and Conditions of Purchase (Revised as of July 28, 2016)
These Terms and Conditions of Purchase, as they may be amended from time to time (“Terms”), apply when referenced by Rede Parts Corp., Inc. (“Buyer”) in any purchase order, purchase order revision or other documentation submitted by Buyer to a supplier or vendor (“Seller”).
1. Offer; Acceptance; Terms of the Order
A) Each purchase order or purchase order revision issued by Buyer (collectively, with the Terms, the “Order”) is an offer to Seller by Buyer for the purchase of products and/or services (collectively, “Supplies”) and includes and is governed by the Terms. The Order also includes any provisions or documents incorporated by reference pursuant to Section 1(F). The Order does not constitute an acceptance of any offer or proposal made by Seller. The Order, when accepted, supersedes all prior agreements, purchase orders and revisions, quotations, proposals and other communications regarding the Supplies covered by the Order. Any reference in the Order to any offer or proposal made by Seller is solely to incorporate the description or specifications of Supplies in the prior offer or proposal, but only to the extent that the description or specifications do not conflict with the description and specifications in the Order. Seller’s written acceptance of an Order, Seller’s commencement of any work under the Order or any other conduct by Seller that recognizes the existence of a contract with respect to the subject matter of the Order constitutes Seller’s acceptance of the Order, including the Terms only.
B) Each Order is limited to and conditional upon Seller’s acceptance of the Order, exclusively. Any additional or different terms and conditions proposed by Seller, whether in Seller’s quotation/proposal, acknowledgement, invoice or otherwise, are unacceptable to Buyer. All such additional or different terms are expressly rejected by Buyer, and will not become part of the Order, but shall not operate as a rejection of the Order if Seller accepts Buyer’s offer by commencement of work, shipment (or provision as the case may be) of the Supplies, or by other means acceptable to Buyer, in which case the Order shall be deemed accepted by Seller without any additional or different terms or variations whatsoever. THE ORDER, INCLUDING THE TERMS, ARE EXCLUSIVE. Any modification of the Terms must be made in accordance with Section 41.
C) These Terms apply to all Orders, including without limitation those with Sellers that any Customer (as defined in Section 17) has directed, recommended, requested, suggested or otherwise identified to Buyer as a source of Supplies. No exception to, deviation from, or waiver of these Terms shall be valid and binding on Buyer unless specified on the face of a purchase order or purchase order amendment issued by Buyer or made in a signed writing by Buyer’s authorized representative.
D) Buyer is Rede Parts Corp., Inc. unless a different affiliate, subsidiary or joint venture is identified as the purchaser in the Order. If a different affiliate, subsidiary or joint venture is so named, Seller acknowledges that Rede Parts Corp., Inc. is performing purchasing functions on behalf of Buyer solely as agent for Buyer and Seller’s sole recourse under the Order shall be against Buyer, not Rede Parts Corp., Inc.
E) The Terms are available on Buyer’s web site at http://www.red-eparts.com. SELLER SPECIFICALLY WAIVES ANY REQUIREMENT FOR SIGNED ACCEPTANCE OF THE ORDER, AND SELLER AND BUYER EACH WAIVE ANY DEFENSE TO THE VALIDITY AND ENFORCEABILITY OF THE ORDER ARISING FROM ELECTRONIC SUBMISSION OF THE ORDER TO SELLER AND SELLER’S ACCEPTANCE OF THE ORDER IN ACCORDANCE WITH THIS SECTION 1.
F) The following documents are incorporated into and shall be a part of the Order: (i) any supply agreement between Buyer and Seller signed by authorized representatives of Buyer and Seller, (ii) Material Authorization Releases (as defined in Section 4(B)), (iii) applicable prints and specifications for Supplies, (iv) Buyer’s policies, as revised by Buyer from time to time, (v) any written agreement between Buyer and Seller signed by authorized representatives of Seller and Buyer, which provides that it is part of the Order, (vi) Customer Purchase Order terms and conditions as provided in the Order (see Section 17). As used herein, the term “Buyer’s policies” includes any statement of work applicable to the Supplies, as well as quality assurance/control, logistics, packaging, delivery, environmental and other standards/guidelines/policies as set forth in the Order (including without limitation the Terms), and including by not limited to amendments or modifications as may be implemented by Buyer during the term of the Order – copies of which may be obtained by contacting Buyer’s purchasing representative.
2. Time Period of Order Subject to Buyer’s termination rights, the agreement formed by the Order is binding on the parties for the length of the applicable Original Equipment Manufacturer (“OEM”) vehicle program production life (including model refreshes and program extensions as determined by the applicable OEM), and both Buyer and Seller acknowledge the risk of the vehicle program production life being cancelled or extended by the OEM. If the Supplies are not used by Buyer for the production of automotive parts or systems, the agreement formed by the Order will be binding for one year from the date the Order is transmitted to Seller. In such case, subject to Buyer’s termination rights, the Order will automatically renew for successive one-year periods after the initial term unless Seller provides written notice at least 180 days prior to the end of the current term of its desire that the Order not be renewed. Notwithstanding the foregoing, if an expiration date is stated in the Order or related agreement signed by Buyer, the term of the Order will continue until that date. Unless specifically waived in writing by an authorized representative of Buyer or unless Buyer removes Tooling from Seller necessary for the production of service and replacement parts, Seller’s obligations with respect to service and replacement parts will survive the termination or expiration of the Order for any reason.
3. Invoicing; Pricing; Taxes
A) Except as expressly stated on the Order, the price of Supplies stated on the Order is complete, fixed, and includes storage, handling, packaging, freight, insurance, transportation, and all other expenses, costs and charges of Seller, and no surcharges, premiums or other additional charges of any type shall be added without Buyer’s express written consent. Prices are not subject to increase, unless specifically stated in the Order, and Seller assumes the risk of any event or cause affecting prices, including without limitation, foreign exchange rate changes, increases in raw material costs, inflation, increases in labor and other production and supply costs, and any other event which impacts the price or availability of materials or supplies. Prices may be subject to decrease as agreed in the Order or other written agreement or in connection with any changes requested by Buyer.
B) All invoices under the Order must reference the purchase order number, amendment or release number, Buyer’s part number, Seller’s part number where applicable, quantity of pieces in the shipment, number of cartons or containers in the shipment, Seller’s name and number, bill of lading number and other information required by Buyer. All correspondence must include the purchase order number. If requested by Buyer, all invoices under the Order must be accompanied by Seller’s sworn statement indicating the status of payments to Seller’s subcontractors and suppliers as of the date of invoice, and, if requested by Buyer, all invoices must be accompanied by lien waivers, in form satisfactory to Buyer, executed by Seller and Seller’s subcontractors and suppliers. No invoice may reference any term separate from or different than the Order. Buyer reserves the right to return incorrect invoices or related documents.
C) Payment will be made against correct invoices and documentation provided to Buyer in compliance with the Terms, subject to adjustments, set-offs, discrepancies and other unresolved issues.
D) The stated price set forth in the Order also includes all applicable taxes, excises, duties and other governmental impositions, except for any value added tax (VAT) imposed by a nonUSA jurisdiction, which must be shown separately on Seller’s invoice for each shipment. Buyer is not liable for any business activity taxes, payroll taxes or taxes on Seller’s income or assets. Seller shall be responsible for all federal, state, and local taxes levied on or assessed with respect to the manufacture, transportation and sale of the Supplies. As owner of the Tooling, Buyer (or, if applicable, Customer) shall be entitled to all federal and state income and franchise tax credits applicable to such Tooling investment.
E) Seller shall indemnify and hold Buyer harmless for Seller’s failure to pay any wages, benefits, taxes or other compensation or amounts owed by Seller on account of the Supplies.
F) Seller represents and warrants that at all times during the term of the Order, the Supplies are and will remain competitive in terms of price and related commercial terms and conditions, as well as technology, quality, delivery and service, with substantially similar goods and services and competitive alternatives available to Buyer or Customers from other suppliers.
G) Seller represents and warrants to Buyer that Seller will fully disclose to Buyer, and give Buyer the full and sole benefit of (unless otherwise expressly agreed by Buyer following disclosure thereof by Seller), any and all discounts, refunds, rebates, credits, allowances or other financial or related incentives or payments of any kind to be provided or agreed to be provided by Seller (or any affiliate thereof) to any direct or indirect customer of Buyer (or any affiliate of each customer) and relating in any way to, and/or based on or determined, in whole or in part, with reference to Buyer’s purchases of Supplies from Seller under the Order.
H) Seller represents and warrants that is has no agreement for exclusivity of supply with any of Seller’s suppliers relating the Supplies or any portion or component of the Supplies. Buyer may purchase goods from Seller’s suppliers without liability and Seller expressly waives any exclusivity or any claim for tortious or other interference with any agreements between Seller and its suppliers in the event Buyer purchases from Seller’s suppliers.
A) Quantities listed in each Order as estimated, forecasted, or for planning purposes are
Buyer’s best estimate of the quantities of Supplies it might purchase from Seller for the related time period(s). Seller acknowledges that any estimates or forecasts of production quantities or program durations, whether from Buyer or Customer, are subject to change from time to time, with or without notice to Seller, and shall not be binding upon Buyer. Unless otherwise expressly stated on the face of the Order, Buyer makes no representation, warranty, guaranty, or commitment of any kind or nature, whether express or implied to Seller in respect of Buyer’s quantitative requirements for the Supplies or the term of supply of the Supplies.
B) (1) Unless otherwise expressly stated in the Order or other agreement signed by an authorized representative of Buyer, if no other quantity is stated on the face of the Order or if the quantity is blank or specifies the quantity as zero, “blanket”, “blanket order”, “as released”, “as scheduled”, “as directed”, “subject to Buyer’s production releases”, or similar terms, then subject to the Order, Buyer will purchase from Seller, and Seller will supply to Buyer, one hundred percent (100%) of Buyer’s requirements for Supplies in such quantities as identified by Buyer as firm in material authorization releases, manifests, broadcasts or similar releases (“Material Authorization Releases”) that are transmitted to Seller during the term of the Order, and Seller shall deliver such quantities on such dates and times at the price and on the other terms specified in the Order. All references herein to an “Order” shall include any related Material Authorization Releases. Material Authorization Releases are not independent contracts. Buyer’s requirements are based on and determined by the needs and related orders of Buyer’s customer(s) for Buyer’s products incorporating or using the Supplies hereunder, and such needs and related orders may change from time to time. If the Order covers services, Buyer is required to purchase services to the extent expressly stated in a Statement of Work signed by an authorized representative of Buyer. Buyer may require Seller to participate in electronic data interchange or similar inventory management program, at Seller’s expense, for notification of Material Authorization Releases, shipping confirmations and other information.
(2) Lead times for Supplies, as and to the extent set forth in an Order, should be considered by Buyer in all of Buyer’s requirements. Seller acknowledges and agrees to accept the risk associated with lead times of various raw materials and/or components if they are beyond those provided in the Order and Material Authorization Releases.
(3) Seller must have a tooling and production plan in place that will enable Seller to supply Buyer’s peak daily, weekly, and annual requirements for the Supplies, including service parts, and Seller capacity as stated in the Order will be based on such tooling and production plan. In the event that Buyer’s peak requirements exceed Seller’s capacity as stated in the Order, Buyer and Seller will, upon the request of either party, discuss what, if any, additional capital investments, together with expenses directly related to such increased demands, are reasonably required by Seller, and what changes in price or tooling are reasonably required, for Seller to continue to meet such peak requirements. Buyer will have the right to verify all claims regarding additional capital investment and the sole discretion to determine whether to accept applicable changes or to source peak requirements beyond Seller’s capacity stated in the Order elsewhere. No changes to the Order or the Terms, other than changes in price or tooling requests directly tied to the need for additional capital investments mutually agreed between Seller and Buyer pursuant to this Section 4(B)(3), are contemplated in this Section 4.
C) Delivery of Supplies shall be F.O.B. Buyer’s designated facility with risk of loss passing from Seller to Buyer upon delivery to Buyer’s facility and acceptance by Buyer (or if shipment is by Buyer, then risk of loss passes from Seller to Buyer upon delivery to Buyer’s transportation carrier), unless otherwise specified by Buyer in writing in or as part of the Order. Time and quantities are of the essence under the Order. Seller agrees to 100% on-time delivery of the quantities and at the times specified by Buyer, as set forth in the Order and any related Material Authorization Releases. Failure to meet agreed delivery and quantities shall be considered a breach of the Order, and Seller shall pay to Buyer any damages or expenses imposed upon or incurred by Buyer. Buyer may change the rate of scheduled shipments or direct temporary suspension of scheduled shipments, neither of which entitles Seller to modify the price for Supplies covered by the Order. Buyer is not obligated to accept early deliveries, late deliveries, partial deliveries or excess deliveries or to make payment for Supplies delivered to Buyer that are in excess of quantities specified in Buyer’s delivery schedules. Seller will comply with Buyer’s delivery and logistics requirements, as amended or updated from time to time. If requested by Buyer, Seller will electronically communicate with Buyer in a secure (encrypted) manner designated by Buyer with respect to all supply chain communications relating to the Order, including without limitation, receiving production schedules and sending advance shipping notices to Buyer.
D) In order to assure the timely delivery of Supplies, Seller will, upon written request by Buyer’s authorized purchasing representative, manufacture goods in excess of Buyer’s current Orders to serve as a reserve for shipment, at an inventory reserve level as may be set by Buyer from time to time, to meet Buyer’s requirements and to meet any unforeseen delays due to any reason whatsoever. Until the reserve is purchased by Buyer from Seller, the reserve shall remain the property of Seller and shall be held by Seller at its sole risk and expense.
E) Seller must assure overall equipment (shared and specific) and plant capacities are adequate to meet Buyer’s needs. Ongoing capacity analysis must account for scrap variation, downtime, maintenance, and other Customer requirements.
5. Premium Freight; Related Costs If Seller’s acts or omissions result in or are likely to result in Seller’s failure to meet applicable delivery requirements and Buyer requires a more expeditious method of transportation for the Supplies than the transportation method originally specified by Buyer, Seller will be solely responsible for all costs and expenses associated with the expedited shipments. Further, Seller will pay any costs incurred by Buyer, including costs charged by Customer(s) to Buyer, as a result of Seller’s failure to comply with shipping or delivery requirements. Buyer is not liable for premium freight costs, unless specifically agreed to in advance, in writing, by Buyer.
6. Packaging; Marking; Shipping; Disclosure; Special Warnings or Instructions
A) Seller will: (i) properly pack, mark and ship Supplies in accordance with the requirements of Buyer (as amended or updated from time to time), the involved carriers, and the laws and regulations of the country of manufacture, the country of destination, and any country in which the Supplies will be transported, including without limitation, laws and regulations governing the handling and transportation of dangerous goods or hazardous materials, (ii) route the shipments in accordance with Buyer’s instructions and the Order, (iii) provide papers with each shipment showing Buyer’s purchase order number, amendment or release number, Buyer’s part number, Seller’s part number (where applicable), number of pieces in the shipment, number of containers in the shipment, Seller’s name and contact information, and the bill of lading number, (iv) promptly forward the original bill of lading or other shipment documents for each shipment in accordance with Buyer’s instructions and carrier requirements, and (v) include on bills of lading or other shipping documents the correct classification of the Supplies.
B) Upon Buyer’s request, Seller will certify to Buyer in writing the origin of any ingredients or materials in the Supplies. Seller will promptly provide Buyer with the following information: (i) a list in a form acceptable to Buyer of all ingredients and materials and the amount of each in Supplies, (ii) notice of and information in a form acceptable to Buyer concerning any changes in or additions to the ingredients and materials, and (iii) further or additional information requested by Buyer from time to time so that Buyer and Customer(s) may comply in a timely manner with reporting requirements under applicable law with respect to consumer protection, “conflict minerals,” or similar materials or ingredients, if any.
C) Before and at the time the Supplies are shipped, Seller will give Buyer sufficient warning in writing (including, without limitation, appropriate labels on all Supplies, containers and packing, together with disposal and recycling instructions, material safety data sheets and certificates of analysis) of any dangerous, hazardous or restricted material that is an ingredient or part of the Supplies, together with any special handling instructions that are needed to advise carriers, Buyer and their employees how to take measures to prevent bodily injury or property damage while handling, transporting, processing, using or disposing of the Supplies, containers and packing. Seller agrees to comply with all federal, state, provincial, national, and local laws and regulations pertaining to product content and warning labels, including without limitation, the U.S. Toxic Substances Control Act and European Union Directive 2000/53/EC. Upon Buyer’s request, Seller will certify to Buyer in writing the origin of any ingredients or materials in the Supplies. Seller will promptly provide, in writing, any information regarding the Supplies requested by Buyer so that Buyer and/or Buyer’s Customer(s) may comply in a timely manner with reporting requirements under applicable law with respect to consumer protection, “conflict minerals,” or similar materials or ingredients, if any.
D) Seller will reimburse Buyer for any liabilities, expenses and costs incurred as a result of improper packing, marking, routing, shipping or any other noncompliance with the requirements of this Section 6.
E) In no event will shipping documents attached to or contained in the shipment display pricing information or any of Buyer’s proprietary information.
F) In the event that no packing requirements are provided by Buyer, Seller will pack the Supplies in accordance with the applicable Automotive Industry Action Group (AIAG) packing requirement.
G) In the event Seller fails to fully and timely comply with this Section, in addition to all other remedies available to Buyer under these Terms, the UCC, or otherwise, Buyer may, in its sole and absolute discretion, with respect to any Supplies, revoke the acceptance, reject, abandon, return or hold such Supplies at Seller’s expense and risk (“Refused Product”) and Buyer may cancel in whole or in part, i) any Order, ii) award letter, iii) any other agreement, iv) any other obligation Buyer may have to purchase any or all Supplies from Seller, or v) any combination of (i), (ii), (iii), and (iv) (collectively “Canceled Products”). Additionally, Buyer has the right to source replacements for any Refused Products, Canceled Products, or any combination thereof and Seller will reimburse Buyer for any difference in cost of such replacements plus all associated expenses, including charges for expediting and quality validation, and losses arising out of or related to adverse effects on Buyer’s business as a result of the need to pursue such alternative sourcing.
7. Inspection; Nonconforming Goods/Services; Audit
A) Buyer (itself or through its authorized representative) may enter Seller’s facility(ies) to inspect and audit the facility(ies), Supplies, materials, and any property relating to the Order; provided that Buyer is not required to perform any inspections or audits. Buyer’s inspection, if any, of Supplies, whether during manufacture, prior to delivery or within a reasonable time after delivery, does not constitute acceptance of any work-in-process or finished goods. Buyer is not required to perform inspections of Supplies, and Seller waives any requirement that Buyer conduct such inspections. Buyer’s acceptance, inspection or failure to inspect does not relieve Seller of any of its responsibilities or warranties. Nothing in the Order releases Seller from the obligation of testing, inspection and quality control.
B) In addition to other remedies available to Buyer: (i) Seller agrees, within one (1) business day of Buyer’s notification, to authorize return, at Seller’s risk and expense at full invoice price, plus transportation charges, and to replace nonconforming Supplies as Buyer deems necessary, (ii) Buyer may have corrected, at any time prior to shipment from Buyer’s plant, Supplies that fail to meet the requirements of the Order, and/or (iii) Seller will reimburse Buyer for all reasonable expenses that result from any rejection or correction of nonconforming Supplies.
Seller will develop and document corrective actions within a commercially reasonable period after receipt of a nonconforming sample and will take whatever measures necessary to correct the nonconformance. Without limiting Seller’s obligations hereunder, Seller will comply, in regard to situations involving nonconforming Supplies, with applicable quality control processes and requirements of Buyer and (as applicable) Customer(s). In addition to Buyer’s rights of entry, inspection and audit, Customer may upon reasonable notice to Seller enter and conduct a routine audit at Seller’s facility(ies) for the purpose of quality, cost or delivery verification. Payment for nonconforming Supplies is not an acceptance, does not limit or impair Buyer’s right to assert any legal or equitable remedy, and does not relieve Seller’s responsibility for latent defects.
C) During the term of the Order and for at least three (3) years following the later of the last delivery of the Supplies, the date of final payment to Seller under the Order, or the expiration of any applicable warranty periods for the Supplies or of any applicable governmental or industry required retention periods, Seller grants Buyer (and Buyer’s authorized representative) access to Seller’s premises and all pertinent information for the purpose of auditing (i) Seller’s compliance with the terms of the Order (including without limitation, charges under the Order), and (ii) inspecting, reviewing or conducting an inventory of finished goods, work-in-process, raw materials, records, and any work, property or other items related to or to be provided pursuant to the Order, whether located at Seller’s premises or otherwise in the possession of or under the control of Seller. Seller will cooperate with Buyer (and Buyer’s authorized representative) so as to facilitate Buyer’s audit, including without limitation, by segregating and promptly producing records as Buyer may request. During the foregoing period, Seller will retain all pertinent records subject to audit or review under this Section 7. If an audit shows Seller’s noncompliance with the Order, Seller will reimburse Buyer for any price discrepancy or other loss caused by its noncompliance, together with interest at an annual rate of 12% (or, if less, the maximum rate permitted by law) plus the cost of the audit.
D) Buyer’s or Customer’s acceptance, inspection, audit, or failure to inspect or audit does not relieve Seller of any of its responsibilities, warranties, or liabilities under the Order, or prejudice Buyer of any rights or remedies. Any inspection, audit or failure to inspect or audit by Buyer or Customer will not constitute acceptance of any Supplies or other goods (whether in progress or finished).
E) Seller will ensure that the terms of its contracts with subcontractors provide Buyer and Customer(s) with all of the rights specified in this Section 7 and Section 22 (Disposal of Scrap).
8. Supplied Materials
A) Under the Order, with Seller’s concurrence, Buyer may supply Seller, directly or indirectly, with parts, materials or components, including raw material, work in process or component parts for use by Seller in Supplies (“Supplied Materials”). The consideration if any to be furnished by Seller for such Supplied Materials shall be established by agreement of the parties. If the Supplied Materials are not purchased by Seller, they shall be treated as “Bailed Materials” hereunder.
B) Any Supplied Materials that are Bailed Materials are Buyer’s Property, as defined in Section 27 and subject to the requirements of Section 27 and Section 29(F) relating to Buyer’s Property. Bailed Materials will remain Buyer’s Property even if they are transferred by Seller to a third party (unless otherwise agreed by an authorized representative of Buyer in writing). Seller shall have sole and complete responsibility for Bailed Materials following delivery by Buyer and bears the risk of loss of and damage to Bailed Materials. In addition to the applicable requirements of Section 27 and Section 29(F), Seller also will segregate, identify as Buyer’s property, and notify Buyer on a monthly basis of Seller’s inventory of Bailed Materials. Seller shall pay Buyer the total cost of the missing Bailed Material including without limitation freight, packaging, taxes, duties, overhead, replacement cost, and other damages associated with Seller’s loss of Bailed Materials. Seller grants to Buyer a limited and irrevocable power of attorney, coupled with an interest, to execute and record on Seller’s behalf any notice or financing statements with respect to Bailed Materials that Buyer determines are reasonably necessary to reflect Buyer’s interest (and, if applicable, the interest of Customer) in Bailed Materials.
C) Buyer is solely responsible for inspecting, testing and approving all Supplied Materials (which includes without limitation Bailed Materials) prior to any use in compliance with the
Order and the Terms (including without limitation Sections 7 and 12) and Buyer’s instructions to Seller and as within the applicable specifications for Supplies. In addition, Seller will give Buyer prompt notice of any nonconformity of the Supplied Materials or the delivery thereof to
Seller which has a high rate of recurrence, impairs or may impair Seller’s ability to meet its delivery schedules or comply with applicable specifications for Supplies, affects Supplies’ safety or is otherwise serious in the opinion of Seller. If the Supplied Materials are furnished by person(s) under agreement with Buyer, Seller will follow-up Buyer’s instructions concerning the Supplied Materials subsequent to such notice.
D) Seller will not substitute any other property for Supplied Materials (which includes without limitation Bailed Materials) and will not sell, use or permit use of the Supplied Materials for any purpose except the furnishing of Supplies to Buyer.
E) Seller will store, inspect and process (and keep records thereof) the Supplied Materials (which includes without limitation Bailed Materials) in such manner as may be requested by Buyer in order for Buyer to take full advantage of any provisions of any customs or duty laws or regulations under which Buyer may be entitled to drawbacks, refunds or other benefits.
9. Payment Payment shall be made as set forth in the Order. If not otherwise specified,
Buyer’s payment will be made on the 60th day (or no later than the Friday following the 60th day) following the month of the later of delivery of the Supplies under the Order and receipt by Buyer of a conforming invoice covering such Supplies. (In the case of services, delivery means the completion of the services.) Buyer may withhold payment pending receipt of evidence, in the form and detail requested by Buyer, of the absence of any liens, encumbrances or claims on Supplies provided under the Order. Payment will be made in the currency expressly stated in the Order; if no such currency is noted, payment will be made in U.S. Dollars. Buyer will make payment by placing a check in the mail or initiating an ECF or wire transfer on or before the due date, unless otherwise expressly agreed by Buyer.
A) Buyer reserves the right at any time by written notice to Seller, to make changes, or to cause Seller to make changes, to drawings, designs, specifications, materials, sub-suppliers, samples, or descriptions of Supplies, time and/or place of delivery, or method of transportation. Buyer also reserves the right to otherwise change the scope of the work covered by the Order, including work with respect to such matters as inspection, testing, or quality control. Buyer also may direct the supply of raw materials from itself or from third parties.
B) Buyer and Seller will promptly discuss, reasonably and in good faith, any pricing adjustments (up or down) to be made in connection with a change requested by Buyer. Notwithstanding any discussions, Seller will promptly implement changes requested by Buyer without delay. In the event that Buyer and Seller are unable to reach agreement of any pricing adjustments to be made in connection with changes requested by Buyer, Buyer will equitably adjust the price or time for performance resulting from such changes based on a fair cost assessment after receipt of documentation in such form and detail as Buyer may request. Notwithstanding the foregoing, in order for Seller to request a reasonable difference in price or time for performance as a result of a change requested by Buyer, Seller must notify Buyer of its request in writing within ten (10) days after receiving notice of a change. Buyer can request additional documentation from Seller as to the need for a different price or time for performance, and Buyer has the right to verify all claims or requests hereunder by auditing relevant records, facilities, work or materials of Seller. If Seller’s claim includes any costs for property made obsolete as a result of the change, the claim must be supported by releases (or other forms of authorization) provided by Buyer authorizing Seller to procure or manufacture the property, and Buyer may prescribe the manner in which the property will be disposed. If Seller does not provide timely notice to Buyer that a requested change may result in a difference in price or time for performance, Buyer’s requested change will not affect the price or time for performance.
C) Seller will not make any change in or relating to the Supplies, including, without limitation, in the Supplies’ contents, design, drawings, specifications, materials, processing, packing, marking, shipping, or date or place of delivery except at Buyer’s written instruction or with Buyer’s written approval. The foregoing restriction applies, among other matters, to any proposed change in the sourcing, or in the nature, type or quality of any services, raw materials or goods used by Seller or its suppliers in connection with the Order, or in the place or manner of manufacture or processing of raw materials or components used in the Supplies, or of any Supplies themselves, in the fit, form, function, appearance or performance of any Supplies covered by the Order, or the production method or any process or software or type of production equipment used in the production or provision of or as part of any Supplies under the Order. Any of the foregoing changes by Seller in relation to any Order or to the Supplies covered by the Order without the prior approval of Buyer’s authorized representative shall constitute a breach of the Order. If Buyer agrees, in Buyer’s discretion, to implement any change proposed by Seller, the agreement between the parties with respect to the change will be made in accordance with Section 41.
A) Seller expressly warrants and guarantees to Buyer, to Buyer’s successors, assigns and Customers, and to users of Buyer’s products, that all Supplies delivered or provided to Buyer and any special tools, dies, jigs, fixtures, patterns, machinery and equipment, that are obtained at Buyer’s expense for the performance of the Order and/or are or become the property of Buyer (including Buyer’s Property as defined in Section 27) will: (i) be world-class, competitive Supplies in terms of price, quality, delivery and technology, and conform to the specifications, standards, drawings, samples, descriptions, designs and revisions as furnished, specified or approved by Buyer, (ii) conform to all applicable laws, orders, regulations or standards in countries where Supplies or vehicles or other products incorporating Supplies are to be sold, including without limitation the National Traffic and Motor Vehicle Safety Act, the federal motor vehicle safety standards and the European Union Directive 2000/53/EC, (iii) be merchantable and free of defects in design (to the extent Seller or any of its subcontractors or suppliers designed or participated in the design of the Supplies in whole or in part, even if the design has been approved by Buyer), materials and workmanship, (iv) be selected, designed (to the extent Seller or any of its subcontractors or suppliers designed or participated in the design of the Supplies in whole or in part, even if the design has been approved by Buyer), manufactured or assembled by Seller based upon Buyer’s intended use and be fit and sufficient for the purposes intended by Buyer, and (v) be free of all liens, claims and encumbrances whatsoever. Seller further expressly warrants that, unless otherwise expressly stated in the Order, the Supplies are manufactured entirely with new materials and none of the Supplies is, in whole or any part, governmental or commercial surplus or used, remanufactured, reconditioned or of such age or condition so as to impair its fitness, usefulness or safety. The warranties set forth in the Order are in addition to those available to Buyer by law. For all Supplies, Seller further warrants that its work will be performed in a professional and workmanlike manner, consistent with all standards and specifications agreed on with Buyer and otherwise consistent with industry standards, and that the Supplies are free from latent defects or conditions that would give rise to a defect regardless of whether the defect or condition was known or discoverable during the warranty period. Buyer’s approval of any design, drawing, material, process or specifications will not relieve Seller of these warranties. These warranties are intended to provide Buyer with protection from any and all warranty claims brought against Buyer by Customer(s), including Customer-required warranties relating to the Supplies or any products into which such Supplies are incorporated. All Customer-required warranties are incorporated herein by reference. Notwithstanding Section 11(B), the Seller also expressly warrants that the Supplies covered by the Order will not at any time (including after expiration or termination of the Order) pose an unreasonable risk to consumer or vehicle safety.
B) Unless otherwise set forth in an Order, the duration of each warranty period provided by Seller to Buyer for the Supplies will be through the later of (i) expiration of any warranty period provided by applicable law for the Supplies, (ii) expiration of any warranty (applicable to Supplies) provided by Customer(s) for the vehicle into which the Supplies are incorporated, (iii) expiration of any specific warranty period or performance standard provided in any document incorporated by reference in the Order, including in the applicable specifications or quality standards of Buyer or Customer(s), or (iv) in the event that Buyer or Customer voluntarily or pursuant to a government mandate, makes an offer to owners of vehicles (or other finished products) on which the Supplies, or any parts, components, or systems incorporating the Supplies, are installed to provide remedial action or to address a defect or condition that relates to motor vehicle safety or the failure of a vehicle to comply with any applicable law, safety standard or guideline, whether in connection with a recall campaign or other customer satisfaction or corrective service action (“Remedial Action”), the expiration of such period of time as may be dictated by a Customer or the federal, state, local or foreign government where the Supplies are used or provided, and Seller shall fully comply (among other matters) with the requirements under Section 17(A).
C) For all services, Seller further warrants that its work will be performed in a professional and workmanlike manner, consistent with all standards and specifications agreed on with Buyer and otherwise consistent with industry standards.
D) Seller will immediately notify Buyer in writing if and at such time as Seller becomes aware of any ingredient, component, design, or defect in Supplies that is or may become harmful to persons or property, or that the Supplies are or may not be fit or sufficient for the purposes intended or otherwise cannot satisfy the warranty requirement of the Order.
E) Buyer’s approval of any design, drawing, material, process, or specifications will not relieve Seller of its warranties.
F) The following communications shall each constitute notice of a breach of warranty under the Order: (i) any communication specifying a defect, default, claim of defect or other problem or quality issue of the Supplies provided under the Order, (ii) any communication to Seller claiming that the Supplies are in breach of any warranty or that Seller is in default under the Order, and (iii) a termination notice from Buyer under Section 19. Any such claim by Buyer of breach may only be rescinded in writing by an authorized representative of Buyer.
G) To mitigate its damages, Buyer may fully defend any claim from any Customer that any Supplies supplied by Seller are defective, in breach of warranty, or otherwise did not meet applicable legal or contractual requirements because such Customer may attempt to hold Buyer responsible for problems caused in whole or in part by Seller. Seller and Buyer agree that this defense is in the interest of both Seller and Buyer. Seller hereby waives the right to argue that the fact that Buyer took any such position in any way limits Buyer’s right to assert a claim against Seller by Buyer for breach of warranty, contribution, indemnification or other claim that may arise from or be related to the subject matter of any of the foregoing.
12. Supplier Quality and Development; PPAP; Parts Identification
A) Seller will conform to the quality control and other standards and inspection systems as established by Buyer or Customer(s), including without limitation quality control policies (such as ISO 9001or ISO/TS 16949quality certification and ISO 14001 environmental certification including registration, as updated from time to time), in relation to quality control, quality certification, health and safety certifications and environmental certification including registration.
B) Seller also will participate in supplier quality and development programs of Buyer and Customer and in any applicable warranty sharing programs/agreements of Buyer. Seller also will promote continuous improvement in the quality of goods and Seller’s manufacturing and logistics processes.
C) Seller agrees to meet the full requirements of industry Production Part Approval Processes (PPAP) as specified by Buyer and (as applicable) Customer(s) and agrees to present this information to Buyer upon request, at the level requested. As requested by Buyer, Seller will participate in and comply with any of Buyer’s programs and standards related to supplier management and performance plans; provided that in the event of any discrepancy, these Terms will control.
D) All Supplies that are a completed part shall permanently bear Buyer’s part number and name or code name, Seller’s part number and Seller’s date of manufacture unless otherwise agreed by Buyer in writing. Unless and to the extent otherwise expressly provided in the Order, Seller is responsible for all lower-tier providers of goods or services, and Seller must maintain adequate development, validation, launch and ongoing supervision to assure all Supplies provided to Buyer conform to all applicable warranties and other provisions of the Order.
13. Remedies The rights and remedies reserved to Buyer in each Order are cumulative with and additional to all other rights and remedies of Buyer under applicable law or in equity. Buyer is entitled to specific performance and injunctive relief as provided in Section 37 and to recover from Seller any and all damages, including without limitation, any direct, indirect, incidental and consequential damages caused or required in the reasonable judgment of Buyer or Customer(s) by Seller’s nonconforming Supplies or any other breach of Seller’s obligations under the Order. Buyer’s direct, indirect, incidental and consequential damages recoverable from Seller under the Order include, without limitation, costs, expenses and losses incurred or suffered directly or indirectly by Buyer or Customer(s): (i) in inspecting, sorting, testing, handling, reworking, repairing or replacing the nonconforming Supplies or deliveries, (ii) resulting from production interruptions, (iii) conducting recall campaigns, customer field service actions or other corrective service actions, (iv) resulting from the transition of supply to another supplier or from the removal or transition of tooling or equipment to another supplier, or (v) resulting from personal injury (including death) and/or property damage. Buyer’s damages include attorneys’ fees and other professional fees, settlements and judgments incurred by Buyer and other costs associated with Buyer’s administrative time, labor, and materials. If requested by Buyer, Seller will enter into a separate agreement for the administration and processing of warranty charge-backs for nonconforming Supplies, and will participate in and comply with any warranty reduction or related programs of Buyer or (to the extent directed by Buyer) Customer(s) that relate to the Supplies. Notwithstanding anything to the contrary contained in any Order, Buyer does not release any claim against Seller that is based in whole or in part on any fraud or duress in connection with the Order or any breach or anticipatory breach of the Order or any other Order between Buyer and Seller (even if that Order relates to other Supplies).
A) To the fullest extent permitted by law, (i) Seller hereby assumes the entire, sole responsibility for any injury to person, including death, or damage to property of any kind or nature caused by, resulting from or in connection with the furnishing of Supplies by Seller, its subcontractors, officers, agents, or employees, (ii) Buyer shall not be responsible for any injury to person or damage to property resulting from use, misuse or failure of any apparatus furnished to Seller by Buyer, and the use of any such apparatus by Seller shall constitute acceptance by Seller of all responsibility for any claims for such injury or damage, and (iii) Seller will defend, indemnify and hold harmless Buyer, Customers, and dealers and users of the products sold by Buyer (or the vehicles in which they are incorporated), including their respective agents, customers, invitees, subsidiaries, affiliates, successors and assigns, against any and all claims, damages, losses, liabilities, and expenses (including actual attorneys’ fees and other professional fees, settlements and judgments) arising out of or resulting in any way from any nonconforming Supplies, or from any negligent or wrongful act or omission of Seller, or Seller’s agents, employees or subcontractors, or any breach or failure by Seller to comply with any of Seller’s representations or other terms and conditions of the Order — including without limitation the cost of recall campaigns, customer field service actions or other corrective service actions that, in Buyer’s reasonable judgment, are required because of nonconformities in some or all of the
Supplies provided by Seller hereunder. Buyer also may assess any interim set-offs or charges (such as interim field service action cost recovery debits) assessed by Customer(s) attributable to the Supplies, but subject to adjustment based on final determination by Customer of whether and to what extent the damages, losses, claims, liabilities and expenses were attributable to defects or other failures of Supplies or Seller to comply with its obligations under one or more Orders.
B) Seller’s obligation to defend and indemnify under this Section 14 will apply regardless of whether the claim arises in tort, negligence, contract, warranty, strict liability or otherwise except for claims that arise as a result of the sole negligence of Buyer. Buyer has the right to be represented by and actively participate through its own counsel in the defense and resolution of any indemnification matters, at Seller’s expense. The indemnification obligations of Seller set forth in this Agreement, including this Section 14, are independent of and in addition to any insurance and warranty obligations of Seller.
C) If Seller or Seller’s subcontractors perform any work on Buyer’s or Customer’s premises or use the property of Buyer or Customer, whether on or off Buyer’s or Customer’s facilities: (i) Seller will examine the premises to determine whether they are safe for the requested services and will advise Buyer promptly of any situation it deems to be unsafe, (ii) Seller’s and Seller’s subcontractor’s employees, contractors and agents will comply with all regulations that apply to the premises and may be removed from Buyer’s premises at Buyer’s discretion, (iii) Seller’s and Seller’s subcontractor’s employees, contractors and agents will not possess, use, sell, transfer or be under the influence of alcohol or unauthorized, illegal or controlled drugs or substances on the premises, and (iv) to the fullest extent permitted by law, Seller in all cases (in addition to Seller’s subcontractor, as applicable) will indemnify and hold Buyer and Customer (and their respective officers, directors, employees, agents, successors and assigns) harmless from and against any and all liability, claims, demands or expenses (including actual attorney’s fees and other professional fees, costs, settlements and judgments) for damages to the property of or personal injuries (including death) to Buyer, Customer(s), or Seller or their respective employees, subcontractors, or agents, or any other person or entity to the extent arising from or in connection with Seller or Seller’s subcontractor’s work on the premises or Seller’s or Seller’s subcontractor’s use of Buyer’s or Customer’s property, except for any liability, claim or demand arising out of the sole negligence of Buyer.
15. Insurance Seller will obtain and maintain, at Seller’s expense, the insurance coverage listed below, or in additional amounts and coverages as may be reasonably requested by Buyer or (to the extent directed by Buyer) Customer(s), in each case naming Buyer and its affiliates and Customer(s) (as applicable) as loss payees and as “additional insureds.” Such insurance shall be obtained and maintained from companies listed in the then-current “Best’s Insurance Guide” as possessing a minimum policy holders rating of “A-“ (excellent) and a financial category no lower than “IX”. Seller will furnish to Buyer a certificate showing compliance with this requirement or certified copies of all insurance policies within ten (10) days of Buyer’s written request. The certificate will provide that Buyer (and, if applicable, Customers) will receive thirty (30) days prior written notice from the insurer of any termination or reduction in the amount or scope of coverage. The existence of insurance does not release Seller of its obligations or liabilities under the Order. Minimum coverage is as follows:
Coverage Limits of Liability
Employer’s liability US$100,000 / each accident, disease
policy limit, disease each employee
liability insurance, including contractual liability coverage general aggregate, products &
completed operations aggregate
US$5,000,000 / each occurrence
Comprehensive automobile US$1,000,000 / each occurrence
combined single limit
Business interruption insurance As specified by Buyer
Minimum coverage also shall include full fire and extended coverage insurance for the replacement value of (i) all Seller’s Property and all losses related thereto and (ii) any Buyer’s Property (including without limitation Bailed Materials) in Seller’s care, custody or control, and all losses related thereto.
16. Compliance with Laws
A) Seller, and any Supplies supplied by Seller, will comply with all applicable laws, and each Order incorporates by reference all clauses required by all applicable laws. Further, all materials used by Seller in the Supplies or in their manufacture shall satisfy current governmental and safety constraints on restricted, toxic and hazardous materials as well as environmental, electrical and electromagnetic considerations that apply to the country of manufacture, sale or destination. For purposes of the Order, applicable laws include without limitation rules, regulations, orders, conventions, ordinances and standards that relate to the content, source of content, manufacture, labeling, transportation, importation, exportation, licensing, approval, certification, or purchase or sale of the Supplies. Applicable laws also include without limitation all laws relating to environmental matters, the handling and transportation of dangerous goods or hazardous materials, data protection and privacy, hiring, wages, hours and conditions of employment, subcontractor selection, discrimination, occupational health, safety, conflict minerals, motor vehicle safety, and anti-corruption laws such as the U.S. Foreign Corrupt Practices Act and the U.K. Bribery Act, all as amended from time to time.
B) Seller shall require compliance with all anti-corruption laws by not only itself and its Seller’s employees, affiliates, subsidiaries, and agents, but also its subcontractors, vendors, and other associated third parties. Seller further warrants that neither Seller nor any of its employees, affiliates, subsidiaries, agents, subcontractors, vendors and other associated third parties will engage in any form of commercial bribery, or directly or indirectly provide or offer to provide anything of value to or for the benefit of any official or employee of a governmental authority or of any government-owned, -controlled, or – affiliated entity, in order to obtain or retain any contract, business opportunity or other business benefit or to influence any act or decision of that person in his or her official capacity.
C) At Buyer’s request, Seller will certify compliance with this Section 16. Further, Seller will indemnify Buyer against and hold Buyer harmless from any liability claims, demands or expenses (including attorney’s fees and other professional fees, settlements and judgments) relating to Seller’s noncompliance with this Section 16. Seller and its employees also will abide by applicable ethics policies of Buyer and its Customer(s), or Seller’s own equivalent ethics policy.
17. Customer Requirements
A) Seller agrees to comply with the applicable terms and conditions of any agreements (“Customer Purchase Orders”) received by Buyer from a third party (“Customer”), or directly or indirectly applicable to Buyer, pursuant to which or in respect to which Buyer agrees to supply to
Customer, or incorporate into goods supplied to Customer, Supplies purchased by Buyer from Seller. For purposes of these Terms, the terms “Customer” and “Customer Purchase Orders” include the final equipment or vehicle manufacturer of goods or services into which the Supplies are or will be incorporated, as well as any intermediate entities in the supply chain between Buyer’s direct customer and such final equipment or vehicle manufacturer, and related terms and conditions of all such customers. Seller acknowledges that it is familiar with the automotive industry and the applicable terms of Customer(s). Buyer may in its discretion supply Seller with information regarding the Customer Purchase Orders; provided that Seller will at all times be responsible for ascertaining how the Customer Purchase Order affects Seller’s obligations under the Order, and Seller will meet all such Customer Purchase Order terms and conditions to the extent within Seller’s control. Further, Seller will do everything within its control to enable Buyer to meet the terms and conditions of the Customer Purchase Orders, including without limitation, cost and productivity terms and price reductions.
B) In the event of a conflict between the Order or the Terms and the terms of the Customer
Purchase Order, Buyer will determine, in its sole and absolute discretion, which terms will supersede and apply to Seller. By written notice to Seller, Buyer may elect to have the provisions of this Section 17 prevail over any conflicting term between Buyer and Seller.
C) In the event that a Customer files or has filed against it a petition in bankruptcy or insolvency and, in the course of such proceeding and in connection with actual or threatened termination (by rejection or otherwise) by the Customer of its contract(s) with Buyer or contracts relating to Supplies purchased by Buyer from Seller, Buyer permits a reduction in the price(s) paid to Buyer for products incorporating the Supplies, the price paid to Seller for the Supplies from and after the date of such reduction will be automatically adjusted proportionally by the same percentage as the price paid to Buyer by its direct customer and the Order will otherwise remain in effect without modification.
D) If any Customer directed, recommended, requested, suggested or otherwise identified Seller as the source from which Buyer is to obtain the Supplies (“Directed Supply
Relationship”), then notwithstanding the particular payment terms otherwise applicable to the Order or anything to the contrary in the Order: (i) in no event will Seller have a right to receive payment from Buyer for the Supplies except following, and in proportion to, Buyer’s actual receipt of payment from its Customer for the Supplies or, as applicable, the goods in which the Supplies are incorporated, (ii) any lengthening of a direct customer’s payment terms to Buyer will automatically lengthen the payment terms as between Buyer and Seller by the same amount of time, and Buyer may, at its option and on notice to Seller, otherwise revise its payment terms for Supplies to take into account any other change in the payment terms of Buyer’s direct customer for the Supplies under the Order, (iii) within three (3) business days of any change in price, specifications or other terms negotiated or proposed between Seller and Customer, Seller shall notify Buyer in writing and immediately adjust its invoices to reflect any price reduction, provided that no change will be binding on Buyer without Buyer’s specific written consent, (iv) (without limiting any other rights and remedies of Buyer) Seller will indemnify and hold harmless Buyer from any liabilities, claims, demands, losses, damages, costs and expenses (including without limitation attorneys’ fees and other professional fees) incurred by Buyer arising from or relating to the Supplies supplied by Seller and/or the Directed Supply Relationship — and including without limitation any charges or set-offs (including without limitation interim field service action cost recovery debits) taken by a Customer against Buyer by reason of alleged defects in Supplies, even if such set-offs by Customer are before final determination of (and subject to adjustment based upon) whether and to what extent defects in Supplies were a cause of the related remedial action undertaken and related costs/damages incurred by Customer, (v) Seller will resolve all commercial issues (including pricing disputes), collection and/or insolvency risks of the Customer and/or Seller, warranty charges, product liability claims, recalls, intellectual property matters and production interruptions arising from or relating to the Supplies (except in each case to the extent caused by Buyer) directly and exclusively with Customer and Seller will indemnify and hold harmless Buyer for these matters, and (vi) any debits claims by Customer arising from or relating to the Supplies will be passed through Buyer to Seller.
E) If any requirement imposed by any Order on Seller is found to be unenforceable or a gap otherwise exists or is created in the terms applicable to any Order through operation of law, conflict in terms or otherwise, the parties agree that the corresponding requirement of Customer(s) shall be applicable to and binding on Seller for the benefit of Buyer. Seller acknowledges that it is familiar with the automotive industry and the applicable terms of Customer(s) that would apply in such event.
18. Insolvency; Review of Financial Condition; Duty to Inform
A) Buyer, or a third party designated by and acting on behalf of Buyer, may at any time review the overall financial condition of Seller and its affiliates (including without limitation, if requested by Buyer, providing to Buyer copies of Seller’s most current income statements, balance sheets, cash flow statements and supporting data and schedules), and Seller shall fully cooperate in such review (including without limitation by segregating and promptly producing records as Buyer may request) and shall make its financial managers available for discussions during reasonable business hours. Buyer and any such third party shall keep confidential any non-public information about Seller obtained in such financial review.
B) The Order may be terminated immediately by Buyer without liability to Seller for any of the following events, or any other comparable events, and Seller shall reimburse Buyer for all costs incurred by Buyer in connection with any of the following, including but not limited to all attorney’s and other professional fees: (i) Seller becomes insolvent (including if Seller is unable to pay its debts as they come due in the ordinary course of business, or if Seller’s liabilities exceed its assets as fairly valued), (ii) Seller files a voluntary petition in bankruptcy, (iii) an involuntary petition in bankruptcy is filed against Seller, (iv) a receiver, trustee or administrator is appointed over Seller or Seller’s assets, (v) Seller needs accommodations from Buyer, financial or otherwise, in order to meet its obligations under the Order, (vi) Seller executes an assignment for the benefit of creditors or (vii) Seller is unable promptly to provide Buyer with adequate assurance of Seller’s financial capability to perform any of Seller’s obligations under the Order on a timely basis. In the event that the Order is not terminated in accordance with the immediately preceding sentence, upon the occurrence of an event described in the immediately preceding sentence, Buyer may make equitable adjustments in the price and/or delivery requirements under the Order as Buyer deems appropriate to address the change in Seller’s circumstances, including Seller’s continuing ability to perform its obligations regarding warranty, nonconforming Supplies or other requirements under the Order. Seller agrees to reimburse Buyer for all costs and expenses (including without limitation all legal and other professional fees) incurred by Buyer in connection with the foregoing events, regardless of whether Buyer exercises its termination rights.
C) Seller agrees that if Seller experiences any delivery or operational problems, Buyer may, but is not required to, designate one or more representatives to be present in Seller’s applicable facility to observe Seller’s operations. Seller agrees that if Buyer provides to Seller any accommodations (financial or other) that are necessary for Seller to fulfill its obligations under the Order, Seller will reimburse Buyer for all costs, including attorneys’ and other professionals’ fees, incurred by Buyer in connection with such accommodation and will grant access to Buyer to use Seller’s facility(ies) and machinery, equipment, and other property necessary for the production of the Supplies covered by the Order. Notwithstanding anything contained in this Section 18 to the contrary, financial information provided by Seller to Buyer hereunder pursuant to a Directed Supply Relationship may be provided to the Customer if Seller fails to provide Buyer with adequate reasonable assurance of Seller’s financial capability to perform any of Seller’s obligations under the Order on a timely basis.
D) Seller will promptly notify Buyer in writing of any of the following events or occurrences, or any facts or circumstances reasonably likely to give rise to any of the following events or occurrences: (i) any failure by Seller to perform any of its obligations under the Order, (ii) any delay in delivery of Supplies under the Order, (iii) any defects or quality problems relating to the Supplies covered by the Order, (iv) any changes in Seller’s corporate structure or organization (including direct or indirect change in control or ownership of Seller), (v) any deficiency in Buyer specifications, samples, prototypes or test results relating to the Order, (vi) any failure by Seller, or its subcontractors or common carriers, to comply with applicable laws and regulations, including, without limitation, with respect to transportation of goods under the Order, (vii) the occurrence of any event described in Section 18(B) or Seller becomes aware of events or circumstances likely to give rise to any such events, or (viii) any change in Seller’s authorized representatives, insurance coverage or professional certifications (e.g., ISO 9001).
19. Termination for Breach or Nonperformance
A) Buyer may terminate all or any part of the Order, or any other Order or agreement between Buyer or Buyer’s affiliate(s) and Seller or Seller’s affiliate(s), without liability to Seller and Seller’s affiliate(s), (i) if Seller repudiates, breaches or threatens to breach any of the terms of the Order, (ii) if Seller fails to perform or threatens not to perform the provision or delivery of Supplies as specified by Buyer, (iii) if Seller fails to make progress or to meet reasonable quality requirements so as to endanger timely and proper completion or delivery of Supplies and does not correct the failure or breach within ten (10) days (or such shorter period of time if commercially reasonable under the circumstances) after receipt of written notice from Buyer specifying the failure or breach, (iv) if Seller sells or offers to sell a substantial portion of its assets used for the production of Supplies for Buyer, or sells or exchanges or offers to sell or exchange an amount of its stock or other equity interests that would result in a change in control of Seller, (v) if Seller or Seller’s affiliate repudiates, breaches or threatens to breach any of the terms of any other Order or agreement between Buyer or Buyer’s affiliate(s) and Seller or Seller’s affiliate(s), or (vi) if Seller fails to remain competitive with respect to quality, technology, delivery and pricing of the Supplies. Seller will notify Buyer within ten (10) days after entering into any negotiations that could lead to the situation specified in subsection (iv) above; provided that upon Seller’s request, Buyer will enter into an appropriate nondisclosure agreement related to information disclosed to Buyer in relation to such transaction.
B) Seller may terminate the Order only for non-payment of the purchase price for Supplies which are thirty (30) or more days past due and material in amount, and then only if: (i) Seller first provides Buyer written notice specifying the amounts past due (including the relevant Order and invoice numbers and date) and Seller’s intent to terminate the Order if the past due amount is not paid; and (ii) Buyer, within sixty (60) days of such notice, does not either: (a) pay the past due amounts, or (b) notify Seller that the amounts claimed to be unpaid are disputed by Buyer. Seller may not terminate or cancel the Order for any reason except as permitted under this Section 19. Seller may not suspend performance of the Order for any reason.
C) In the event Buyer has reasonable grounds for insecurity with respect to Seller’s continued performance under the Order, Buyer may, in writing, demand adequate assurance of such performance from Seller. After receipt of such demand, Seller’s failure, with a reasonable period of time under the circumstances (not to exceed 20 days or such shorter period as required by Customer(s)), to provide assurances adequate under the circumstances (as determined by Buyer in its reasonable discretion) will be deemed a breach of the Order by Seller.
A) In addition to any other rights of Buyer to cancel or terminate the Order, Buyer may, at its option, upon at least thirty (30) days’ written notice, or, if applicable, such shorter period as may be required by Customer, and in its sole discretion, terminate all or any part of the Order at any time (other than any quantities identified as firm orders in Material Authorization Releases) and for any reason, and notwithstanding the existence of any event of force majeure under Section 23. If, after termination by Buyer pursuant to Section 18, 19 and/or 23, it is determined that such termination was not authorized thereunder, the rights and obligations of Buyer and Seller will be the same as if the termination were for convenience pursuant to this Section 20(A).
B) Upon receipt of and consistent with such notice of such termination, and unless otherwise directed by Buyer, Seller will: (i) terminate promptly all work under the Order on the effective date of termination, (ii) transfer title and deliver to Buyer the finished Supplies, the work in process, and the parts and materials which Seller reasonably produced or acquired according to the quantities ordered by Buyer and in accordance with the terms and conditions of the Order and which Seller cannot use in producing goods for itself or for others, (iii) verify and settle any claims by subcontractors for actual costs incurred directly and made unrecoverable by the termination and ensure the recovery of materials in subcontractor’s possession, (iv) take actions reasonably necessary to protect property in Seller’s possession in which Buyer has an interest until disposal instruction from Buyer has been received, and (v) upon Buyer’s reasonable request, cooperate with Buyer in transferring the production of Supplies to a different supplier, including as described in Section 21.
C) Upon termination by Buyer under this Section 20, Buyer will be obligated to pay Seller only the following: (i) the Order price for all finished Supplies in the quantities ordered by Buyer that conform to the requirements of the Order and for which Seller has not been paid, (ii) Seller’s reasonable actual cost of merchantable and useable work-in-process and the parts and materials transferred to Buyer in accordance with subsection (B)(ii) above, (iii) Seller’s reasonable actual costs of settling regarding its obligations to subcontractors required under the Order, to the extent directly caused by termination, but limited to the amount of any firm quantities of Supplies and raw materials/components specified in related Material Releases issued by Buyer and then outstanding, (iv) Seller’s reasonable actual cost of carrying out its obligation under subsection (B)(iv), and (v), if applicable, amounts due in connection with Transition Support under Section 21. Notwithstanding any provision to the contrary, Buyer shall have no obligation 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, tooling, facilities and equipment rearrangement costs or rental, unamortized capital or depreciation costs, finished goods, work-in-process or raw materials that Seller fabricates or procures in amounts that exceed those authorized in the Material Authorization Releases, or general administrative burden charges from termination of the Order, unless otherwise expressly agreed to in writing by Buyer in a separate Order issued by Buyer.
D) Buyer’s obligation upon termination under this Section 20 shall not exceed the obligation Buyer would have had to Seller in the absence of termination.
E) Seller will furnish to Buyer, within one (1) month after the date of termination under this Section 20 (or such shorter period as may be required by Customer), its termination claim, which shall consist exclusively of the items of Buyer’s obligation to Seller that are listed in Section 20(C) above. Buyer may audit Seller’s records before or after payment to verify amounts requested in Seller’s termination claim.
F) Buyer will not have any obligation under Sections 20(A), (C), (D) or (E) above if Buyer terminates Buyer’s obligations under the Order because of a default or breach by Seller, and any termination shall be without prejudice to any claims which Buyer may have against Seller.
21. Transition of Supply
A) Buyer and Seller acknowledge and agree that, where the Supplies represent materials or components that will be incorporated into or used in the production of supplies that will be incorporated into motor vehicles, any disruption in the supply of Supplies would materially and irreparably harm Buyer and Customer(s) and that any resourcing of the Supplies by Buyer to an alternative source would require significant time, effort, cost and resources. In the event the Order expires or is terminated by either party, in whole or in part, for any reason, or Buyer’s other decision to change to an alternate source of Supplies (including but not limited to a Buyerowned or -operated premises, which collectively any alternative source is referred to herein as an alternative supplier), Seller will cooperate in the transition of supply, including the following (collectively, “Transition Support”): (i) Seller will continue production and delivery of all Supplies as ordered by Buyer, at the prices and other terms stated in the Order, without premium or other condition, during the entire period reasonably needed by Buyer to complete the transition to the alternative supplier(s) (including, at Buyer’s request, providing a sufficient bank of Supplies) such that Seller’s action or inaction causes no interruption in Buyer’s ability to obtain Supplies as needed, (ii) at no cost to Buyer, Seller will (a) promptly provide all requested information and documentation regarding and access to Seller’s manufacturing process, including on-site inspections, bill-of-material data, tooling and process detail and samples of Supplies and components, (b) will provide all notices necessary or desirable for Buyer to resource the Order to an alternative supplier, (c) when requested by Buyer, will return to Buyer all Buyer’s Property in as good condition as when received by Seller (reasonable wear and tear excepted, and (d) will comply, and cause Seller’s subcontractors to comply, with Seller’s obligations relating to Seller’s Proprietary Rights and Seller’s Property under the Order (see, e.g., Sections 25 and Section 28) and with comparable subcontractor obligations (see, e.g., Section 44), as applicable, and (iii) subject to Seller’s reasonable capacity constraints, Seller will provide special overtime production, storage and/or management of extra inventory of Supplies, extraordinary packaging and transportation and other special services as expressly requested by Buyer in writing.
B) If the transition occurs for reasons other than Seller’s termination or breach, Buyer will, at the end of the transition period, pay the reasonable, actual cost of Transition Support as requested and incurred, provided that Seller has advised Buyer prior to incurring such amounts of its estimate of such costs. If the parties disagree on the cost of Transition Support, Buyer will pay the agreed portion to Seller and pay the disputed portion into third-party escrow for disbursement by arbitration in accordance with the provisions of Section 37.
C) Seller acknowledges that the terms of this Section are reasonable under the circumstances of the automotive industry and that if Seller asserts or claims that Seller may terminate the Order at will or for any reason (including without limitation Buyer’s material breach) prior to the expiration of the term of the Order, Seller will nonetheless perform its obligations under this Section.
22. Disposal of Scrap Any Supplies, Tooling, goods, assemblies, subassemblies of materials related to the Order which are disposed of by Seller in any manner other than through a sale to Buyer under the terms of the Order (including without limitation Supplies determined to be or rejected as nonconforming or that become obsolete or surplus) are scrap (“Scrap”) and must be mutilated or otherwise rendered unusable for anything other than material content. If the Scrap is the subject of a cancellation claim, mutilation must occur only after audit inspection and receipt of disposal instructions from Buyer. Buyer has the right to examine all pertinent documents, data, and other information relating to the mutilation of any and all Scrap. In addition, Buyer has the right to visually inspect and audit any facility or process relating to the mutilation of Scrap. Seller must retain all relevant documents, data and other written information relating to its obligations to mutilate Scrap under the Order for at least four (4) years following the later of last delivery of the Supplies or final payment under the Order, and such documents, data, and written information will be made available to Buyer upon Buyer’s request.
Seller will ensure that the terms of its contracts with subcontractors provide Buyer and Customer(s) with all of the rights specified in this Section and Section 7.
23. Force Majeure
A) Any delay or failure of either party to perform its obligations under the Order shall be excused to the extent that it is caused directly by an event or occurrence beyond the reasonable control of such party and without such party’s fault or negligence. By way of example, this includes, if applicable, restrictions, prohibitions, priorities or allocations imposed by or actions taken by any governmental authority (whether valid or invalid), embargoes, fires, floods, windstorms, earthquakes, severe weather, explosions, riots, natural disasters, wars, sabotage, or court injunction or order. Seller’s inability to perform as a result of, or delays caused by, Seller’s insolvency or lack of financial resources is deemed to be within Seller’s control. Notwithstanding anything to the contrary herein, the change in cost or inability to obtain power, materials, components, labor, equipment or transportation based on market conditions, Seller or supplier actions, contract disputes or any labor strike or other labor disruption applicable to Seller or any of its subcontractors or suppliers, will not excuse Seller’s performance (under theories of force majeure, commercial impracticability or otherwise), and Seller assumes these risks. Written notice of such delay (including the anticipated duration of the delay) must be given to the other party as soon as possible after the occurrence (but no more than ten (10) days after). Seller will use all diligent efforts to ensure that the effects of any force majeure event are minimized and, as promptly as possible, resume full performance under the Order.
B) During any force majeure event affecting Seller’s performance, Buyer may, at its option (i) purchase Supplies from other sources and reduce its schedules to Seller by such quantities, without liability to Seller, (ii) require Seller to deliver to Buyer at Buyer’s expense all finished goods, work in process and parts and materials produced or acquired for work under this Order, and/or (iii) require Seller to provide Supplies from other sources in quantities and at a time requested by Buyer at the price set forth in this Order. If Buyer requests in writing, Seller shall, within five (5) days of Buyer’s request, provide adequate assurance that the delay in Seller’s performance resulting from a force majeure event will not exceed thirty (30) days. If the delay lasts more than 30 days or Seller does not provide adequate assurances, Buyer may immediately terminate the Order without liability to Seller, and without prejudice to Buyer’s other remedies under the Order or applicable law.
C) If, due to forces beyond its control, Buyer determines to alter Buyer’s delivery schedule to delay delivery: (i) the provisions of this Section (rather than Section 10) will control; (ii) Seller will hold any delayed Supplies at the direction of Buyer and will deliver them when the cause affecting the delay has been removed; and (iii) Buyer will be responsible only for Seller’s direct additional costs (excluding interest on the purchase price) incurred in holding the Supplies or delaying performance at Buyer’s request.
D) Seller will, at Seller’s expense, take such actions as are necessary or appropriate to ensure the uninterrupted supply of Supplies to Buyer for not less than thirty (30) days (or such longer period as Customer(s) may require) during any foreseeable or anticipated event or circumstance, the occurrence of which could interrupt or delay Buyer’s production or Seller’s performance under the Order, including, without limitation, any labor disruption, whether or not resulting from the expiration of Seller’s labor contracts. This Section 23(D) shall not constitute a waiver of and is without prejudice to, any and all of Buyer’s other rights and remedies under the Order or applicable law, each of which are hereby reserved.
24. Technical Information Disclosed to Buyer Unless otherwise agreed to in writing in a separate confidentiality or nondisclosure agreement signed by an authorized representative of Buyer: (i) no technical or other information disclosed in any manner at any time by Seller, or
Seller’s contractors, to Buyer, Buyer’s affiliates, or Customers, will be treated as confidential, and (ii) Seller agrees not to assert any claim (other than a claim for patent infringement) against Buyer, Buyer’s affiliates, Customers or their respective suppliers, with respect to any technical or other information that Seller, or Seller’s contractors, have disclosed or may disclose to Buyer, Buyer’s affiliates, or Customers, in connection with the Supplies or Order. Seller may not release or disclose Buyer’s Property to any third party without the express written permission of Buyer.
A) All information, materials, inventions, and intellectual property (including without limitation Tooling) created, developed or acquired by or on behalf of Seller, along with all intellectual property rights relating thereto, paid for or to be paid for by Buyer (either through direct payment and/or by designated amortization in the piece price), are the sole and exclusive property of Buyer. Seller will promptly disclose in an acceptable form and assign to Buyer all such information, materials, inventions, and intellectual property. Seller will cause its employees to perform any act, including without limitation, executing and delivering any papers necessary to enable Buyer to confirm Buyer’s title to the foregoing and to seek intellectual property protection throughout the world. To the extent that any works of authorship (including, without limitation, software) are created by or on behalf of Seller and are paid for or to be paid for by Buyer under the Order, such works shall be considered “work made for hire”. To the extent that such works do not qualify as “work made for hire,” Seller hereby assigns to Buyer all right, title, and interest in all copyrights and moral rights therein.
B) Seller acknowledges and agrees that Buyer, Buyer’s affiliates, and Buyer’s dealers, subcontractors, and designees, and Customers have the worldwide, irrevocable right to repair, reconstruct, remanufacture, reflash, rebuild and relocate, and to have repaired, reconstructed, remanufactured, reflashed, rebuilt or relocated, Supplies delivered under the Order without payment of any royalty or other compensation to Seller.
C) Seller hereby grants Buyer, and Buyer’s present and future affiliates, an irrevocable, nonexclusive, worldwide, royalty-free, paid-up, license, including the right to sublicense, under any and all proprietary rights controlled by Seller or its affiliates, including, without limitation, any patent, copyright, moral, industrial design right, trademark, technical information, know-how or other proprietary right) (“Seller Proprietary Rights”): (i) in the event that this Agreement is terminated by Buyer under Sections 18, 19 or 23, and/or (ii) in the event that Seller for any reason (including without limitation requirements imposed on Buyer by Customer) is unable to satisfy the quality, quantity, delivery or related requirements of Buyer for Supplies under the Order and/or additional orders (including, for example and without limitation, in the event of force majeure, or increased demand due to volume requirements for a corrective field service action/recall, or by reason of Seller’s insolvency, or in the event of a required change or expansion in relation to the country(ies) of manufacture or delivery): (x) to make, have made, use, sell, offer to sell, and import the Supplies, (y) to copy, modify, use, distribute, publicly display/perform, prepare derivative works of, reproduce in the case of a mask work, and import or distribute in the case of a semiconductor chip product in which a mask work is embodied, any copyrighted or copyrightable portions of such Seller Proprietary Rights relating in any way to Supplies, and (z) to do all other things and exercise all other rights in Seller Proprietary Rights necessary or useful to avoid, remedy and mitigate, as Buyer reasonably determines to be appropriate, all or any portion of any consequences to Buyer, and to any Customers, arising from any situation under subparagraphs (i) or (ii) above. Seller shall also cooperate with Buyer in the exercise of such license including providing, without restriction on use, reproduction or disclosure, all information and data deemed necessary by Buyer. At no additional cost, Seller hereby grants Buyer an irrevocable, nonexclusive, worldwide license under Seller Proprietary
Rights that is necessary or incident to the reasonably intended use or application of the Supplies.
Rights under this Section 25(C) are intended to be subject to 11 USC Section 365(n), and are supplementary to any other rights of Buyer under existing Orders and other agreements with
D) All Supplies or other deliverables provided under the Order (including, for example, computer programs, technical specifications, documentation and manuals), shall be original to Seller and shall not incorporate, or infringe upon, any intellectual property rights (including, without limitation, copyright, patent, trade secret, mask work or trademark rights) of any third party, unless otherwise expressly agreed to in writing by Buyer. Seller agrees: (i) to investigate, defend, hold harmless and indemnify Buyer, its affiliates, successors, assigns, Customers and users of the Supplies against any suit, claim or action for actual or alleged infringement (including without limitation direct or contributory infringement or inducement to infringe) of any proprietary right (including any patent, trademark, copyright, moral, industrial design right or other proprietary right or misuse or misappropriation of trade secret) and against any resulting damages or expenses (including attorney’s and other professional fees, royalties, settlements and judgments) arising in any way in relation to Supplies covered by the Order (including without limitation their manufacture, purchase, use and/or sale), including such claims where Seller has provided only part of Supplies (and Seller expressly waives any claim against Buyer, Buyer’s affiliates, successors, assigns, dealers and Customers that such infringement arose out of compliance with Buyer’s or Buyer’s affiliates’, successors’, assigns’, dealers’, or Customers’ specifications or direction), (ii) to waive any claim against Buyer or Customer(s), including any hold harmless or similar claim, in any way related to a third-party claim asserted against Seller or Buyer or Customer(s) for infringement of any proprietary right (including any patent, trademark, copyright, moral, industrial design right or other proprietary right or misuse or misappropriation of trade secret), including claims arising out of specifications furnished by Buyer, and (iii) that if the sale or use of the Supplies is enjoined or, in Buyer’s sole judgment, is likely to be enjoined, Seller will, at Buyer’s election and Seller’s sole expense, procure for Buyer the right to continue using the Supplies, replace the same with equivalent non-infringing goods or modify such Supplies so they become non-infringing.
26. Service and Replacement Parts:
A) So that Buyer can satisfy the current model service and replacement parts requirements of itself or Customers, Seller agrees to supply Buyer with Supplies, component parts and materials that are the same as the Supplies, component parts and materials that Buyer purchases under the Order at the price(s) set forth in the Order plus any actual cost differential for packaging and logistics costs. If the Supplies are systems or modules, Seller agrees to sell each component or part at price(s) that will not, in the aggregate, exceed the system or module price specified in this Order, less assembly costs, plus any actual cost differential for packaging and logistics costs.
B) After Buyer completes its purchases for Customer’s current model requirements under the Order, Seller will sell such Supplies, component parts and materials to Buyer or Buyer’s designee in order to fulfill Buyer’s past model service and replacement parts requirements for the longer of a period of fifteen (15) years after Buyer terminates volume production of the Supplies, or the relevant Customer’s requirements with respect to such service parts, at the following prices: (i) for the first five years after the end of volume production, at the stated price of Supplies set forth in the Order, plus any actual cost differential for packaging and logistics; and (ii) beginning five (5) years after the end of volume production, at the stated price of Supplies set forth in the Order, plus any actual cost differentials for packaging and logistics to take account of appropriately documented cost changes due to raw materials and set up.
C) At Buyer’s request, Seller will make service literature and other materials available at no additional charge to support Buyer’s service part sales activities. Seller will keep tools and dies available and at operational conditions to fulfill all service parts requirements by Buyer for at least 15 years after the end of volume production (or, if longer, the time period required by Customer), and Seller will be responsible for developing the same commitments and agreements with its own suppliers.
D) Unless Buyer removes Tooling from Seller necessary for production of service parts,
Seller’s obligations under Section 26 will survive termination or expiration of the Order for any reason.
27. Buyer’s Property; Warranty Disclaimer; Confidentiality
A) All information and materials (including, for example, Tooling, packaging, documents, standards, specifications, jigs, dies, returnable containers, samples, raw materials, components or other supplies, and including whether or not the foregoing are in any way modified, altered or processed, and including any accessions, appurtenances, modifications, repairs, refurbishments and replacements thereof) furnished by Buyer, either directly or indirectly, to Seller to perform the Order, along with any and all Supplies, Tooling, deliverables, data, inventions and intellectual property rights under Section 25(A), shall be and remain the sole and exclusive property of Buyer (or, as applicable in the case of certain Tooling, Customer) (collectively “Buyer’s Property”), and all right, title and interest in Buyer’s Property will remain with Buyer, subject only to the limited right of possession granted to Seller under this Section 27 and Section 29(F) (regarding Tooling). Buyer will, at any time, have the right to immediate possession of Buyer’s Property, on Buyer’s demand without payment of any kind. Any and all Supplies or other goods manufactured by Seller with the use of Buyer’s Property may not be used for Seller’s own use or manufactured or provided (or offered to be manufactured or provided) to third parties without Buyer’s express written authorization. Seller acknowledges and agrees that Buyer’s Property may be covered by one or more patents, patent applications or copyrights owned by Buyer. To the extent any intellectual property rights owned by or licensed to Seller are embodied in, or is otherwise necessary for the intended use of, any Buyer’s Property, Seller hereby grants to Buyer a fully paid, irrevocable, non-exclusive, worldwide, perpetual to the maximum extent permitted by law, royalty-free license, with the right to grant sublicenses as necessary for any use of Buyer’s Property, to use such intellectual property rights
B) Buyer does not guarantee the accuracy of, or the availability or suitability of, Buyer’s Property. Seller agrees carefully to check and approve, for example, all tooling, dies or materials supplied by Buyer prior to using it. Seller assumes all risk of death or injury to persons or damage to property arising from the use of Buyer’s Property. BUYER WILL HAVE NO LIABILITY TO SELLER OR TO ANYONE CLAIMING BY OR THROUGH SELLER FOR ANY INCIDENTAL OR CONSEQUENTIAL OR OTHER DAMAGES OF ANY KIND WHATSOEVER RELATING TO BUYER’S PROPERTY. BUYER DISCLAIMS ALL WARRANTIES, EXPRESS OR IMPLIED, WITH RESPECT TO BUYER’S PROPERTY, INCLUDING WARRANTIES OF MERCHANTABILITY AND FITNESS FOR A PARTICULAR PURPOSE, AND SELLER WAIVES, FOR ITSELF AND ITS SUCCESSORS AND ASSIGNS, ALL CLAIMS OF NEGLIGENCE AND STRICT LIABILITY.
C) The provisions of Section 29(F) below, relating to Tooling, also apply to Buyer’s Property which is not Tooling and are incorporated here by reference.
D) Seller acknowledges that Buyer’s Property includes proprietary information, regardless of whether such information is marked or identified as confidential, and is delivered to Seller on a confidential basis for the purpose of performing the Order only. All terms of the Order are deemed proprietary information of Buyer. Seller will disclose Buyer’s Property within Seller’s organization only to those employees who have a need to know in order to fulfill Seller’s obligations hereunder and who have agreed to keep Buyer’s Property confidential, and will prevent any such Buyer’s Property from being divulged to third persons not employed by Seller without the prior written consent of Buyer, including having recipients acknowledge the proprietary status of such Buyer’s Property and agree to similar restrictions. These obligations will survive termination of the Order and will continue for a period of three (3) years thereafter, or for as long as Buyer’s Property remains a trade secret, whichever is longer. Notwithstanding anything to the contrary in the Order, any confidentiality or non-disclosure agreement between the parties that predates the Order will remain in effect except as expressly modified by the Order, and to the extent of a conflict between the express terms of such an agreement relating to Buyer’s proprietary information and this Section 27(D), the terms of that agreement will control with respect to Buyer’s proprietary information.
28. Seller’s Property: Seller, at its expense, will furnish, keep in good working condition capable of producing Supplies meeting all applicable specifications, and replace when necessary, all machinery, equipment, tools, jigs, dies, gauges, fixtures, molds, patterns, and items other than Buyer’s Property that are necessary for the production of Supplies (“Seller’s Property”). Seller will insure Seller’s Property with coverage for all losses for its replacement value. If Seller uses Seller’s Property to produce goods or services, similar to Supplies, for other Customers, including aftermarket Customers, such goods or services shall not incorporate any of Buyer’s Property, intellectual property, logos, trademarks, tradenames, or part numbers. Seller shall not disclose or imply in its marketing efforts that these goods or services are equivalent to those purchased by Buyer. Seller grants to Buyer an irrevocable option to take possession of and title to Seller’s Property that is special for or configured for the production of Supplies under the Order upon payment to Seller of its net book value less any amounts that Buyer has previously paid to Seller for the cost of these items, and less any amounts otherwise owing to Buyer by Seller or Seller’s affiliates. This option does not apply to Seller’s Property used to produce goods that are the standard stock of Seller or if a substantial quantity of like goods are being sold by Seller to others. Upon the request of Buyer from time to time, Seller shall promptly provide Buyer with a then-current list of Seller’s Property that is special for, or configured for, the production of Supplies under the Order, including the individual and aggregate net book value of the listed items of Seller’s Property.
A) Tooling, as used in these Terms, includes all prototype and production tools, equipment, dies, fixtures, jigs, gauges, castings, molds, patterns, related software, returnable containers and dunnage, specifications, embodiments, and all intellectual property embodied therein, paid for or to be paid for or otherwise furnished by Buyer (or Customer) (with all accessions, appurtenances, modifications, repairs, refurbishments, and replacements to the Tooling) and is included in Buyer’s Property. Tooling also includes, as applicable, Seller’s Property of any of the foregoing types for which Buyer has an option to purchase under Section 28, unless the context of this Section 29 requires otherwise.
B) Unless the Order is issued on a fixed-price basis, the price of the Tooling will not exceed the lowest of: (i) the maximum amount reimbursable specified on the Order; (ii) Seller’s actual verified costs of acquiring the Tooling from a toolmaker without markup; or (iii) Seller’s actual verified costs of fabrication of the Tooling (subject to applicable Buyer’s guidelines). Buyer shall have access to Seller’s facility(ies), prior or subsequent to any payment, to inspect work performed and to verify charges submitted by Seller against the Order or amendment. Seller further agrees to retain all cost records for a period of two (2) years after receiving final payment of the charges.
C) Notwithstanding any other provision of the Terms, and except as otherwise expressly agreed in writing, where Buyer is entitled to receive reimbursement or other payment from a Customer for Supplies to be provided by Seller to Buyer under the Order that constitute tooling or capital equipment, Seller shall be entitled to receive payment under the Order for such tooling or capital equipment only after and to the extent of, and in proportion to, Buyer’s actual receipt of such reimbursement or other payment from the Customer.
D) Buyer becomes the sole owner of all Tooling as soon as it is fabricated or acquired by Seller. Seller acknowledges and agrees that Buyer takes title to the Tooling even if Seller has not yet been paid for the Tooling. Seller has no property or other rights in the Tooling. Seller has no power to transfer any rights or grant a security interest in the Tooling to a third party. Seller waives any objection to Buyer’s repossession and removal of the Tooling for any or no reason, including bankruptcy or insolvency proceedings. Seller waives, to the extent permitted by law, any lien or other rights that Seller might otherwise have on any Tooling, including, without limitation, molder’s and builder’s liens.
E) To the extent permitted by applicable law, any payments made by Buyer for Tooling are expressly intended by Buyer to be held in trust for the benefit of any subcontractor(s) used by Seller to produce the Tooling that are covered by such payments and Seller agrees to hold such payments as trustee in express trust for such subcontractor(s) until Seller has paid the subcontractor(s) in full for the Tooling. Seller acknowledges and agrees that such subcontractor is an intended third party beneficiary of the terms of this Section 29(E) relating to the express trust and as such, such tooling subcontractor shall have the right to enforce the terms of this Section 29(E) directly against Seller in subcontractor’s own name. Seller agrees that Buyer has no obligation to Seller or Seller’s tooling subcontractor under this Section other than making the payment to Seller in accordance with a Tooling order. In the event Seller’s subcontractor brings an action against Seller under this Section 29, Seller agrees that it will not join Buyer in any such action.
F) Tooling will be held by Seller or by a third party, to the extent that Seller has transferred possession of Tooling to a third party, on a bailment basis, as a bailee-at-will. Seller bears the risk of loss of and damage to Tooling. Tooling shall be housed, maintained, repaired and replaced by Seller at Seller’s expense in good working condition capable of producing Supplies or other goods meeting all applicable specifications, shall not be used by Seller for any purpose other than the performance of the Order, shall be deemed to be personalty, shall be conspicuously marked by Seller as the property of Buyer (or if applicable and as directed by Buyer, as the property of Customer), shall not be commingled with the property of Seller or with that of a third person, and shall not be moved from Seller’s facility without Buyer’s approval. Seller shall insure Tooling with coverage for all losses and for its replacement value. Buyer shall have the right at any time to enter Seller’s facility(ies) to inspect Tooling and Seller’s records regarding Tooling. Only Buyer (and, if applicable and directed by Buyer, Customer) has any right, title or interest in Tooling, except for Seller’s limited right, subject to Buyer’s unfettered discretion, to use Tooling in the manufacture of Supplies. Buyer and its affiliates shall have the right to take immediate possession of Tooling at any time without payment of any kind. Seller agrees to cooperate with Buyer if Buyer elects to take possession of Tooling. Likewise, effective immediately upon written notice to Seller, without further notice or court hearings, Buyer has the right to enter the facility(ies) of Seller and take possession of all of Tooling. Seller expressly waives any right to additional notice or process and agrees to provide Buyer or its nominee(s) with immediate access to Tooling. Seller grants to Buyer a limited and irrevocable power of attorney, coupled with an interest, to execute and record on Seller’s behalf any notice or financing statements with respect to Tooling that Buyer determines are reasonably necessary to reflect Buyer’s interest (and, if applicable, the interest of Customer) in Tooling. At Buyer’s request and without payment of any kind, Tooling shall be immediately released to Buyer or delivered by Seller to Buyer either (i) FOB transport equipment at Seller’s plant, properly packed and marked in accordance with the requirements of Buyer’s selected carrier, or (ii) to any location designated by Buyer, in which case Buyer will pay Seller the reasonable costs of delivery. Seller waives, to the fullest extent permitted by law, any lien, claims, encumbrances, interests, or other rights that Seller might otherwise have or assert on or with respect to any of Tooling, including but not limited to molder’s and builder’s liens. Seller agrees that in the event of such failure or threatened failure for any reason, and in addition to any other remedy to which Buyer may be entitled, Buyer shall be entitled to institute and prosecute proceedings in a court to obtain temporary and/or permanent injunctive or other equitable relief to enforce any provision hereof without necessity of posting bond or proof of actual injury or damage.
G) If Buyer issues the Order for Tooling, Seller will design and fabricate, rework, or acquire Tooling that fully conforms to the specifications and other requirements of Buyer. The Tooling must be capable of producing the appropriate volume projections for the Supplies during the life of the part as well as satisfying the requirements for Service and Replacement Parts under Section 26. The Tooling may not contain or be marked in any manner with the name of any person or entity other than Buyer (or if applicable and as directed by Buyer, with the name of Customer).
H) Buyer, at any time, including prior to payment, may ask Seller to provide status reports on the construction or acquisition of the Tooling. Each status report will identify the Tooling, identify any subcontractors working on the Tooling, state the percentage of completion of the Tooling, and state the percentage of sunk costs already expended. The Tooling is subject to inspection by Buyer at any time during normal business hours.
I) If, at any time, Seller believes that the Tooling might not be completed by the completion date specified in the Order (or at the time required consistent with any other order, for example relating to Supplies to be produced using the Tooling), Seller will notify Buyer as soon as practicable. Sending this notice will not relieve Seller of either its obligation to complete the Tooling on the completion date or its liability for any additional costs incurred by Seller or Buyer as a result of any delay.
J) Seller, at its own expense, will manufacture the requisite number of sample Supplies or other goods using the Tooling in order to successfully complete Buyer’s approval process, and this shall be done in sufficient time to permit subsequent correction by Seller of any faults or defects before the completion date specified in the Order. Prior to shipment, Seller, at Seller’s expense, shall inspect samples manufactured from the Tooling to be supplied hereunder and shall certify results in the manner requested by Buyer. Unless otherwise stated in the Order, Seller has no claim for payment for Tooling until Buyer has approved the Tooling.
K) Seller’s warranties for Tooling are the warranties for Supplies under this Agreement, including Section 11. Buyer expressly disclaims liability for damage to persons or property, resulting from the use of the Tooling, and Buyer’s warranty disclaimers and the limitation of liability under Section 27(B) for Buyer’s Property are applicable to Tooling.
L) If all or part of the fabrication, modification, repair or refurbishment of the Tooling will be subcontracted to a third-party toolmaker, Seller will: (i) inform and obtain the approval of Buyer in advance; (ii) inform the toolmaker in writing that it is a bailee-at-will, through Seller, of Tooling owned by Buyer; (iii) obtain a written agreement from the subcontractor to be bound by the Terms and make Buyer a third party beneficiary to such agreement and (iv) be solely responsible for payments to the toolmaker. Seller will defend and indemnify Buyer for all costs incurred (including actual fees for attorneys, consultants and experts) in connection with any claim that challenges Buyer’s sole right, title and interest in the Tooling, or right to possession of the Tooling, brought by any third party, including toolmakers, subcontractors, and lending institutions.
M) Seller will at its expense: (i) use the Tooling in compliance with all applicable laws, regulations, orders, and standards; and (ii) maintain the Tooling, including its repair or replacement, in the condition necessary to produce the Supplies in accordance with any and all standards, specifications or instructions furnished by Buyer and be responsible for all wear and tear.
N) In the event Seller fails to comply with any of the requirements of the Order, and Buyer determines that it is necessary to either take possession of the Tooling or have it relocated, Seller will provide Buyer or its designees with any technical information for the Tooling requested by Buyer or its designees that is required for the relocation, installation, assembly, maintenance, certification, or use of the Tooling.
O) Nothing herein contained or capable of being inferred from any possession of Tooling by Seller shall obligate Buyer in any way to purchase Supplies or goods from Seller or to create any defense in favor of Seller, whether by setoff, contract, or otherwise, to any demand by Buyer for possession of the Tooling.
P) The term “Supplies” as defined in Section 1 of the Terms includes, without limitation, any Tooling ordered by Buyer under the Order. The Terms in their entirety apply to the purchase of Tooling subject to the Order – provided that in the event of a conflict between this Section 29 (which relates solely to Tooling) and any other portion of the Terms, the conflict in relation to Tooling shall be resolved by giving effect to this Section 29, and by giving effect to the other provisions of the Terms to the fullest extent possible consistent with giving effect to this Section 29.
30. Customs; Export Controls, Sanctions Compliance; Related Matters Credits or benefits resulting from the Order, including trade credits, export credits, or the refund of duties, taxes or fees, belong to Buyer. Seller will timely and accurately provide all information and certificates (including NAFTA Certificates of Origin) necessary to permit Buyer (or Customers) to receive these benefits or credits, as well as to fulfill Seller’s import, and where required by the Order, export customs related obligations, origin marking or labeling requirements, and local content origin requirements. Seller agrees to comply with all applicable export control and sanctions laws and regulations of the United States of America, of member States of the European Union, and any other relevant country (the “Export Control Laws”). Seller will not violate, and will not cause Buyer to violate, any Export control Laws (e.g., by transshipping goods through or supplying goods or services from sanctioned countries.) Export licenses or authorizations necessary for the export of Supplies are Seller’s responsibility unless otherwise indicated in the Order, in which case Seller will provide the information necessary to enable Buyer to obtain the licenses or authorizations. Seller will promptly notify Buyer in writing of any material or components used by Seller in filling the Order that Seller purchases in a country other than the country in which the Supplies are delivered. Seller will furnish any documentation and information necessary to establish the country of origin or to comply with the applicable country’s rules of origin requirements. Seller will promptly advise Buyer of any material or components imported into the country of origin and any duty included in the Supplies’ purchase price. If Supplies are manufactured in a country other than the country in which Supplies are delivered, Seller will mark Supplies “Made in (country of origin).” Seller will provide to Buyer and the appropriate governmental agency the documentation necessary to determine the admissibility and the effect of entry of Supplies into the country in which Supplies are delivered. Seller warrants that any information that is supplied to Buyer about the import or export of Supplies is true and that all sales covered by the Order will be made at not less than fair value under the anti-dumping laws of the countries to which the Supplies are exported. Seller will assure compliance with the recommendations or requirements of all applicable Authorized Economic Operator (AEO), governmental security/anti-terrorism and enhanced boarder release programs (including without limitation the United States Bureau of Customs and Border Protection’s Customs-Trade Partnership Against Terrorism (C-TPAT), the Canada Border Services Agency’s Partners in Protection initiative, and the Administration General de Aduanas de Mexico’s Neuvo Esquema Empressa Certificada (NEEC) program). Upon request by Buyer, or the appropriate Customs Authority, Seller will certify in writing its compliance with the foregoing.
31. Set-Off; Recoupment In addition to any right of setoff or recoupment provided by law, all amounts due to Seller, whether directly by Buyer or indirectly by Buyer’s affiliates, joint ventures or subsidiaries, will be considered net of indebtedness of Seller and its affiliates, joint ventures, or subsidiaries to Buyer and its affiliates, joint ventures, or subsidiaries. Buyer has the right to set off against or to recoup from any payment or other obligation owed to Seller, in whole or in part, in any capacity, whether directly or indirectly, on this Order or any other order or agreement, any amounts due to Seller or its affiliates, joint ventures or subsidiaries from Buyer or its affiliates, joint ventures or subsidiaries. Buyer or its affiliates or subsidiaries from Seller or its affiliates or subsidiaries. Buyer will provide Seller with a statement describing any setoff or recoupment taken by Buyer.
32. No Advertising Seller shall not, without first obtaining Buyer’s written consent (and, if applicable, the written consent of Customer(s)), in any manner (i) advertise, publish or disclose to third parties (other than to Seller’s professional advisors on a confidential, need-to-know basis) the fact that Seller has contracted to furnish Buyer the Supplies covered by an Order and any terms of the Order (including without limitation pricing), (ii) use any trademarks or trade names or logos or confidential information of Buyer (or Customer(s)) in Seller’s advertising or promotional materials, or (iii) use trademarks, trade names or confidential information of Buyer (or Customer(s)) in any form of electronic communication such as web sites (internal or external), blogs or other types of postings.
33. Relationship of Parties Seller and Buyer are independent contracting parties and nothing in the Order will make either party the employee, agent or legal representative of the other for any purpose. The Order does not grant either party any authority to assume or to create any obligation on behalf of or in the name of the other. Seller will be solely responsible for all employment and income taxes, insurance premiums, charges and other expenses it incurs in connection with its performance of the Order, except as expressly provided in a written agreement signed by Buyer. All employees and agents of Seller or its respective contractors are employees or agents solely of Seller or such contractors, and not of Buyer, and are not entitled to employee benefits or other rights accorded to Buyer’s employees. Buyer is not responsible for any obligation with respect to employees or agents of Seller or its contractors.
34. Non-Assignment In addition to and without limiting Section 19, Seller may not transfer, assign or delegate, in whole or in part, any of its rights or obligations under the Order (including without limitation any right of payment), whether directly or indirectly by merger, acquisition or contribution to a joint venture, without Buyer’s prior written consent. In the event of any approved assignment or delegation authorized by Buyer, Seller retains all responsibility for Supplies, including, without limitation, all related warranties and claims, unless otherwise expressly agreed in writing by Buyer. With Buyer’s prior written consent, Seller may make an assignment of receivables due or to become due to a single financial institution; provided, however, that any such assignment shall be subject to set-off or other proper method of enforcing any claims that Buyer may have under Section 31 of this Order. Buyer may assign or delegate (including without limitation by subcontract) any right or duty under the Order to any third party upon notice to Seller with or without consent. Further, Buyer may enter or offer to enter into a transaction that includes a sale of its assets used in connection with the purchase of Supplies under the Order, or any merger, sale or exchange of stock or other equity interests, in any case to any affiliated entity or other third party without the need for Seller’s approval.
35. Suppliers with Particular Needs Buyer encourages Seller to use suppliers with particular needs. A supplier with particular needs is a business, which meets one or more of the following conditions: (i) a small business, as defined in Title 15, Section 632 of the United States Code and related regulations; (ii) a small business owned and controlled by socially disadvantaged individuals (at least 51% of the business owned and controlled by one or more socially and economically disadvantaged individuals and the management and daily business operations are controlled by one or more such individuals); and (iii) a business that is at least 51% owned by a woman or women who also control and operate the business. Upon Buyer’s request, Seller will inform Buyer on an annual basis the percentage, based on a dollar value, of the content of the Supplies provided by suppliers with particular needs as well as the basis for claiming that such content was provided by a supplier with particular needs.
36. Basic Working Conditions Seller represents that neither it nor any of its subcontractors or suppliers or other associated third parties will use child, slave, illegal immigrant, prisoner or other form of forced or involuntary labor, regardless of its form or engage in abusive employment or corrupt business practices, in the supply of Supplies under an Order. Seller further represents when it delivers the Supplies that it has complied with the requirements of this Section 36. Buyer may retain an independent third party, or request Seller to retain one reasonably acceptable to Buyer, to: (i) audit Seller’s compliance with this Section 36 and (ii) provide Seller and Buyer with written certification of Seller’s compliance, including areas for potential improvement. Seller will bear the cost of any third-party audit and certification under this Section 36, regardless of which party retained the auditor. Buyer, at its option, may accept an audit or certification by Seller in lieu of a third-party certification. For purposes of this Section 36, the temporary assignment of employees of one party to the facilities operated by the other party will not affect the status or change the employment relationship of the assigned employees.
37. Governing Law; Jurisdiction; Arbitration
A) Each Order and any claims relating to Supplies provided or to be provided under such Order will be governed, construed and enforced under the laws of the State of Michigan and the United States excluding the provisions of the United Nations Convention on Contracts for the International Sale of Goods (Vienna, 1980), as amended, or any conflict of law provisions that would require application of another choice of law apply to or govern an Order or any claims relating to Supplies provide or to be provided under such Order.
B) Subject to Section 37(C) regarding arbitration, (i) any litigation on contractual claims arising from this Order may be brought solely in courts (1) in the state of Buyer’s place of business in connection with such Order, as evidenced by Buyer’s address specified in the Order, if such place of business is in the United States, or (2) the State of Michigan if no such address is provided in the Order or Buyer’s place of business in connection with the Order is outside the United States. Buyer and Seller hereby consent to such jurisdiction and service of process in accordance with applicable procedures.
C) The arbitration provisions of this Section 37 will be governed by the United States Federal Arbitration Act. At Buyer’s option, exercised by written notice any time before or within 30 days following the service of process in a legal action, any dispute regarding the Supplies, the Order, the validity of the Order or any of the Terms, or any other matter between the parties (other than requests for injunctive relief) will be resolved by binding arbitration, conducted in the English language, as follows: (i) the arbitration will be conducted under the commercial arbitration rules of the American Arbitration Association (AAA) and under Rules 26 through 37 of the U.S. Federal Rules of Civil Procedure, in either (i) a location agreed by the parties; (ii) the state of Buyer’s place of business in connection with such Order, as evidenced by Buyer’s address specified in the Order, if such place of business is in the United States, or (iii) the State of Michigan if no such address is provided in the Order or Buyer’s place of business in connection with the Order is outside the United States. The arbitrator will be selected from an AAA list using the AAA-recommended selection method. Each party will bear equally the costs and expenses of AAA and the arbitrator, and each party will bear its own costs and expenses — provided, however, (1) that the failure by one party to pay its share of the arbitration fees constitutes a waiver of such party’s claim or defense in the arbitration, and (2) that the arbitrator may award attorneys’ fees and costs to the substantially prevailing party. In no event will any party be awarded punitive or exemplary damages. All arbitration proceedings shall be confidential, except to the extent that disclosure is necessary to enforce an arbitration award in a court of competent jurisdiction or is required by Customer(s). The arbitration award shall be final and binding upon the parties, and enforceable in any court of competent jurisdiction.
D) Seller acknowledges that a breach of its obligations under the Order, including without limitation Seller’s obligation to supply Supplies in accordance with the Order or to transfer Buyer’s Property or other bailed property to Buyer in accordance with the Order, would cause irreparable damage to Buyer, including without limitation damage to Buyer’s relationship with its Customers, suppliers, labor, lenders and prospective future customers, the exact amount of which would be difficult to ascertain, and that the remedies at law and monetary damages for any such breach would be inadequate. Accordingly, in the event of any action taken or threatened by Seller hereunder that, if taken, would constitute a breach of Seller’s obligations under the Order, Buyer and its successors and assigns are entitled to specific performance and temporary, preliminary and permanent injunctive relief in connection with any action to enforce the Order, without the posting of any bond or other security, in addition to any other remedies Buyer may have for damages or otherwise. Seller may not take any action or position inconsistent with this acknowledgement, and Buyer will be entitled to recover its costs and expenses (including incidental and consequential damages, court costs, and attorneys’ and other professional fees) arising out of the enforcement of this paragraph.
38. Language; Severability The parties acknowledge that it is their wish that these terms and all documents related thereto be in the English language only. If any term of the Order is invalid or unenforceable under any applicable law, the term will be deemed reformed or deleted, as the case may be, but only to the extent necessary to comply with applicable law or regulation. The remaining provisions of the Order will remain in full force and effect.
39. Survival The obligations of Seller to Buyer survive termination of this Order, except as otherwise provided in this Order. Among other matters, unless specifically waived in writing by an authorized representative of Buyer, Seller’s obligations with respect to service and replacement parts will survive the termination or expiration of the Order.
40. Waiver of Jury Trial BUYER AND SELLER ACKNOWLEDGE THAT THE RIGHT TO TRIAL BY JURY IS A CONSTITUTIONAL ONE, BUT THAT IT MAY BE WAIVED.
EACH OF BUYER AND SELLER, AFTER CONSULTING (OR HAVING THE OPPORTUNITY TO CONSULT) WITH COUNSEL OF ITS CHOICE, KNOWINGLY, VOLUNTARILY AND INTENTIONALLY WAIVES ANY RIGHT TO TRIAL BY JURY IN
ANY ACTION OR OTHER LEGAL PROCEEDING ARISING OUT OF OR RELATING TO ANY ORDER OR OTHER DOCUMENT PERTAINING TO ANY ORDER.
41. Entire Agreement; Modifications; No Implied Waiver
A) The Order constitutes the entire agreement between Seller and Buyer with respect to the matters contained in the Order and supersedes all prior oral or written representations and agreements, except as described in Section 1. The Order may be modified only by a (i) written amendment physically signed by authorized representatives of each party, (ii) revision to the Order issued by Buyer on Buyer’s purchase order form through Buyer’s standard purchasing protocol and accepted by Seller as provided in Section 1, or (iii) in the case of changes within the scope of Section 10, by a purchase order revision issued by Buyer or by specific conditions described in the Order. In the event of a direct conflict, (x) an agreement signed by the authorized representatives of Buyer and Seller (and forming a part of the Order under Section 1) takes precedence over other terms with respect to the direct conflict, and (y) terms on the face of a purchase order or purchase order amendment issued through Buyer’s standard purchasing protocol (and forming a part of the Order under Section 1) take precedence over these Terms with respect to the direct conflict. Any clerical errors contained in the Order are subject to correction by Buyer.
B) Buyer may modify the Terms with respect to future Orders and Order amendments at any time by posting revised Terms to its internet web site as listed in Section 1 or at such other internet web site as is specified in writing by Buyer to Seller, and such revised Terms will apply to all Orders and Order amendments issued thereafter. It is the responsibility of Seller to review and obtain a copy of the current version of the Terms. The Terms that are applicable to the Order or Order amendment shall be the version of the Terms that is in effect on the date of the Order or the Order amendment applicable to the Order, whichever date is later.
C) The failure of either party at any time to require performance by the other party of any provision of the Order will in no way affect the right to require performance at any later time, nor will the waiver of either party of a breach of any provision of the Order constitute a waiver of any later breach of the same or any other provision of the Order.
42. Conflict of Interest Seller represents and warrants that its performance of the Order will not in any way conflict with any continuing interests or obligations of Seller or its employees or contractors. Seller further warrants that while the Order is in effect, Seller and those of its employees and contractors participating in the performance of the Order will refrain from any activities which could reasonably be expected to present a conflict of interest with respect to Seller’s relationship with Buyer or its performance of the Order, including without limitation, the provision of (or attempts to provide) Supplies directly to Customers without Buyer’s express written consent.
43. Sales Tax Exemption Buyer certifies that Supplies purchased under the Order and identified as industrial processing are eligible for state and federal sales tax exemption under the federal identification number indicated on the face of the Order or otherwise provided by Buyer.
44. Subcontracts Seller will inform Buyer in writing of any third parties to whom Seller proposes to subcontract any of the work required under the Order, specifying in detail the work proposed to be subcontracted to such third party. Seller will not subcontract any of its obligations under the Order without the prior written consent of buyer. Any such consent will not release Seller from, or limit any of Sellers obligations under the Order. Seller will ensure that the terms of its contracts with subcontractors cause Seller’s subcontractors to provide, to and for the benefit of Buyer and Customers, all of the rights and licenses and benefits specified in the Order (including but not limited to those set forth in Sections 2, 7, 10-12, 14-18, 21-22, 24
– 42, and 44-45). Seller warrants and guarantees that any subcontractor’s performance will satisfy all requirements applicable to Seller under the related Order.
45. Claims by Seller Any legal action by Seller under any Order must be commenced no later than (1) year after the breach or other event giving rise to Seller’s claim occurs, or Seller becomes aware of the existence (or facts and circumstances giving rise to the existence) of such claim whichever occurs first.
46. Battle of the Forms Not Applicable The parties have agreed and it is their intent that the battle of the forms Section 2-207 of the Uniform Commercial Code shall not apply to the Terms or to any invoice or acceptance form of Seller relating to the Terms. It is the parties’ intent that the Terms shall exclusively control the relationship of the parties, and in the event of any inconsistency between any invoice or acceptance form sent by Seller to Buyer and the Terms, the Terms shall control.
NASHVILLE 65676-1 570251v2