In consideration of the covenants and conditions set forth herein, the parties agree as follows:
1. ACCEPTANCE. This order is deemed accepted by Seller if not rejected via electronic mail, facsimile, or any other form of writing within five (5) days of the order’s date. Acceptance is limited to the terms and conditions of this order. This order, with any attachments, constitutes the entire agreement of the parties. No waiver, modification or additions to the terms of this order shall be valid unless in writing and signed by the parties.
2. PRICES. Buyer shall not be billed at prices higher than those stated on Buyer’s order. Unless otherwise specified, the price includes all charges for packing, hauling, storage and transportation to point of delivery. Seller will pay all delivery charges in excess of any delivery charge Buyer has agreed to pay. The price stated includes all taxes except state or local sales or use tax or similar taxes, which Seller is required by law to collect from Buyer. Such taxes, if any, shall be separately stated in Seller’s invoice and paid by Buyer unless an exemption is available. Seller agrees that any price reduction made with respect to the items covered by this order subsequent to its placement but prior to payment will be applicable to this order.
3. DELIVERY. Substitutions will be accepted. The order must be shipped complete by the date requested but must not be shipped more than one week in advance of the time or times specified herein, without Buyer’s prior approval. When more than one shipment is made against any order, indicate “Final Shipping” on shipping papers and invoice accompanying the last shipment in the order. Seller shall not ship excess quantities without Buyer’s prior approval. Except as otherwise provided herein, Buyer shall not be obligated to accept untimely, excess or under shipments and such shipments in whole or in part may, at Buyer’s option, be returned to Seller, or held for disposition at Seller’s expense and risk. Seller’s invoice shall describe the items, state the purchase order number and be attached to the original bill of lading or other shipping receipt.
4. CHANGES. Buyer may change in drawings, specifications, quantities, delivery schedules, or methods of shipment or packaging on any goods at any time. If such changes result in an increase or decrease in cost, an equitable adjustment of price and delivery schedules may be made, or Buyer may, at its option, terminate the order if agreement on an adjustment cannot be reached. Claims for adjustment must be asserted by Seller within ten days of the change order.
5. WARRANTIES. Seller warrants that the items and services covered hereunder will conform to applicable specifications, instructions, drawings and data, and that samples will be merchantable, of good material and workmanship, free from defects and will be fit and sufficient for the purpose intended. These warranties shall be in addition to all other warranties, express, implied or statutory. Payment for, inspection of, or receipt of articles or services shall not constitute a waiver of any breach of warranty.
6. INSPECTION AND TESTS. All goods ordered hereunder will be subject to inspection and test by Buyer to the extent practicable at all times and places, including the period of manufacture and in any event prior to acceptance. Seller agrees to permit access to Seller’s facilities at all reasonable time for inspection of goods by Buyer’s agents or employees and will provide all tools, facilities and assistance reasonably necessary for such inspection at no additional cost to Buyer. Such goods will be subject to final inspection and acceptance by Buyer after delivery to Buyer. It is expressly agreed that inspection and/or payments prior to delivery will constitute final acceptance. If the goods delivered do not meet the specifications, or otherwise do not conform with the requirements of this order, Buyer shall have the right to reject such goods. Goods which have been delivered and rejected in whole or in part may at Buyer’s option, be returned to Seller or held for disposition at Seller’s risk and expense.
Buyer will have the right, but not the obligation to examine Seller’s records for the purpose of determining compliance with this order. Should a compliance review be performed. Buyer or it duly designated representatives will provide reasonable notice to Seller and the records may be examined only during the normal business hours. Buyer will bear all costs of audit. The right to audit shall expire 18 months after the expiration or termination of this order.
7. BUYER’S PROPERTY. Title to and right of immediate possession of any property, including without limitation, patterns, tools, jigs, dies, equipment or materials furnished paid for by the Buyer shall remain in Buyer. No articles made therefrom shall be furnished by Seller to any other party without Buyer’s prior written consent. Seller shall keep adequate records of such property, which shall be made available to Buyer upon request, and shall store, protect, preserve, repair and maintain such property in accordance with sound industrial practice, all at Seller’s expense. Unless otherwise agreed to by Buyer, Seller shall insure Buyer’s interest in such property against all risks of theft, loss or damage (including extended coverage). Copies of certificates on insurance evidencing this coverage will be to the Buyer on demand.
In the event that Buyer’s property becomes lost or damaged to any extent from any cause while in Seller’s possession. Seller agrees to indemnify Buyer or replace such property, at Seller’s expense, in accordance with Buyer’s request. At the completion of the goods requested by Buyer in this order for which Buyer’s property was required, Seller shall request disposition instructions for all such property, or the remainder thereof, whether in its original form or in semi-processed form. Seller agrees to make such property available to Buyer at Buyer’s request, in the manner requested by Buyer including preparation, packing and shipping as directed. Expenses for preparation for shipment will be for Seller’s account and shipment shall be made F.O.B. Buyer’s facility.
8. DRAWING AND SPECIFICATION REVIEW. If, during the term of the order, Buyer’s representatives review drawings, specifications, or other data developed by Seller in connection with the order and make suggestions or comments or approve such documents and data, such action is only an expression of opinion by Buyer and shall not serve to relieve Seller of any responsibility for the reliability, quality, rate of output, cost, delivery, performance or any other requirements of this order.
9. DRAWINGS AND DATA. Seller shall keep confidential all information, drawings, specifications, or data furnished by Buyer, or prepared by Seller specifically in connection with the performance of this order, and shall not divulge or use such information, drawings, specifications or data for the benefit of any other party. Except as required for the efficient performance of this order, Seller shall not make copies or permit copies to be made without the prior written consent of Buyer. Seller shall not use, either directly or indirectly, any such data or any information derived therefrom for any purpose other than to perform this order without obtaining Buyer’s written consent. Seller shall return all information, drawings, specifications, or data of Buyer upon termination of this agreement or upon Buyer’s demand.
10. USE OF INFORMATION. Seller agrees that all information heretofore or hereafter furnished or disclosed to Buyer or Seller in connection with the placing or filing of this order is furnished or disclosed as a part of the consideration for this order, that such information is not, unless otherwise agreed to by Buyer in writing, to be treated as confidential or proprietary and that Seller shall assert no claims by reason of the use or disclosure of such information by Buyer, its assigns or its customers.
11. ADVERTISEMENTS. Seller shall not in any manner advertise or publish the fact that it has furnished Buyer, or contracted to furnish Buyer, the goods or services herein mentioned without prior written consent of Buyer. Seller shall not disclose any details in connection with this order to any party except as may be otherwise provided.
12. TOOLING. Unless otherwise specified in this order, all tooling and/or all other articles required for the performance hereof shall be furnished by Seller, shall be maintained in good condition and replaced when necessary at Seller’s expense, and if furnished by Buyer, returned to Buyer upon demand.
13. TERMINATION. Buyer may terminate the performance of the work under this order in whole at any time, or from time to time in part, by written notice to Seller. Upon receipt of such notice, Seller shall, unless the notice directs otherwise, immediately discontinue all work and the placing of all orders for materials, facilities and supplies in connection with the performance of this order and shall proceed to cancel promptly all existing orders and terminate all subcontracts insofar as such orders or subcontracts are chargeable to this order. Upon the termination of work under this order, full and complete settlement of all claims of Seller with respect to the terminated work shall be made as follows:
(a) as compensated to Seller for such termination, unless such termination is for the default of Seller, Buyer shall pay Seller the percentage of the total order price correspondence to the proportion of the amount of work completed on the date of termination to the total work to be done, that are not recoverable in the normal course of Seller’s business, as Seller’s full compensation for the work completed under this order; and
(b) upon Buyer’s payment to Seller in accordance with this paragraph, title to all equipment, materials, work-in-progress, finished products, plans, drawings, specifications, information, special tooling and other things for which Seller has paid such vest in Buyer.
Nothing contained in this paragraph shall be construed to limit to affect any remedies, which Buyer may have as a result of default, by Seller.
14. DEFAULT – CANCELLATION. Buyer reserves the right, by written notice of default, to cancel this order, without liability to Buyer, in the event of the happening of any of the following: insolvency of Seller, the filing of a voluntary petition in bankruptcy by Seller, the filing of an involuntary petition to have Seller declared bankrupt, the appointment of a Receiver or Trustee for Seller, or the execution by Seller of an assignment for the benefit of creditors. If Seller fails to perform as specified herein, or if Seller breaches any of the terms hereof, Buyer reserves the right, without any liability to Buyer, upon giving Seller written notice, to (i) cancel this order in whole or in part, by written notice to Seller and Seller shall be liable to Buyer for all damages, losses and liability incurred by Buyer directly or indirectly resulting from Seller’s breach, or (ii) obtain the goods ordered herein from another source with any excess cost resulting therefrom, chargeable to Seller, if such deficiencies are not remedied. The remedies herein provided shall be cumulative in addition to any other remedies provided at law or in equity.
15. FORCE MAJEURE. Neither party shall be liable for defaults or delays due to Acts of God or the public enemy, acts or demands of any Government or any Governmental agency, strikes, fires, floods, accidents, or other unforeseeable causes beyond its control and not due to its fault or negligence. Each party shall notify the other in writing of the cause of such delay within five (5) days after the beginning thereof.
16. COMPLIANCE WITH LAWS. Seller shall, at all times during the term of this agreement, comply with all applicable laws and regulations and Buyer’s Prime Contract terms and conditions, and shall refrain from engaging in any illegal, unethical, or deceptive practices. Without limiting the foregoing, Seller agrees to comply with:
(a) DEPARTMENT OF LABOR STANDARDS COMPLIANCE:
Seller agrees and certifies that the goods to be manufactured or furnished hereunder have been or will be produced in compliance with all applicable requirements of Sections 6, 7 and 12 of the Federal Fair Labor Standards Act, as amended, and that regulations and orders of the U.S. Department of Labor issued under Section 14 thereof and with 29 CFR Part 470 Obligations of Federal Contractors and Subcontractors; Notice of Employee Rights Concerning Payment of Union Dues or Fees.
(b) GOVERNMENT PROCUREMENT PROVISIONS. The Procurement Integrity Act (41 U.S.C. § 423) and associated regulations in the Federal Acquisition Regulation (“FAR”) (currently at FAR 3.104), the Anti-Kickback Act (41 U.S.C. § § 51-58) and associated regulations in the FAR (currently FAR 3.502), the provisions on bribery and gratuities set forth in 18 U.S.C. § 201 and associated regulations in the FAR (currently at FAR Subpart 3.2), the Organizational and Consultant Conflicts of Interest prohibitions and requirements in the FAR (currently at Subpart FAR 9.5),and the independent pricing requirements in the FAR (currently at FAR 3.103). As prescribed by the Federal Acquisition Regulation (“FAR”), the following clauses are incorporated by reference and apply to this agreement with the same force and effect as if the text of the clauses was fully set forth: (i) FAR 52.219-8, Utilization of Small Business Concerns, (iii) FAR 52.222-26, Equal Opportunity, (iii) FAR 52.222-35, Equal Opportunity for Special Disabled Veterans, Veterans of the Vietnam Era, and Other Eligible Veterans, (iv) FAR 52.222-36, Affirmative Action for Workers with Disabilities, and (v) FAR 52.247-64, Preference for Privately Owned U.S.-Flagged Commercial Vessels. Additional FAR clauses may also apply to this agreement and be flowed-down if the Government incorporates by reference other FAR clauses into the Prime Contract, including clauses enumerated in FAR 52.212-5. Supplemental Government Agency FAR clauses may also be incorporated by reference into Buyer’s contracts with the U.S. Government and thus will be required to be flowed-down and incorporated into this agreement. In particular, prime contracts with the U.S. Department of Defense may incorporate by reference the following U.S. Department of Defense FAR Supplement (“DFAR”) clauses that would be required to be flowed-down to subcontracts with the same force and effect as if the text of the clauses was fully set forth in the subcontracts: ( i ) DFAR 252.225-7014, Preference for Domestic Specialty Metals (ii) DFAR 252.247-7023, Transportation of Supplies by Sea, and (iii) FAR 252.247-7024, Notification of Transportation of Supplies by Sea.
(c) OCCUPATIONAL SAFETY AND HEALTH ACT: Seller hereby certifies that the goods ordered meet or exceed all applicable requirements of the occupational safety and health standards adopted pursuant to the Williams-Steiger Occupational Safety and Health Act of 1970 and that the use by Buyer and its customer of such goods, if used by any of them in the manner prescribed in such standards, will not cause them to be in violation of such standards.
(d) ENVIRONMENTAL COMPLIANCE: With respect to transactions under this agreement and facilities of the Seller to which U.S. Executive Order 11738 applies, the Seller certifies: ( i ) no facility to be utilized by Seller, or any of its subsidiaries and/or affiliates, in the performance of this subcontract is included on the U.S. Environmental Protection Agency list of violating facilities, and (ii) prompt written notification shall be given by Seller to Buyer of any communication indicating that any facility of Seller, or any facility of its subsidiaries and/or affiliates, is under consideration to be included on or has been placed on the U.S. Environmental Protection Agency list of violating facilities. Seller shall label the goods in compliance with 40 CFR 82, subpart E, or certify that the goods are neither manufactured with nor contain a controlled ozone depleting substance.
(e) CUSTOMS AND BORDER PROTECTION: Seller shall complete any security chain questionnaire or other document reasonably requested by Buyer relating to its import/export activities and shall provide written notice if it is CTPAT certified.
Upon request, Seller shall furnished Buyer certificates of compliance with such laws and regulations.
17. INDEMNIFICATION. Seller will defend, hold harmless and indemnify Buyer from and against any liability and expenses (including, without limitation, attorney and other professional fees and disbursements) arising from or in connection with any damages, injuries or third party claims or demands to recover for personal injury, death, or property damage causes by or arising out of any of the goods or services supplied by Seller (regardless of whether such claim or demand arises under tort, negligence, contract, warranty, strict liability or other legal theories), except to the extent such injury, damage or loss results from Buyer’s negligent actions or alteration or misuse of the goods provided by Seller.
18. INSURANCE. During the performance of the agreement period, Seller shall maintain and keep in force at its own expense. Commercial General Liability Insurance, including products and contractual liability, with a combined single limit of $1 million per occurrence in excess of it’s deductible and/or self insured retention. Seller shall provide a Certificate of Insurance to Buyer upon request to verify above listed coverage
19. INTELLECTUAL PROPERTY INDEMNIFICATION. Seller shall indemnify and save harmless Buyer, its successors, assigns, customers or users of its products, from and against all loss, liability and damage, including costs and expenses, resulting from any claim that the manufacture, use, sale or resale of any goods supplied under this order infringe any patent or patent rights, trademark copyright or other intellectual property right of a third party and Seller shall when notified, defend any action or claim of such infringement at its own expense.
20. ASSIGNMENT. Neither this order nor any rights or obligations herein may be assigned by Seller nor may Seller delegate the performance of any of its duties hereunder without Buyer’s prior written consent.
21. APPLICABLE LAW AND JURISDICTION. The validity, interpretation and performance of these terms and conditions shall be governed by the laws of the State of North Carolina without reference to conflict of laws principles. The parties agree that any action related to this agreement shall be venued in the Federal District Court for the Eastern District of North Carolina or the Superior Court for the State of North Carolina, Pitt County, and the parties hereby irrevocably commit to the jurisdiction of these courts.
22. ATTORNEY’S FEES. In the event there is any dispute concerning the terms of this agreement or the performance of any party, and any party retains counsel for the purpose of enforcing any of the provisions of this agreement or asserting the terms of this agreement in defense of any suit filed against said party, each party shall be solely responsible for its own costs and attorneys’ fees incurred in connection with the dispute irrespective of whether or not a lawsuit is actually commenced or prosecuted to conclusion.
23. INVOICES AND NOTICES. All correspondence and invoices covering this order must be addressed to Buyer’s Purchasing Department at the address indicated on the purchase order. The parties agree that for any transactions subject to this purchase order, facsimile signatures shall be accepted as original signatures, orders may be transmitted electronically and any document created pursuant to this order may be maintained in an electronic document storage and retrieval system a copy of which shall be considered an original. Neither party shall raise any objection to the authenticity of this purchase order of any document created hereunder, based on the use of a facsimile signature, electronic order or the use of a copy retrieved from an electronic storage system.
24. PAYMENT TERMS. Unless otherwise agreed to in writing, all payment terms are 2/15 Net 45 days, commencing upon receipt and acknowledgment of delivery by Shepherd.
25. SEVERABILITY. In case any one or more provisions contained in this purchase order shall be invalid, illegal, or unenforceable in any respect, the validity, legality, or enforceability of the remaining provision contained herein shall not in any way be affected or impaired thereby.