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Terms of Purchase

1. DEFINITION

“Article” or “Articles” means the goods, products, materials, supplies, parts, assemblies, technical data, drawings, services and other items covered by this Purchase Order.

 

2. ACCEPTANCE OF PURCHASE ORDER

This Purchase Order constitutes Buyer’s offer to purchase the Article or Articles from Seller and shall become a binding contract between the parties upon the terms and conditions set forth herein upon acceptance by Seller, either by acknowledgment or commencement of performance. Any terms or conditions including prices or delivery dates proposed by Seller in accepting Buyer’s offer which are inconsistent with or in addition to the terms and conditions herein set forth shall be void and of no force or effect unless and to the extent expressly accepted by Buyer in writing. 

 

3. TIME IS OF THE ESSENCE

The production schedules of Buyer are based upon the agreement that the Articles will be delivered to Buyer by the date specified on the face of this Purchase Order. Therefore, time is of the essence for this Purchase Order. If shipment is not made on the promised date, Buyer reserves the right to cancel or to purchase elsewhere and to hold Seller accountable thereof.

 

4. PACKAGING AND SHIPPING

Deliveries shall be made as specified without charge for boxing, crating or storage. The Articles shall be suitably packed (i) to secure lowest costs, (ii) in accordance with the requirements of common carriers, and (iii) to protect against damage from weather or damage in shipment. The Articles shall be described on bills of lading in accordance with current National Motor Freight or Uniform Freight Classification whichever is applicable. The Purchase Order number and symbols of Buyer must be marked plainly on all invoices, packages, bills of lading and shipping orders. Packing lists shall accompany each box or package shipment. Buyer’s count or weight shall be final and conclusive on shipments not accompanied by packing lists. Shipments for two or more destinations when so directed by Buyer shall be shipped in separate boxes or containers for each destination at no extra charge. On all shipments made F.O.B. shipping point by carriers of limited liability (railway express, air express, air freight, air freight forwarders and household carriers) do not declare more than free minimum valuation. Shipments valued in excess of $75,000 are not to be made F.O.B. shipping point via carriers of limited liability without prior consent of Buyer. Shipments valued over $500 are not to be shipped via parcel post and shipments valued at $500 or less shipped parcel post or air parcel post are not to be insured but Seller shall secure “Certificate of Mailing” (Post Office Form Number 3817). Violation of these instructions will result in Seller being liable for the excess valuation charge. Without the prior consent of Buyer, Seller shall not ship in advance and shall not ship more or less than the exact quantities ordered.

 

5. PRICES

Seller represents that prices quoted to or paid by Buyer shall not exceed current prices charged to any other customer of Seller for items which are the same or similar to the Articles purchased hereunder considering the quantity specified, and Seller agrees to promptly refund any amount paid by Buyer in excess of such price.

 

6. TAXES

Seller shall state separately on all invoices any taxes Imposed by federal, state or local authorities on the sale of the Articles. No tax shall be included for which an exemption is available. In the event it is subsequently determined that any tax included in the prices herein was not required to be paid, Seller agrees to notify the Buyer and to make prompt application for the refund, to take all necessary steps to obtain the refund and to pay the amount of such refund to Buyer.

 

7. CASH DISCOUNT 

The date used for purpose of calculation of cash discounts shall be the date the Articles are received by Buyer or the date an acceptable invoice is received by Buyer whichever date is the later.

 

8. WARRANTIES

Seller warrants that all Articles will conform to applicable specifications, drawings, descriptions and samples and will be merchantable, of good workmanship and material and free from defect. Unless manufactured pursuant to detailed design furnished by Buyer, Seller assumes design responsibility and warrants the Articles to be free from design defect and suitable for the purpose intended, if such purpose is known by or has been disclosed to Seller. These warranties of Seller, together with the service guarantees of Seller shall run to Buyer and its customers or users of the Articles and shall not be deemed to be exclusive. Buyer’s inspections, approval, acceptance, use of or payment for all or any part of the Articles in no way shall affect its warranty rights whether or not a breach of warranty had become evident at the time.

 

9. INSPECTION

The Articles may be inspected by Buyer at all times and places and at any stage of production. If inspected at the premises of Seller, Seller without additional charge shall provide all reasonable facilities and assistance necessary for safe and convenient tests and inspection. The foregoing shall not relieve Seller of its obligation to make full and adequate tests and inspections. Buyer may base acceptance or rejection of any and all Articles on inspection by sampling. If upon inspection any of the Articles shall be found to be defective in material or workmanship or otherwise not in conformity with the requirements of this contract, Buyer in addition to its other rights may (i) require prompt correction or replacement thereof at Seller’s expense, including transportation charges, or (ii) rework or have reworked any such Articles at Seller’s expense for the purpose of conforming the Articles to the requirements of this contract, or (iii) reject any such Articles and require the immediate removal thereof with Buyer to be repaid or credited with the full invoice price therefor plus transportation charges, or (iv) cancel the contract in whole or in part under Section 10, Default, hereof. From the time of notice of rejection of defective Articles upon inspection or for a breach of warranty, risk of loss thereof shall be upon Seller until redelivery, if any, to Buyer.

 

10. DEFAULT

Buyer in addition to other rights afforded by law may cancel this contract for default in whole or from time to time in part (i) if the Seller fails to deliver the Articles or to perform the services strictly within the time specified herein or if no time is specified within a reasonable time, (ii) if the Articles delivered do not conform to contractual requirements or if Seller falls to perform any of the other provisions of this contract or so fails to make progress as to endanger performance of the contract in accordance with its terms, or (iii) if any proceedings in bankruptcy or insolvency, voluntary or involuntary, including any proceeding under the Bankruptcy Code, as amended, are commenced by or against Seller, or if any receiver is appointed with or without Seller’s consent, or if Seller makes any assignment for the benefit of creditors or if Seller commits any other act of bankruptcy or becomes insolvent or unable to meet its debts as they mature.

 

11. CHANGES

Buyer shall have the right, upon written notice to Seller, to change the extent of the work covered by the contract, the drawings, specifications or other descriptions herein, the time, method or place of delivery or the place of delivery or the method of shipment or packaging or to suspend work. Upon receipt of any such notice, Seller shall proceed promptly to make the changes in accordance with the terms of the notice.  If any such changes cause an increase or decrease in the cost of performance or in the time required for performance, an equitable adjustment shall be negotiated promptly and the contact modified in writing accordingly. Seller shall deliver to Buyer as promptly as possible, and in any event within thirty (30) days after receipt of change notice, a statement showing the effect of any such change in the delivery dates and prices. Such statement shall be supplemented within thirty (30) days from the date thereof by detailed specification of the amount of the price adjustment and supporting cost figures. Failure of Seller to submit these statements within the time limits as aforesaid shall constitute the consent of Seller to perform the change without increase in price, without claim for material(s) rendered obsolete and without change in delivery schedule.

 

12. TOOLS AND MATERIALS

Title to and the right of immediate possession of all tooling, equipment or materials furnished or paid by Buyer directly or indirectly for use hereunder shall be and remain in Buyer. The accuracy of any tooling furnished by Buyer to Seller is not guaranteed or warranted. Seller shall (i) be responsible for all loss or damage to tooling, equipment or materials furnished by Buyer while the same is in possession of Seller and shall insure such risk with adequate fire and extended coverage insurance, (ii) clearly mark the same as belonging to Buyer, keep it segregated in Seller’s facilities and treat the same confidentially, (iii) keep the same in good operating condition, and (iv) use the same exclusively for the performance of work for Buyer and not for production of larger quantities than specified or in advance of normal production schedules except with the written consent of Buyer. All taxes, assessments and similar charges levied with respect to or upon such items owned by Buyer while in possession or control of Seller and for which no exemption is available shall be borne by Seller. Upon completion of this order, disposition of all such items shall be made by Seller as directed by Buyer.

 

13. PATENT RIGHTS; PATENT INDEMNITY

If payment is made hereunder for experimental, developmental or research work, including engineering amounting thereto, Seller agrees to grant and hereby does grant to Buyer all right, title and interest in and to any invention whether or not patentable conceived or first reduced to practice in the performance of such work; and all drawings, reports, specifications or other data related to such work shall be the property of Buyer and shall be delivered to Buyer at its request. If the Articles are to be manufactured or supplied in accordance with drawings or specifications which are furnished by Buyer and which are not based upon drawings or specifications of Seller or upon Seller’s design, Seller agrees to grant and hereby does grant to Buyer a nonexclusive fully paid-up and irrevocable license to make, have made, use and sell any improvement in the Articles which is made or introduced by Seller in its work hereunder. Seller shall indemnify and save Buyer, its customers and users of the Articles, harmless from liability or suit of any nature, including costs and legal and other expenses arising from the manufacture, use or sale of the Articles except to the extent that any such liability or suit shall have arisen because of Seller’s manufacture of Articles of original design of the Buyer and made by Seller in accordance with specifications and drawings which are furnished by Buyer. Seller agrees to grant and hereby does grant to Buyer a royalty-free, non-exclusive and irrevocable license to reproduce, translate, publish, use and to make disposition of, and to authorize others so to do, any copyrighted or copyrightable material incorporated in or supplied as a supplement with the Articles.

 

14. REPRODUCTION AND DATA RESTRICTIONS; CONFIDENTIALITY

Seller agrees not to make any use of any of the drawings, reports, specifications or other data furnished to Seller by Buyer except for the performance of this contract. Seller further agrees not to disclose the same to others except to facilitate the performance of the contract under similar restrictions against use and disclosure. Rights to all ideas and features of novelty or invention described in the data furnished to the extent originating with Buyer and all design, manufacturing, reproduction, use and sales rights regarding the same shall be deemed exclusively the property of and reserved to Buyer. Upon completion, cancellation or termination of this contract, Seller shall return to Buyer without demand all such data, drawings, specifications and other information including copies made by Seller. Any knowledge or information which Seller shall have disclosed to Buyer in connection with the purchase of the Articles shall not, unless otherwise specifically agreed upon in writing by Buyer, be deemed to be confidential or proprietary information and shall be acquired free from any restrictions (other than a claim for patent infringement) as part of the consideration for this Purchase Order.

 

15. TERMINATION

This contract may be terminated in whole or in part by Buyer upon written notice to Seller.

 

16. COMPLIANCE WITH LAWS

Seller shall comply with all applicable governmental laws, regulations, orders, and other rules of duly-constituted authority in the performance of this contract. 

 

17. ASSIGNMENT AND SUBCONTRACTING

Seller shall not assign, transfer, or subcontract any of its duties or responsibilities under this contract without the prior written consent of Buyer.

 

18. ADVERTISING

Seller shall not advertise or publish in any manner the fact that Seller has contracted to furnish the Articles to Buyer without first obtaining the written consent of Buyer.

 

19. INDEMNITY

Seller agrees to indemnify and hold Buyer harmless from any and all claims and liability, including court costs, legal fees and other expenses, for injuries or death of persons or damage to or destruction of property caused by or resulting from the acts or omissions of Seller, its agents, suppliers or employees, in the performance of this contract.  At the request of Buyer, Seller agrees to defend at the expense of Seller all suits or proceedings arising out of any such claims or liability.

 

20. NON-WAIVER

The failure of Buyer to insist in any one or more instances upon the performance of any of the terms, covenants or conditions of this contract or to exercise any rights hereunder shall not be construed as a waiver or relinquishment of the future performance of any such term, covenant or condition or the future exercise of such right, but the obligation of Seller with respect to such future performance shall continue in full force and effect.

 

21. ENTIRE AGREEMENT; MODIFICATION

The terms and conditions of this contract constitute the entire agreement between Buyer and Seller and supersede all previous communications, representations or agreements between Buyer and Seller. This contract may only be modified in a writing making specific reference thereto that is signed by the purchasing agent or other authorized representative of Buyer.

 

22. GOVERNING LAW AND EFFECT

This contract shall be deemed to have been entered into and shall be construed and interpreted in accordance with the laws of the State of Indiana.  This contract shall be binding upon the agents, employees, officers, directors, principals, shareholders, successors and assigns of both parties.

 

23. SEVERABILITY

If any provision of this contract or of any order is or becomes void or unenforceable by force or operation of law, the other provisions shall remain valid and enforceable.

 

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