Seller must ensure that all items covered under this contract are kept in strict confidence. Seller will exercise all reasonable precautions to prevent unauthorized disclosure of confidential information. Seller will only use confidential information to execute contract. Seller will, at Buyer’s request, employ computer systems to facilitate electric commerce between Buyer and Seller. Seller will not share any communication with any third party or entity and will keep it in strict confidence. Technical data obtained from Loc through any electronic solicitation are subject to U.S. Export Control Laws including the International Traffic in Arms Regulations (ITAR). Such technical data may not be disclosed to foreign persons or otherwise exported without first obtaining required U.S. Government export authorization.
RELATIONSHIP OF PARTIES
Seller and Buyer are independent contracting parties. Nothing in this contract shall make either party the agent or legal representative of the other. Nor does it grant either party any authority to assume or to create any obligation on behalf of or in the name of the other.
SEVERABILITY
If any term of this contract shall be deemed invalid or unenforceable such term shall be deleted or reformed, as the case may be, but only to the extent necessary to render it enforceable, and the remaining provisions of this contract shall remain in full force and effect.
SERVICE AND REPLACEMENT PARTS
Seller will sell to Buyer goods necessary to fulfill its service and replacement parts requirements at the prices set forth in this contract. If the goods are systems or modules, Seller will sell the components or parts that comprise at prices that shall not exceed the price of the system or module less assembly costs.
ENTIRE AGREEMENT
This contract together with any attachments, exhibits, supplements or other terms of Buyer specifically referenced in contract, constitutes the entire agreement between Buyer and Seller. Matters in this contract supersede all prior oral and written representations and agreements. This contract may only be modified by a purchase order amendment/alteration issued by Buyer.
GOVERNING LAW; JURISDICTION
This contract is to be construed according to the laws of the State of Michigan and the United States of America, excluding the provisions of the United Nations Convention on Contracts for the International Sale of Goods and any conflict of law provisions that would require application of another choice of law. Any action or proceedings by Buyer against Seller may be brought by Buyer in any court(s) in the State of Michigan having jurisdiction over Buyer’s location, in which event Seller consents to jurisdiction and service of process in accordance with applicable procedures. Any actions or proceedings by Seller against Buyer may be brought by Seller only in the court(s) having jurisdiction over the location of Buyer from which this contract is issued.
FORCE MAJEURE
Any delay or failure of either party to perform its obligations shall be excused if Seller is unable to produce, sell or deliver, or Buyer is unable to accept delivery, buy or use, the goods or services covered by this contract, as the result of an event or occurrence beyond the reasonable control of the party and without its fault or negligence, including, but not limited to, acts of God, actions by any governmental authority (whether valid or invalid), fires, floods, windstorms, explosions, riots, natural disasters, wars, sabotage, labor problems (including lockouts, strikes and slowdowns), inability to obtain power, material, labor equipment or transportation, or court injunction or order; provided that written notice of such delay (including the anticipated duration of the delay) shall be given by the affected party to the other party as soon as possible after the event or occurrence (but in no event more than 10 days thereafter). During the period of such delay or failure to perform by Seller, Buyer, at its option, may purchase goods and services from other sources and reduce its schedules to Seller by such quantities, without liability to Seller, or have Seller provide the goods and services from other sources in quantities and at times requested by Buyer, and at the price set forth in this contract. In addition, Seller at its expense shall take such actions as are necessary to ensure the supply of goods and services to Buyer for a period of at least 30 days during any anticipated labor disruption or resulting from the expiration of Seller’s labor contract(s). If requested by Buyer, Seller shall, within 10 days, provide adequate assurances that the delay shall not exceed 30 days. If the delay lasts more than 30 days or Seller does not provide adequate assurance that the delay will cease within 30 days, Buyer may immediately terminate this contract without liability.
REMEDIES
The rights and remedies reserved to Buyer in this contract shall be cumulative with, and additional to, all other or further remedies provided in law or equity.
NO IMPLIED WAIVER
The failure of either party at any time to require performance by the other party of any provision of this contract shall in no way affect the right to require such performance at any time thereafter, nor shall the waiver of either party of a breach of any provision of this contract constitute a waiver of any succeeding breach of the same or any other provision.
NON-ASSIGNMENT
Seller may not assign or delegate its rights or obligations under this contract [or engage subcontractors to perform its obligations under this contract] without Buyer’s prior written consent.
CHANGES
Buyer reserves the right at any time to direct changes, or cause Seller to make changes, to drawings and specifications of the goods or to otherwise change the scope of the work covered by this contract including work with respect to such matters as inspection, testing or quality control, and Seller agrees to promptly make such changes. Any difference in price or time for performance resulting from such changes shall be equitably adjusted by Buyer after receipt of documentation in such form and detail as Buyer may direct.
TOOLING
Programs requiring tooling will require the supplier to furnish photos of all such tooling. Suppliers may also be required to ID tooling per Loc Performance customer requirements, i.e. tagging, barcoding, etc. Any additional charges for identification costs must be called out separately on the quote response.
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Loc provides payment to its suppliers on a weekly basis. If payment falls out of cycle, payment will be made during the next cycle.
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DETROIT.2557765.3