Terms and Conditions
Terms and Conditions
1.
Complete Terms: The order is the complete and exclusive
statement of the agreement between Hi-Lex and Seller. Seller shall accept these
terms in writing or by beginning work hereunder. Any additions or modifications
proposed by Seller are expressly rejected by Hi-Lex and are not part of the
agreement in the absence of an agreement in writing signed by an authorized
representative of Hi-Lex.
2.
Delivery Schedules: Deliveries shall be made both in quantities
and at times specified on the order or on written fabrication and shipping
releases, which shall be furnished by Hi-Lex. Time and quantity of delivery are
of the essence of the order. Hi-Lex may change the rate of scheduled shipments
or direct temporary suspension of scheduled shipments, neither of which shall
entitle Seller to a modification of the price of goods or services covered by
the order.
3.
Premium Shipments: Premium shipping expenses and/or other
related expenses necessary to meet delivery schedules shall be Seller’s sole
responsibility.
4.
Risk of Loss: Unless otherwise agreed in writing, delivery
shall not have occurred and the risk of loss shall not have shifted to Hi-Lex
until the goods or tooling or equipment have been delivered to Hi-Lex’s
applicable facility and have been accepted at that facility.
5. Termination for Cause: Hi-Lex may immediately terminate the order
without liability to Seller in the event of the happening of any of the
following or any other similar or comparable event: (i) insolvency of Seller;
(ii) filing of a voluntary petition in bankruptcy by Seller; (iii) filing of an
involuntary petition in bankruptcy against Seller; (iv) appointment of a
receiver or trustee for Seller; (v) execution of an assignment for the benefit
of creditors of Seller; (vi) other material adverse change in the financial or
other condition of Seller such that Hi-Lex reasonably concludes that Seller's
ability to perform, or to deliver product or services, is substantially
impaired; (vii) Seller repudiates, breaches or threatens to breach any of the
terms of the order including Seller’s warranties; (viii) Seller fails to
perform services or deliver goods as specified by Hi-Lex; or (ix) Seller fails to make
progress so as to endanger timely and proper completion of services or delivery
of goods, and does not correct such failure within ten (10) days (or such
shorter period of time as is commercially reasonable under the circumstances)
after receipt of written notice from Hi-Lex specifying such failure or breach;
or (x) Hi-Lex terminates for breach any other
purchase order issued by Hi-Lex to Seller in accordance with the terms of such other
purchase order (whether or not such other purchase order is related to the
order).
6. Termination for Convenience:
In addition to any other rights of Hi-Lex to terminate the order, Hi-Lex may at its option, immediately
terminate all or any part of the order at any time and for any reason by giving
written notice to Seller. Upon receipt of notice of termination pursuant to
this Section, Seller, unless otherwise directed in writing by Hi-Lex, shall (i)
terminate immediately all work under the order; (ii) transfer title and deliver
to Hi-Lex
the finished work, the work-in-process, and the parts and materials which
Seller produced or acquired in accordance with the order and which Seller
cannot use in producing goods for itself or for others; (iii) settle all claims
by subcontractors approved by Hi-Lex hereunder, if any, for reasonable actual
costs that are rendered unrecoverable by such termination; (iv) take actions
reasonably necessary to protect property in Seller’s possession in which Hi-Lex
has an interest; and (v) upon Hi-Lex’s request, cooperate with Hi-Lex in effecting the resourcing of
Seller’s goods and/or services covered by the order to a different supplier
designated by Hi-Lex. Upon
termination by Hi-Lex under this Section, Hi-Lex shall pay to Seller the
following amounts without duplication: (i) the purchase order price for all
finished work and completed services which conform to the requirements of the
order and not previously paid for; (ii) Seller’s reasonable actual cost of the
work-in-process and parts and materials transferred to Hi-Lex in accordance
with subsection (B) (ii) hereof; (iii) Seller’s reasonable actual cost of
settling the claims of the obligation Seller would have had to the
subcontractors in the absence of termination, and (iv) Seller’s reasonable
actual cost of carrying out its obligations under subsection (B)(iv) and (v). Hi-Lex shall not be liable for and shall not
be required to make payments to Seller, directly or on account of claims by
Seller’s subcontractors, for any other alleged losses or costs, whether
denominated as loss of anticipated profit, unabsorbed overhead, interest on
claims, product development and engineering costs, facilities and equipment
rearrangement costs or rental, unamortized depreciation costs, general and
administrative burden charges resulting from termination of the order or
otherwise. Notwithstanding anything herein to the contrary, Hi-Lex’s obligation
to Seller upon termination under this Section shall not exceed the obligation Hi-Lex
would have had to Seller in the absence of termination. Within ten (10) days after the effective date
of termination under this Section, Seller shall furnish to Hi-Lex its
termination claim, together with all supporting data which shall consist
exclusively of the items of Hi-Lex’s obligation to Seller that are listed above. Hi-Lex may audit Seller’s records before or
after payment to verify amounts requested in Seller’s termination claim.
7.
Assignment: Seller shall not assign, subcontract or
delegate any of its substantive duties or performance under the order without
the prior written consent of Hi-Lex. Any sale or other transfer of stock or
other securities of Seller that would result in a change in control of Seller
shall be deemed an assignment under the order. If Hi-Lex approves Seller’s
subcontracting of any of the work under the order, Seller will ensure that the
subcontractor agrees to be bound by the terms and conditions of the order. Hi-Lex may freely assign to any third party
its rights and obligations under the order.
8. Changes: Hi-Lex reserves the
right at any time to direct changes, or cause Seller to make changes, to the
design (including drawings and specifications) processing, methods of packing
and shipping and the date or place of delivery of the goods covered by the
order or to otherwise change the scope of the work covered by the order
including work with respect to such matters as inspection, testing or quality
control, and Seller agrees to promptly make such changes. Any such changes
shall be deemed not to affect the time for performance or cost unless Seller
notifies Hi-Lex in writing within ten (10) days of receipt by Seller of notice
of any change order. Seller shall not make any change in the order without the
written approval of Hi-Lex. Seller shall consider and advise Hi-Lex of the
impact of a design change on the system in which the product covered by the order
is used. Nothing in this Section shall excuse Seller from proceeding with the
order as changed. Seller shall not make
any change in the order without the written approval of Hi-Lex. In addition, without Hi-Lex’s prior written
approval, Seller shall not change (i) any third party supplier to Seller of
services, raw materials or goods used by Seller in connection with its
performance under the order, (ii) the facility from which Seller or such
supplier operates, or (iii) the nature, type or quality of any services, raw
materials or goods used by Seller or its suppliers in connection with the order.
9.
Inspection: Hi-Lex shall have the right to enter Seller’s
facility at reasonable times to inspect the facility, goods, materials and any
property of Hi-Lex covered by the order. Hi-Lex’s inspection of the goods,
whether during manufacture, prior to delivery or within a reasonable time after
delivery, shall not constitute acceptance of any work-in-process or finished
goods.
10.
Nonconforming Goods: Hi-Lex, at its option, may reject and return
at Seller’s risk and expense, or retain and correct, goods received pursuant to
the order that fail to conform to the requirements of the order even if the
nonconformity does not become apparent to Hi-Lex until the manufacturing or
processing stage. To the extent Hi-Lex rejects goods as nonconforming, the
quantities under the order will not be reduced by the quantity of nonconforming
goods unless Hi-Lex otherwise notifies Seller in writing. Seller will replace
nonconforming goods with conforming goods unless otherwise notified in writing
by Hi-Lex. Nonconforming goods will be held by Hi-Lex for disposition in
accordance with Seller’s written instructions at Seller’s risk. Seller’s
failure to provide written instructions within ten (10) days (or such shorter
period as may be commercially reasonable under the circumstances) after notice
of nonconformity shall entitle Hi-Lex, at Hi-Lex’s option, to charge Seller for
storage and handling, or to dispose of the goods without liability to Seller.
Seller shall reimburse Hi-Lex for (a) any amounts paid by Hi-Lex on account of
the purchase price of any returned nonconforming goods, and (b) any costs
incurred by Hi-Lex in connection with the nonconforming goods, including, but
not limited to inspection, sorting, testing, evaluations, storage or rework,
within thirty (30) days after a debit memo for the costs has been issued by Hi-Lex.
Payment by Hi-Lex for nonconforming goods shall not constitute an acceptance
hereof, limit or impair Hi-Lex’s right to assert any legal or equitable remedy,
or relieve Seller’s responsibility for latent defects.
11. Warranty: Seller expressly
warrants that all goods and services covered by the order will conform to the
specifications, drawings, samples or descriptions furnished to or by Hi-Lex
and/or U.S. industry standards, and all laws and regulations in force in
countries where products or vehicles equipped with such products are to be sold
and will be merchantable, of good material and workmanship and free from
defects. In addition, Seller acknowledges that Seller knows of Hi-Lex’s
intended use and expressly warrants that all goods covered by the order which
have been selected, designed, manufactured or assembled by Seller, based upon Hi-Lex’s
intended use, will be fit and sufficient for the particular purpose intended by
Hi-Lex. Such warranty will be effective
for the longer of (i) the period provided by applicable law, or (ii) the
warranty period provided by Hi-Lex to its customers; provided, however, in the
case of any recall campaign or other customer satisfaction or corrective
service action undertaken by Hi-Lex or its customers, the warranty shall
continue for such time period as may be dictated by Hi-Lex’s customer or the
federal, state, local or foreign government where the goods are used or the
services provided. The warranty period
for non-production goods shall be the longer of one (1) year after final
acceptance by Hi-Lex or the period stated in Seller’s sales materials.
12. Indemnification: Seller
hereby covenants and agrees to indemnify and hold Hi-Lex, its directors,
officers and employees harmless from any claims, liabilities, damages
(including special, consequential, punitive and exemplary damages), costs and
expenses (including reasonable attorney fees) incurred in connection with any
claims (including lawsuits, administrative claims, regulatory actions and other
proceedings to recover for personal injury or death, property damage or
economic losses) that are related in any way to or arise in any way from
Seller’s representations, performance of obligations under the order, including
claims based on Seller’s breach or alleged breach of warranty (whether or not
Seller’s goods or services have been incorporated into Hi-Lex’s products and/or
resold by Hi-Lex), and claims for any violation of any applicable law,
ordinance or regulation or government authorization or order. Seller’s
obligation to indemnify under this Section will apply regardless of whether the
claim arises in tort, negligence, contract, warranty, strict liability or
otherwise, except to the extent of any such liability arising out of the sole
negligence of Hi-Lex.
13. Insurance: Seller shall obtain and
maintain at its sole expense insurance coverage as reasonably requested by Hi-Lex
with such insurance carriers and in such amounts as are reasonably acceptable
to Hi-Lex. Seller shall furnish to Hi-Lex certificates of insurance setting
forth the amount of coverage, policy number and date(s) of expiration for
insurance maintained by Seller and such certificates must provide that Hi-Lex
shall receive thirty (30) days prior written notification from the insurer of
any termination or reduction in the amount or scope of coverages.
14. Compliance: Seller agrees to comply with all federal,
state, local and foreign laws, Executive Orders, rules, regulations and
ordinances which may be applicable to Seller’s performance of its obligations
under the order, and the order shall be deemed to incorporate by reference all
the clauses required by the provisions of said laws, orders, rules, regulations
and ordinances.
15.
Shipping and Labeling: Seller agrees
to properly pack, mark, label and ship goods in accordance with the
requirements of Hi-Lex as set forth in Hi-Lex's Supplier Guide or as otherwise
communicated to Seller.
16. Invoices: All invoices and/or advanced
shipping notices (“ASN”) for material shipped pursuant to the order must
reference the order number, amendment or release number, Hi-Lex’s part number,
Seller’s part number where applicable, quantity of pieces in shipment, number
of cartons or containers, Seller’s name and number, and bill of lading number,
before any payment will be made for material by Hi-Lex. Hi-Lex reserves the
right to return all invoices or related documents submitted incorrectly, and
payment terms will be determined as of the date of the latest correct invoice
or ASN received.
17. Setoff: In addition to any
right of setoff or recoupment provided by law, all amounts due Seller or its affiliates
shall be considered net of indebtedness or obligations of Seller or its
affiliates to Hi-Lex or its affiliates, and Hi-Lex or its affiliates may setoff
against or recoup from any amounts due or to become due from Seller or its
affiliates to Hi-Lex or its affiliates however and whenever arising. If an obligation of Seller or its affiliates
to Hi-Lex is disputed, contingent or unliquidated, Hi-Lex may defer payment of
the amount due until such obligation is resolved.
18. Applicable Law; Jurisdiction:
The order shall be governed by the internal laws of the State of
19. Proprietary Rights: If Hi-Lex
furnished or supplied Seller with any designs, drawings, specifications,
blueprints or other materials which contain proprietary information, Seller
shall not disclose or use for the benefit of Seller or others such designs,
drawings, specifications, blueprints or other material including any copies
thereof, except with the written approval of Hi-Lex. All copyrightable works of original
authorship (including but not limited to computer programs, technical
specifications, documentation and manuals), ideas, inventions (whether
patentable, patented or not), know-how, processes, compilations of information,
trademarks and other intellectual property (collectively, “Deliverables”) shall
be original to Seller and shall not incorporate any intellectual property
rights (including copyright, patent, trade secret, mask work, or trademark
rights) of any third party. All
Deliverables which are created in the course of performing the order are owned
by Hi-Lex and not by Seller and are “works made for hire” as that term is used
in connection with the U.S. Copyright Act. Seller hereby assigns to Hi-Lex all
right, title and interest in and to all Deliverables, inventions, trademarks,
copyrights, industrial design rights and other proprietary rights in any
material created for and paid for by Hi-Lex under the order. Technical
information and data furnished to Hi-Lex in connection with the order are
disclosed on a nonconfidential basis. Seller
agrees: (i) to defend, hold harmless and indemnify Hi-Lex and its customers
against all claims, demands, losses, suits, damages, liability and expenses
(including reasonable attorneys fees) arising out of any suit, claim or action
for infringement of any United States or foreign patent, trademark, copyright,
industrial design right, trade secret or other proprietary right by reason of
the manufacture, use or sale of the goods or services ordered, including
infringement arising out of compliance with specifications furnished by Hi-Lex.
20. Excusable Delay: Neither Hi-Lex
nor Seller shall be liable for a failure to perform that arises from causes or
events beyond its reasonable control and without its fault or negligence,
including labor disputes of any kind, provided, however, that the party
claiming the excusable delay must provide prompt notice of the delay after the
event causing the delay has occurred. During the period of excusable delay or
failure to perform by Seller, Hi-Lex at its option may purchase goods from
other sources and reduce the order by such quantities without liability to
Seller. Seller shall take all actions
deemed reasonably necessary by Seller to ensure that in the event of a labor
disruption, strike or worker slowdown, an uninterrupted supply of goods will be
available to Hi-Lex in an area that will not be affected by any such disruption
for a period of at least thirty (30) days. If upon request of Hi-Lex, Seller
fails to provide within ten (10) days (or such shorter period as Hi-Lex
requires) adequate assurances that any excusable delay will not exceed thirty (30)
days or if any excusable delay lasts longer than thirty (30) days, Hi-Lex may
terminate the order without liability.
21. Service and Replacement Parts:
Upon receipt of a request from Hi-Lex, Seller will sell to Hi-Lex all
goods necessary for Hi-Lex to fulfill Hi-Lex’s and its customers’ service and
replacement parts requirements for its current model year at the then current
production prices plus any cost differential for packaging. If the goods are
systems, modules or assemblies, Seller will sell the components or parts of
such systems, modules or assemblies at prices that will not in the aggregate
exceed the then current production price of the system, module or assembly less
the costs of labor involved in connection with the system, module or assembly
plus any cost differential for packaging.
After the current model production of the vehicle involved,
Seller will sell Hi-Lex goods necessary for Hi-Lex to fulfill Hi-Lex’s and its
customers’ service and replacement parts requirements for past model years at
the prices then specified in the last order for current model production plus
any cost differential for packaging for the first three (3) years of past model
service. For the following seven (7) years of past model service, the prices
shall be as specified in the last order for current model production plus any
cost differential for packaging and manufacturing. The prices for service and
replacement parts after that ten (10) year period will be as negotiated by the
Seller and Hi-Lex.
23. Financial and Operational Condition of
Seller: Seller will permit Hi-Lex
and its representatives to review Seller’s books and records concerning
compliance with the order and Seller’s overall financial condition. Seller
agrees that if Seller experiences any delivery or operational problems, Hi-Lex
may, but is not required to, designate a representative to be present in
Seller’s applicable facility to observe Seller’s operations. Seller agrees that
if Hi-Lex provides to Seller any accommodations (financial or other) that are
necessary for Seller to fulfill its obligations under the order, Seller will
reimburse Hi-Lex for all costs, including attorneys’ and other professionals’
fees, incurred by Hi-Lex in connection with such accommodation and will grant
access to Hi-Lex to use Seller’s premises, machinery, equipment and other
property necessary for the production of goods covered by the order under an
access agreement.
24. Sourcing Limitations: Unless Hi-Lex’s order for goods to be
delivered hereunder specifically provides that Seller shall produce one hundred
percent (100%) of Hi-Lex’s requirements for the goods, Hi-Lex shall have the
right to obtain a portion of such goods from another third party source or from
Hi-Lex’s internal sources.
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