1. ARRANGEMENT OF CONTRACT
1.1 These terms and conditions of purchase are incorporated into and from a part of the purchase order and/or scheduling agreement issued by MDF Technologies, Inc. The term “Buyer” refers to MDF Technologies, Inc. and or designated Buyer representative of MDF Technologies, Inc.. The term “Seller” refers to the legal entity associated to this purchase order agreement with
Buyer as such on the attached purchase order and/or scheduling agreement. The term Supplier is the entity to which the Seller is associated with as a sub-tier provider of Goods or services as it pertains to the Goods or services provided to MDF Technologies, Inc. by the Seller. The term “Goods” refers to the Goods and/or services to be provided to Buyer by Seller as specified on the purchase order and/or scheduling agreement.
1.2 MDF Technologies, Inc. rejects any additional or inconsistent terms and conditions offered by Seller at any time. Any reference to Seller’s quotation, bid or proposal does not imply acceptance of any term, condition or instruction contained in that document. 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, supersedes any prior contemporaneous communications, representations, promises or negotiations, whether oral or written, respecting the subject matter of this purchase order. All contract documents referenced in this purchase order are interpreted together as one agreement.
1.3 If the Seller becomes aware of any ambiguities, issues, or discrepancies between this purchase order and any specifications, design or other technical requirement applicable to this purchase order, Seller will immediately submit the matter to and agrees to abide by MDF Technologies, Inc. for resolution.
2. ACKNOWLEDGEMENT
This purchase order is deemed accepted when Seller returns acknowledgement of this purchase order or begins performing, whichever is earlier. Acceptance of this offer in any manner shall conclusively evidence acceptance of this offer as written.
3. DELIVERY
3.1 Seller will deliver Goods in the quantities and on the dates specified on the purchase order or purchase order schedule releases. In the event of any anticipated or actual delay, including but not limited to delays attributed to labor disputes, Seller shall (a) promptly notify Buyer in writing of the reasons for the delay and the actions being taken to overcome or minimize the delay; (b) provide Buyer with a written recovery schedule and (c) if requested by Buyer, ship via air or other expedited routing to avoid or minimize delay to the maximum extent possible. Time is of the essence for Seller’s performance of all of its obligations under this agreement. Buyer reserves the right to cancel all of any part of the undelivered portion of this purchase order at no charge if Seller does not deliver in accordance with the required delivery dates or schedule releases.
3.2 Unless Seller is excused from prompt performance as provided in the “force majeure” section of this contract, the added premium transportation costs are to be borne by Seller, Seller shall not deliver Goods prior to the delivery dates and/or schedule agreement unless authorized by Buyer. Seller agrees that pursuant to the confidential, proprietary and trade secrets information and materials section of this contract, it will not sell or offer such Goods for sale to anyone other than Buyer without Buyers written consent.
4. PACKAGING AND SHIPPING
Seller shall pack the Goods to prevent damage and deterioration. Buyer’s Order numbers and item controls numbers (ICN) must be plainly marked on all invoices, packages, bills of lading and shipping orders. A packing list shall accompany each box or package shipment. Specific shipments may require additional identification as stated on the purchase order. Unless otherwise specified in this contract, Goods sold origin (place of shipment) shall be forwarded collect. Seller shall make no declaration concerning the value of the Goods shipped except on Goods where the tariff rating is dependent upon released or declared value. In such event, Seller shall release or declare such value at the maximum value within the lowest rating. Buyer may charge Seller for damage to or deterioration of any Goods resulting from improper packing or packaging.
5. CUSTOMS REGULATIONS
For Goods imported into the United States, Seller shall comply with all applicable recommendations or requirements of the United States Bureau of Customs and Border Protection's ("U.S. Customs") including, but not limited to, the Customs ·Trade Partnership Against Terrorism (“C-TPAT”) initiative (for information go to http://www.cbp.gov/ and find the link to the C-TPAT section). At Buyer's or U.S. Customs' request, Seller shall certify in writing its compliance with C-TPAT and with all other applicable U.S. Customs laws and regulations. Seller shall provide both Buyer and U.S. Customs access to Sellers facilities for the purpose of auditing Seller's compliance with the foregoing. If the Goods are transported via ocean carrier Into the United States, Seller must also comply with U.S. Customs' Importer Security Filing ("ISF”) and provide the necessary data to the freight forwarder selected by Buyer who will act as Buyer's agent for filing of the ISF.
5.1 Seller shall obtain all export licenses or authorizations necessary for the export of Goods, unless otherwise set forth in the order, in which case Seller shall promptly provide to Buyer all information necessary to enable Buyer to obtain the licenses or authorizations. Seller shall promptly notify Buyer in writing of any material or components incorporated in the Goods that Seller purchases in
a country other than the country in which Goods are delivered. Seller shall furnish any and all documentation and information necessary to establish the country of origin or to comply with the applicable country's rules of origin requirements.
5.2 Goods and the containers into which they are placed for shipment shall be marked in accordance with all U.S. laws including but not limited to 19 CFR §134 (as amended from time to time).
5.3 Seller shall indemnify and hold Buyer harmless from and against any liability, claims demands or expenses (including attorney's fees or other professional fees) arising from or relating to Seller's noncompliance with this Section. Seller shall be responsible for the full costs of any delay in delivery of the Goods caused by its failure to comply with the requirements of this Section 5, including but not limited to missing, incomplete, untimely or inaccurate data being furnished to Buyer, Buyer's agents or any governmental authority.
6. INSPECTION
All Goods may be inspected and tested by MDF Technologies, Inc., either at Seller’s premises or after delivery. If an inspection or a testing is made on Seller’s premises, Seller will provide, without additional charge, all reasonable facilities and assistance required for the inspection and test. Seller will use a standard method of testing acceptable to MDF Technologies, Inc. In the event any Goods and/or documents are found to be defective in material, workmanship or otherwise not in conformance with the requirements of the purchase order within 1 year from date of shipment, Seller shall promptly repair, or replace such defective material at Seller’s expense. Any such repaired or replaced Goods will be subject to all requirements of the purchase order unless otherwise stated on the rejection notice. (a) At no additional cost to Buyer, Goods shall be subject to inspection, surveillance and test at reasonable times and places, including Seller's subcontractors' locations. Buyer shall perform inspections, surveillance and tests so as not to unduly delay the work. (b) Seller shall maintain an inspection system acceptable to Buyer for the Goods purchased under this contract.
7. GOVERNMENT INSPECTION
The Government reserves the right to inspect at source supplies or services not manufactured or performed within the contractor’s facility. Government inspection shall not constitute acceptance: nor shall it in any way replace contractor inspection or otherwise relieve the contractor of his responsibility to furnish an acceptable end item. When inspection at subcontractors’ plants is performed by the Government, such inspection shall not be used by contractors as evidence of effective inspection by such subcontractors. The purpose of this inspection is to assist the Government Representative at the contractor’s facility to determine the conformance of supplies or services with contract requirements. Such inspection can only be requested by or under authorization of the Government Representative.
7.1 Government Inspection Requirements. When Government inspection is required, MDF Technologies Inc. shall add to his purchasing document the following statements: “Government inspection is required prior to shipment from your plant. Upon receipt of this order, promptly notify the Government Representative who normally services your plant so that appropriate planning for Government inspection can be accomplished.”
7.2 Purchasing Documents. When , under authorization of the Government Representative, copies of the purchasing documents are to be furnished directly by the subcontractor or vendor to the government Representative at his facility rather than through government channels, MDF Technologies Inc. shall add to his purchasing documents a statement substantially as follows: “On receipt of this order, promptly furnish a copy to the Government Representative who normally services your plant or, if none, to the nearest Army, Navy , Air Force, or Defense Supply Agency inspection office. In the event the representative or office cannot be located, our purchasing agent should be notified immediately.”
7.3 Referenced Data. All documents and referenced data for purchases applying to a Government contract shall be available for review by the Government Representative to determine compliance with the requirements for the control of such purchases. Copies of purchasing documents required for Government inspection purposes shall be furnished in accordance with the instructions of the Government Representative.
7.4 Receiving Inspection. Subcontracted or purchased supplies shall be subjected to inspection after receipt, as necessary, to assure conformance to contract requirements. MDF Technologies Inc. shall report to the Government Representative any nonconformance found on Government source-inspected supplies and shall require his supplier to coordinated with his Government Representative on corrective action.
7.5 Government Evaluation. MDF Technologies Inc.’s inspection system and supplies generated by the system shall be subject o evaluation and verification inspection by the government Representative to determine its effectiveness in supporting the quality requirement established in the detail specification, drawings and contract and as prescribed herein.
8. BUYERS RIGHTS TO SURVEILLANCE
Buyer’s rights to perform inspections, surveillance and tests and to review procedures, practices, processes and related documents related to quality assurance, quality control, shall extend to the customers of Buyer that are departments, agencies or instrumentalities of the United States Government. Buyer may also, at Buyer’s option, by prior written notice, extend such rights to other customers of Buyer. Seller shall cooperate with any such United States Government-directed or Buyer-directed inspection, surveillance, test or review without additional charge to Buyer. Nothing in this contract shall be interpreted to limit access to Seller’s facilities pursuant to law or regulation at Seller or Seller’s sub-tier facilities.
9. ACCESS TO PLANTS AND PROPERTIES
Seller shall comply with all the rules and regulations established by Buyer for access to and activities in and around premises controlled by Buyer or Buyer’s customer.
10. ACCEPTANCE AND REJECTION
10.1 Buyer shall accept the Goods or give Seller notice of rejection or revocation of acceptance ("rejection" herein), notwithstanding any payment, prior test or inspection, or passage of title. No inspection, test, delay or failure to inspect or test or failure to discover any defect or other nonconformance shall relieve Seller of any obligations under this contract or impair any rights or remedies of Buyer.
10.2 If Seller delivers non-conforming Goods, Buyer may at its option and at Seller's expense:
a) Return the Goods for credit or refund;
b) Require Seller to promptly correct or replace the Goods;
c) Correct the Goods; or
d) Obtain replacement Goods from another source.
11. QUALITY
11.1 Seller shall establish and maintain a quality control system acceptable to Buyer for the Goods purchased under this contract. Seller shall permit Buyer to review procedures, practices, processes and related documents to determine such acceptability. Seller shall have a continuing obligation to promptly notify Buyer of any violation of or deviation within 10 days of such knowledge from Seller’s approved inspection quality, control system and to advise Buyer of the quantity and specific identity of any Goods delivered to Buyer during the period of any such violation or deviation. Buyer reserves the right at any reasonable time to inspect witness, review or otherwise audit Sellers quality assurance and quality control procedures. Buyer shall have access to all parts of Seller's
plant(s} and/or Seller's Supplier's plant(s) engaged In the manufacturing or processing of Goods in order to inspect, witness, review or otherwise audit the quality control processes being utilized at such plant(s). Seller shall furnish to Buyer the status of engineering, material procurement, production and shipping information upon request.
11.2 Seller shall have a continuing obligation to promptly notify Buyer of any violation of or deviation from Seller’s approved inspection/quality control system and to advise Buyer of the quantity and specific identity of and Goods delivered to Buyer during the period of any such violation or deviation.
12. CHANGES
12.1 Buyers may without notice to sureties and in writing, direct changes within the general scope of this contract in any of the following:
a) Technical requirements and descriptions, specifications,
b) statement of work, drawings or designs;
c) Shipment or packing methods;
d) Place of delivery, inspection or acceptance;
e) Reasonable adjustments I quantities or delivery schedules or both;
f) Amount of Buyer-furnished property;
g) Terms and conditions of this contract required to meet Buyer's obligations under Government prime contracts or subcontracts; and, if this contract includes services,
h) Description of services to be performed;
i) Time of performance (e.g., hours of the day, days of the week); and
j) Place of performance, Seller shall comply immediately with such direction.
12.2 If such change increases or decreases the cost or time required to perform this contract, Buyer and Seller shall negotiate an equitable adjustment in the price or schedule, or both, to reflect the increase or decrease. Buyer shall modify this contract in writing accordingly. Unless otherwise agreed in writing, Seller must assert any claim for adjustment to Buyer in writing within 15 days and deliver a fully supported proposal to Buyer within 30 days after Seller's receipt of such direction. Buyer may, at its sole discretion, consider any claim regardless of when asserted. If Seller's proposal includes the cost of property made obsolete or excess by the change, Buyer may direct the disposition of the property.
Buyer may examine Seller's pertinent books and records to verify the amount of Seller's claim. Failure of the parties to agree upon any adjustment shall not excuse Seller from performing in accordance with Buyer's direction. Seller shall not make any changes relating to Goods, including without limitation, in the Goods’ content’s, design, specification, processing, part or material substitutions, packaging, marking, shipping, price or date or place of delivery, except at Buyer’s written instructions or Buyer’s prior written approval. The Seller shall ensure that these requirements are processed through the sub-tier supply chains that support the Goods on this purchase order.
12.3 If Seller considers that Buyer's conduct constitutes a change, Seller shall notify MDF Technologies, Inc. immediately in writing as to the nature of such conduct and its effect upon Seller's performance.
13. SPECIAL PROCESSES PROCEDURES
Special Processes involved in manufacturing such as Welding, NDT Procedures, and Radiographic Film, that require customer approval must be submitted to the buyer before manufacturing or inspection begins. A written approval must be received prior to start of work.
14. ASSIGNMENT, DELEGATION AND SUBCONTRACTING
Seller shall not without written authorization from Buyer disclose any information or knowledge to sub-tier Suppliers in connection with this purchase order which shall be deemed confidential and proprietary information by MDF Technologies, Inc. After approval of sub-tier Suppliers by MDF Technologies, Inc., Seller shall be responsible for the disclosure of all applicable specifications and requirements to sub-tier Suppliers to ensure product complies, meets and conforms to purchase order requirements as permitted by Buyer. Seller agrees to cause its employees, Suppliers, officers, directors, agents and representatives to be bound by and comply with the foregoing restrictions regarding the use or disclosure of such confidential and proprietary information. All documents containing proprietary information relating to the Goods produced or acquired by Seller in connection with this agreement shall belong to the Buyer.
15. VENDOR INFORMATION REQUEST (VIR)
The VIR is used by MDF Technologies Inc. as a means of written communication between Seller and MDF Technologies Inc. to accomplish the following objectives:
a) Describe material and process discrepancies for which approval by MDF Technologies Inc. is required.
b) Present information of a technical nature to MDF Technologies Inc. for which acknowledgement, concurrence or approval desired or required.
c) Transmit documentation such as special process procedures, test reports and planning documents specifically required by Purchase Order or Subcontract. Submittal of certifications, data sheets and test reports stipulated by reference to Quality Assurance Provision do not require the use of the VIR format.
All VIRS must be transmitted from the Seller to the MDF Technologies Inc. Purchasing Department.
The VIR form should be completed as follows (format available from MDF Technologies Inc.):
1. VENDOR NAME AND ADDRESS - Indicate the vendor facility where the parts were processed.
2. VIR NO., DATE RECEIVED, DATE PROCESSED, PROGRAM & PROCUREMENT - Leave Blank.
3. P.O. NO., LINE ITEM NO. - Enter the applicable purchase order number and the line item no. Use a separate VIR form for each purchase order and part number.
4. PART NO., PART REVISION, PART NAME - Enter the information as shown in the applicable drawing or specification.
5. LOT NO., QUANTITY, SERIAL NO’S - Fill in the applicable information for all discrepant parts, prior to corrective action effectivity.
6. DISCREPANCY DESCRIPTION/CHANGE OR INFORMATION REQUEST
a) For nonconforming material, describe the discrepant characteristics of the material. Refer to serial numbers and state the applicable requirements together with the actual measurements or a clear word description of the discrepant characteristics.
b) For document transmittals, state the full name of the document and the document number.
c) For conditions requiring clarifications or concurrence, state all pertinent details.
7. CAUSE OF DISCREPANCY, CONDITIONS, SOURCE OF REQUIREMENTS
a) For nonconforming material describe the assignable cause of the discrepancy.
b) For conditions requiring clarification or concurrence, describe the cause of the conditions.
c) For documentation transmittals, state the name and identification number of the specification or Work Statement requiring the document transmittal.
8. CORRECTIVE ACTION AND EFFECTIVITY/ACTION DESIRED BY PROPULSION
a) Explain what corrective actions have been taken to prevent recurrence of each assignable discrepancy cause. State the effectivity of the corrective actions by serial number, date, or other effectivity point which can be verified. Include any recommendations for repair, if appropriate.
b) For conditions requiring clarification or concurrence, state the action taken or the action recommended to be taken by the vendor or Propulsion.
c) For document transmittals, simple state “Approval Requested”.
NOTE: FOR DISCREPANT MATERIAL ONLY
Material that fails to comply with purchase order and drawing requirements is discrepant material. When a Seller finds discrepant material, it should be so marked and removed from normal processing areas. If the discrepant material cannot be reworked to meet specifications, and if in the vendor’s opinion the material is usable, MDF Technologies Inc. material review action may be requested by submitting a VIR to the MDF Technologies Inc. Procurement Representative.
Transmit the completed VIR form to the cognizant MDF Technologies Inc. Purchasing Representative. DO NOT SHIP THE DISCREPANT MATERIAL until instructions are received. If the VIR information is telephoned to the MDF Technologies Inc. Procurement Representative for the sake of saving time, a confirming written VIR must be transmitted within 24 hours.
The MDF Technologies Inc. Procurement Representative will advise the vendor of the intended material disposition. If the authorization for use is given, the vendor will receive a copy of the approved VIR identified with a VIR number. To prevent rejection at MDF Technologies Inc. receiving inspection of materials shipped under VIR authorization, identify the discrepant material by tagging within the lot shipped, reference the VIR number on all shipping documentation and material certifications, and include a copy of the VIR with each shipment.
All VIR dispositions are subject to final acceptance after receipt of material at MDF Technologies Inc.. After verification of documented discrepancies, MDF Technologies Inc. will use the approved VIR as a basis of acceptance of material. Discrepancies authorized by an approved VIR will not be counted in the vendor’s quality history file. Approval of a VIR does not relinquish the rights of either MDF Technologies Inc. or the Government to an equitable price adjustment negotiation with the MDF Technologies Inc. Procurement Representative.
16. COUNTERFEIT WORK
Seller is responsible for work in which are of the lowest level of separately identifiable items example: articles, components, Goods and assemblies delivered under this contract. Counterfeit work means work/Goods that contain items misrepresented as having been designed and/or produced under an approved system or other acceptable method. The term also includes approved work/Goods that have reached a design life limit or has been damaged beyond possible repairs, but is altered and misrepresented as acceptable by Seller.
a) Seller agrees and shall ensure that counterfeit work/Goods are not delivered to MDF Technologies, Inc.
b) Seller shall only purchase products to be delivered or incorporated as work/Goods to MDF Technologies, Inc. directly from the Original Component Manufacturer (OCM) / Original Equipment Manufacturer (OEM) or through an OCM / OEM authorized distributor chain. Goods shall not be acquired from independent distributors or brokers unless approved in advance in writing by MDF Technologies, Inc.
c) Seller shall immediately notify MDF Technologies, Inc. with the pertinent facts if Seller becomes aware of suspects that have furnished Counterfeit work/Goods. When requested by MDF Technologies, Inc., Seller shall provide OCM/OEM documentation that authenticates traceability of the affected items to the applicable OCM/OEM.
d) In the event that work delivered under this contract constitutes or includes counterfeit work/Goods, Seller shall, at Seller’s expense, promptly replace such counterfeit work/Goods with genuine work/Goods conforming to the requirements of this Contract. Notwithstanding any other provision in this contract, Seller shall be liable for all costs relating to the removal and replacement of counterfeit work/Goods, including without limitation, MDF Technologies, Inc. costs of removing counterfeit work/Goods, of reinserting replacement work/Goods and of any testing necessitated by the reinstallation of work/Goods after Counterfeit work/Goods has been exchanged. The remedies contained in this paragraph are in addition to any remedies MDF Technologies, Inc. have at law, equity or under other provisions of this contract.
e) This clause applies in addition to any quality provision, specification, statement of work or other provision included in this contract addressing the authenticity of work/Goods. To the extent such provisions conflict with this clause, this clause prevails.
f) Seller shall include paragraphs (a) through (d) of this clause or equivalent provisions in lower tier subcontracts for the delivery of items that will be included in or furnished as work/Goods to MDF Technologies, Inc.
17. WARRANTY
Seller warrants that all Goods furnished (including all replacement or corrected Goods or components that Seller furnishes under this warranty) will be fee from defects in material and workmanship, conform to applicable drawings, design, quality control specifications and samples and other descriptions furnished or specified by MDF Technologies, Inc. be merchantable to the extent Goods are not manufactured pursuant to detailed designs and specifications furnished by Buyer, the Goods shall be free from design and specification defects. This warranty shall survive inspection, test and acceptance of, and payment for the Goods. This warranty shall run to Buyer and its successors, assigns and customers. Such warranty shall begin after Buyer’s final acceptance. Non-conforming Goods may, at the Buyers option, either be returned for credit or returned for correction or replacement. Seller shall bear expenses for all returned and re-delivered Goods. All Goods re-delivered to Buyer shall be subject to this article and the inspection article of this contract. Even if the parties disagree about the existence of a breach of this warranty, Seller promptly comply with Buyer’s direction to ; repair, rework or replacement of Goods. If the parties later determine that Seller did not breach this warranty, the parties shall equitably adjust the contract price.
18. CONFIDENTIAL, PROPRIETARY AND TRADE SECRET INFORMATION AND MATERIAL
18.1 Buyer and Seller shall each keep confidential and protect from unauthorized use and disclosure all:
a) Confidential, proprietary and/or trade secret information;
b) Tangible items and software containing, conveying or embodying such information and
c) Tooling identified as being subject to this article and obtained, directly or indirectly, from the other in connection with this contract or other agreement referencing this contract (collectively referred to as "Proprietary Information and Materials").
18.2 Buyer and Seller shall each use Proprietary Information and Materials of the other only in the performance of and for the purpose of this contract and/or any other agreement referencing this contract. However, despite any other obligations or restrictions imposed by this article, Buyer shall have the right to use, disclose and reproduce Seller's Proprietary Information and Materials, and make derivative works thereof, for the purposes of testing, certification, use, sale or support of any Goods delivered under this contract or any other agreement referencing this contract. Any such use, disclosure, reproduction or derivative work by Buyer shall, whenever appropriate, include restrictive legend suitable for the particular circumstances. The restrictions on disclosure or use of Proprietary Information and Materials by Seller shall apply to all materials derived by Seller or others from Buyer's Proprietary Information and Materials. Upon Buyer's request at any time, and in any event upon the completion, termination or cancellation of this contract, Seller shall return to Buyer all of Buyer's Proprietary Information and Materials and all materials derived there from, unless specifically directed otherwise in writing by Buyer. Seller shall not, without the prior written authorization of Buyer, sell or otherwise dispose of (as scrap or otherwise) any parts or other materials containing, conveying, embodying or made in accordance with or by reference to any Proprietary Information and Materials of Buyer. Prior to disposing of such parts or other materials as scrap, Seller shall render them unusable. Buyer shall have the right to audit Seller's compliance with this article. Seller may disclose Proprietary Information and Materials of Buyer to its subcontractors as required for the performance of this contract, provided that each such subcontractor first agrees in writing to the same obligations imposed upon Seller under this article relating to Proprietary Information and Material. Seller shall be liable to Buyer for any breaches of such provisions of this article are effective in lieu of any restrictive legends or notices applied to Proprietary Information and Materials. The provisions of this article shall survive the performance, completion, termination or cancellation of this contract.
19. PATENT PROTECTION
Seller will indemnify, defend and hold harmless Buyer and its customer from all claims, suits, actions, awards (including, but not limited to, awards based on intentional infringement of patents known at the time of such infringement, exceeding actual damages and/or including attorneys' fees and/or costs), liabilities, damages, costs and attorneys' fees related to the actual or alleged infringement of any United States or foreign intellectual property right (including, but not limited to, any right in a patent, copyright, industrial design or based on misappropriation or wrongful use of information or documents) and arising out of the manufacture, sale or use of Goods by either Buyer or its customer. Buyer and/or its customer will duly notify Seller of any such claim, suit or action; and Seller will, at its own expense, fully defend such claim, suit or action on behalf of indemnities. Seller will have no obligation under this article with regard to any infringement arising from (a) Seller's compliance with formal specifications issued by Buyer where infringement could not be avoided in complying with such specifications or (b) use or sale of Goods for other than their intended application in combination with other items when such infringement would not have occurred from the use or sale of those Goods solely for the purpose for which they were designed or sold by Seller. For purposes of this article only, the term Buyer will include all officers, agents and MDF Technologies, Inc. employees.
20. INTELLECTUAL PROPERTY
20.1 "Intellectual Property" shall mean and include patents, copyrights, trade secrets, know-how, concepts, Ideas, discoveries, inventions (whether or not patentable), processes, designs, improvements, documentation, intellectual property/proprietary rights, rights in other tangible and intangible assets of a proprietary nature, and the like. “Intellectual Property Rights" means all forms
of Intellectual Property protection or proprietary rights available throughout the world including, without limitation, design patents, patent applications, design registrations, industrial designs, copyrights, trade secrets and rights in domain names.
20.2 Seller warrants that the Goods and the sale and/or use thereof (before or after incorporation into products during manufacture) are original to Seller and do not and shall not infringe any third-party's Intellectual Property Rights.
20.3 Seller agrees:
a) To defend, hold harmless and indemnify Buyer and its owners, shareholders, affiliates, officers, directors, members, managers, partners, employees, attorneys and agents and any of their respective successors and assigns (each a "Buyer Indemnified Party') against any suit, claim or action for actual or alleged direct or contributory Infringement of or inducement to infringe or violate any third party's Intellectual Property or Intellectual Property Rights and against any resulting damages or expenses (including attorney's and other professional fees and expenses, settlements and judgments) arising out of or relating to the manufacture, sale or use of the Goods including cases in which Seller has provided only part of Goods;
b) To waive any claim against any Buyer Indemnified Party, including any hold-harmless or similar claim, in any way related to a third-party claim asserted against such Buyer Indemnified Party for infringement of any Intellectual Property Right, Including any claim against Buyer that the Infringement arose out of compliance with Buyer's specifications: and
c) That if the sale or use of the Goods is enjoined or, in Buyer's sale and absolute judgment, is likely to be enjoined, Seller shall, at Buyer's election in its sale discretion and at Seller's sale expense, procure for Buyer the right to continue using the Goods, replace the same with equivalent non-infringing Goods or modify such Goods so they become non-infringing.
21. BUYER'S PROPERTY
Seller shall have a defined documented system required to clearly mark, maintain an inventory of, and keep segregated or identifiable all of Buyer's property and all property to which Buyer acquires an interest by virtue of this contract. Seller assumes all risk of loss, destruction or damage of such property while in Seller's possession, custody or control, including any transfer to Seller's subcontractors. Upon request, Seller shall provide Buyer with adequate proof of insurance against such risk of loss. Seller shall not use such property other than in performance of this contract without Buyer's prior written consent. Seller shall promptly notify Buyer if Buyer's property is lost, damaged or destroyed. As directed by Buyer, upon completion, termination or cancellation of this contract, Seller shall deliver such property, to the extent not incorporated in delivered Goods, to Buyer in good condition subject to ordinary wear and tear and normal manufacturing losses. Nothing in this article limits Seller's use, in its direct contracts with the Government, of property in which the Government has an interest.
22. CANCELLATION
Buyer may terminate the Order for Cause, without liability to Seller, which shall be effective upon delivery of written notice or upon such other date specified by Buyer in writing. "Cause" for termination includes, but not limited to, the following actions:
a) Seller breaches any representation, warranty or other term of the Order;
b) Seller repudiates breaches or threatens to breach any of the terms of the Order;
c) Seller fails to deliver, or threatens not to deliver, Goods in accordance with a Material Release;
d) Seller fails to meet applicable quality requirements so as to endanger timely and proper performance of the Order;
e) Seller makes an assignment for the benefit of creditors;
f) Proceedings in bankruptcy or insolvency are instituted by or against Seller;
g) Seller requests accommodations from Buyer, financial or otherwise, in order for Seller to meet its obligations under the Order;
h) Seller enters or offers to enter into a transaction or series of transactions that would cause a sale of a material portion of the assets used by Seller for the production and/or provision of Goods to Buyer;
i) Seller enters or offers to enter into a merger, sale or exchange of stock or other equity interests that would result in a change in control of Seller within the meaning of Section 409A of the Internal Revenue Code and regulations issued there under, in which case Seller shall notify Buyer within ten (10) days after entering into any related negotiations (or the first period in which such negotiations can be made public consistent with applicable law) that could lead to such a transaction, provided that upon Seller's request, Buyer shall enter into an appropriate nondisclosure agreement related to information disclosed to Buyer In relation to such transaction; or
j) At any time in Buyer's sole judgment Seller's financial or other condition or progress on the Order shall be such as to endanger timely performance. In the event Buyer elects not to terminate the Order in connection with an event that would constitute Cause for termination, Buyer may make such equitable adjustments in the price, payment terms, sole supply relationship and delivery requirements under the Order as Buyer deems appropriate to address changes in Seller's circumstances, including Seller's continuing ability to perform its obligations regarding warranty, nonconforming Goods or other requirements under the Order, provided that Buyer must provide Seller with notice and details regarding the adjustments.
23. TERMINATION FOR CONVENIENCE
Buyer may terminate all or part of this contract, effective as of the date specified by Buyer, in accordance with the provisions of Federal Acquisition Regulation ("FAR") 52.249-2 (May 2004), "Termination for Convenience of the Government (Fixed Price)," which provisions, except for subparagraphs (d) and 0), are incorporated herein by reference. The terms "Government" and "Contracting Officer" shall mean "Buyer," "Contractor" shall mean "Seller," and the phrase "1 year" is deleted each place it occurs and "six months" is substituted in its place. The time for requesting an equitable adjustment under subparagraph (I - lower case letter L) is reduced to 45 days. Settlements and payments under this article may be subject to approval by the Contracting Officer and the Settlement Review Board.
24. SUSPENSION OF WORK
24.1 Buyer may, by written order, suspend all or part of the work to be performed under this contract for a period not to exceed 100 days. Within such period of any suspension of work, Buyer shall:
a) Cancel the suspension of work order;
b) Terminate this contract in accordance with the "Termination for Convenience" article of this contract;
c) Cancel this contract in accordance with the "Cancellation for default" article of this contract; or
d) Extend the stop work period.
24.2 Seller shall resume work whenever a suspension is canceled. Buyer and Seller shall negotiate an equitable adjustment in the price or schedule or both if;
a) This contract is not canceled or terminated;
b) The suspension results in a change in Seller's cost of performance or ability to meet the contract delivery schedule; and
c) Seller submits a claim for adjustment within 20 days after the suspension is canceled
25. DISPUTES
Any dispute that arises under, or is related to, this contract that cannot be settled by mutual agreement of the parties may be decided by binding arbitration, mediation, or be heard in the Superior Court of CA, San Diego county with consent to a waiver of trial by jury. Pending final resolution of any dispute, Seller shall proceed with performance of this contract according to Buyer's instructions so long as Buyer continues to pay amounts not in dispute.
26. FORCE MAJEURE
Seller shall not be liable for excess reprocurement costs pursuant to the "Cancellation for Default" article of this contract, incurred by Buyer because of any failure to perform this contract under its terms if the failure arises from causes beyond the control and without the fault or negligence of Seller. Examples of these causes are:
a) Acts of God or of the public enemy,
b) Acts of the Government in either its sovereign or contractual capacity,
c) Fires,
d) Foods,
e) Epidemics,
I) Quarantine restrictions,
g) Strikes,
h) Freight embargoes and
i) Unusually severe weather.
In each instance, the failure to perform must be beyond the control and without the fault or negligence of Seller. If the delay is caused by delay of a subcontractor of Seller and if such delay arises out of causes beyond the reasonable control of both, and if such delay is without the fault or negligence of either, Seller shall not be liable for excess costs unless the Goods or services to be furnished by the subcontractor were obtainable from other sources in sufficient time to permit Seller to meet the required delivery schedules. Seller shall notify Buyer in writing within 10 days after the beginning of any such cause.
27. TAXES
Unless this contract specifies otherwise, the price of this contract includes, and Seller is liable for and shall pay, all taxes, impositions, charges and exactions imposed on or measured by this contract except for applicable sales and use taxes that are separately stated on Seller's invoice. Prices shall not include any taxes, impositions, charges or exactions for which Buyer has furnished a valid exemption certificate or other evidence of exemption.
28. PAYMENT
Unless otherwise authorized by Buyer, Seller shall issue a separate original invoice for each delivery of Goods that shall include Buyer's contract number and line item number. Seller shall forward its invoice and all other applicable documents to the address specified elsewhere in this contract. Unless freight or other charges are itemized, Buyer may take any offered discount on the full amount of the invoice. Payment due date, including discount periods, shall be computed from the later of the scheduled delivery of Goods date, the actual delivery of Goods date or the date of receipt of a correct invoice. Payment shall be deemed made on the date Buyer's check is mailed or payment is otherwise tendered. Terms are as per purchase order. Seller shall promptly repay Buyer any amounts paid in excess of amounts due Seller.
29. OFFSET CREDITS
29.1 To the exclusion of all others, Buyer or its assignees shall be entitled to all industrial benefits or offset credits which might result from this contract. Seller shall provide documentation or information that Buyer or its assignees may reasonably request to substantiate claims for industrial benefits or offset credits.
29.2 Seller agrees to use reasonable efforts to identify the foreign content of Goods that Seller either produces itself or procures from subcontractors for work directly related to this contract. Promptly after selection of a non-U.S. subcontractor for work under this contract, Seller shall notify Buyer of the name, address, subcontract point of contact (including telephone number), and dollar value of the subcontract.
30. SELLER FINANCIAL REVIEW
If the contract exceeds $250,000 and extends for more than one year, and if requested, the Seller shall provide financial data on a quarterly basis or as requested to the Buyer's Credit Office for credit and financial condition reviews. Said data shall include but not be limited to balance sheets, schedule of accounts payable and receivable, major lines of credit, creditors, income statements (profit and loss), cash flow statements, firm backlog, and headcount. Copies of such data are to be made available within 72 hours of any written request by Buyer. All such information shall be treated as confidential.
31. COMPLIANCE WITH LAWS
Seller warrants that all Goods furnished by Seller under the Order shall comply with all applicable local, state, Federal and all other applicable laws, ordinances and regulations, including those concerned with labor, environment and safety, as those laws, ordinances and regulations are amended from time to time. Seller shall provide all permits, certificates, licenses, insurance approvals and inspections which may be required for the performance of the Order.
32. CODE OF CONDUCT
Buyer is committed to conducting its business fairly, impartially, and in an ethical and proper manner. Buyer's expectation is that Seller also will conduct its business fairly, impartially, and in an ethical and proper manner. Buyer's further expectation is that Seller will have (or will develop) and adhere to a code of ethical standards. If Seller has cause to believe that Buyer or any employee or agent of Buyer has behaved improperly or unethically under this contract, Seller shall report such behavior in writing to MDF Technologies, Inc. Buyer will not use the failure to report improper or unethical behavior as a basis for claiming breach of contract by Seller, Seller is encouraged to exert reasonable effort to report such behavior when warranted.
33. AFFIRMATIVE ACTION
During the performance of this Order, the Seller agrees to comply with all provisions of the President’s Executive Order Number 11246 as amended, Section 503 of the Rehabilitation Act of 1973, and 38 U.S.C. 4212 (The Vietnam Era Veterans Readjustment Assistance Act of 1974).
34. PUBLICITY
Without Buyer's prior written approval, Seller shall not, and shall require that its subcontractors at any tier shall not, release any publicity, advertisement, news release or denial or confirmation of same regarding this contract or the Goods or program to which it pertains. Seller shall be responsible to Buyer for any breach of such obligation by any subcontractor.
35. GOVERNING LAW
This contract shall be governed by and construed in accordance with the laws of the state of California. No consideration shall be given to California’s conflict of laws rules. This contract excludes the application of the 1980 United Nations Convention on Contracts for the International Sale of Goods.
36. GOVERNMENT CLAUSES
Government clauses applicable to this contract are incorporated herein either by attachment to this document or by some other means of reference.
37. RIGHTS AND REMEDIES
37.1 Any failures, delays or forbearances of either party in insisting upon or enforcing any provisions of this contract, or in exercising any rights or remedies under this contract, shall not be construed as a waiver or relinquishment of any such provisions, rights or remedies; rather, the same shall remain in full force and effect. Except as otherwise limited in this contract, the rights and remedies set forth herein are cumulative and in addition to any other rights or remedies that the parties may have at law or in equity. If any provision of this contract is or becomes void or unenforceable by law, the remainder shall be valid and enforceable.
37.2 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, Price: Most Favored Customer and Meet or Release, Invoicing and Payment, Set Off, Warranty, Cessation of Production, General Indemnification, Intellectual Property Indemnification, Insurance, Protection of Information, Audit, Applicable law and Forum, Publicity, and Survival.
38. RECORD RETENTION
All documents associated with purchased material, including records, physical and test reports shall be retained a minimum of 7 years or as specified on the purchase order.
39. ORDER OF PRECEDENCE
In the event of a conflict between the text of this Purchase Order and the references and/or drawings cited herein, the text of this Purchase Order shall take precedence. Nothing in this
Purchase Order, however, shall supersede applicable laws and regulations unless a specific exemption has been obtained.
40. PRIORITY RATINGS
Priority Ratings are flowed down to suppliers through the Purchase Order agreement. There are two levels of priority for rated orders established by the DPAS, identified by the rating symbols “DO” and “DX”. All DO rated orders have equal priority with each other and take preference over unrated orders. All DX rated orders have equal priority with each other and take preference of DO rated and unrated orders.
41. MERCURY FREE
The material supplied under this purchase order may be intended for use on submarines/surface ships and therefore shall contain no metallic mercury and shall be free from mercury contamination. Mercury contamination of the material may be cause for rejection.
42. TRANSMISSION ABROAD OF EQUIPMENT OR TECHNICAL DATA
Except with prior written consent of MDF Technologies Inc., the Seller shall not, at any time during or after the performance of this contract, trans or authorize the transmittal of any equipment or technical data as defined in paragraph below, outside of the United States, or irrespective of location, to any foreign national not working on this contract or on a subcontract hereunder, to any foreign organization (including foreign subsidiaries and affiliates of the Seller), to any Government, or to any international organization.
As used in this clause, the following terms shall have the following definitions:
“United States” means the States, the District of Columbia, Puerto Rico, American Samoa, the Canal Zone, the Virgin Islands, Guam, and an area subject to the complete sovereignty of the United States.
“Equipment” means all supplies of the kind specified to be delivered under this contract, all component parts thereof, and all models or such supplies and component parts and models thereof.
“Technical data” means all professional, scientific, or technical information and data produced or prepared for the performance of this contract, or on or for the operation, maintenance, evaluation, or testing of any contract item whether or not the information and data were specified to be delivered under this contract, including without limitation, all writings, sound recordings, pictorial reproductions and drawings or other graphical representations. “Technical data” does not include such information and data on standard commercial supplies and component parts in or in connection with any item or component part thereof, specified to be delivered under this contract.
“Foreign national or immigrant alien” means a person not a United States citizen or a United States National. United States Citizens acting as agents for foreign concerns are considered to be foreign nationals for industrial security purposes and the purpose of this restriction.
The Seller agrees to insert in all subcontractors under this contract provision, which shall conform substantially to the language of this clause, including this paragraph.
43. ENTIRE AGREEMENT
This contract contains the entire agreement of the parties and supersedes any and all prior agreements, understandings and communications between Buyer and Seller related to the subject matter of this contract. No amendment or modification of this contract shall bind either party unless it is accepted as described in the acknowledgment section of these terms and conditions.
1.1 These terms and conditions of purchase are incorporated into and from a part of the purchase order and/or scheduling agreement issued by MDF Technologies, Inc. The term “Buyer” refers to MDF Technologies, Inc. and or designated Buyer representative of MDF Technologies, Inc.. The term “Seller” refers to the legal entity associated to this purchase order agreement with
Buyer as such on the attached purchase order and/or scheduling agreement. The term Supplier is the entity to which the Seller is associated with as a sub-tier provider of Goods or services as it pertains to the Goods or services provided to MDF Technologies, Inc. by the Seller. The term “Goods” refers to the Goods and/or services to be provided to Buyer by Seller as specified on the purchase order and/or scheduling agreement.
1.2 MDF Technologies, Inc. rejects any additional or inconsistent terms and conditions offered by Seller at any time. Any reference to Seller’s quotation, bid or proposal does not imply acceptance of any term, condition or instruction contained in that document. 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, supersedes any prior contemporaneous communications, representations, promises or negotiations, whether oral or written, respecting the subject matter of this purchase order. All contract documents referenced in this purchase order are interpreted together as one agreement.
1.3 If the Seller becomes aware of any ambiguities, issues, or discrepancies between this purchase order and any specifications, design or other technical requirement applicable to this purchase order, Seller will immediately submit the matter to and agrees to abide by MDF Technologies, Inc. for resolution.
2. ACKNOWLEDGEMENT
This purchase order is deemed accepted when Seller returns acknowledgement of this purchase order or begins performing, whichever is earlier. Acceptance of this offer in any manner shall conclusively evidence acceptance of this offer as written.
3. DELIVERY
3.1 Seller will deliver Goods in the quantities and on the dates specified on the purchase order or purchase order schedule releases. In the event of any anticipated or actual delay, including but not limited to delays attributed to labor disputes, Seller shall (a) promptly notify Buyer in writing of the reasons for the delay and the actions being taken to overcome or minimize the delay; (b) provide Buyer with a written recovery schedule and (c) if requested by Buyer, ship via air or other expedited routing to avoid or minimize delay to the maximum extent possible. Time is of the essence for Seller’s performance of all of its obligations under this agreement. Buyer reserves the right to cancel all of any part of the undelivered portion of this purchase order at no charge if Seller does not deliver in accordance with the required delivery dates or schedule releases.
3.2 Unless Seller is excused from prompt performance as provided in the “force majeure” section of this contract, the added premium transportation costs are to be borne by Seller, Seller shall not deliver Goods prior to the delivery dates and/or schedule agreement unless authorized by Buyer. Seller agrees that pursuant to the confidential, proprietary and trade secrets information and materials section of this contract, it will not sell or offer such Goods for sale to anyone other than Buyer without Buyers written consent.
4. PACKAGING AND SHIPPING
Seller shall pack the Goods to prevent damage and deterioration. Buyer’s Order numbers and item controls numbers (ICN) must be plainly marked on all invoices, packages, bills of lading and shipping orders. A packing list shall accompany each box or package shipment. Specific shipments may require additional identification as stated on the purchase order. Unless otherwise specified in this contract, Goods sold origin (place of shipment) shall be forwarded collect. Seller shall make no declaration concerning the value of the Goods shipped except on Goods where the tariff rating is dependent upon released or declared value. In such event, Seller shall release or declare such value at the maximum value within the lowest rating. Buyer may charge Seller for damage to or deterioration of any Goods resulting from improper packing or packaging.
5. CUSTOMS REGULATIONS
For Goods imported into the United States, Seller shall comply with all applicable recommendations or requirements of the United States Bureau of Customs and Border Protection's ("U.S. Customs") including, but not limited to, the Customs ·Trade Partnership Against Terrorism (“C-TPAT”) initiative (for information go to http://www.cbp.gov/ and find the link to the C-TPAT section). At Buyer's or U.S. Customs' request, Seller shall certify in writing its compliance with C-TPAT and with all other applicable U.S. Customs laws and regulations. Seller shall provide both Buyer and U.S. Customs access to Sellers facilities for the purpose of auditing Seller's compliance with the foregoing. If the Goods are transported via ocean carrier Into the United States, Seller must also comply with U.S. Customs' Importer Security Filing ("ISF”) and provide the necessary data to the freight forwarder selected by Buyer who will act as Buyer's agent for filing of the ISF.
5.1 Seller shall obtain all export licenses or authorizations necessary for the export of Goods, unless otherwise set forth in the order, in which case Seller shall promptly provide to Buyer all information necessary to enable Buyer to obtain the licenses or authorizations. Seller shall promptly notify Buyer in writing of any material or components incorporated in the Goods that Seller purchases in
a country other than the country in which Goods are delivered. Seller shall furnish any and all documentation and information necessary to establish the country of origin or to comply with the applicable country's rules of origin requirements.
5.2 Goods and the containers into which they are placed for shipment shall be marked in accordance with all U.S. laws including but not limited to 19 CFR §134 (as amended from time to time).
5.3 Seller shall indemnify and hold Buyer harmless from and against any liability, claims demands or expenses (including attorney's fees or other professional fees) arising from or relating to Seller's noncompliance with this Section. Seller shall be responsible for the full costs of any delay in delivery of the Goods caused by its failure to comply with the requirements of this Section 5, including but not limited to missing, incomplete, untimely or inaccurate data being furnished to Buyer, Buyer's agents or any governmental authority.
6. INSPECTION
All Goods may be inspected and tested by MDF Technologies, Inc., either at Seller’s premises or after delivery. If an inspection or a testing is made on Seller’s premises, Seller will provide, without additional charge, all reasonable facilities and assistance required for the inspection and test. Seller will use a standard method of testing acceptable to MDF Technologies, Inc. In the event any Goods and/or documents are found to be defective in material, workmanship or otherwise not in conformance with the requirements of the purchase order within 1 year from date of shipment, Seller shall promptly repair, or replace such defective material at Seller’s expense. Any such repaired or replaced Goods will be subject to all requirements of the purchase order unless otherwise stated on the rejection notice. (a) At no additional cost to Buyer, Goods shall be subject to inspection, surveillance and test at reasonable times and places, including Seller's subcontractors' locations. Buyer shall perform inspections, surveillance and tests so as not to unduly delay the work. (b) Seller shall maintain an inspection system acceptable to Buyer for the Goods purchased under this contract.
7. GOVERNMENT INSPECTION
The Government reserves the right to inspect at source supplies or services not manufactured or performed within the contractor’s facility. Government inspection shall not constitute acceptance: nor shall it in any way replace contractor inspection or otherwise relieve the contractor of his responsibility to furnish an acceptable end item. When inspection at subcontractors’ plants is performed by the Government, such inspection shall not be used by contractors as evidence of effective inspection by such subcontractors. The purpose of this inspection is to assist the Government Representative at the contractor’s facility to determine the conformance of supplies or services with contract requirements. Such inspection can only be requested by or under authorization of the Government Representative.
7.1 Government Inspection Requirements. When Government inspection is required, MDF Technologies Inc. shall add to his purchasing document the following statements: “Government inspection is required prior to shipment from your plant. Upon receipt of this order, promptly notify the Government Representative who normally services your plant so that appropriate planning for Government inspection can be accomplished.”
7.2 Purchasing Documents. When , under authorization of the Government Representative, copies of the purchasing documents are to be furnished directly by the subcontractor or vendor to the government Representative at his facility rather than through government channels, MDF Technologies Inc. shall add to his purchasing documents a statement substantially as follows: “On receipt of this order, promptly furnish a copy to the Government Representative who normally services your plant or, if none, to the nearest Army, Navy , Air Force, or Defense Supply Agency inspection office. In the event the representative or office cannot be located, our purchasing agent should be notified immediately.”
7.3 Referenced Data. All documents and referenced data for purchases applying to a Government contract shall be available for review by the Government Representative to determine compliance with the requirements for the control of such purchases. Copies of purchasing documents required for Government inspection purposes shall be furnished in accordance with the instructions of the Government Representative.
7.4 Receiving Inspection. Subcontracted or purchased supplies shall be subjected to inspection after receipt, as necessary, to assure conformance to contract requirements. MDF Technologies Inc. shall report to the Government Representative any nonconformance found on Government source-inspected supplies and shall require his supplier to coordinated with his Government Representative on corrective action.
7.5 Government Evaluation. MDF Technologies Inc.’s inspection system and supplies generated by the system shall be subject o evaluation and verification inspection by the government Representative to determine its effectiveness in supporting the quality requirement established in the detail specification, drawings and contract and as prescribed herein.
8. BUYERS RIGHTS TO SURVEILLANCE
Buyer’s rights to perform inspections, surveillance and tests and to review procedures, practices, processes and related documents related to quality assurance, quality control, shall extend to the customers of Buyer that are departments, agencies or instrumentalities of the United States Government. Buyer may also, at Buyer’s option, by prior written notice, extend such rights to other customers of Buyer. Seller shall cooperate with any such United States Government-directed or Buyer-directed inspection, surveillance, test or review without additional charge to Buyer. Nothing in this contract shall be interpreted to limit access to Seller’s facilities pursuant to law or regulation at Seller or Seller’s sub-tier facilities.
9. ACCESS TO PLANTS AND PROPERTIES
Seller shall comply with all the rules and regulations established by Buyer for access to and activities in and around premises controlled by Buyer or Buyer’s customer.
10. ACCEPTANCE AND REJECTION
10.1 Buyer shall accept the Goods or give Seller notice of rejection or revocation of acceptance ("rejection" herein), notwithstanding any payment, prior test or inspection, or passage of title. No inspection, test, delay or failure to inspect or test or failure to discover any defect or other nonconformance shall relieve Seller of any obligations under this contract or impair any rights or remedies of Buyer.
10.2 If Seller delivers non-conforming Goods, Buyer may at its option and at Seller's expense:
a) Return the Goods for credit or refund;
b) Require Seller to promptly correct or replace the Goods;
c) Correct the Goods; or
d) Obtain replacement Goods from another source.
11. QUALITY
11.1 Seller shall establish and maintain a quality control system acceptable to Buyer for the Goods purchased under this contract. Seller shall permit Buyer to review procedures, practices, processes and related documents to determine such acceptability. Seller shall have a continuing obligation to promptly notify Buyer of any violation of or deviation within 10 days of such knowledge from Seller’s approved inspection quality, control system and to advise Buyer of the quantity and specific identity of any Goods delivered to Buyer during the period of any such violation or deviation. Buyer reserves the right at any reasonable time to inspect witness, review or otherwise audit Sellers quality assurance and quality control procedures. Buyer shall have access to all parts of Seller's
plant(s} and/or Seller's Supplier's plant(s) engaged In the manufacturing or processing of Goods in order to inspect, witness, review or otherwise audit the quality control processes being utilized at such plant(s). Seller shall furnish to Buyer the status of engineering, material procurement, production and shipping information upon request.
11.2 Seller shall have a continuing obligation to promptly notify Buyer of any violation of or deviation from Seller’s approved inspection/quality control system and to advise Buyer of the quantity and specific identity of and Goods delivered to Buyer during the period of any such violation or deviation.
12. CHANGES
12.1 Buyers may without notice to sureties and in writing, direct changes within the general scope of this contract in any of the following:
a) Technical requirements and descriptions, specifications,
b) statement of work, drawings or designs;
c) Shipment or packing methods;
d) Place of delivery, inspection or acceptance;
e) Reasonable adjustments I quantities or delivery schedules or both;
f) Amount of Buyer-furnished property;
g) Terms and conditions of this contract required to meet Buyer's obligations under Government prime contracts or subcontracts; and, if this contract includes services,
h) Description of services to be performed;
i) Time of performance (e.g., hours of the day, days of the week); and
j) Place of performance, Seller shall comply immediately with such direction.
12.2 If such change increases or decreases the cost or time required to perform this contract, Buyer and Seller shall negotiate an equitable adjustment in the price or schedule, or both, to reflect the increase or decrease. Buyer shall modify this contract in writing accordingly. Unless otherwise agreed in writing, Seller must assert any claim for adjustment to Buyer in writing within 15 days and deliver a fully supported proposal to Buyer within 30 days after Seller's receipt of such direction. Buyer may, at its sole discretion, consider any claim regardless of when asserted. If Seller's proposal includes the cost of property made obsolete or excess by the change, Buyer may direct the disposition of the property.
Buyer may examine Seller's pertinent books and records to verify the amount of Seller's claim. Failure of the parties to agree upon any adjustment shall not excuse Seller from performing in accordance with Buyer's direction. Seller shall not make any changes relating to Goods, including without limitation, in the Goods’ content’s, design, specification, processing, part or material substitutions, packaging, marking, shipping, price or date or place of delivery, except at Buyer’s written instructions or Buyer’s prior written approval. The Seller shall ensure that these requirements are processed through the sub-tier supply chains that support the Goods on this purchase order.
12.3 If Seller considers that Buyer's conduct constitutes a change, Seller shall notify MDF Technologies, Inc. immediately in writing as to the nature of such conduct and its effect upon Seller's performance.
13. SPECIAL PROCESSES PROCEDURES
Special Processes involved in manufacturing such as Welding, NDT Procedures, and Radiographic Film, that require customer approval must be submitted to the buyer before manufacturing or inspection begins. A written approval must be received prior to start of work.
14. ASSIGNMENT, DELEGATION AND SUBCONTRACTING
Seller shall not without written authorization from Buyer disclose any information or knowledge to sub-tier Suppliers in connection with this purchase order which shall be deemed confidential and proprietary information by MDF Technologies, Inc. After approval of sub-tier Suppliers by MDF Technologies, Inc., Seller shall be responsible for the disclosure of all applicable specifications and requirements to sub-tier Suppliers to ensure product complies, meets and conforms to purchase order requirements as permitted by Buyer. Seller agrees to cause its employees, Suppliers, officers, directors, agents and representatives to be bound by and comply with the foregoing restrictions regarding the use or disclosure of such confidential and proprietary information. All documents containing proprietary information relating to the Goods produced or acquired by Seller in connection with this agreement shall belong to the Buyer.
15. VENDOR INFORMATION REQUEST (VIR)
The VIR is used by MDF Technologies Inc. as a means of written communication between Seller and MDF Technologies Inc. to accomplish the following objectives:
a) Describe material and process discrepancies for which approval by MDF Technologies Inc. is required.
b) Present information of a technical nature to MDF Technologies Inc. for which acknowledgement, concurrence or approval desired or required.
c) Transmit documentation such as special process procedures, test reports and planning documents specifically required by Purchase Order or Subcontract. Submittal of certifications, data sheets and test reports stipulated by reference to Quality Assurance Provision do not require the use of the VIR format.
All VIRS must be transmitted from the Seller to the MDF Technologies Inc. Purchasing Department.
The VIR form should be completed as follows (format available from MDF Technologies Inc.):
1. VENDOR NAME AND ADDRESS - Indicate the vendor facility where the parts were processed.
2. VIR NO., DATE RECEIVED, DATE PROCESSED, PROGRAM & PROCUREMENT - Leave Blank.
3. P.O. NO., LINE ITEM NO. - Enter the applicable purchase order number and the line item no. Use a separate VIR form for each purchase order and part number.
4. PART NO., PART REVISION, PART NAME - Enter the information as shown in the applicable drawing or specification.
5. LOT NO., QUANTITY, SERIAL NO’S - Fill in the applicable information for all discrepant parts, prior to corrective action effectivity.
6. DISCREPANCY DESCRIPTION/CHANGE OR INFORMATION REQUEST
a) For nonconforming material, describe the discrepant characteristics of the material. Refer to serial numbers and state the applicable requirements together with the actual measurements or a clear word description of the discrepant characteristics.
b) For document transmittals, state the full name of the document and the document number.
c) For conditions requiring clarifications or concurrence, state all pertinent details.
7. CAUSE OF DISCREPANCY, CONDITIONS, SOURCE OF REQUIREMENTS
a) For nonconforming material describe the assignable cause of the discrepancy.
b) For conditions requiring clarification or concurrence, describe the cause of the conditions.
c) For documentation transmittals, state the name and identification number of the specification or Work Statement requiring the document transmittal.
8. CORRECTIVE ACTION AND EFFECTIVITY/ACTION DESIRED BY PROPULSION
a) Explain what corrective actions have been taken to prevent recurrence of each assignable discrepancy cause. State the effectivity of the corrective actions by serial number, date, or other effectivity point which can be verified. Include any recommendations for repair, if appropriate.
b) For conditions requiring clarification or concurrence, state the action taken or the action recommended to be taken by the vendor or Propulsion.
c) For document transmittals, simple state “Approval Requested”.
NOTE: FOR DISCREPANT MATERIAL ONLY
Material that fails to comply with purchase order and drawing requirements is discrepant material. When a Seller finds discrepant material, it should be so marked and removed from normal processing areas. If the discrepant material cannot be reworked to meet specifications, and if in the vendor’s opinion the material is usable, MDF Technologies Inc. material review action may be requested by submitting a VIR to the MDF Technologies Inc. Procurement Representative.
Transmit the completed VIR form to the cognizant MDF Technologies Inc. Purchasing Representative. DO NOT SHIP THE DISCREPANT MATERIAL until instructions are received. If the VIR information is telephoned to the MDF Technologies Inc. Procurement Representative for the sake of saving time, a confirming written VIR must be transmitted within 24 hours.
The MDF Technologies Inc. Procurement Representative will advise the vendor of the intended material disposition. If the authorization for use is given, the vendor will receive a copy of the approved VIR identified with a VIR number. To prevent rejection at MDF Technologies Inc. receiving inspection of materials shipped under VIR authorization, identify the discrepant material by tagging within the lot shipped, reference the VIR number on all shipping documentation and material certifications, and include a copy of the VIR with each shipment.
All VIR dispositions are subject to final acceptance after receipt of material at MDF Technologies Inc.. After verification of documented discrepancies, MDF Technologies Inc. will use the approved VIR as a basis of acceptance of material. Discrepancies authorized by an approved VIR will not be counted in the vendor’s quality history file. Approval of a VIR does not relinquish the rights of either MDF Technologies Inc. or the Government to an equitable price adjustment negotiation with the MDF Technologies Inc. Procurement Representative.
16. COUNTERFEIT WORK
Seller is responsible for work in which are of the lowest level of separately identifiable items example: articles, components, Goods and assemblies delivered under this contract. Counterfeit work means work/Goods that contain items misrepresented as having been designed and/or produced under an approved system or other acceptable method. The term also includes approved work/Goods that have reached a design life limit or has been damaged beyond possible repairs, but is altered and misrepresented as acceptable by Seller.
a) Seller agrees and shall ensure that counterfeit work/Goods are not delivered to MDF Technologies, Inc.
b) Seller shall only purchase products to be delivered or incorporated as work/Goods to MDF Technologies, Inc. directly from the Original Component Manufacturer (OCM) / Original Equipment Manufacturer (OEM) or through an OCM / OEM authorized distributor chain. Goods shall not be acquired from independent distributors or brokers unless approved in advance in writing by MDF Technologies, Inc.
c) Seller shall immediately notify MDF Technologies, Inc. with the pertinent facts if Seller becomes aware of suspects that have furnished Counterfeit work/Goods. When requested by MDF Technologies, Inc., Seller shall provide OCM/OEM documentation that authenticates traceability of the affected items to the applicable OCM/OEM.
d) In the event that work delivered under this contract constitutes or includes counterfeit work/Goods, Seller shall, at Seller’s expense, promptly replace such counterfeit work/Goods with genuine work/Goods conforming to the requirements of this Contract. Notwithstanding any other provision in this contract, Seller shall be liable for all costs relating to the removal and replacement of counterfeit work/Goods, including without limitation, MDF Technologies, Inc. costs of removing counterfeit work/Goods, of reinserting replacement work/Goods and of any testing necessitated by the reinstallation of work/Goods after Counterfeit work/Goods has been exchanged. The remedies contained in this paragraph are in addition to any remedies MDF Technologies, Inc. have at law, equity or under other provisions of this contract.
e) This clause applies in addition to any quality provision, specification, statement of work or other provision included in this contract addressing the authenticity of work/Goods. To the extent such provisions conflict with this clause, this clause prevails.
f) Seller shall include paragraphs (a) through (d) of this clause or equivalent provisions in lower tier subcontracts for the delivery of items that will be included in or furnished as work/Goods to MDF Technologies, Inc.
17. WARRANTY
Seller warrants that all Goods furnished (including all replacement or corrected Goods or components that Seller furnishes under this warranty) will be fee from defects in material and workmanship, conform to applicable drawings, design, quality control specifications and samples and other descriptions furnished or specified by MDF Technologies, Inc. be merchantable to the extent Goods are not manufactured pursuant to detailed designs and specifications furnished by Buyer, the Goods shall be free from design and specification defects. This warranty shall survive inspection, test and acceptance of, and payment for the Goods. This warranty shall run to Buyer and its successors, assigns and customers. Such warranty shall begin after Buyer’s final acceptance. Non-conforming Goods may, at the Buyers option, either be returned for credit or returned for correction or replacement. Seller shall bear expenses for all returned and re-delivered Goods. All Goods re-delivered to Buyer shall be subject to this article and the inspection article of this contract. Even if the parties disagree about the existence of a breach of this warranty, Seller promptly comply with Buyer’s direction to ; repair, rework or replacement of Goods. If the parties later determine that Seller did not breach this warranty, the parties shall equitably adjust the contract price.
18. CONFIDENTIAL, PROPRIETARY AND TRADE SECRET INFORMATION AND MATERIAL
18.1 Buyer and Seller shall each keep confidential and protect from unauthorized use and disclosure all:
a) Confidential, proprietary and/or trade secret information;
b) Tangible items and software containing, conveying or embodying such information and
c) Tooling identified as being subject to this article and obtained, directly or indirectly, from the other in connection with this contract or other agreement referencing this contract (collectively referred to as "Proprietary Information and Materials").
18.2 Buyer and Seller shall each use Proprietary Information and Materials of the other only in the performance of and for the purpose of this contract and/or any other agreement referencing this contract. However, despite any other obligations or restrictions imposed by this article, Buyer shall have the right to use, disclose and reproduce Seller's Proprietary Information and Materials, and make derivative works thereof, for the purposes of testing, certification, use, sale or support of any Goods delivered under this contract or any other agreement referencing this contract. Any such use, disclosure, reproduction or derivative work by Buyer shall, whenever appropriate, include restrictive legend suitable for the particular circumstances. The restrictions on disclosure or use of Proprietary Information and Materials by Seller shall apply to all materials derived by Seller or others from Buyer's Proprietary Information and Materials. Upon Buyer's request at any time, and in any event upon the completion, termination or cancellation of this contract, Seller shall return to Buyer all of Buyer's Proprietary Information and Materials and all materials derived there from, unless specifically directed otherwise in writing by Buyer. Seller shall not, without the prior written authorization of Buyer, sell or otherwise dispose of (as scrap or otherwise) any parts or other materials containing, conveying, embodying or made in accordance with or by reference to any Proprietary Information and Materials of Buyer. Prior to disposing of such parts or other materials as scrap, Seller shall render them unusable. Buyer shall have the right to audit Seller's compliance with this article. Seller may disclose Proprietary Information and Materials of Buyer to its subcontractors as required for the performance of this contract, provided that each such subcontractor first agrees in writing to the same obligations imposed upon Seller under this article relating to Proprietary Information and Material. Seller shall be liable to Buyer for any breaches of such provisions of this article are effective in lieu of any restrictive legends or notices applied to Proprietary Information and Materials. The provisions of this article shall survive the performance, completion, termination or cancellation of this contract.
19. PATENT PROTECTION
Seller will indemnify, defend and hold harmless Buyer and its customer from all claims, suits, actions, awards (including, but not limited to, awards based on intentional infringement of patents known at the time of such infringement, exceeding actual damages and/or including attorneys' fees and/or costs), liabilities, damages, costs and attorneys' fees related to the actual or alleged infringement of any United States or foreign intellectual property right (including, but not limited to, any right in a patent, copyright, industrial design or based on misappropriation or wrongful use of information or documents) and arising out of the manufacture, sale or use of Goods by either Buyer or its customer. Buyer and/or its customer will duly notify Seller of any such claim, suit or action; and Seller will, at its own expense, fully defend such claim, suit or action on behalf of indemnities. Seller will have no obligation under this article with regard to any infringement arising from (a) Seller's compliance with formal specifications issued by Buyer where infringement could not be avoided in complying with such specifications or (b) use or sale of Goods for other than their intended application in combination with other items when such infringement would not have occurred from the use or sale of those Goods solely for the purpose for which they were designed or sold by Seller. For purposes of this article only, the term Buyer will include all officers, agents and MDF Technologies, Inc. employees.
20. INTELLECTUAL PROPERTY
20.1 "Intellectual Property" shall mean and include patents, copyrights, trade secrets, know-how, concepts, Ideas, discoveries, inventions (whether or not patentable), processes, designs, improvements, documentation, intellectual property/proprietary rights, rights in other tangible and intangible assets of a proprietary nature, and the like. “Intellectual Property Rights" means all forms
of Intellectual Property protection or proprietary rights available throughout the world including, without limitation, design patents, patent applications, design registrations, industrial designs, copyrights, trade secrets and rights in domain names.
20.2 Seller warrants that the Goods and the sale and/or use thereof (before or after incorporation into products during manufacture) are original to Seller and do not and shall not infringe any third-party's Intellectual Property Rights.
20.3 Seller agrees:
a) To defend, hold harmless and indemnify Buyer and its owners, shareholders, affiliates, officers, directors, members, managers, partners, employees, attorneys and agents and any of their respective successors and assigns (each a "Buyer Indemnified Party') against any suit, claim or action for actual or alleged direct or contributory Infringement of or inducement to infringe or violate any third party's Intellectual Property or Intellectual Property Rights and against any resulting damages or expenses (including attorney's and other professional fees and expenses, settlements and judgments) arising out of or relating to the manufacture, sale or use of the Goods including cases in which Seller has provided only part of Goods;
b) To waive any claim against any Buyer Indemnified Party, including any hold-harmless or similar claim, in any way related to a third-party claim asserted against such Buyer Indemnified Party for infringement of any Intellectual Property Right, Including any claim against Buyer that the Infringement arose out of compliance with Buyer's specifications: and
c) That if the sale or use of the Goods is enjoined or, in Buyer's sale and absolute judgment, is likely to be enjoined, Seller shall, at Buyer's election in its sale discretion and at Seller's sale expense, procure for Buyer the right to continue using the Goods, replace the same with equivalent non-infringing Goods or modify such Goods so they become non-infringing.
21. BUYER'S PROPERTY
Seller shall have a defined documented system required to clearly mark, maintain an inventory of, and keep segregated or identifiable all of Buyer's property and all property to which Buyer acquires an interest by virtue of this contract. Seller assumes all risk of loss, destruction or damage of such property while in Seller's possession, custody or control, including any transfer to Seller's subcontractors. Upon request, Seller shall provide Buyer with adequate proof of insurance against such risk of loss. Seller shall not use such property other than in performance of this contract without Buyer's prior written consent. Seller shall promptly notify Buyer if Buyer's property is lost, damaged or destroyed. As directed by Buyer, upon completion, termination or cancellation of this contract, Seller shall deliver such property, to the extent not incorporated in delivered Goods, to Buyer in good condition subject to ordinary wear and tear and normal manufacturing losses. Nothing in this article limits Seller's use, in its direct contracts with the Government, of property in which the Government has an interest.
22. CANCELLATION
Buyer may terminate the Order for Cause, without liability to Seller, which shall be effective upon delivery of written notice or upon such other date specified by Buyer in writing. "Cause" for termination includes, but not limited to, the following actions:
a) Seller breaches any representation, warranty or other term of the Order;
b) Seller repudiates breaches or threatens to breach any of the terms of the Order;
c) Seller fails to deliver, or threatens not to deliver, Goods in accordance with a Material Release;
d) Seller fails to meet applicable quality requirements so as to endanger timely and proper performance of the Order;
e) Seller makes an assignment for the benefit of creditors;
f) Proceedings in bankruptcy or insolvency are instituted by or against Seller;
g) Seller requests accommodations from Buyer, financial or otherwise, in order for Seller to meet its obligations under the Order;
h) Seller enters or offers to enter into a transaction or series of transactions that would cause a sale of a material portion of the assets used by Seller for the production and/or provision of Goods to Buyer;
i) Seller enters or offers to enter into a merger, sale or exchange of stock or other equity interests that would result in a change in control of Seller within the meaning of Section 409A of the Internal Revenue Code and regulations issued there under, in which case Seller shall notify Buyer within ten (10) days after entering into any related negotiations (or the first period in which such negotiations can be made public consistent with applicable law) that could lead to such a transaction, provided that upon Seller's request, Buyer shall enter into an appropriate nondisclosure agreement related to information disclosed to Buyer In relation to such transaction; or
j) At any time in Buyer's sole judgment Seller's financial or other condition or progress on the Order shall be such as to endanger timely performance. In the event Buyer elects not to terminate the Order in connection with an event that would constitute Cause for termination, Buyer may make such equitable adjustments in the price, payment terms, sole supply relationship and delivery requirements under the Order as Buyer deems appropriate to address changes in Seller's circumstances, including Seller's continuing ability to perform its obligations regarding warranty, nonconforming Goods or other requirements under the Order, provided that Buyer must provide Seller with notice and details regarding the adjustments.
23. TERMINATION FOR CONVENIENCE
Buyer may terminate all or part of this contract, effective as of the date specified by Buyer, in accordance with the provisions of Federal Acquisition Regulation ("FAR") 52.249-2 (May 2004), "Termination for Convenience of the Government (Fixed Price)," which provisions, except for subparagraphs (d) and 0), are incorporated herein by reference. The terms "Government" and "Contracting Officer" shall mean "Buyer," "Contractor" shall mean "Seller," and the phrase "1 year" is deleted each place it occurs and "six months" is substituted in its place. The time for requesting an equitable adjustment under subparagraph (I - lower case letter L) is reduced to 45 days. Settlements and payments under this article may be subject to approval by the Contracting Officer and the Settlement Review Board.
24. SUSPENSION OF WORK
24.1 Buyer may, by written order, suspend all or part of the work to be performed under this contract for a period not to exceed 100 days. Within such period of any suspension of work, Buyer shall:
a) Cancel the suspension of work order;
b) Terminate this contract in accordance with the "Termination for Convenience" article of this contract;
c) Cancel this contract in accordance with the "Cancellation for default" article of this contract; or
d) Extend the stop work period.
24.2 Seller shall resume work whenever a suspension is canceled. Buyer and Seller shall negotiate an equitable adjustment in the price or schedule or both if;
a) This contract is not canceled or terminated;
b) The suspension results in a change in Seller's cost of performance or ability to meet the contract delivery schedule; and
c) Seller submits a claim for adjustment within 20 days after the suspension is canceled
25. DISPUTES
Any dispute that arises under, or is related to, this contract that cannot be settled by mutual agreement of the parties may be decided by binding arbitration, mediation, or be heard in the Superior Court of CA, San Diego county with consent to a waiver of trial by jury. Pending final resolution of any dispute, Seller shall proceed with performance of this contract according to Buyer's instructions so long as Buyer continues to pay amounts not in dispute.
26. FORCE MAJEURE
Seller shall not be liable for excess reprocurement costs pursuant to the "Cancellation for Default" article of this contract, incurred by Buyer because of any failure to perform this contract under its terms if the failure arises from causes beyond the control and without the fault or negligence of Seller. Examples of these causes are:
a) Acts of God or of the public enemy,
b) Acts of the Government in either its sovereign or contractual capacity,
c) Fires,
d) Foods,
e) Epidemics,
I) Quarantine restrictions,
g) Strikes,
h) Freight embargoes and
i) Unusually severe weather.
In each instance, the failure to perform must be beyond the control and without the fault or negligence of Seller. If the delay is caused by delay of a subcontractor of Seller and if such delay arises out of causes beyond the reasonable control of both, and if such delay is without the fault or negligence of either, Seller shall not be liable for excess costs unless the Goods or services to be furnished by the subcontractor were obtainable from other sources in sufficient time to permit Seller to meet the required delivery schedules. Seller shall notify Buyer in writing within 10 days after the beginning of any such cause.
27. TAXES
Unless this contract specifies otherwise, the price of this contract includes, and Seller is liable for and shall pay, all taxes, impositions, charges and exactions imposed on or measured by this contract except for applicable sales and use taxes that are separately stated on Seller's invoice. Prices shall not include any taxes, impositions, charges or exactions for which Buyer has furnished a valid exemption certificate or other evidence of exemption.
28. PAYMENT
Unless otherwise authorized by Buyer, Seller shall issue a separate original invoice for each delivery of Goods that shall include Buyer's contract number and line item number. Seller shall forward its invoice and all other applicable documents to the address specified elsewhere in this contract. Unless freight or other charges are itemized, Buyer may take any offered discount on the full amount of the invoice. Payment due date, including discount periods, shall be computed from the later of the scheduled delivery of Goods date, the actual delivery of Goods date or the date of receipt of a correct invoice. Payment shall be deemed made on the date Buyer's check is mailed or payment is otherwise tendered. Terms are as per purchase order. Seller shall promptly repay Buyer any amounts paid in excess of amounts due Seller.
29. OFFSET CREDITS
29.1 To the exclusion of all others, Buyer or its assignees shall be entitled to all industrial benefits or offset credits which might result from this contract. Seller shall provide documentation or information that Buyer or its assignees may reasonably request to substantiate claims for industrial benefits or offset credits.
29.2 Seller agrees to use reasonable efforts to identify the foreign content of Goods that Seller either produces itself or procures from subcontractors for work directly related to this contract. Promptly after selection of a non-U.S. subcontractor for work under this contract, Seller shall notify Buyer of the name, address, subcontract point of contact (including telephone number), and dollar value of the subcontract.
30. SELLER FINANCIAL REVIEW
If the contract exceeds $250,000 and extends for more than one year, and if requested, the Seller shall provide financial data on a quarterly basis or as requested to the Buyer's Credit Office for credit and financial condition reviews. Said data shall include but not be limited to balance sheets, schedule of accounts payable and receivable, major lines of credit, creditors, income statements (profit and loss), cash flow statements, firm backlog, and headcount. Copies of such data are to be made available within 72 hours of any written request by Buyer. All such information shall be treated as confidential.
31. COMPLIANCE WITH LAWS
Seller warrants that all Goods furnished by Seller under the Order shall comply with all applicable local, state, Federal and all other applicable laws, ordinances and regulations, including those concerned with labor, environment and safety, as those laws, ordinances and regulations are amended from time to time. Seller shall provide all permits, certificates, licenses, insurance approvals and inspections which may be required for the performance of the Order.
32. CODE OF CONDUCT
Buyer is committed to conducting its business fairly, impartially, and in an ethical and proper manner. Buyer's expectation is that Seller also will conduct its business fairly, impartially, and in an ethical and proper manner. Buyer's further expectation is that Seller will have (or will develop) and adhere to a code of ethical standards. If Seller has cause to believe that Buyer or any employee or agent of Buyer has behaved improperly or unethically under this contract, Seller shall report such behavior in writing to MDF Technologies, Inc. Buyer will not use the failure to report improper or unethical behavior as a basis for claiming breach of contract by Seller, Seller is encouraged to exert reasonable effort to report such behavior when warranted.
33. AFFIRMATIVE ACTION
During the performance of this Order, the Seller agrees to comply with all provisions of the President’s Executive Order Number 11246 as amended, Section 503 of the Rehabilitation Act of 1973, and 38 U.S.C. 4212 (The Vietnam Era Veterans Readjustment Assistance Act of 1974).
34. PUBLICITY
Without Buyer's prior written approval, Seller shall not, and shall require that its subcontractors at any tier shall not, release any publicity, advertisement, news release or denial or confirmation of same regarding this contract or the Goods or program to which it pertains. Seller shall be responsible to Buyer for any breach of such obligation by any subcontractor.
35. GOVERNING LAW
This contract shall be governed by and construed in accordance with the laws of the state of California. No consideration shall be given to California’s conflict of laws rules. This contract excludes the application of the 1980 United Nations Convention on Contracts for the International Sale of Goods.
36. GOVERNMENT CLAUSES
Government clauses applicable to this contract are incorporated herein either by attachment to this document or by some other means of reference.
37. RIGHTS AND REMEDIES
37.1 Any failures, delays or forbearances of either party in insisting upon or enforcing any provisions of this contract, or in exercising any rights or remedies under this contract, shall not be construed as a waiver or relinquishment of any such provisions, rights or remedies; rather, the same shall remain in full force and effect. Except as otherwise limited in this contract, the rights and remedies set forth herein are cumulative and in addition to any other rights or remedies that the parties may have at law or in equity. If any provision of this contract is or becomes void or unenforceable by law, the remainder shall be valid and enforceable.
37.2 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, Price: Most Favored Customer and Meet or Release, Invoicing and Payment, Set Off, Warranty, Cessation of Production, General Indemnification, Intellectual Property Indemnification, Insurance, Protection of Information, Audit, Applicable law and Forum, Publicity, and Survival.
38. RECORD RETENTION
All documents associated with purchased material, including records, physical and test reports shall be retained a minimum of 7 years or as specified on the purchase order.
39. ORDER OF PRECEDENCE
In the event of a conflict between the text of this Purchase Order and the references and/or drawings cited herein, the text of this Purchase Order shall take precedence. Nothing in this
Purchase Order, however, shall supersede applicable laws and regulations unless a specific exemption has been obtained.
40. PRIORITY RATINGS
Priority Ratings are flowed down to suppliers through the Purchase Order agreement. There are two levels of priority for rated orders established by the DPAS, identified by the rating symbols “DO” and “DX”. All DO rated orders have equal priority with each other and take preference over unrated orders. All DX rated orders have equal priority with each other and take preference of DO rated and unrated orders.
41. MERCURY FREE
The material supplied under this purchase order may be intended for use on submarines/surface ships and therefore shall contain no metallic mercury and shall be free from mercury contamination. Mercury contamination of the material may be cause for rejection.
42. TRANSMISSION ABROAD OF EQUIPMENT OR TECHNICAL DATA
Except with prior written consent of MDF Technologies Inc., the Seller shall not, at any time during or after the performance of this contract, trans or authorize the transmittal of any equipment or technical data as defined in paragraph below, outside of the United States, or irrespective of location, to any foreign national not working on this contract or on a subcontract hereunder, to any foreign organization (including foreign subsidiaries and affiliates of the Seller), to any Government, or to any international organization.
As used in this clause, the following terms shall have the following definitions:
“United States” means the States, the District of Columbia, Puerto Rico, American Samoa, the Canal Zone, the Virgin Islands, Guam, and an area subject to the complete sovereignty of the United States.
“Equipment” means all supplies of the kind specified to be delivered under this contract, all component parts thereof, and all models or such supplies and component parts and models thereof.
“Technical data” means all professional, scientific, or technical information and data produced or prepared for the performance of this contract, or on or for the operation, maintenance, evaluation, or testing of any contract item whether or not the information and data were specified to be delivered under this contract, including without limitation, all writings, sound recordings, pictorial reproductions and drawings or other graphical representations. “Technical data” does not include such information and data on standard commercial supplies and component parts in or in connection with any item or component part thereof, specified to be delivered under this contract.
“Foreign national or immigrant alien” means a person not a United States citizen or a United States National. United States Citizens acting as agents for foreign concerns are considered to be foreign nationals for industrial security purposes and the purpose of this restriction.
The Seller agrees to insert in all subcontractors under this contract provision, which shall conform substantially to the language of this clause, including this paragraph.
43. ENTIRE AGREEMENT
This contract contains the entire agreement of the parties and supersedes any and all prior agreements, understandings and communications between Buyer and Seller related to the subject matter of this contract. No amendment or modification of this contract shall bind either party unless it is accepted as described in the acknowledgment section of these terms and conditions.
