HIROTEC Purchase Order Terms and Conditions

GENERAL TERMS AND CONDITIONS

1. Agreement and Acceptance.

Seller agrees to sell and deliver the goods or services specified in any purchase order in accordance with these General Terms and Conditions (these “Terms and Conditions”), including any documents referenced herein, all of which constitute the entire agreement of the parties and cancel and supersede any prior or contemporaneous negotiation or agreements. These Terms and Conditions may only be modified by a contract amendment issued by Buyer. BUYER’S ORDER EXPRESSLY LIMITS ACCEPTANCE TO THE TERMS OF THESE TERMS AND CONDITIONS AND ANY ADDITIONAL OR DIFFERENT TERMS, WHETHER CONTAINED IN SELLER’S FORMS OR OTHERWISE PRESENTED BY SELLER ARE REJECTED UNLESS EXPRESSLY AGREED TO BY BUYER IN WRITING. THE PROVISIONS CONTAINED IN THESE TERMS AND CONDITIONS SHALL CONTROL IN THE EVENT OF ANY INCONSISTENCY BETWEEN ANY OF THE PROVISIONS OF THESE TERMS AND CONDITIONS AND THE PROVISIONS OF ANY OTHER DOCUMENT, INCLUDING BUT NOT LIMITED TO ANY FORMS, TERMS AND CONDITIONS OR PURCHASE ORDERS.
Seller specifically agrees to, and acknowledges its acceptance of, these Terms and Conditions by returning a signed copy of these Terms and Conditions.

2. Purchase Orders and Changes.

  1. Seller will be authorized to begin work only if Seller has received a purchase order from Buyer or if Seller has received written authorization to begin work from one or more of the following Buyer personnel:
    1. Manager of Project Management;
    2. Vice President of Product Development,
    3. Vice President of Operations or
    4. Vice President of Engineering.
  2. Buyer may, at any time, make changes, or cause Seller to make changes, of any kind in these Terms and Conditions. Any claim by Seller for a price adjustment due to such changes must be asserted in writing within ten (10) days from date of receipt by Seller of Buyer’s notification of any change. Buyer will have the right to verify all claims hereunder by auditing relevant records, facilities, work or materials of Seller. Seller agrees to proceed with the changes made pursuant to this paragraph during such audit.
  3. All engineering changes, whether initiated by Buyer or Seller, will be processed pursuant to Buyer’s practices in effect at the time of the change. All Buyer approved engineering changes will be promptly implemented by Seller as directed by Buyer. Price changes for Buyer approved engineering changes are to be based solely on the design cost variance from the superseded design and must be substantiated with appropriate documentation satisfactory to Buyer.

3. Price and Payments.

  1. General. Prices contained in any purchase order are firm and are not subject to change without prior Buyer’s approval as evidenced by Buyer’s properly authorized written amendment to such purchase order. No change shall be made by Seller for boxing, packing or cartage unless by express agreement. Seller is granted no right or set off of unpaid invoices against obligations of Seller’s parent, subsidiaries or affiliates, to Buyer. No purchase money security interest will be granted by Buyer to Seller under these Terms and Conditions or any purchase order.
  2. Most Favored Customer. Seller warrants that the prices for the goods and services sold to Buyer hereunder are and will be no less favorable than Seller currently extends to any other customer for the same or similar goods or services in similar quantities. If Seller reduces its prices to others for the same or similar goods or services, Seller will immediately reduce the prices to Buyer for such goods or services. Seller warrants that no additional charges of any type will be added to prices shown on any purchase order without Buyer’s express written consent.
  3. Payment. Buyer will make all payments to Seller within sixty (60) days net proximo from the date of Seller’s invoice, unless expressly stated to the contrary on the front of a purchase order.

4. Delivery.

  1. General. Time is of the Essence. Deliveries are to be made both in the quantities and at the dates specified by Buyer. Buyer will not pay for material or items delivered to Buyer which are in excess of quantities specified in any order. Buyer may, from time to time, change delivery schedules or direct temporary suspension of scheduled shipments upon prior written notice, none of which shall entitle Seller to a modification of the price for goods or services. If Seller fails to make deliveries or perform services at the agreed time, all damages suffered by Buyer and any additional transportation or other costs required to meet the specified delivery schedule will be at the expense of Seller. 100% on time delivery is required as negotiated.
  2. Release Authorization. When deliveries are specified to be in accordance with Buyer’s written releases, Seller with not fabricate or assemble any goods, nor procure required materials, nor ship any supplies, except to the extent authorized by such written releases.
  3. Excusable Delays. At Buyer’s sole discretion, allowances may be made for delays caused by fire, flood, earthquake, strikes, insurrections and circumstances beyond the reasonable control of Seller. If, at any time, Seller has reason to believe that deliveries will not be made as scheduled, written notice setting forth the cause and the anticipated new delivery date(s) will be sent to Buyer immediately. Fire, strikes, accidents and other causes beyond Buyer’s control shall relieve Buyer from accepting delivery hereunder while such cause is operative.

5. Packing, Marking and Shipment.

  1. General. Seller will pack and mark goods and make shipments in accordance with Buyer’s instructions, meet carrier requirements and assure delivery free of damage and deterioration. All shipments to Buyer’s plants must include two packing slips and bills of lading, or four packing slips and bills of lading in the case of shipments directed to a Buyer consolidation point. Whenever shipment is made by truck, Seller will enclose one of the packing slips (or packing slip sets in the case of multiple item shipments) in an envelope to Buyer’s traffic representative upon arrival at Buyer’s plant. Seller is responsible for all risks to the goods until delivery and acceptance at the Buyer designated FOB point.
  2. Designated Carrier. Buyer may specify the carrier and/or method of transportation and Seller will process shipping documents and route shipments accordingly. Seller will comply with all of Buyer’s transportation routing instructions, including without limitation, mode of transportation, utilization of assigned carrier and identification of the shipping point. Seller will be responsible for all excess costs incurred because of its failure to comply with Buyer’s transportation instructions.
  3. Documentation Requirements. Buyer will not be responsible for delays in the payment of invoices if the following requirements are not met: invoices and packing slips must bear the Buyer-assigned supplier code, purchase order number, part number, the requisition number on quantity buys or the release number on blanket orders, the “Ship-to” address, Buyer-assigned plant location code, invoice-to-address, and whether containers used are “returnable” or “non-returnable.”

6. General Warranty.

  1. General. Seller warrants that the goods or services will
    1. comply with all specifications, drawings, descriptions or samples furnished and/or specified by Buyer,
    2. be merchantable, and
    3. be free from defects in materials and workmanship. In addition, Seller acknowledges that Seller knows of Buyer’s intended use and Seller further warrants that all goods not designed by Buyer will be fit and sufficient for the purposes intended. The warranty item will be coterminous with the warranty extended to Buyer’s customers by Buyer. Seller’s liability for a breach of the warranties given herein will be determined by Buyer’s analysis of a sample of products against which claims are made that the products are defective. Seller will participate in such analysis in accordance with Buyer’s procedures.
  2. Title. Seller further warrants that on delivery Buyer will receive good and merchantable title to the goods and services, free and clear of all liens and encumbrances of any kind and that all goods and services will be free from any actual or claimed patent, copyright or trademark infringement and any claims of third parties.
  3. Survival. These warranties are in addition to any warranties implied by law or otherwise made by Seller and will survive acceptance and payment by Buyer.

7. Inspection and Claims.

  1. General. Seller acknowledges that Buyer will not perform incoming inspections of the goods, and waives any rights to require Buyer to conduct such inspections. To the extent Buyer rejects goods as nonconforming, the quantities under the subject purchase order will automatically be reduced unless Buyer otherwise notifies Seller. Seller will not replace quantities so reduced without a new contract or schedule from Buyer. Nonconforming goods will be held by Buyer in accordance with Seller’s instructions at Seller’s risk. Seller’s failure to provide written instructions within 10 days, or such shorter period as may be commercially reasonable under the circumstances, after notice of nonconformity shall entitle Buyer, at Buyer’s option, to charge Seller for storage and handling or to dispose of the goods without liability to Seller. Payment for nonconforming goods shall not constitute an acceptance of them, limit or impair Buyer’s right to assert any legal or equitable remedy, or relieve Seller’s responsibility for latent defects.
  2. Inspection of Manufacturing Process. Buyer may inspect and evaluate all goods (including all tooling and material used in their manufacturing process), and all services at times and places designed by Buyer. Seller will provide and maintain a Supplier Quality Assurance System approved by Buyer and which meets Buyer’s specifications, as they may be amended from time to time. Seller will perform inspections as designed by Buyer and Seller will make inspection systems, procedures and records available to Buyer upon request. Buyer reserves the right to inspect at Seller’s premises and have Buyer’s customer present when required.
  3. Remedies. Without limiting its remedies, after notice to Seller, Buyer may
    1. replace or correct any non-conforming goods or services and charge Seller the full cost of such replacement or correction on an expedited basis to meet delivery dates and removal of any defective materials and goods,
    2. cancel the order for default,
    3. subject Seller’s account to a debit for the damages suffered by Buyer, and/or
    4. cause the removal of Seller as an approved Buyer supplier.
  4. Setoff/Recoupment. In addition to any right of setoff or recoupment provided by law, all amounts due to Seller shall be considered net of indebtedness of Seller and its affiliates/subsidiaries to Buyer and its affiliates/subsidiaries; and Buyer shall have the right to deduct any amounts due or to become due from Seller and its affiliates/subsidiaries to Buyer and its affiliates/subsidiaries from any sums due or to become due to Seller and its affiliates/subsidiaries from Buyer and its affiliates/subsidiaries.


8. Property and Special Tooling.

Property of every description including all tools, equipment, material, drawings, manufacturing aids and replacements of the foregoing furnished by Buyer, either directly or indirectly, or as acquired or manufactured by Seller for use in the performance of work hereunder, for which Seller has been reimbursed by Buyer (“Special Tooling”), will be

  1. the property of Buyer,
  2. plainly marked or otherwise adequately identified by Seller as the property of Buyer, and
  3. safely stored separate and apart from Seller’s property. Seller will adhere to the Buyer procedure in effect at the time for submitting requests for reimbursement for tooling costs. All requests for reimbursement for tooling costs are subject to review, approval and audit by Buyer. Seller will retain and not use or rework tooling or property of Buyer except for performance of work hereunder or as authorized in writing by Buyer. Seller will keep such tooling or property in its possession and/or control in good condition, fully covered by insurance, free of liens and encumbrances and will replace such tooling or property when lost, damaged or destroyed. All Buyer tooling and property will be transferred as Buyer may direct at any time. If Seller makes any unauthorized transfer of Special Tooling, Seller will reimburse Buyer for any costs incurred by Buyer in returning the tooling to Buyer or moving the tooling as directed by Buyer.

9. Work on Premises.

If Seller’s employees, contractors, or agents provide services to Buyer on Buyer’s premises or Buyer’s customer’s premises, Seller shall examine the premises to determine whether they are safe for such services and shall advise Buyer promptly, in writing, of any situation it deems to be unsafe. Seller shall handle and be responsible for every claim that arises from Seller’s work on Buyer’s premises or Buyer’s customer’s premises that is for actual or alleged injury or damage to any person, property, economic loss, worker’s compensation claim, or violation of any law, or at Buyer’s option provide reasonable assistance to Buyer in Buyer’s handling of such claims.

10. Insurance and Indemnification.

  1. Insurance. Seller shall provide worker’s compensation, comprehensive general liability, automobile, public liability, and property damage insurance in amounts and coverages sufficient to cover all claims hereunder. Such policies will name Buyer as an additional insured thereunder and shall contain endorsements stating that the policies are primary and not excess over or contributory with any other valid, applicable, and collectible insurance in force for Buyer. Buyer may require Seller to furnish evidence of the foregoing insurance but failure to comply with these insurance requirements will not relieve Seller of its liability and obligations under this paragraph. Buyer’s action or inaction will not act as a waiver of any of Buyer’s rights described in this paragraph.
  2. General Indemnification. Seller shall will defend, indemnify, and hold Buyer harmless against all claims, liability, losses, damages, costs and settlement expenses, including attorneys fees, in connection with
    1. any breach by Seller of these Terms and Conditions,
    2. for injury or death of any person and damage or loss of any property allegedly or actually resulting from or arising out of any act, omission or negligent work of Seller or its employees, agents, or subcontractors in connection with performing hereunder, whether on Buyer’s property or Buyer’s customer’s property or in the course of their employment and
    3. any product recalls, production interruptions and product line shut downs of Buyer or Buyer’s customer resulting from any of the foregoing or from any act or omission by Seller or any of its employees, contractors or agents. Such damages may include indirect or consequential, incidental, exemplary, punitive or special damages, including lost profits or revenues.


11. Use of Buyer’s Name.

Seller will not, without the prior written consent of Buyer, in any manner publish the fact that Seller has furnished or contracted to furnish Buyer goods and/or services, or use the name or trademarks of Buyer, its products, or any of its associated companies in Seller’s advertising or other publication. Seller will not place its or any third party’s trademark or other designation on the part if the product bears a Buyer trademark or an indentifying mark specified by Buyer, or if the product is peculiar to Buyer’s design (“Marked Product”). Seller will sell Marked Product, and similar goods, only to Buyer and will not sell Marked Product or similar goods to third parties without Buyer’s prior written consent.

12. Technology Rights.

  1. General. The specifications, drawings, designs, manufacturing data and other information transmitted to Seller by Buyer in connection with the performance hereunder are the property of Buyer and/or Buyer’s customers and may be covered by one or more Buyer patents, patent applications, copyrights or are otherwise part of Buyer’s know-how or proprietary information (“Confidential Information”). No rights are granted to Seller under any Buyer patents or technology except as may be necessary to fulfill Seller’s obligations hereunder.
  2. Infringement Claims. Seller shall indemnify and hold harmless Buyer and its customers and shall handle and be responsible for every claim of infringement of any present or future patent, copyright, industrial design right or other proprietary right that results from the sale or use of the goods/services supplied hereunder
    1. alone,
    2. in combination by reason of their content, design or structure, or
    3. in combination in accordance with Seller’s recommendations, and at Buyer’s option provide all reasonable assistance to Buyer in Buyer’s handling of such claims. Seller’s obligations shall apply even though Buyer furnishes all or any portion of the design and specifies all or any portion of the processing.
  3. Grant-back License. Seller grants to Buyer and its affiliates/subsidiaries a worldwide, nonexclusive, royalty-free, irrevocable license to rebuild and/or repair and have rebuilt and/or repaired the goods covered hereunder, including any improvements thereto as they may be delivered from time to time.
  4. Non-Assertion. Seller will neither assert nor transfer to another a right to assert against Buyer and/or its associated companies, or dealers or customers thereof any copyright of Seller that is applicable to any works of authorship furnished to Buyer or any of Buyer's associated companies in the course of Seller's activity hereunder. All information disclosed heretofore and hereafter by Seller to Buyer in connection with these supplies or services is disclosed on a non-confidential basis. Seller assigns to Buyer all right, title and interest in and to all trademarks, copyrights and mask work rights in any material created for Buyer hereunder.
  5. Secrecy. Seller will handle all of this Confidential Information in such a manner to insure that it is not used for any purpose detrimental to the interests of Buyer and will not, directly or indirectly,
    1. use or exploit such Confidential Information in any way except to fulfill purchase orders and
    2. will keep confidential and not disclose such Confidential Information to any third-party without Buyer's prior written consent. All drawings and tracings furnished by Buyer for any purchase order must be returned with the last invoice.

13. Injunctive Relief.

Seller agrees that Buyer, in addition to any other available remedies under applicable law, shall be entitled, as a matter of course, to an injunction, restraining order or other equitable relief from any court of competent jurisdiction, restraining any violation or threatened violation of any of the provisions contained in paragraphs 8, 11 and 12 of these Terms and Conditions.

14. Assignment.

These Terms and Conditions or any rights or interest herein may not be assigned, delegated or encumbered in whole or in part, or sold or transferred as part of a sale of the Seller or its business, stock or assets without Buyer's prior written consent, including without limitation, the subcontracting of work to be performed hereunder or the transfer of Special Tooling to third parties for the performance of work hereunder.

15. Termination at Buyer's Option.

Buyer may terminate these Terms and Conditions or any purchase order at any time without cause in whole or in part by written notice, whereupon Seller will stop work on the date and to the extent specified in such notice and terminate all orders and subcontracts that relate to the terminated order. Within thirty (30) days after receipt or termination notice, Seller will submit all claims resulting from such termination. Buyer will have the right to verify such claims by auditing the relevant records, facilities, work or materials of Seller and/or its subcontractors such claims will be subject to the following limitations:. Buyer will pay Seller for finished work accepted by Buyer as well as for the documented cost to Seller of work in process and raw material allocable to the terminated work which is not in excess of any prior Buyer authorization. Payment made under this paragraph will not apply to any cancellation by Buyer for default by Seller or for any other cause recognized by law or specified in these Terms and Conditions.

16. Cancellation for Default.

If Seller

  1. fails to deliver goods or perform services at the time specified herein or fails to make progress so as to endanger performance of the work or impair delivery dates, or
  2. fails to perform any other provisions hereof and does not cure such failure within a period of (10) days after receipt of written notice from Buyer specifying such failure, or
  3. becomes financially unstable, insolvent, makes an assignment in favor of creditors, or enters bankruptcy or dissolution procedures, or
  4. is merged into another company and/or is expropriated or nationalized, Buyer may cancel the whole or any part of any purchase order without any liability, except for payment (subject to Buyer’s right of sell-off) due for goods and services delivered and accepted to date. Upon such termination Buyer will have the right, and on notice to Seller, to take title to and possession of all or any part of such materials, work in process or finished goods performed by Seller, any Special Tooling and all drawings, technology and information furnished by Buyer. Seller shall reimburse Buyer for all costs incurred by Buyer in connection with Buyer’s cancellation pursuant to this paragraph, including but not limited to all attorneys or other professional fees, and seller shall be liable for all damages of seller as provided in these Terms and Conditions.

17. Spare Parts for Equipment.

  1. Seller will make spare parts for Buyer's requirements for any equipment purchased hereunder for ten years or for such longer time as may be required by Buyer after an order is terminated. The price of the part for Buyer's service requirements will be the price provided in the order plus costs actually incurred for special packaging.
  2. If the part is no longer required, then the price of the part for Buyer's equipment will be no greater than the last price stated in the order plus or minus
    1. any changes in the cost of materials since the order was terminated, plus
    2. a volume adjustment reflecting the actual increase in the cost per unit of producing fewer units, plus
    3. a set-up charge reflecting the actual cost of preparation for the production run, plus
    4. any additional costs actually incurred for special packaging. All of the foregoing components of the price will be documented to Buyer's reasonable satisfaction, including without limitation, set-up detail, machine productivity, scrap allowance, labor inefficiencies and excess raw material requirements.
  3. If the parts are manufactured in a country other than the country in which the goods are delivered to Buyer, Seller will mark the goods shipped for Buyer's service requirement "Made in (country of origin)".

18. Taxes.

The goods purchased hereunder are for resale or for an exempt purpose and may be exempt from local sales or use taxes in the foreign jurisdiction.

19. Remedies.

The rights and remedies herein reserved to Buyer are cumulative and in addition to any other or further rights and remedies available at law or in equity. The failure of either party at any time to require performance by the other party of any provision hereunder shall in no way affect the right to require such performance at any time thereafter. No waiver of any breach of any provision hereunder will constitute a waiver of any other breach or a waiver of such provision.

20. Component Application Sign-Off.

Suppliers of component parts and sub-systems are expected to concur, in writing, that the application of their components or sub-systems meets the design intent for which they have been developed. This includes both the application in the Buyer tooling system and its operation in its final environment. Concurrence must occur at both design and try-out. This should be the objective of Seller.

21. Required Compliance.

In providing goods or services hereunder, Seller will comply with any and all applicable foreign and U.S. federal, state and local laws, and regulations promulgated thereunder, including without limitation, the U.S. Fair Labor Standards Act as amended. Seller will defend, indemnify and hold Buyer harmless from and against any and all claims, losses, damages, costs and expenses resulting from or arising out of any failure out of any failure of Seller or Seller's employees, agents and subcontractors to comply with any applicable governmental regulations and/or statutes.

22. Relationship of Parties.

Seller and Buyer are independent contracting parties and nothing hereunder shall make either party the agent or legal representative of the other for any purpose whatsoever, nor does it grant either party any authority to assume or to create any obligation on behalf of or in the name of the other.

23. Governing Law.

These Terms and Conditions shall be construed and interpreted according to the laws of the State of Michigan.