Standard Terms and Conditions of Purchase

The following are the Terms and Conditions applicable to purchase orders placed by US Micro Products.

STANDARD TERMS AND CONDITIONS OF PURCHASE   Revision 2019-05-03

This Purchase Order constitutes U.S. Micro Products, Inc.’s (hereinafter referred to as “Buyer”) offer to purchase the goods and services, (hereinafter referred to as “Product”) described in this Purchase Order in accordance with the provisions set forth on the face hereof, the provisions hereto, and the provisions incorporated herein by reference. Buyer shall not be bound by this Purchase Order unless and until an authorized representative of Seller executes and returns to Buyer the acknowledgement of this Purchase Order within three (3) days after receipt. Seller’s acceptance of the Purchase Order is expressly limited to the terms contained herein and no additional or different terms shall be binding on Buyer unless agreed to by Buyer in writing.

I.   DEFINITIONS
The term “Seller” as used herein also includes subcontractors, independent contractors, and all other classes of person performing any type of work under this Purchase Order number. The term “Buyer” or “USMP” as used herein refers to US MICRO PRODUCTS, INC., a Texas corporation.

II.   INVOICING
Invoices should be rendered by Seller to Buyer in triplicate promptly after each shipment or unit of work is performed under this Purchase Order. The Purchase Order number, Buyer’s part number, and revision level, quantity and unit price, discount, if any, and F.O.B. point shall be clearly shown on such Seller invoices. If the Seller invoices specify discount terms for prompt payment within a specified period of time, the time specified there on shall be deemed to run from the time of receipt of the Product by Buyer, or date of Seller invoice, whichever is later, notwithstanding any terms of the Seller invoice to the contrary. If no terms of payment have been mutually agreed prior to the first shipment to Buyer, they will be deemed Net 60 days after receipt of the Product or the date of Seller invoice, whichever is later. Product shall be delivered to Buyer freight and insurance prepaid unless specifically marked otherwise by Buyer on the face of this Purchase Order.

III.   PRICE
Seller represents that the prices charged for the Products covered by this Purchase Order are the lowest prices net of discounts charged by Seller and on terms no less favorable than accorded by Seller to its other customers purchasing in quantities and under circumstances comparable to those specified in the Purchase Order. Buyer shall be entitled to a retroactive reduction in price hereunder to reflect such lowest prices and most favorable terms. Seller agrees that any price reduction applicable to any Product covered by this Purchase Order subsequent to the placement of this Purchase Order and until delivery of the last installment hereunder shall be automatically applicable hereto.  Seller is bound by the terms of this agreement to notify Buyer at the time of the purchase regarding any price differential.

IV.   INSPECTION AND WARRANTY
Seller warrants that all Products supplied by Seller under this Purchase Order shall conform to the specifications, drawings, samples, or other description specified by Buyer on the face of this Purchase Order and that they are of good material and workmanship, free from defects, liens, and encumbrances, merchantable and fit for Buyer’s particular purpose if Buyer shall have made known to Seller in writing the purpose and application for which the Product is purchased. Such warranty shall be in effect for a period of two (2) years after date of receipt of Product by Buyer and shall be in addition to any other warranties and guarantees given to Buyer by Seller and the warranties and guarantees provided under the applicable law. Seller’s warranties shall survive inspection, test, acceptance and payment, and shall run to Buyer, its successors, assigns, and customers.  The Products shall be subject to inspection and test by Buyer at all times and places, including the period of manufacture for hardware, the period of development for software, and the period of performance of services. Unless otherwise specified, final inspection and acceptance of Product by Buyer shall be at Buyer’s facility from which the Purchase Order originates, Buyer reserves the right to reject Product which does not conform to the specifications, drawings, samples or other descriptions specified in this Purchase Order. Buyer may, at its option, either return defective or nonconforming Product for full credit of the purchase price, plus any transportation charges paid by the Buyer, or require prompt correction or replacement of defective or nonconforming Product, which rights shall be in addition to such other rights as Buyer may have at  law or under any other Agreement. Return to the Seller of any defective or non-conforming Product by Buyer shall be at the Seller’s expense, and no replacements shall be made unless specified in writing by Buyer. Product required to be corrected or replaced shall be subject to the inspection and warranty provisions of this Paragraph IV to the same extent as the product originally delivered under this Purchase Order. In addition, Buyer may, at Buyer’s discretion, charge Seller for costs of any above normal levels of inspection if rejection of a shipment endangers Buyer’s production schedules. 

V.    PRODUCT LIABILITY AND INFRINGEMENT INDEMNIFICATION
Seller shall indemnify, defend and hold USMP and its customers harmless from and against any and all claims, actions, causes of action, judgments, awards, injuries, losses, liabilities, damages, costs, expenses and fees, including without limitation attorney’s fees, arbitration fees, court costs and settlement costs incurred by USMP in connection with: a) any allegation or claim that any Product is defective, does not conform to Seller’s warranty, to applicable federal or state regulations, or to UL certification requirements, or has caused injury or death to any person or damage to property or both, and b) any allegation or claim that any Product infringes any United States patent, trademark, copyright or other intellectual property right (“Infringement Claim”). Following notice to Seller by Buyer of an Infringement Claim, Seller shall, at its expense and election: a) substitute a fully equivalent non-infringing product with substantially the same functionality, form, fit, and function, as the Infringing Product; b) modify the infringing item so that it no longer infringes but remains functionally equivalent, c) obtain for USMP and its customer the right to use, distribute, offer for sale, and/or sell, as applicable, the infringing Product or d) take back the infringing Product and return the purchase price thereof. This Paragraph shall survive the termination of this Agreement.

VI.   CHANGES
Buyer shall have the right to change from time to time any of the drawings, specifications or instructions for work covered by this Purchase Order and Seller agrees to comply with such changes. If such changes result in a change in Seller’s cost or in the time of performance an adjustment in price and time for performance shall be made by the parties in writing, provided however that Seller shall notify Buyer of the request for such price adjustments within thirty (30) days after receipt by Seller of the notice of such change. Seller’s writing shall detail the reasons for the price adjustment to the Buyer. Seller agrees not to make any changes that affect this Purchase Order without the prior written approval of the Buyer.

VII. ASSIGNMENTS
This Purchase Order and any payments to be made hereunder shall not be assigned or transferred without prior written approval by Buyer. Seller shall not further subcontract any substantial portion of the work to be performed by it under this Purchase Order without the prior written consent of the Buyer. Under this agreement, when the Buyer is notified of assignments or transfers, Seller shall maintain the responsibility for ownership for inspection and warrantees as detailed in the Inspection and Warranty paragraph of this agreement.

VIII.   GRATUITIES
Seller warrants that neither it or any of its employees, agents, or representatives has offered or given any gratuity to Buyer’s employees, agents or representatives with a view towards securing favorable treatment with respect thereto.

IX.   COMPLIANCE WITH LAWS AND REGULATIONS
Both parties shall comply with all applicable laws, regulations, and other requirements of federal, state, county, and municipal governmental authorities. Without limiting the generality of the foregoing, Seller shall ensure that the Products: a) meet all applicable United States Federal Communications Commission requirements and b) are certified by the Underwriters Laboratories, Inc. Seller shall be solely responsible for compliance with all applicable laws governing the export of the Products from their country of origin and the import of the Products into the country of delivery.

X.   TERMINATION
Buyer may cancel and/or terminate the work to be performed under this Purchase Order, in whole or in part, at any time by written notice to Seller. Such notice shall state the extent and effective date of such cancellation or termination and, upon the receipt thereof, Seller shall:

1.     Immediately terminate work to be performed by Seller under this Purchase Order until otherwise instructed by Buyer,

2.    Promptly notify Buyer in writing of any Seller cancellation charges, and

3.    Incur no further charges.

Buyer shall not be responsible for any cancellation charges for which written notice is not given within ten (10) days of Buyer’s notice of termination.

XI.   FORCE MAJUERE
Neither party shall be liable for damages for any delay arising out of causes beyond its reasonable control including, but not limited to, acts of God, acts of civil or military authority, fire, earthquakes, floods, or shortage of power. If any such delay is caused by the delay of a subcontractor and is beyond the control and without the fault or negligence of the Seller and such subcontractor, Seller shall incur no liability for such delay unless Seller could have reasonably obtained the services and materials to be provided by such subcontractor from other sources in sufficient time to meet the schedule for delivery required hereunder. Seller shall notify Buyer immediately upon learning of any event which may result in any such delay.

Any reduction in supply to Buyer due to Force Majuere events pursuant to this Paragraph XI shall be in proportion to the reduction in Seller’s total production capacity during each month in which such reduction to Buyer occurs, and Seller shall accordingly reduce all other customer’s supplies proportionately and in an equitable manner.
 

XII.   DELIVERY
The delivery dates indicated by Buyer for the Product to be supplied under this Purchase Order shall be considered to be of equal importance as the quality and the price, and TIME SHALL BE OF THE ESSENCE in the performance of this Purchase Order. Failure to meet agreed upon delivery shall be considered a breach of the contract and shall subject this Purchase Order to termination by Buyer without liability effective upon written notice to Seller. In such event, Buyer at its option may, without affecting any other remedies it may have, arrange for completion of performance and/or purchase substitute product elsewhere and charge Seller with any losses incurred. Furthermore, Seller agrees to pay to Buyer any penalty and damages imposed upon or incurred by Buyer for failure of Seller to deliver Product on such delivery dates. Buyer may reject shipments sent C.O.D. without Buyer’s prior written consent, and such shipments shall be at Seller’s risk. Buyer may return or store at Seller’s expense any Product delivered more than three Business (3) Days in advance of the delivery date specified in this Purchase Order for such Product. If at any time during the term of this Purchase Order, Seller anticipates a shortfall in production of the goods and services to be provided, which shortfall is reasonably likely to result in Seller’s inability to meet Buyer’s requirements as set forth in this Purchase Order, then Seller shall (a) promptly notify Buyer in writing and in advance of the shortage stating reasons for and estimated duration of the shortage condition), (b) take all commercially reasonable steps to avoid the shortfall (to include documenting corrective action, paying expedite fees, using premium transportation, and overtime at the Seller’s expense).

XIIIV.   OVERSHIPMENTS
Seller is instructed to ship only the quantity of Product specified in this Purchase Order. Buyer reserves the right to return at Seller’s expense any shipment in excess of the quantity stated in this Purchase Order.

XIV.   PACKAGING and SHIPPING INSTRUCTIONS

1.     PACKAGING – All Products shall be prepared and packed in a commercially reasonable manner and so as to secure the lowest transportation rates and to meet carrier's requirements. No charges shall be allowed for packing, crating, or carriage unless stated in this Purchase Order.

2.    MARKING – Each shipping container must be marked to show Buyer’s Purchase Order number, Buyer’s part number and the quantity contained therein. A packing list showing Purchase Order number must be included with each shipment and the container in which the packing list is contained shall be clearly and appropriately marked.

3.    SPECIAL PACKAGING REQUIREMENTS – Certain Products may require special packaging to facilitate compliance with safety and other agency rating standards. Cost for special packaging requirements shall be negotiated independent of costs for the Product which they contain. Special packaging requirements may include, but not be limited to:

Concepts, General design (size and shape, quantity per box, maximum or minimum number of boxes per skid, physical protection, and/or static protection). Specific design, and/or labeling requirements. Buyer agrees to notify Seller of special packaging requirements when need for such is determined.

XV.   PROPRIETARY INFORMATION
All written or oral information obtained by Seller from Buyer in connection with this Purchase Order which is identified as proprietary or confidential is received in confidence and shall remain the property of Buyer. Such proprietary information shall be used and/or disclosed by Seller only to the extent necessary for the performance of this Purchase Order and as agreed to by Buyer. Seller may, on occasion, be required to execute a separate non-disclosure agreement.

XVI.   RIGHTS IN DEVELOPMENT
This clause shall apply if the Product is services, or if the Product is hardware or software, to be designed or developed, is paid for by Buyer, whether itemized separately or included in the price for the Product to be furnished under this Purchase Order. Seller shall disclose and does hereby assign to Buyer any and all inventions, improvements, or developments, which it may create, develop, or make, solely or jointly with others, as applicable, in the course of such design and/or development, Seller assigns all patents, applications for patents in connection with any such invention, improvement or development to Buyer. Seller shall take the necessary steps and shall cause its personnel to execute the necessary documents to vest and register copyrights to all works of authorship (including but not limited to software, drawings, and integrated circuit artwork) in Buyer. All such works shall be legibly marked with the following legend: “Copyright US Micro Products, Inc. 20XX (year of first fixing of the work in a tangible medium). In addition, all information, works of authorship, ideas, results and data developed by Seller as a result of design and/or developmental work contemplated by this clause shall be transmitted by Seller only to Buyer and shall become the exclusive property of Buyer.

XVII.   MATERIALS and TOOLS
If Buyer furnishes Seller material or equipment or pays for such material or equipment, title thereto shall remain or vest in Buyer and Seller shall identify, maintain, insure and preserve such material and equipment in accordance with buyer’s direction. All special drawings, dies, tools, patterns or other items supplied by Buyer shall be the property of Buyer and shall be preserved in good condition, utilized for Buyer’s product only, and if requested by Buyer returned when the work on this Purchase Order has been completed or terminated. Seller shall pack and ship all special tooling and prepare same for shipment pursuant to buyer’s written notification. If material, equipment, special drawings, dies, tools, patterns and/or other items are furnished by Buyer for performance of this Purchase Order, all risk of loss thereof or damage thereto shall be upon Seller until such items have been redelivered to Buyer in the same condition as delivered to Seller, ordinary wear and tear excepted. Seller shall not permit a lien or other encumbrance on Buyer’s materials or equipment that is furnished to Seller.

XVIII.   CESSATION OF PRODUCTION
If production of Product covered by this Purchase Order is to be permanently discontinued at any time within one (1) year after final delivery under this Purchase Order, Seller shall give Buyer at least twenty-four (24) months prior written notice of such discontinuance during which time Seller shall continue to sell and supply Product pursuant to Purchase Orders from Buyer for reasonable quantities of such Product. If such product or service is proprietary to Seller, Seller shall release the proprietary information to Buyer for Buyer to resource or produce product beyond Seller’s cessation of the production of the Product if the cessation of the Product is due to the Product becoming obsolete. If the Seller fails to provide twenty-four (24) months prior written notice of discontinuance, Seller shall be liable for all damages and expenses (including but not limited to any fine or claim made by a third party) arising from Seller's violation of the prior-notice obligation.

XIX.   PUBLICITY
Seller shall not make or authorize any news release, advertisement, or other disclosure, which shall deny or confirm the existence of this Purchase Order without prior written consent of Buyer.

XX.   WAIVER
The failure of Buyer to insist upon the performance of any provision of this Purchase Order shall not constitute or be construed as a waiver of any such provision.

XXI.   APPLICABLE LAW; SURVIVAL
The validity, performance and construction of this Purchase Order shall be governed by the laws of the State of Texas, excluding its conflicts of laws principles, or the law of the state shown in Buyer’s address on the face of the Purchase Order if the Purchase Order specifies a different applicable law. The parties agree that the United Nations Convention on Contracts for the International Sale of Goods shall not apply to this Agreement, and its application is expressly excluded. The following paragraphs of this Purchase Order shall survive any termination or expiration of this Purchase Order: IV-V and VII-XXV.

XXII.    INVALIDITY
The invalidity in whole or in part of any provision hereof shall not affect the validity of any other provision. 

XXIII.   EEO / AFFIRMATIVE ACTION
Seller warrants that all goods and services sold hereunder shall have been produced, sold, delivered, and furnished in strict compliance with all applicable laws and regulations including EEO and affirmative action to which they are subject.

XXIV.   COMPLETE AGREEMENT
This Purchase Order which includes any supplemental sheets and riders annexed by Buyer, contains the complete and entire agreement between the parties. No agreement or understanding to modify this contract shall be binding upon Buyer unless agreed to in writing by Buyer and any and all previous agreements or understandings, whether oral, written, inconsistent with any of the various terms and conditions set forth herein are hereby cancelled and rendered null and void.

XXV.   CONFLICT
In the event that other provisions such as the NDA or any additional terms approved by USMP ("other provisions") are regarded as part of this Purchase Order , and there is a conflict between the terms and conditions of this Purchase Order and the other provisions, such other provisions shall prevail.