Terms and Conditions of Purchase
- Acceptance of Purchase Order
This general purchase conditions are for the purchase of goods, services, or both as described on the Purchase Order (collectively, “Goods”) and is issued by the issuer having an address identified on the face of the Purchase Order (referred as “The Buyer”) to an appointed Vendor/Subcontractor (referred as “Supplier”). A Purchase Order (PO) is deemed accepted upon a) the date the Supplier returns an acknowledgment to the Buyer or b) three calendar days from date the Buyer issues the Purchase Order to Supplier regardless of mechanism used to convey requirements, whichever is earlier. The Buyer rejects any additional or inconsistent terms and conditions offered by Supplier at any time. Any reference to Supplier’s quotation, bid, or proposal does not imply acceptance of any term, condition, or instruction contained in that document. No course of prior dealing or usage of the trade may modify, supplement, or explain any terms used in this Purchase Order. These terms and conditions together with the specifications, drawings, or other documents referred to on the face of the Purchase Order, or attached, or any documents incorporated by reference, supersede any prior or contemporaneous communications, representations, promises, or negotiations, whether oral or written, respecting the subject matter of this Purchase Order. No change to or modification of this Purchase Order will be binding upon the Buyer unless in writing, specifically identifying that it amends this Purchase Order, and signed, or approved electronically, by an authorized Supply Chain representative of the Buyer.
- Order of Precedence
All contract documents referenced in this Purchase Order are interpreted together as one agreement. In the event there is an irreconcilable conflict of such contract documents, the following order of precedence applies: a) any supply agreement or other agreement of the Parties referenced by the Purchase Order; then b) the face of the Purchase Order and any supplemental terms included or incorporated by reference; then c) these general Terms and Conditions of Purchase; and d) other contractual documents agreed to in writing by the parties.
- Delivery, Shipment and Packaging
3.1 Supplier will deliver Goods in the quantities and on the date(s) specified on the Purchase Order or Purchase Order schedule releases. If delivery dates are not stated, Supplier will offer its best delivery date(s), which will be subject to acceptance by the Buyer. Unless otherwise directed, all Goods shipped in one day from and to a single location must be consolidated on one bill of
lading or air waybill, as appropriate.
3.2 If the delivery schedule is endangered for any reason other than the Buyer’s fault then Supplier will, at its expense, deliver Goods by the most expeditious shipping method. The Buyer reserves the right to reject, at no expense to the Buyer, all or any part of any delivery that varies from the quantity authorized by the Buyer for shipment. Supplier will not make any substitutions without the Buyer’s prior written approval. All items will be packaged according to the Buyer’s instructions or, if none, according to good commercial practice in a manner sufficient to ensure receipt in an undamaged condition. The Buyer will not be liable for any discharge, spill or other environmental incident (including clean-up costs) involving any Goods shipped under the Purchase Order until received by the Buyer. All containers will be properly marked for identification as instructed on the Buyer’s Purchase Order and contain a packing slip that details, at a minimum, the Buyer Purchase Order number(s), product part number, detailed product description, total number of boxes in shipment, quantity of product shipped, and final delivery address. Items shipped in advance of the Buyer’s delivery schedule may be returned at Supplier’s expense. For domestic shipments, if requested by the Buyer, and for all international shipments, Supplier will give written notice of shipment to the Buyer when the Goods are delivered to a carrier for transportation. The Purchase Order number(s) must appear on all correspondence, shipping labels, and shipping documents, including all packing sheets, bills of lading and air waybills.
3.3 All Goods, unless specifically exempted by the destination country’s governing authorities, must be marked with the country of
origin (manufacture) of the Goods in a conspicuous place as legibly, indelibly, and permanently as the nature of the article or container permits.
3.4 Supplier will provide the Buyer with (a) the Harmonized Tariff Schedule number, country of origin information or certificates, manufacturer’s affidavits, applicable Free Trade Agreement (“FTA”) certificates, and any other documents or information the Buyer may require to comply with international trade regulations or to lawfully minimize duties, taxes, and fees, and (b) FTA certificates for all Goods that qualify under one or more FTAs. Supplier will provide the Buyer all documents, records, and other supporting information necessary to substantiate the Goods’ qualification under an FTA. Supplier will exert reasonable efforts to qualify the Goods under FTAs.
3.5 Within one business day after Supplier delivers the Goods to the carrier, Supplier will send the Buyer a complete set of shipping documents including the commercial invoice, packing list, and air waybill, or three original parts of the combined through-bill of lading, clean without notation, necessary to release the Goods to the Buyer’s custody.
3.6 Supplier shall provide the Goods with suitable and environmentally compatible packing material, as appropriate at its’ own expense. The Buyer shall be entitled to have it disposed in accordance to applicable laws and regulations at the Supplier’s expense.
At the request of the Buyer, the Supplier shall submit a certificate of declaration, specifying the compliance to applicable environmental regulation for the delivered Goods.
- Notice of Delay
Whenever anything delays or threatens to delay the timely performance of this Purchase Order, Supplier must immediately notify the Buyer in writing of all relevant information with respect to such delay.
- Excusable Delay (Force Majeure)
Neither party will be in default for any delay or failure to perform due to causes beyond its control and without its fault or negligence, but any delay or failure to perform caused by the default of a sub-tier supplier of Supplier will be excused only if (a) it is beyond the control of both Supplier and its sub-tier supplier(s) and without the fault or negligence of any of them, and (b) the Goods to be furnished cannot be obtained from other sources in sufficient time to permit Supplier to meet the delivery schedule. The party affected by an excusable delay will promptly provide written notice to the other within seven (7) working days of occurrence date of Force Majeure, explaining in detail the full particulars and expected duration of the excusable delay, and will use its best efforts to remedy the delay if it can be remedied. If an excusable delay occurs that affects delivery of Goods to the Buyer, Supplier will allocate its available supply of Goods in a manner that assures the Buyer of at least the same proportion of Supplier’s total output of Goods as was allocated to the Buyer before the excusable delay event. The Buyer shall not be liable to reimburse the Supplier for any loss or damage incurred by the Supplier as a result of any excusable delay. If delivery of any Goods is delayed for more than fifteen (15) working days, the Buyer is entitled to, without liability, cancel all or any part of this Purchase Order. The affected party of Force Majeure shall inform aggrieved party, in writing, of the end of the excusable delay event.
- Quality Assurance
6.1 Where the Buyer, in its sole discretion, determines there is a significant risk that Supplier will fail to meet its performance or delivery requirements under this Purchase Order, the Buyer shall have the right to carry out quality system and production line audits at the expense of Supplier’s cost in fulfilling its’ obligations. The Buyer may appoint Supplier Quality Representative (SQE) at Supplier’s premises to monitor, check and follow-up activities related to the quality assurance of the Goods until deliveries are completed. A Quality Assurance Plan may be requested to include specific reporting and performance requirements, reasonably tailored to ensure Supplier’s adequate performance under identified provisions of this Purchase Order. Any failure by Supplier to satisfy the terms of the Quality Assurance Plan constitutes a material breach of this Purchase Order.
6.2 The Supplier undertakes to inform the Buyer without undue delay if the Goods already delivered deviates from specifications, exhibits potential quality problems or problems due to product modifications that actually or possibly affect the reliability or characteristics of the Goods, or exhibits defects in additional components (e.g.; documentation) that are included in the scope of delivery.
- Shipping Terms, Title and Risk of Loss
7.1 Any agreed trade term shall be construed in accordance with the latest Incoterm publication (ICC Publ. No. 715 ED). General shipping term shall be as per identified on the face of the Purchase Order. The foregoing does not relieve Supplier of any responsibility for scheduling the shipment, of which, Supplier shall be obliged to pay any extra costs incurred due to non-compliance with any shipping instructions or due to the use of a faster mode of transport that became necessary to meet the agreed delivery date.
7.2. Risk of loss of all Goods shall remain in Supplier until the acceptance of the Goods by the Buyer, unless otherwise specified on the face of the Purchase Order. Title shall pass to the Buyer upon the Buyer’s acceptance of Goods per the Purchase Order.
Notwithstanding restrictive legends to the contrary, title to plans, drawings and specifications for Goods shall be vested in and remain with the Buyer and may be used by the Buyer for any purpose.
7.3. The Buyer may direct Supplier to ship the Goods to any designated location of the Buyer or to any third party.
- Import /Customs Compliance
8.1 Supplier assumes all responsibility and liability for any shipments covered by this Purchase Order requiring any government import clearance. If government authorities declare or otherwise impose countervailing duties, antidumping duties, or retaliatory duties on the Goods imported under this Purchase Order, the Buyer reserves the right to terminate this Purchase Order under the Termination provisions of this Purchase Order. Supplier will be debited for any duties, fees, or freight incurred by the Buyer due to Supplier’s failure to comply with the terms and conditions of this Purchase Order.
8.2 Supplier will comply with all export and import laws and regulations of all applicable countries involved in transactionsassociated with this Purchase Order. Supplier will first obtain the written consent of the Buyer before submitting any request for authority to export or re-export any drawing, data, hardware, equipment or other item provided to Supplier by the Buyer.
8.3 If Supplier is a U.S. company that engages in the business of either manufacturing or exporting defense articles or furnishing defense services, Supplier hereby certifies that it has registered with the U.S. Department of State Directorate of Defense Trade Controls and understand its obligations to comply with International Traffic in Arms Regulations (“ITAR”) and the Export Administration Regulations (“EAR”).
8.4 Supplier shall control the disclosure of and access to technical data, information and other items received under this Purchase Order in accordance with U.S. export control laws and regulations, including but not limited to the ITAR. Supplier agrees that no
technical data, information or other items provided by the Buyer in connection with this Purchase Order shall be provided to any foreign persons or to a foreign entity, including without limitation, a foreign subsidiary of Supplier, without the express written authorization of the Buyer and Supplier’s obtaining of the appropriate export license, technical assistance agreement or other requisite documentation for ITAR-controlled technical data as outlined in the ITAR prior to any release to a third party abiding by the terms outlined herein. Supplier shall indemnify the Buyer for all liabilities, penalties, losses, damages, costs or expenses that may be
imposed on or incurred by the Buyer in connection with any violations of such laws and regulations by Supplier include, but not limited to the improper or delayed submission of information or declarations.
8.5 Supplier shall immediately notify the Buyer if it is or becomes listed on any Excluded or Denied Party List of an agency of the U.S. Government or its export privileges are denied, suspended or revoked.
8.6 The Buyer may be required to obtain information concerning citizenship or export status of Supplier’s personnel. Supplier agrees to provide such information as necessary and certifies the information to be true and correct.
- Supplied Materials, Technical Data, Consigned Tooling and Equipment
9.1 Title to any material, tooling, equipment or technical data that the Buyer pays for or provides to Supplier or is responsible for providing to Supplier, including replacements (referred as “The Buyer Property”), will remain or vest with the Buyer. Supplier will conspicuously label The Buyer Property as such, maintain it in good condition, keep written records of The Buyer Property in its
possession and the location of the property, not allow any liens to be placed upon it, and not change its location without prior written approval from the Buyer. Supplier is responsible for inspecting and determining that The Buyer Property is in useable and acceptable condition.
9.2 Supplier will use The Buyer Property exclusively to fulfill the Buyer Purchase Orders unless otherwise authorized in writing by the Buyer’s Supply Chain highest authority. The Buyer Property is intended for use at the Supplier’s site only or as otherwise authorized in writing by the Buyer’s Supply Chain highest authority. Supplier is responsible for any loss, damage, or destruction of The Buyer Property and any loss, damage or destruction of any third-party property resulting from Supplier’s negligent use of The Buyer Property. Supplier will not include the cost of any insurance for The Buyer Property in the prices charged under this Purchase Order.
Supplier will return The Buyer Property or dispose of it at the Buyer’s sole option as it directs in writing. The Buyer makes no representations and disclaims all warranties (express or implied) with respect to The Buyer Property.
This is a firm fixed price order that include all packaging and freight to the specified delivery point charges, necessary certificates, applicable taxes and other government charges and levies, including but not limited to all sales, use, or excise taxes; and all customs duties, fees, or charges. The Supplier shall furnish the Goods which satisfy all requirements as stated on the face of the Purchase Order. Supplier will offer its lowest prices subject to written acceptance by the Buyer.
- Invoicing and Payment
11.1 After each shipment made or service provided, Supplier will submit an invoice listing a description of the Goods provided and, as applicable, part numbers, quantity, unit of measure, hours and the unit and total prices. If authorized by the Buyer in the Purchase Order, any incidental charges such as royalties, selling commissions, non-recurring engineering or other incidental charges must be separately itemized and identified on the invoice. The invoice must also include the following information, as applicable, in English, or in Malaysia official language, if required: (a) name and address of Supplier and the Buyer entity purchasing the Goods; (b)
name of shipper (if different from Supplier); (c) The Buyer’s Purchase Order number(s)/Call number(s); (d) country of export; (e) detailed description of the Goods; (f) Harmonized Tariff Schedule number; (g) country of origin (manufacture) of the Goods, or if
multiple countries of origin, the country of origin of each part shipped; (h) weights of the Goods shipped; (i) currency in which the sale was made; (j) payment terms; (k) shipment terms used; and (l) all rebates or discounts. The invoice will be accompanied (if applicable) by assigned bill of lading or express receipt evidencing shipment.
11.2 Payment of an invoice does not constitute acceptance of the Goods and is subject to appropriate adjustment should Supplier fail to meet the requirements of the Purchase Order. The Buyer will make payment only for those Goods, which has been supplied in accordance with the terms of the Purchase Order. It is agreed the Buyer may deduct any amount owing from Supplier to the Buyer as a set off against any amount owing to Supplier under this Purchase Order.
12.1 All Goods may be inspected and tested by the Buyer, its Customers, prime contractors, and end users at all reasonable times and places. If an inspection or a testing is made on Supplier’s premises, Supplier will provide, without additional charge, all reasonable facilities and assistance required for the inspection and tests. In its standard inspection and testing of the Goods, Supplier will use an inspection system accepted by the Buyer in writing. All inspection records, including sub-tier supplier records relating to the Goods, will be maintained by Supplier and made available to the Buyer during the performance of this Purchase Order, and for such longer periods as may be specified by the Buyer.
12.2 Final inspection and acceptance by the Buyer will be at destination unless otherwise specified in this Purchase Order. The Buyer may inspect 100% or a sample of Goods, at the Buyer’s option, and may reject all or any portion of the Goods or lot of Goods if the
Buyer determines them to be defective or nonconforming. If the Buyer performs any inspection (other than the standard inspection) after discovering defective or nonconforming Goods, any additional inspection costs will be paid by Supplier. No inspection, tests, approval, design approval, or acceptance of the Goods relieves Supplier from responsibility for warranty or any latent defects, fraud, or negligence. If the Goods are defective or otherwise do not conform to the requirements of this Purchase Order, the Buyer may, by written notice to Supplier: (a) rescind this Purchase Order as to the Goods; (b) accept the Goods at an equitable reduction in price;
or (c) reject the Goods and require the delivery of replacements. Delivery of replacements will be accompanied by a written notice specifying that such Goods are replacements. Supplier shall assume responsibility for and all lost, cost, damage, or expense,including attorney fees, incidental costs, and cost of replacement incurred by the Buyer attributed to the Buyer’s rejection of goods
due to non-conformance to specifications or untimely delivery.
13.1 Supplier warrants to the Buyer, its’ successors, assigns, Customers, and end users that, upon delivery, and during the entire warranty entitlement specified below, all Goods furnished (including all replacement or corrected Goods or components that Supplier furnishes under this warranty) will (a) be new (have not been repaired or used for any purpose) and free from defects in material, workmanship, and design, even if the design has been approved by the Buyer’s Customer, (b) conform to applicable drawings, designs, quality control plans, specifications and samples and other descriptions furnished or specified by the Buyer, (c) bemerchantable (authorized Original Equipment Manufacturer, reseller or distributor, and not contain Counterfeit Items), (d) be fit for the intended purposes (to the extent the Goods are not of a detailed design furnished by the Buyer) and operate as intended, (e) comply with all applicable national and local laws, (f) be free and clear of any and all liens, restrictions, reservations, security interests, or encumbrances, and (g) not infringe any patent, published patent application, or other intellectual property rights of any third party existing as of the date of delivery, and not utilize misappropriated third party trade secret information. Services will be performed in accordance with the highest standards in the industry. Supplier also warrants that items with shelf-life shall have not expired and such items shall have been preserved in the storage area in accordance with the manufacturer’s instructions, have not been put through extensive maintenance, not have been provided from the balance inventory formed as the result of terminated
contracts-genuine, free from defect and deficiency in design, material, workmanship and manufacture, and in full conformity with the Buyer’s specifications, drawing and data, and Suppliers descriptions, promises or samples, and that such Goods will befit for the
Buyer’s intended use.
13.2 This warranty entitlement shall inure to the benefit of both the Buyer and the Buyer’s Customers or the date on which any longer or broader government requirement covering the Goods ends or generally accepted market terms. As used in this Purchase Order, the Buyer’s Customers shall include its direct and indirect Customers such as direct sale end users, higher-tier subcontractors, prime contractors and the ultimate user under relevant prime contracts.
13.3 Supplier warrants that any hardware, software and firmware Goods delivered under this Purchase Order (a) shall not contain any viruses, malicious code, Trojan horse, worm, time bomb, self-help code, back door, or other software code or routine designed
to (i) damage, destroy or alter any software or hardware,(ii) reveal, damage, destroy, or alter any data, (iii) disable any computer program automatically, or (iv) permit unauthorized access to any software or hardware, (b) shall not contain any third party software (including software that may be considered free software or open source software) that (i) may require any software to be
published, accessed or otherwise made available without the consent of the Buyer, or (ii) may require distribute, copying or modification of any software free of charge, and (c) shall not infringe any patent, copyright, trademark, or other proprietary right of any third party or misappropriate any trade secret of any third party.
13.4 These warranties shall survive any delivery, inspection, test, final acceptance, or payment of Goods and services by the Buyer for the entire warranty entitlement. Claims for breach of warranty do not accrue until discovery of noncompliance, even if the Goods were previously inspected, herein includes latent defect. The warranties provided are cumulative and in addition to anywarranty provided by law or equity. Any applicable statute of limitations runs from the date of discovery. Goods that meet the preceding standards are collectively called “conforming Goods”. If conforming Goods are not furnished within the time specified by the Buyer then the Buyer may, at its election and in addition to any other rights or remedies it may have at law or in equity, have the nonconforming Goods repaired, replaced, or corrected at Supplier’s expense. Supplier is responsible for the costs of handling and storage, repairing, replacing or correcting nonconforming Goods, and for all related costs, expenses and damages including, but not
limited to, the costs of removal, disassembly, failure analysis, fault isolation, reinstallation, reinspection, and retrofit of the nonconforming Goods or of the Buyer’s affected end-product; all freight charges; all Customer charges; and all corrective action costs (i.e., costs of additional inspection or quality control systems). Unless set off by the Buyer, Supplier will reimburse the Buyer for all such costs upon receipt of the Buyer’s invoice.
13.5 Without limiting the foregoing clauses, the Supplier shall inform the Buyer, throughout the period commencing from the date of acceptance of the Purchase Order until the expiry of the warranty period, as soon as the Supplier has notice of any equipment, parts or item of a system or spares which are obsolesce or obsolete. The Supplier shall be obliged to provide details about any plans for product discontinuation, including a binding last stockpiling offer and to specify substitute products, if available. The Supplier shall undertake the replacement of such part or item, which is obsolesce or obsolete include, but not limited to damage suffered by the Buyer due to incorrect or delayed information (e.g.; acquisition of replacements from third parties, third-party replicas and redesigned products).
13.6 For the purpose of Clause 13.4, “Latent Defect” means a failure of Goods which (a) was not discovered by the Buyer and/or the Buyer’s Customer before the end of the warranty entitlement (b) inhibits performance or reliability or adversely affects the cost of operation of the Goods (c) is the result of manufacturing error or deficiency or, where the Supplier is responsible for design, is the result of design error or deficiency (d )is not the result of fair wear and tear (e) does not fall within the incidence of random failures.
In the event of changes in the drawings, designs, specifications, method of shipment or packing, quantity, or time or place of delivery of the Goods, Buyer shall provide a revised PO which supersede the former PO. Supplier will make no specification changes to the design, materials, manufacturing location, or processes specified in the Purchase Order or documents referenced in it, or if none, those in place when the Purchase Order is issued, without the advance written approval of the Buyer’s Supply Chain representative. Changes to a process specification include, but are not limited to, changes to the production process, changes in
manufacturing equipment, or changes between a manual and automated process. This requirement applies whether or not the change affects costs and regardless of the type of change, including product improvements.
At any time by written notice and at no cost, the Buyer may require Supplier to stop all or any part of the work under this Purchase Order for up to twelve (12) months (“Stop Work Order”), beyond which it shall call for mutual discussion between the Buyer and Supplier. The Supplier shall preserve, protect and secure the Goods against any deterioration, loss or damage throughout the suspension period. Immediately upon receipt of a Stop Work Order, Supplier will comply with its terms. At any time during thesuspension period, the Buyer may, in whole or in part, either cancel the Stop Work Order or terminate the work under the
Termination section of this Purchase Order. To the extent the Stop Work Order is cancelled or expires, Supplier must resume work.
16.1 The non-breaching party may terminate this Purchase Order if the other party commits a material breach and fails to remedy the breach within fifteen (15) working days following receipt of written notice specifying the grounds for the breach. A material
breach includes, but is not limited to, late delivery or delivery of nonconforming Goods. The solvent party may terminate this Purchase Order upon written notice if the other party becomes insolvent or if any petition is filed or proceedings commenced by or against that party relating to bankruptcy, receivership, reorganization, or assignment for the benefit of creditors.
16.2 Notwithstanding any firm time period or quantity on the face of the Purchase Order, the Buyer may terminate this Purchase Order in whole or in part at any time with or without cause for undelivered Goods or unperformed services upon five (5) working days prior written notice.
16.3 If the Buyer terminates this Purchase Order, the Buyer’s sole liability to Supplier, and Supplier’s sole and exclusive remedy, is payment for Goods received and accepted by the Buyer before the termination. The payment can be set off against any damagesand/or accruals owing to the Buyer. For the purpose of this clause, the Buyer may also require Supplier to transfer title and deliver to the Buyer any completed Goods, or all property produced or procured by Supplier to perform this Purchase Order. The Buyer will credit Supplier with the reasonable value of the property, but not more than Supplier’s actual cost or the Purchase Order value, whichever is less.
16.4 To the extent that any portion of this Purchase Order is not terminated, Supplier will continue performing that portion.
- Cessation of Supplier Production
If production of any Goods called for under this Purchase Order is to be discontinued or suspended at any time within one year after final delivery of any Goods under this Purchase Order, Supplier must give the Buyer at least one hundred eighty (180) working days
prior written notice of the discontinuance or suspension. During the notice period Supplier must accept orders from the Buyer for the Goods at the price and on the terms of this Purchase Order.
- General Indemnification and Liquidated Damages
18.1 Supplier will, at its expense, defend and indemnify the Buyer and its subsidiaries, affiliates, and agents, and their respective officers, directors, shareholders, and employees, and the Buyer’s Customers (collectively “Indemnitees”) from and against any and
all loss, cost, expense, damage, claim, demand, or liability, including reasonable attorney and professional fees and costs, and the cost of settlement, compromise, judgment, or verdict incurred by or demanded of an Indemnitee arising out of, resulting from or
occurring in connection with Supplier’s negligence, willful misconduct, or breach of the terms of this Purchase Order. In no event will Supplier enter into any settlement without the Buyer’s prior written consent, which will not be unreasonably withheld.
18.2 If the Supplier should delay or exceed delivery dates as per stated on the face of the Purchase Order wholly or partly, and such delay attributable to the Supplier is not due to suspension or Force Majeure, then the Supplier shall pay liquidated damages of two
percent (2%) of the total delayed Goods according to the Contract Price, with incremental of two percent (2%) with every week of delay. The Buyer shall be entitled to recover from the Supplier as liquidated damages but not as penalty the amount calculated above. Payment of liquidated damages shall be made by the Supplier to the Buyer no later than fifteen (15) working days after the date of receipt of invoice for liquidated damages claim.
- Intellectual Property Indemnification
19.1 For Goods provided under this Purchase Order, Supplier will, at its expense, defend and indemnify Indemnitee from and against any and all loss, cost, expense, damage, claim, demand, or liability, including reasonable attorney and professional fees and costs,
and the cost of settlement, compromise, judgment, or verdict incurred by or demanded from Indemnitee arising out of, resulting from, or occurring in connection with any alleged: (a) patent, copyright, or trademark infringement; (b) unlawful disclosure, use, or misappropriation of a trade secret; or (c) violation of any other third-party intellectual property right, and from expenses incurred by Indemnitee in defense of such suit, claim, or proceeding if Supplier does not undertake the defense thereof. Supplier will have the right to conduct the defense of any such claim or action and, consistent with Indemnitee’s rights hereunder, all negotiations for its
settlement. But in no event, will Supplier enter into any settlement without the Buyer’s prior written consent, which will not be unreasonably withheld. Indemnitee may participate in a defense or negotiations to protect its interests. If any injunction or restraining order is issued, Supplier will, at its expense, either obtain for Indemnitee the right to continue using and selling the Goods or replace or modify the Goods to make them non-infringing. Supplier shall also indemnify the Buyer’s Customers and agents for such infringement if and to the extent that the Buyer has agreed to so indemnify them, but to no greater extent than Supplier
has indemnified the Buyer herein and under the same conditions as set forth herein.
19.2 In case any Goods or item being part of the Goods, delivered by the Supplier under the Purchase Order is in any such suit held to constitute an infringement, and its use is enjoined, the Supplier shall at its option and expense: (a) procure for the Buyer the right
to continue using the Goods concerned; (b) replace or modify the Goods so that it becomes non-infringing yet remains functionally and substantially equivalent to conform to the Purchase Order.
19.3 Applicable U.S. Government Procurement Regulations incorporated into this Purchase Order shall, when applicable, take precedence over any conflicting provision of this Clause 19 to the extent that such Regulations so required. The incorporation by reference of such U.S. Government Regulations dealing with subcontractor’s rights in Technical Data, subject inventions, copyrights, software and similar intellectual property are not intended to, and shall not, unless otherwise required by applicable law, obviate or
modify any greater rights which Supplier may have previously granted to the Buyer pursuant to prior agreements between the
20.1 Supplier will maintain and carry insurance which includes, but is not limited to, commercial general liability (including product liability and for services to be performed, completed operations liability) in a sum no less than the aggregate total value of orders transacted in the preceding year. Supplier will also maintain “all risk” property insurance (covering all property at full replacement value) which is subject to the risk of loss provision per Clause 7 of these terms and conditions. Supplier shall furnish the Buyer with certificates of insurance from its carrier(s) on the foregoing coverage(s) upon the Buyer request. Any change of such coverage shall be notified to the Buyer in written within fifteen (15) working days. Except where prohibited by law, Supplier will require its insurers to waive all rights of recovery or subrogation against the Buyer’s insurers, the Buyer’s subsidiaries and affiliated companies and their respective officers, directors, shareholders, employees, and agents. The amount of insurance carried in compliance with the above requirements is not to be construed as either a limitation on or satisfaction of the indemnification obligation in this Purchase Order.
20.2 Supplier shall comply with all the rules and regulations established by the Buyer for access to and activities in and around premises controlled by the Buyer or the Buyer’s Customer. Supplier shall be responsible for the actions and failure to act of all parties retained by, though, or under Supplier in connection with the performance of this Purchase Order.
- Protection of Information and Security
21.1 All information, including without limitation specifications, samples, drawings, data, documents, computer software, materials, know-how, designs, inventions, processes, and other technical, business, or financial information, that: (a) is supplied to Supplier by or on behalf of the Buyer, whether transmitted in writing, orally, or otherwise and whether supplied to Supplier prior to or after the issuance of this Purchase Order and is marked as “proprietary”; (b) Supplier designs, develops, or creates in connection with this Purchase Order at the Buyer’s expense; (c) Supplier designs, develops, or creates to meet the Buyer-furnished technical requirements; or (d) is a derivative of (a), (b), or (c) that Supplier designs, develops or creates in connection with this Purchase Order is deemed to be “Information”.
21.2 Information will remain the property of the Buyer, may not be used by Supplier for any purpose other than for performing this Purchase Order, may not be disclosed to any third party, and will be returned to the Buyer upon the earlier of the Buyer’s written request or completion of the Purchase Order. If, with the Buyer’s prior written approval, Supplier furnishes such Information to a sub-tier supplier, Supplier will bind the sub-tier supplier to requirements substantially identical to Clause 21 and Supplier will remain responsible to the Buyer for any breach of Clause 21 by its sub-tier suppliers.
21.3 Without the prior written approval of the Buyer, Supplier will not use (or assist others in using) Information or The Buyer Property (as defined in Paragraph 9.1) to: (a) design, manufacture or sell any component or part that is similar to, identical to, interchangeable with, or a substitute for any component or part, or detail of any component or part, designed, manufactured and/or sold by the Buyer (hereinafter “The Buyer Part”) to anyone other than the Buyer; (b) provide services and repair in relation to a The Buyer Part; or (c) obtain governmental approval to manufacture or repair any The Buyer Part, including Parts Manufacturing Approval (PMA) from the Federal Aviation Administration (FAA). If the Buyer has reason to believe that Supplier has engaged in any of the activities set forth in the preceding sentence, Supplier will, upon written request from the Buyer, promptly provide to the Buyer documentation and information sufficient to establish Supplier’s compliance with this Clause 21.3. If Supplier has sought government approval to manufacture or repair The Buyer Part, such documentation will include all documentation submitted in the application(s) for governmental approval.
21.4 Supplier must obtain the Buyer’s written permission before selling any products designed, developed or created using Information to any third party purporting to purchase such products under authority of the Buyer.
21.5 Supplier is obliged to strictly comply with our security instructions for external companies, as well as, in the case of orders involving classified material, with the relevant applicable issue of the manual for the protection of classified material in industry by applicable Authorities.
21.6 Supplier is obliged to strictly observe the security rules and regulations applying there at whenever accessing to the Buyer’s premises or the Buyer Customer’s premises or other related subcontractor in the performance of the Purchase Order.
- Audit and Rights of Access
22.1 The Buyer’s representatives shall be allowed in Supplier’s premises to monitor, check and follow-up activities related with the performance of this Purchase Order and any corrective/preventive actions shall be taken with the consent of the Buyer’s representatives, so as to ensure execution of the Purchase Order in a successful manner.
22.2 Supplier shall maintain suitably detailed records as may be necessary to adequately reflect Supplier’s compliance with the terms of this Purchase Order. Supplier will permit the Buyer’s auditors and related personnel to have access at all reasonable times to Supplier’s books and other pertinent records. Supplier will require each of its sub tier suppliers to do likewise with respect to their books and records. Supplier and each sub tier supplier will also furnish other information as may be needed by the Buyer’s representatives in auditing compliance.
22.3 The Buyer may perform audits up to two years following completion of this Purchase Order. If, as a result of an audit, any invoice submitted by Supplier is found to be in error, an appropriate adjustment will be made to the invoice or the next succeeding invoice following the discovery of the error and will be paid promptly by Supplier to the Buyer, as the case may be. Supplier will promptly correct any other Supplier deficiencies discovered as a result of the audit.
- Assignment, Subcontracting and Organization Changes
23.1 Supplier will not assign this Purchase Order or any rights or obligations or subcontract all or any material aspect of the work called for without the knowledge and prior written approval of the Buyer. Any assignment without the Buyer’s written approval is a material breach and can be voidable at the Buyer’s option. In the event that subcontracting is permitted, this does not relieve the Supplier from its obligations to the Buyer under this Purchase Order, that Supplier remains fully liable to the Buyer for all obligations hereunder. The Buyer shall be allowed to attend progress and other program and technical meetings between the Supplier and its subcontractor subject to adherence to security regulations. Supplier shall not appoint any foreign sub-subcontractor or service provider who for political, security or commercial reasons is not acceptable to the Government of Malaysia.
23.2 The Buyer may assign this Purchase Order or any of its rights or obligations to any of its subsidiaries or affiliates, or to any purchaser or successor to all or a portion of the assets of the business or product line to which this Purchase Order relates without Supplier’s consent and upon written notice to Supplier.
23.3 Supplier shall promptly notify the Buyer in writing of any organizational changes made by Supplier, including name or ownership changes, mergers or acquisitions.
- Relationship of Parties / Independent Contractor
Nothing in this Purchase Order will be construed to place Supplier and the Buyer in an agency, employment, joint venture, or partnership relationship. Neither party has the authority to obligate the other in any manner, and nothing contained in this Purchase Order will give rise or is intended to give rise to rights of any kind to any third parties. Neither party will make any representation to the contrary. The parties agree that Supplier will perform its obligations under this Purchase Order as an independent contractor. Supplier retains the right to exercise full control of, supervision over and responsibility for Supplier’s performance hereunder, including the employment, direction, compensation and discharge of Supplier’s personnel, as well as compliance with workers’
compensation, unemployment, disability insurance, social security, withholding and all other laws, rules, codes, regulations and ordinances governing such matters. As such, the Buyer shall not be liable for Supplier’s loss of production, loss of profit, loss of use, loss of contracts or for any other consequential or indirect loss whatsoever.
- Compliance with Laws, Integrity and Ethics
25.1 Supplier will comply with all applicable national, state and local laws, regulations and ordinances, including but not limited to obtain all registrations, licenses and permits required in performing this Purchase Order. In particular, the Supplier shall neither actively or passively, nor directly or indirectly participate in any form of corruption or bribery, and shall ensure compliance with the internationally applicable human rights in its sphere of influence. Supplier will maintain an integrity and compliance program acceptable to the Buyer and effective in preventing and correcting ethical violations and in maintaining compliance with laws.
25.2 If the Supplier breaches the aforementioned obligations, without prejudice to any of its other remedies, the Buyer shall have the right to rescind ab initio (where possible) or terminate the Purchase Order, without prejudice to any further claims it may have. If it is possible to remedy the said breach, the Buyer may exercise this right of rescission or termination only after a reasonable period of time is granted for remedying the breach and such period expires without the breach being remedied to the Buyer’s satisfaction.
25.3 Where stipulated on the face of the Purchase Order with “For U.S. Customer”, Supplier warrants that in the performance of this Purchase Order, it will comply with all U.S. Department of Transportation regulations on hazardous materials and other pertinent federal, state, or local statutes, laws, rules, or regulations; and Supplier further agrees to save the Buyer harmless from any loss, damage, fine, penalty, or expense whatsoever that the Buyer may suffer as a result of Supplier’s failure to comply with this warranty. Additionally, Supplier will implement the Business Partner Criteria of any Supply Chain Security Program that the country of import for the Goods may adopt such as the U.S. Customs Trade Partnership Against Terrorism (C-TPAT) or the Canadian Partners in Protection (PIP) Program. The foregoing is in addition to and not in mitigation of any other requirements of this Purchase Order.
- Compliance with Environmental, Health and Safety Laws
26.1 Supplier shall comply with all applicable national, EU, state and local environmental, health and safety laws, regulations or directives (e.g.; OHSAS requirement).
26.2 Upon request, in form and substance satisfactory to enable the Buyer to meet its compliance obligations with regard to Regulation (EC) No 1907/2006 (“REACH”) or similar laws or regulations identified by the Buyer, Supplier will provide the Buyer with complete information regarding the chemical composition (substances, preparations, mixtures, alloys or goods) of any Goods supplied under this Purchase Order, including all safety information required under REACH and information regarding the registration or pre-registration status of any Goods pursuant to REACH. Supplier agrees that it will inform the Buyer of “Identified Use” in its REACH registrations or applications for Authorization, unless Supplier notifies the Buyer in writing that it rejects such
Identified Use in order to protect human health or the environment and specifies the reason for such rejection. In such case the Buyer shall have the right to terminate this Purchase Order without incurring any costs or damages.
26.3 Additionally, unless Supplier informs the Buyer in writing and obtains the Buyer’s prior written consent, no Goods will contain any of the substances identified in the European Parliament Directive 2002/95/EC (RoHS Directive) or any superseding directives, as that Directive is updated from time to time, or similar laws or regulations identified by the Buyer, restricting the use of hazardousmaterials in other jurisdictions.
26.4 Goods supplied under this Purchase Order shall not contain any hazardous and ozone-depleting substance prohibited by any applicable laws and relevant conventions.
26.5 In acceptance of the Purchase Order, Supplier will abide and enforce any laws or acts including but not withstanding The Dodd?Frank Act and Child Employment Law and further agrees to provide the Buyer with complete information regarding these acts. Supplier will comply to any other internationally recognized directives that may be made compulsory from time to time.
26.6 Supplier will be responsible for all costs and liabilities for or relating to the recycling of Goods pursuant to the most current version of European Parliament Directive2002/96/EC (WEEE Directive) as such Directive is implemented in each country, or similar laws or regulations identified by the Buyer.
- Compliance with Statutory and Regulatory Laws
Supplier shall observe and comply to the latest internationally recognized acts, prohibitions and/or laws. When required, supplier shall declare its compliance to such requirements including but not withstanding RoHS, REACH, Conflict Mineral Act, ITAR, EAR and any requirements which may be imposed from time to time.
- Unauthorized Parts
28.1 A “Suspect Part” is a part in which there is an indication by visual inspection, testing, or other information that it may meet the definition of a Fraudulent Part or a Counterfeit Part. A “Fraudulent Part” is any part knowingly misrepresented as meeting required specifications. A “Counterfeit Part” is a part that has been represented, identified, or marked as genuine, but has been confirmed to be a copy, imitation, or substitute that was created (a) without legal right to do so, and (b) with intent to mislead, deceive, or defraud. Suspect Parts, Fraudulent Parts, and Counterfeit Parts are referred to collectively as “Unauthorized Parts.”
28.2 Promptly upon the Buyer discovering that Supplier has delivered to the Buyer the Goods that is or contains an Unauthorized Part (“Contaminated Product”), the Buyer will impound such Contaminated Product and provide written notice to Supplier of such action. Vice versa, upon Supplier discovering that Supplier has delivered to the Buyer a Contaminated Product, Supplier will provide written notice to the Buyer of same. Promptly upon the occurrence of either condition above, Supplier will, at its sole cost and expense, replace such Contaminated Product with a Product that meets the Buyer’s specifications.
28.3 Supplier shall indemnify the Buyer from Liability relating to the removal and replacement of Contaminated Products, including without limitation the Buyer’s external and internal costs of removing Unauthorized Parts, of reinserting replacement parts, and of any testing necessitated by the reinstallation of Supplier’s goods after Unauthorized Parts have been exchanged.
28.4 When requested by the Buyer, Supplier shall provide documentation that authenticates traceability of the applicable manufacturers utilized by Supplier to obtain all parts under this Agreement.
- Governing Law, Settlement of Disputes and Language
29.1 While the Buyer is a legal entity formed in Malaysia, then the construction, interpretation and performance hereof and all transactions hereunder will be governed in accordance with the arbitration rules of the Kuala Lumpur Regional Arbitration Centre, of which having exclusive jurisdiction of any dispute arising out of or relating to this Purchase Order, including the breach, termination or validity thereof. The place of arbitration shall take place in Malaysia. The language of arbitration including documentation shall bein the English language.
29.2 All documentation under or pursuant to this Purchase Order shall be in the English language.
All the Buyer remedies set forth in this Purchase Order are in addition to, and will in no way limit, any other rights and remedies that may be available to the Buyer at law or in equity. The Buyer may enforce one or more of such remedies successively or concurrently.
All Notices relating to this Purchase Order must be in writing. Notices to the parties will be sent to their respective addresses appearing on the face of this Purchase Order. Notices must be delivered personally; or delivered by recognized overnight courier; or mailed certified first-class mail, postage prepaid; or sent by facsimile transmission to the facsimile number provided by the Buyer or Supplier respectively; or sent by electronic transmission (email) with proof of delivery. Any Notice will be deemed given on the date delivered if delivered personally; three (3) working days after being placed in the mail as specified; or upon confirmation receipt that it was transmitted satisfactorily if transmitted by facsimile or electronic transmission. Any news release, public announcement, advertisement, publicity or any other disclosure concerning this Purchase Order to any third party except as may be necessary to comply with other obligations stated in this Purchase Order requires prior written approval of the Buyer.
If any provision of this Purchase Order is held to be illegal, invalid, or unenforceable by a court of competent jurisdiction, that provision will be severed from this Purchase Order; the remaining provisions will remain in full force and effect; and a similar legal, valid and enforceable provision will be substituted in lieu of the severed provision.
All provisions of this Purchase Order which by their nature should apply beyond their terms will remain in force after any termination or expiration of this Purchase Order including, but not limited to, those addressing the following subjects: Import/Customs Compliance, Price, Invoicing and Payment, Warranty, Cessation of Supplier Production, General Indemnification and Liquidated Damages, Intellectual Property Indemnification, Insurance, Protection of Information and Security, Audit and Rights of Access, Governing Law, Settlement of Disputes and Language, Notices, and Survival.