Sylhan LLC Supplier Terms and Conditions

Revised: 8/31/2018


All purchases by Buyer are subject to the following terms and conditions and those on the face of any Order. In the event of a conflict, the terms on the face of an Order shall have precedence over the provisions in these General Terms and Conditions of Purchase.

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The following definitions apply unless otherwise specifically stated. “Buyer” – Sylhan, LLC. “Confidential Information” – all information disclosed by the disclosing party (the “Discloser”) to the receiving party (the “Recipient”) in written or other tangible form and identified as proprietary and/or confidential, using an appropriate legend, marking, stamp or other clear and conspicuous written identification or, if the information is orally or visually disclosed, which is identified as proprietary and/or confidential at the time of disclosure and is reduced to writing clearly identified as proprietary and/or confidential within thirty (30) days after the initial disclosure. Only information in good faith believed to be proprietary and/or confidential by the Discloser shall be identified as such. Confidential Information shall not include information that (a) is or becomes part of the public domain through no fault of Recipient, (b) is known to Recipient prior to receipt from Discloser, (c) is disclosed to Recipient after receipt thereof from Discloser by a third party that has the right to disclose such information without restriction, or (d) is independently developed by Recipient without the use of or reference to Confidential Information. “Contracting Officer” – the Government contracting officer for the Prime Contract or authorized representative. “End User” – is a person or entity who ultimately uses or is intended to ultimately use a product. “FAR” – the Federal Acquisition Regulations and the Department of Defense supplement thereto. “Goods” – the processes, products, or services supplied or provided by Seller to Buyer pursuant to these General Terms and Conditions of Purchase, an Order, or other agreement between the parties. “Government” – the federal government of the United States and its administrative agencies. “Indemnitee” – The person(s) or entity who, is to be indemnified or protected by the other pursuant to these General Terms and Conditions of Purchase or other agreement between the parties. “Order” – a purchase order or the purchase order schedule releases issued by Buyer or any other contract between Buyer and Seller for Goods, and which incorporates by reference Buyer’s quality requirements as set forth on the Order. “Prime Contract” – the Government contract under which an Order is issued, if any. “Seller” – the legal entity which contracts with the Buyer to provide goods and/or services hereunder.

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The Seller’s acknowledgment of an Order, commencement of work on the goods ordered or shipment of such goods, whichever occurs first, shall be deemed Seller’s acceptance of the Order. Any acceptance of an Order is limited to the express terms and conditions thereof. Any additional or different terms contained in Seller’s purchase orders, invoices or other attempt by Seller to vary in any degree any of the terms of the Order is hereby rejected and shall be null and void. Any such additional terms shall be deemed a material alteration of the terms and conditions of the Order, and the Order shall be deemed accepted by the Seller without said additional or different terms. The following order of precedence shall apply: (a) the terms and conditions contained in an Order, and then (b) these General Terms and Conditions of Purchase.

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The Buyer shall not be required to pay for the goods at prices higher than those specified in an Order. Unless otherwise indicated on the face of an Order, the prices specified in an Order include all taxes, duties, fees and assessments by any governmental authority. No additional charges by Seller for transportation, storage, drayage, insurance, boxing, packing, or crating will be allowed unless specified in the Order or agreed to by the Buyer in writing. The Seller warrants that the prices for the goods sold to the Buyer under the Order are no less favorable than those currently extended to any other customer of Seller for comparable or like goods in equal or lesser quantities. In the event Seller reduces its price for such goods during the term of an Order, Seller agrees to reduce the prices under any Order accordingly and credit the difference to Buyer.

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The terms of delivery are as stated in the Order. Time is of the essence with respect to Seller’s obligations pertaining to delivery dates, specifications and quantities set forth in the Order. Deliveries are to be made both in quantities and at times specified in the Order, or alternatively, in such quantities and at times as specified pursuant to Buyer’s written instruction. Shipments in greater or lesser quantities than ordered may be returned at Seller’s expense unless written acceptance of such quantities is issued by Buyer. If Seller’s deliveries fail to meet specified delivery schedules, Buyer, without limiting its other rights or remedies, may either direct expedited routing or charge excess costs including cover and any incidentals incurred thereby to Seller or cancel all or part of the Order. Goods which are delivered in advance of scheduled delivery dates are delivered at the risk of Seller and may, at Buyer’s option, be returned at Seller’s expense for proper delivery and/or have payment therefore withheld by Buyer until the date that the goods are actually scheduled for delivery unless both parties mutually agree to other recourse.

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Upon delivery of the goods or the performance of services ordered, Seller shall issue an invoice for each such Order containing such information as the Buyer may reasonably request. Invoices shall be paid by the Buyer, net sixty (60) days from the date of invoice receipt, on its next regularly scheduled accounts payable payment date following such net terms.

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The Seller shall bear all risk of loss of all goods until such goods are accepted by Buyer at Buyer’s facility, unless specifically indicated to the contrary in the Order.

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No change in the terms of any Order shall be binding upon Buyer unless in writing and signed by Buyer’s authorized purchasing agent. Buyer reserves the right to change the Order at any time by submitting a written change Order or a new Order to Seller. If any such change affects the Seller’s cost or time of performance, Seller must submit a written claim for an equitable adjustment within ten (10) days after receipt of notification of change. Seller shall continue its performance under the Order while the parties negotiate an equitable adjustment.

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Payment for the goods delivered hereunder shall not constitute acceptance thereof. Seller acknowledges that goods purchased under these General Terms and Conditions of Purchase and any Order may be subject to Government, Buyer’s customers’, or other Buyer representatives’ surveillance and/or inspection at Seller’s facilities and Seller’s sub-tier supplier’s facilities. Buyer and Government representatives shall have the right to inspect or conduct surveillance with respect to such goods upon reasonable notice, and at reasonable times, and Buyer shall have the right to reject any or all of said goods which are in Buyer’s judgment defective. Buyer, the Government and/or their respective customers also reserve the right to verify and inspect work-in-process at Seller’s facility during Seller’s normal working hours. Seller further acknowledges that it may be required to perform first article inspections on goods subject to these General Terms and Conditions of Purchase and any Order, which inspections shall be in accordance with SAE AS9102. All inspection procedures and records shall be in accordance with SAE AS9102 and shall identify each characteristic and feature required by design data, allowable tolerance limits, and actual dimensions measured as objective evidence that each characteristic and feature has been inspected and accepted by Seller’s quality and/or inspection function. When testing is required, the parameters and results of such tests shall be recorded in the same manner. Goods rejected and goods supplied in excess of quantities called for in the Order may be returned to the Seller at Seller’s expense. Buyer may charge the Seller all expenses of unpacking, inspecting, repacking and reshipping such Goods. In the event Buyer receives defective or non- conforming goods, without limiting Buyer’s remedies, if directed by Buyer, Seller shall provide replacement goods on an expedited basis at Seller’s expense. Delivery of replacement goods shall be accompanied by a written notice specifying that such goods are replacements. If Supplier fails to deliver replacements promptly, Buyer may correct any defective or nonconforming goods at Seller’s expense, replace them with goods from another supplier and charge the Seller the cost thereof and any incidental costs.

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Whether or not Seller is a merchant of goods and services provided by it, Seller warrants that all goods and services provided by it shall (a) be of good quality and workmanship and free from defects, latent or patent, (b) conform to all specifications, drawings and descriptions, furnished, specified or adopted by Buyer or its customers, (c) be merchantable and suitable and sufficient for their intended purpose, (d) be free of any claim of any third party, (e) comply with all applicable 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 shall be performed in accordance with the highest standards in the industry. The warranty period shall be for a period of five (5) years from the date of delivery to the “End User” or such longer period of time as may have been provided by Buyer to its customer or the date on which any longer or broader government requirement covering the goods ends. In addition to the costs of repairing, replacing or correcting nonconforming goods, Seller is responsible for all related costs, expenses and damages including, but not limited to, the costs of removal, disassembly, failure analysis, fault isolation, reinstallation, re-inspection and retrofit of the nonconforming goods or of Buyer’s or its customers’ affected endproduct(s); all freight charges; all customer charges and/or penalties; inventory carrying costs and all corrective action costs (i.e., costs of additional inspection or quality control systems). Unless set off by Buyer, Seller will reimburse Buyer for all such costs upon receipt of Buyer’s invoice. None of the remedies available to Buyer for the breach of any of the foregoing warranties may be limited except to the extent and in the manner agreed upon by Buyer in a separate agreement specifically designating such limitation and signed by an authorized representative of Buyer. Buyer’s inspection and/or acceptance of and payment for goods and services shall not constitute a waiver by it of any warranties. Buyer’s approval of any sample or acceptance of any goods shall not relieve Seller from responsibility to deliver goods and to perform service conforming to specifications, drawings and descriptions.

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Seller represents and warrants that it maintains a qualitymanagement system that complies with applicable industry standards, includingbut not limited to ISO 9001, AS9100, AS9120, AC7004 or an equivalent thereto.In the event Seller holds a third party certificate for its quality managementsystem, Seller agrees to notify Buyer of any change in Seller’s certificationunder such program within three (3) days of such change. Seller agrees tomaintain records of all inspections and tests for goods provided hereunder fora period of ten (10) years from the date of manufacture. Such records shall beavailable to Buyer, its customers, and/or Government representatives uponrequest, and shall include, but not be limited to, the following items:receiving inspections, first article inspections, inprocess and finalinspection results, traceability and serialization, calibrations, completedmanufacturing plans, actual material test reports, process certifications,actual test data of all qualification, functional interchangeability andacceptance tests performed, and any other inspection documents. Seller furtheragrees to notify Buyer in writing of any nonconforming processes or Goods andobtain Buyer’s prior written approval for the disposition or resolution of theidentified non-conformances. In the event Seller’s quality management system isnot certified by an independent third party, in addition to any otherinspection and audit rights provided to Buyer herein, Buyer reserves the right,on behalf of itself and its customers, and upon reasonable notice, to enterupon Supplier’s premises to audit Seller’s quality management system andSupplier shall furnish Buyer with any relevant documents requested by Buyer inrelation thereto. Seller acknowledges and expressly assumes the responsibilityto understand, implement, and comply with all applicable quality managementrequirements imposed by Buyer and which are incorporated by reference intothese General Terms and Conditions of Purchase or any Order at the time of acceptanceby Seller, including but not limited to ensuring that Seller’s employees,agents, and independent contractors are aware of their contribution to Goods’conformity, their contribution to the Safety of Goods, and the importance ofethical behavior as specified in Section 18 hereof.

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Seller is liable for all costs or damages associated with any voluntary or involuntary recall of defective or potentially defective goods or any products containing or incorporating such goods including, but not limited to, recalls by a customer, regulatory agency or in accordance with applicable laws or regulations. Seller will be solely responsible for administering any recall or will fully participate in the administration of any recall conducted by Sylhan or its customer in relation to Seller’s goods as Sylhan may so direct. Each party will cooperate in making available records and other information reasonably required by the other party in connection with any recall. This section will survive any termination or expiration of this Order and apply for at least the same duration as Sylhan’s obligation to its customer(s).

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The Seller shall hold all Confidential Information in confidence, shall not disclose the Confidential Information to any other person, shall not use the Confidential Information commercially for its own benefit or the benefit of anyone except the Buyer, and shall not use the Confidential Information for the purpose of developing, improving, marketing or commercializing a product or method for anyone except the Buyer. The Seller agrees not to copy or otherwise reproduce any Confidential Information without the Buyer’s prior written consent. All Confidential Information and all reproductions, copies and embodiments thereof, in whole or in part, shall be the sole property of the Buyer. Nothing in this Order shall be deemed, by implication or otherwise, to convey to the Seller any rights under any patents, patent applications, copyrights, trademarks, trade secrets, inventions or any other intellectual property owned by the Buyer, and the Buyer makes no representation or warranty as to the accuracy or completeness of any Confidential Information. If the Parties have signed a separate Confidentiality Agreement and/or Non-Disclosure Agreement, the provisions of such agreement shall not be altered or amended by this section.

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(a) For purposes of this Agreement (i) "Counterfeit Parts" shall mean a part, component, module, or assembly whose origin, material, source of manufacture, performance, or characteristics are misrepresented, including, but not limited to, (i) parts that have been (re)marked to disguise them or falsely represent the identity of the manufacturer, (ii) defective parts and/or surplus material scrapped by the original manufacturer, and (iii) previously used parts pulled or reclaimed and provided as "new", (ii) "authentic" shall mean (A) genuine, (B) from the legitimate source claimed or implied by the marking and design of the product offered, and (C) manufactured by, or at the behest and to the standards of, the manufacturer that has lawfully applied its name and trademark for that model/version of the material, and (iii) "Independent Distributor" shall mean a person, business, or firm that is neither authorized nor franchised by an Original Component Manufacturer ("OCM") to sell or distribute the OCM's products but which purports to sell, broker, and/or distribute such OCM products. Independent Distributors are also referred to as unfranchised distributors, unauthorized distributors, and/or brokers.

(b) Seller represents and warrants that only new and authentic materials are used in goods required to be delivered to Buyer under any Order and that the goods delivered contain no Counterfeit Parts. No other material, part, or component other than a new and authentic part is to be used unless approved in advance in writing by Buyer. To further mitigate the possibility of the inadvertent use of Counterfeit Parts, Seller shall only purchase authentic parts/components directly from the original equipment manufacturers ("OEMs")/OCMs of such goods or through the OEM's/OCM's authorized distribution chain. Seller must make available to Buyer, at Buyer’s request, OEM/OCM documentation that authenticates traceability of the components to that applicable OEM/OCM. Purchase of parts/components from Independent Distributors is not authorized unless first approved in writing by the Buyer. Seller must present complete and compelling support for its request and include in its request all actions to ensure the parts/components thus procured are legitimate parts. Buyer’s approval of Seller request(s) does not relieve Seller's responsibility to comply with all requirements contained herein, including the representations and warranties in this section. A breach of this paragraph/clause or any subparagraph herein shall be considered a material breach of these General Terms and Conditions of Purchase or any Order.

(c) In the event that goods delivered under these General Terms and Conditions of Purchase or any Order constitute or include Counterfeit Parts, Seller shall, at its expense, promptly replace such Counterfeit Parts with genuine goods conforming to the requirements of these General Terms and Conditions of Purchase or any Order. Notwithstanding any other provision in these General Terms and Conditions of Purchase or any Order, Seller shall be liable and indemnify Buyer for all costs relating to the removal and replacement of Counterfeit Parts, including without limitation Buyer’s and higher tier customer’s costs of removing Counterfeit Parts of installing replacement materials and of any testing necessitated by the reinstallation of goods after Counterfeit Parts have been exchanged. The remedies contained in this paragraph are in addition to any remedies Buyer may have at law, equity or under other provisions of these General Terms and Conditions of Purchase or any Order.

(d) Seller shall maintain a documented system (policy, procedure, or other documented approach) consistent with AS6174 “Counterfeit Material: Assuring Acquisition of Authentic and Conforming Material” or AS5553 “Counterfeit Electronic Parts: Avoidance, Detection, Mitigation, and Disposition” as applicable, which includes training of personal, inspection and testing of electronic parts, counterfeit parts proliferation, traceability, and use of OEMs/OCMs or provides for prior notification and customer approval before parts/components are procured from sources other than OEMs/OCMs or through the OEM's/OCM's authorized distribution chain. Seller shall provide copies of such documentation for its system for Buyer’s inspection upon Buyer request.

(e) Seller shall flow the requirements of this clause to its subcontractors and suppliers at any tier for the performance of any Order. If Seller is providing electronic components/devices only, the following certification applies: “Certification of Origin of Goods: Acceptance of any Order constitutes confirmation by Seller that it is either the OEM, OCM, or a franchised or authorized distributor of the OEM/OCM for the goods herein procured.” Seller further warrants that OEM/OCM acquisition documentation that authenticates traceability of the components to that applicable OEM is available upon request. If Seller is not the OEM/OCM or a franchised or authorized distributor, Seller confirms by acceptance of these General Terms and Conditions of Purchase or any Order that the goods supplied to Buyer have been procured from the OEM/OCM or a franchised or authorized distributor of the OEM/OCM. The Seller further warrants that OEM/OCM acquisition traceability documentation is accurate and available to Buyer upon Buyer’s request. A breach of this section herein shall be considered a material breach of these General Terms and Conditions of Purchase or any Order.

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Seller will, at its expense, defend and indemnify Buyer and its subsidiaries, affiliates, and agents, and their respective officers, directors, shareholders, and employees, and Buyer’s customers (collectively “Indemnitee(s)”) from and against any and all loss, cost, expense, damage, liquidated damages, claim, demand, or liability, including reasonable attorney and professional fees and costs, and the cost of settlement, compromise, judgment, or verdict (collectively, “Damages”) incurred by or demanded of an Indemnitee by any third party arising out of, resulting from or occurring in connection with Seller's goods or services or Seller’s negligence, willful misconduct, or breach of these General Terms and Conditions of Purchase or any Order. In no event will Seller enter into any settlement without Buyer’s prior written consent, which will not be unreasonably withheld. If Buyer is obligated to pay Damages pursuant to its contract with its customer, then Seller will be liable for such Damages to the extent Seller causes or contributes to those Damages. Nothing in this section limits Buyer’s right to claim all actual damages sustained by Buyer as a result of Seller-caused delays. Seller shall maintain such public liability insurance, including products liability and aircraft products liability, completed operations, contractors liability, automobile liability insurance (including non-owned automobile liability) worker’s compensation, and employer’s liability insurance as will adequately protect Buyer against such damages, liabilities, claims, losses and expenses (including attorneys’ fees) or as required by statute, provided that all such liability insurance policies shall be in an amount of not less than $1,000,000. Seller agrees to name Buyer as an additional insured by endorsement on all policies required by this section other than Seller’s worker’s compensation policy prior to the shipment of any goods hereunder or any Order.

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For goods provided under these General Terms and Conditions of Purchase or any Order, Seller 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 or any third party 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 Seller does not undertake the defense thereof. Seller 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 Seller enter into any settlement without 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, Seller will, at its expense, obtain for Indemnitee either the right to continue using and selling the goods or replace or modify the goods to make them non-infringing.

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Seller warrants that the goods to be furnished and the services to be rendered under any Order shall be manufactured, sold, used and rendered in compliance with all relevant federal, state, local and international laws, orders, rules, ordinances, and regulations. Without limiting the foregoing, Seller warrants and certifies that the goods and the production of the goods and/or the performance of the services covered by the Order fully comply with (i) the Fair Labor Standards Act of 1938, as amended, and the regulations and orders of the United States Department of Labor relating thereto, (ii) all applicable state and Government laws, orders, rules, ordinances and regulations relating to occupational safety and the protection of the environment, including, but limited to, those involving hazardous waste, hazardous materials, air and water pollution, and natural resources, (iii) the Foreign Corrupt Practices Act and the Anti-Kickback Act of 1986 and the regulations relating thereto, (iv) Section 1502 of the Dodd-Frank Wall Street Reform and Consumer Protection Act relating to the use of conflict minerals originating in certain covered countries (the “Conflict Minerals Rule”) , and (v) the California Transparency in Supply Chains Act (SB657). Any breach of any warranty contained in this section shall be a material breach of each and every Order and contract between Buyer and Seller. Seller shall defend and indemnify Buyer against all damages, liabilities, claims, losses and expenses (including attorneys’ fees) arising out of or resulting in any way from Seller’s failure to comply with this section.

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Sylhan operates in accordance with the highest standards of business ethics and to comply with the letter and spirit of all applicable laws. Seller acknowledges and agrees that (a) it will adhere to highest standards of business ethics in all its dealings with, for or on behalf of Buyer in connection with these General Terms and Conditions of Purchase or any Order and the business resulting therefrom. Supplier will notify Buyer immediately if it becomes aware of any behavior by Buyer’s or Supplier’s staff which is, or may be, inconsistent with the highest level of business ethics or, where Supplier has adopted equivalent principles, their equivalent; and (b) at Buyer’s request, Supplier will provide information to Buyer as required to complete and fully respond to Buyer’s usual supplier questionnaires and due diligence to confirm compliance by Supplier with applicable laws. As part of Buyer’s due diligence, Supplier will grant Buyer or its representatives’ reasonable access to Supplier’s facilities and sites.

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Supplier represents and warrants that: (i) it does not employ engage or otherwise use any child labor in circumstances such that the tasks performed by any such child labor could reasonably be foreseen to cause either physical or emotional impairment to the development of such child; (ii) it does not use forced labor in any form (prison, indentured, bonded or otherwise) and its employees are not required to lodge papers or deposits on starting work; (iii) it provides a safe and healthy workplace, presenting no immediate hazards to its employees; any housing provided by it to its employees is safe for habitation; and it provides access to clean water, food, and emergency healthcare to its employees in the event of accidents or incidents at its workplace; (iv) it does not discriminate against any employees on any ground (including race, religion, disability or gender); (v) it does not engage in or support the use of corporal punishment, mental, physical, sexual or verbal abuse and does not use cruel or abusive disciplinary practices in the workplace; (vi) it pays each employee at least the minimum wage, or a fair representation of the prevailing industry wage (whichever is the higher) and provides each employee with all legally mandated benefits; (vii) it complies with the laws on working hours and employment rights in the countries in which it operates; (viii) it is respectful of its employees’ right to join and form independent trade unions and freedom of association; (ix) it agrees that it is responsible for controlling its own supply chain and that it shall encourage compliance with ethical standards and human rights by any subsequent supplier of goods and services that are used by it when performing its obligations under these General Terms and Conditions of Purchase or any Order; and (x) it certifies that materials incorporated into its products comply with the laws regarding slavery and human trafficking of the country or countries in which it is doing business. Seller shall ensure that it has ethical and human rights policies and an appropriate complaints procedure to deal with any breaches of such policies. In addition to any other inspection and audit rights provided to Buyer herein, Buyer reserves the right upon reasonable notice (unless inspection is for cause, in which case no notice shall be necessary) to enter upon Supplier’s premises to monitor compliance by Supplier of the warranties set out above and Supplier shall, subject to compliance with law, furnish Buyer with any relevant documents requested by Buyer in relation thereto.

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Supplier shall provide Buyer reasonable assistance in conducting due diligence of Supplier’s supply chain for the purpose of complying with the Conflict Minerals Rule. Supplier shall permit Buyer to conduct due diligence and conduct inspections and audits of Supplier’s operations, premises, and facilities to ensure compliance with Supplier’s obligations hereunder with respect to the Conflict Minerals Rule. Supplier shall impose upon its suppliers and vendors provisions similar to that found in this section.

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If Seller is a U. S. company that engages in the business of either manufacturing or exporting defense articles or furnishing defense services, the Seller hereby certifies that it has registered with the U. S. Department of State Directorate of Defense Trade Controls and has complied and will comply with its obligations under export control laws and regulations, including, but not limited to, the International Traffic in Arms Regulations (“ITAR”) and the Export Administration Regulations (“EAR”). Seller shall control the disclosure of and access to technical data, information and other items received under the Order in accordance with U. S. export control laws and regulations, including, but not limited to, the ITAR. Seller agrees to provide Buyer with the export control classification number for all goods supplied to Buyer hereunder or any Order. Seller further agrees that no technical data, information or other items provided by the Buyer in connection with an Order shall be provided to any foreign subsidiary of Seller or any other foreign person, without the express written authorization of the Buyer and the Seller’s obtaining of the appropriate export license, technical assistance agreement or other requisite documentation for ITAR-controlled technical data or items. Seller shall defend and indemnify Buyer from any loss, damage, fine, penalty, or expense (including attorneys’ fees) that Buyer may suffer as a result of Seller’s failure to comply with this section.

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Buyer’s remedies shall be cumulative and remedies herein specified do not exclude any remedies allowed by law. Waiver of any breach by Buyer shall not constitute waiver of any other breach of the same or any other provision. Acceptance of any goods or payment therefor by Buyer shall not waive any breach.

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This Agreement shall be governed and construed in accordance with the laws of the state of New York, not including its law of conflicts of laws. Any legal action relating to or arising out of this Agreement, any Order or the transactions contemplated thereby, shall be brought in the Superior Court of the County of Suffolk, New York or the United States District Court of the Suffolk County District of New York, and the Parties hereby consent to the sole jurisdiction of said courts.

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Seller shall not use, reproduce, appropriate or disclose to anyone other than Buyer any material, samples, tooling, dies, drawings, designs, specifications, software, technical information and other property or data furnished by Buyer, nor shall Seller use the same to produce or manufacture articles other than those required hereunder without prior written authorization from Buyer. Where the Government has received from Buyer the right to authorize such use by Seller, Seller may utilize Buyer’s data and information in the manufactured articles for direct sale to the Government provided, however, that Seller shall (i) give Buyer prior written notice of each such proposed use, (ii) prominently identify and segregate, to the extent possible, each item being provided by Seller for direct sale to the Government, and (iii) make no claim against Buyer which arises out of use by Seller of such data and information. Title to such Buyer-furnished property shall be and remain in Buyer at all times. Buyer does not guarantee the accuracy of any tooling or the quality or suitability of any material supplied by it. Seller shall bear the risk of loss, damage or destruction of the property furnished by Buyer and shall promptly replace or repair without expense to Buyer any property which is lost, damaged or destroyed, unless such loss, damage or destruction is solely, directly and proximately caused by Buyer’s negligence. All Buyer furnished property, together with spoiled and surplus materials shall be returned to Buyer at termination or completion of the Order unless Buyer shall direct otherwise in writing. Where Buyer’s data, designs or other information are furnished to Seller’s suppliers for procurement of supplies or services by Seller for use in the performance of Buyer’s Order, Seller shall insert the substance of this provision in its subcontracts.

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Time is of the essence in performing the Order. Should Seller experience or anticipate any delay in performing the Order, Seller shall immediately notify Buyer of such delay, its expected duration and the reasons thereof. Neither such notification nor an acknowledgement by Buyer shall constitute a waiver of the Order’s delivery schedule. The delivery schedule shall not be modified unless the parties agree in writing.

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Unless otherwise directed in the Order, Seller shall supply all Goods in accordance with the current specifications, drawings and designs for the goods. Seller is responsible for verifying that the Order’s specifications, drawings and designs are the current revisions. If Seller determines that any of the specifications, drawings or designs are not the most current revision, Seller shall so notify Buyer immediately in writing. Seller shall notify Buyer in writing in advance of any and all changes to: (i) the Goods, including but not limited to their specifications and/or composition, (ii) Seller’s internal processes with respect to the Goods, (iii) Seller’s external service providers, and (iv) the location of manufacture of the Goods, to permit Buyer to identify any quality, regulatory or other reporting requirements that may arise from such changes, and no such change shall occur until Buyer has had the opportunity to conduct such audits, surveys and/or testing necessary to determine the impact of such changes on the Goods and has approved such changes in writing.

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Buyer may set off any amount due to Seller against any amount owed by Seller to Buyer under these General Terms and Conditions of Purchase or supply agreement between the parties.

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Neither an Order, these General Terms and Conditions of Purchase, or any other agreement between the parties, nor any interest therein may be assigned by Seller without the prior written consent of Buyer. If Buyer consents to any such assignment, (i) payment to an assignee of any such claim shall be subject to set off or recoupment for any present or future claim or claims which Buyer may have against Seller except to the extent that any such claims are expressly waived in writing by Buyer, and (ii) Buyer reserves the right to make direct settlements or adjustments in price with Seller notwithstanding any assignment of claims for monies due or to become due hereunder and without notice to the assignee. As used herein, any merger, consolidation or other combination involving Seller, any sale of more than 25% of the outstanding voting securities of Seller and any other change in control of Seller, whether in one or a series of transactions shall be considered an “assignment” subject to this section.

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(a) If either party is in material default of any of its obligations under the Order and such default is not cured within fifteen (15) days after written notice thereof by the party not in default, then such non-defaulting party may terminate these General Terms and Conditions of Purchase and/or any Orders, in whole or in part, provided, however, that in the event of Seller’s failure to meet the delivery schedule or quality requirements of Buyer, Seller shall be given the opportunity to cure a default only once and thereafter Buyer may terminate any Order, in whole or in part, immediately by written notice to Seller. In the event that the Buyer disputes the basis for the Seller’s termination, the Seller shall continue its performance under these General Terms and Conditions or any Orders until the dispute is finally resolved.

(b) The Buyer may, at any time, terminate any Order for convenience and without cause, in whole or in part, upon written notice to Seller. In such event, Seller shall be entitled to reasonable termination charges equal to (i) the portion of the Order price reflecting the services performed or goods delivered prior to termination, plus (ii) Seller’s actual direct costs (excluding overhead, SG&A and similar allocated costs) resulting from termination, minus (iii) the reuse or resale value of the work terminated. Seller shall submit any claim for termination costs in writing within thirty (30) days of receipt of the notice together with documentation to substantiate such costs satisfactory to the Buyer.

Notwithstanding the foregoing, no termination charges shall apply if the goods are not custom goods (i.e. goods unique to the Buyer) specially manufactured to the Buyer’s specifications pursuant to an Order, and notice of termination is provided to the Seller at least thirty (30) days prior to the required delivery date. The Seller’s reasonable termination charges shall not exceed under any circumstances those allowed for a termination for convenience under the Federal Acquisition Regulations in effect at the time of termination. The foregoing termination charges state the entire liability of the Buyer for termination for convenience by the Buyer of any Order.

(c) In the event of termination of any Order, the terms hereof shall continue to apply to any Orders to the extent performed prior to the effective date of termination and shall continue to apply to any Orders to the extent such Orders have not been terminated.



Seller shall not advertise, publish or otherwise release any information relating to any Order, including the fact that Buyer has issued an Order, without Buyer’s prior written permission.



No waiver of any provision or failure to perform any provision of an Order shall be effective unless consented to by Buyer in writing nor shall any such waiver constitute a waiver of any other provision or failure to perform.



If any provision of an Order, or part thereof, shall be invalid or unenforceable, such provision or part shall be deemed severed and the remainder hereof shall be given full force and effect.



Except when issued under, or to carry out, a written contract between the parties, these General Terms and Conditions of Purchase and the terms of an applicable Order constitute the entire agreement of sale and purchase of the goods specified in such Order.



Seller shall comply with all applicable FAR and DFARSclauses if applicable.