These Purchase Order Terms and Conditions (the "Terms and Conditions") apply to any Purchase Order ("PO") issued by Cox Machine, Inc. ("Cox") that is not governed by a written Master Purchase Agreement entered into between Cox and the vendor or seller named on the PO (the "Supplier"). Supplier's commencement of performance pursuant to or acknowledgment by electronic mail or otherwise of Cox's PO constitutes Supplier's acceptance of these Terms and Conditions without modification, alteration, deletion, or addition notwithstanding any contrary terms or provisions which may appear in or on any form or document produced by Supplier. Any additional or different terms in any form, document, or acknowledgement prepared and sent to Cox from Supplier are expressly rejected by Cox and will not be deemed accepted by Cox unless Cox responds in writing to the additional or different term and such writing specifically approves the additional or different term. The manufactured materials or goods described in the PO to be delivered by Supplier to Cox are referred to in these Terms and Conditions as the "Goods."
Price; Payment Terms
A separate original invoice is required for each shipment under the PO. Cox will pay for the Goods within forty-five (45) days after the later of the date of Cox's receipt of the applicable invoice or the date acceptable Goods are received by Cox (but not earlier than the specified delivery date). Supplier warrants that the prices charged to Cox are no higher than the lowest prices charged to any other customer during the past twelve months for the same or comparable Goods.
The price will reflect shipping F.O.B. Cox's Wichita facility. Cox will not accept C.O.D. shipments. Supplier will be responsible for payment of all charges for handling, shipping, packaging, wrapping, bags, container, boxing, crating, labeling, customs and duties, taxes (except for Kansas sales tax, if any), storage, insurance and other related matters. Supplier will cause all Goods to be insured for the full value during all phases of packaging and delivery and such insurance will remain in place until such time as Cox has accepted delivery of Goods at its Wichita facility.
The price includes all taxes directly applicable to the Goods unless otherwise specified. Notwithstanding the foregoing, Cox will only be liable for such federal, state, and local taxes that Supplier is required by law to collect from Cox.
Supplier will comply with any specifications stated on the face of the PO and with any applicable United States Government specifications including the latest version of Cox's specifications found at http://cmivendorportal.com/pos/specs. Additionally, the following rules are applicable to POs where Boeing is the end-user:
Cox's rights to perform inspections, surveillance, and tests and to review procedures, practices, processes, and documents related to quality assurance, quality control, and configuration control at Supplier's facility or its subcontractor's facility, a right which Supplier hereby grants to Cox, will extend to Cox's customers. Supplier will cooperate with any government-directed or Cox-directed inspection, surveillance, test or review, without additional charge to Cox. Nothing in these Terms and Conditions will be interpreted to limit United States Government access to Supplier's facilities pursuant to law or regulation.
Supplier will inspect and otherwise verify that all Goods, including those components procured from or furnished by others, comply with the requirements of the PO prior to shipment. Supplier is responsible for all tests and inspections. Supplier agrees to furnish copies of test and/or control in data upon request of Cox. Supplier must assure Cox in writing that all Goods and production comply with Cox's Quality Assurance and Product Data (DPD) surveys and that the Goods are processed and shipped in compliance with the latest version of Cox's specifications. Supplier will maintain inspection records for a period of ten (10) years, which records must directly reflect that all Goods were produced in accordance with applicable specifications.
Cox may at any time, by written notice to Supplier, make changes in the drawings, specifications, quantities, delivery schedules, and shipping instructions under a PO. If any such change increases or decreases the cost of performing or the time required for performance of the PO, an equitable adjustment in prices and/or schedules will be considered by Cox provided that any claim by Supplier for such adjustment is presented in writing with supporting documentation to Cox within two (2) business days from the date of Cox's notice to Supplier. No changes whatsoever will be initiated by Supplier without Cox's written approval.
Subcontracting and Mandatory Flow Down
Supplier will not enter into a subcontract for manufacture or procurement of any Goods without first obtaining Cox's prior written approval. This does not, however, preclude Supplier from purchasing raw materials from subtiers as long as such raw materials are in compliance with the specifications standards and rules of the PO and the Supplier and its subtiers must comply with all mandatory flow down clauses, whether pursuant to U.S. Government contract or otherwise which are applicable to Cox and the Goods.
Raw material mills are to be of U.S. origin or other "FAA Bilateral Airworthiness Safety Agreement (BASA)" country as identified on the following link:
Ownership of Intellectual Property
Cox retains title and ownership of all information, patents materials and intellectual property ("Cox IP") furnished to Supplier or developed by Supplier in connection with performance of the PO, and the same will be: (i) treated as and will legally become Cox's sole property segregated from Supplier's property, and individually marked and identified as Cox's property; (ii) used by Supplier exclusively for the purpose of completing the PO, and (iii) returned to Cox at Cox's direction or upon completion, termination, or cancellation of the PO, along with all copies or reproductions, unless otherwise agreed in writing by Cox. Except as noted in this paragraph, all work product and intellectual property developed in relation to Goods for sale to Cox in conjunction with the performance of a PO is and will be the sole property of Cox and that Cox will have all rights therein or arising from such and the same will also be deemed Cox's IP. To the extent all rights in Cox IP do not automatically vest in Cox, Supplier and each employee or subcontractor of Supplier hereby assigns and grants to Cox all of the right, title, and interest of every kind and nature in any IP, without additional compensation for doing so, in a manner that will enable Cox to fully secure the applicable Cox IP rights. Supplier and each of its employees waive any and all of their respective intellectual property rights in the Cox IP. Cox IP does not include Supplier's background patent and intellectual property rights. Supplier grants to Cox an irrevocable, non-exclusive and world-wide license of all intellectual property owned or controlled by Supplier, but only to the extent that such intellectual property rights would interfere with Cox's use or enjoyment of the Goods delivered by Supplier.
Storage of Goods Prior to the Time for Delivery
Supplier will store Goods at its cost in a safe manner and not subject to environmental degradation until the Goods are ready for shipment to Cox.
Goods will be suitably prepared for shipment to secure the lowest transportation rates (unless a premium method is specified on the face of a PO) and comply with all carrier regulations. No charges are allowed for packing, crating, freight express, or cartage unless authorized by Cox. Aluminum clad material must be interleafed with foam, craft paper or similar grade and quality protective packaging.
Liens, Claims and Encumbrances
Supplier warrants and represents that all the Goods when delivered will be free and clear of all liens, claims, encumbrances and infringements of any patents, trademarks, copyrights or franchise rights.
Routing, Risk of Loss, Excess Shipments and Delays
Time is of the essence in the performance of POs. Supplier will take all necessary action, both normal and extraordinary, to ensure timely deliveries. If Cox selects the mode of transportation, routing of, and carrier for the Goods on the face of the PO, Supplier will be liable for excess transportation costs resulting from deviation. Supplier will bear the risk of loss until the delivery point specified in the PO or, if not so specified, until delivery at Cox's dock in Wichita, Kansas. If Supplier believes that it will be unable to meet its delivery schedule, Supplier will immediately notify Cox in writing. Upon receipt of notice of the anticipated delay or upon occurrence of an actual delay, Cox may (i) direct expedited routing of Goods, with excess costs paid by Supplier, or (ii) cancel the PO and purchase substitute Goods elsewhere.
Rejection of Goods and Revocation of Acceptance
Cox's action in paying for or initially accepting any Goods will not constitute a waiver of any rights or remedies of Cox, including Cox's right to revoke acceptance and return any part of the Goods or the right to make a claim for damages because of the failure of the Goods to conform to the PO. For all non-conforming Goods, Supplier will provide Cox, at Cox's election, a full refund or replacement of the Goods, at Supplier's risk and expense, including transportation costs both ways. As an example of grounds for rejection, Cox will not accept hardware marked "FAA-PMA." Cox may, at its option, purchase substitute Goods in lieu of non-conforming Goods, and Supplier will be liable for the difference in costs, less expenses saved by Cox. Cox's rights herein will be in addition to all other rights of Cox under the PO and applicable law.
Supplier warrants that all Goods delivered will strictly conform to the PO (and all applicable Cox specifications); will be of good design, material, and workmanship; will be free of defects; will be merchantable and fit for their intended purpose; and will meet all applicable industrial and governmental safety standards. Supplier further warrants that Supplier will have title to and the right to sell such Goods at the time of delivery, and that all such Goods will be new (unless otherwise specified in the PO) at the time of delivery. Supplier will also transfer to Cox the warranties on goods and services incorporated into Goods. All warranties will survive any inspections, delivery, acceptance or payment by Cox, and will run to Cox, its successors, assigns, customers and users of Goods. Cox may, at its option and without cost to Cox, either (i) return for credit or refund any defective or nonconforming Goods, (ii) require prompt correction or replacement of the defective or nonconforming Goods, or (iii) repair the defective or nonconforming Goods and charge Supplier for all related repair costs. Return to Supplier of defective or nonconforming Goods and re-delivery to Cox of corrected or replaced Goods will be at Supplier's expense and Supplier will pay for all other resulting damage, loss or claims arising out of defective or nonconforming Goods. Supplier's warranties with respect to repaired or replaced Goods will be the same as the warranties given with respect to the original Goods. No approval of Supplier's designs, drawings, samples, test results, procedures, processes, schedules or other items by Cox will in any way limit or diminish Supplier's warranties hereunder.
Supplier agrees to defend, indemnify and hold Cox, including its officers, directors, employees, parent, subsidiaries, affiliates and agents (collectively, the "Indemnified Party"), harmless of and from any claim, loss, cost, damage, settlement or judgment arising out of Supplier's provision of Goods to the Indemnified Party or the presence of Supplier's employees, agents or subcontractors on the Indemnified Party's premises. This duty to defend, indemnify and hold harmless extends to any legal claim or proceeding, whether based on contract, warranty, infringement, strict liability in tort, negligence or other legal theory, and also extends not only to third party claims but also to any loss suffered directly by the Indemnified Party. Cox is entitled to control Supplier's defense of Cox hereunder.
Limitations of Cox's Liability
Any liability of Cox for any breach of any term or condition imposed upon it, whether such term or condition is contained in these Terms and Conditions or otherwise, will not exceed the purchase price for the Goods involved in the alleged breach. Cox will not under any circumstance be liable for consequential or incidental damages.
Supplier will not assign or delegate any of its rights or interest in a PO without the prior written consent of Cox, which consent Cox will give in its sole and absolute discretion. The prohibition against assignment or delegation includes, without limitation, a change of control of Supplier. Change of control means any of the following transactions: (a) the sale or other transfer to, or acquisition by, any person of securities possessing more than fifty percent (50%) of the total combined voting power of the outstanding securities of Supplier in one or more related transactions; or (b) the sale or other transfer of all or substantially all of the assets of Supplier in one or more related transactions, whether by sale, exchange, merger, consolidation, reorganization, dissolution, or liquidation; or (c) a merger or consolidation (or series of related transactions culminating in a merger or consolidation) (i) in which Supplier is not the surviving entity, except for a transaction the principal purpose of which is to change its state of domicile, or (ii) in which Supplier is the surviving entity but in which securities possessing more than fifty percent (50%) of the total combined voting power of its outstanding securities are transferred to a person or persons different from those who held such securities immediately prior to such event. Failure to obtain approval of any assignment, including an involuntary assignment to creditors, will constitute a breach which may lead to termination of any outstanding POs.
All of Cox's rights and remedies under any PO or at law are cumulative and non-exclusive. In the event of a delivery delay other than due to Force Majeure or in the event the Supplier delivers nonconforming Goods which Cox rejects, the parties acknowledge that Cox may suffer and Supplier may be liable for significant costs, including administrative costs, and damages at law and that Cox may proceed to press its claims against Supplier and, at the same time, pursue corrective actions.
Supplier agrees to be liable for certain administrative expenses incurred by Cox because of such delay(s) or rejection(s). Administrative expenses include but are not limited to: employee overtime; telecommunication costs; transportation charges; special handling expenses; and various anticipated and unanticipated costs to install the products out of the normal manufacturing sequence. The nature and actual amount of costs, damages and administrative expenses associated with delivery delay are uncertain and difficult to calculate. Therefore, but separate and apart from Cox's right to pursue Other Rights and Remedies to recover its actual costs and damages, the parties agree Cox may, in its sole discretion, invoice Supplier for administrative expenses associated with delivery or developmental delay or delivery of rejected Goods. The parties acknowledge that such payments are not intended as a penalty, but are in lieu of actual calculation of such administrative expenses. If Cox chooses to invoice for the administrative expenses, such expenses – regardless of their actual amount – will equal the greater of 1% of the value of the delinquent or rejected Goods per day of delay (or rejection turnaround or second sourcing) or $100 for each item per day for such days of delay or turnaround ("Administrative Claim"); however, Cox will not invoice Supplier for the Administrative Claim for any delay or rejection that is resolved to Cox's sole satisfaction within five (5) days. This calculation represents a reasonable estimate of the additional administrative expenses to be incurred by Cox in in such circumstances. Cox's election to invoice for such administrative expenses as agreed reimbursement for administrative costs on any one or more occasions will not, however, preclude Cox from recovering the actual costs and damages (including reasonable attorney fees) incurred because of delayed delivery or rejected Goods even on those occasions when the administrative expenses are charged or any other occasion, as determination and invoicing of administrative expenses is a matter separate and apart from Cox's potential claims for actual costs and damages. Cox's exercise of rights under this provision will not preclude Cox from exercising its option to cancel a given PO, even if Supplier has (a) paid such administrative charges or actual damages to Cox on prior occasions, or (b) if repeated incidents of later or rejected delivers in the aggregate (or a single significant incident of delay or rejection) materially adversely affect Cox's ability to enjoy the bargained for benefits of the PO on an ongoing basis.
Other Rights and Remedies
In the event of such delay(s) or rejection(s), Cox, in its sole and absolute discretion, may elect to pursue any or all legal or equitable rights and claims in addition to or in lieu of an Administrative Claim. This includes, as illustration and not as limitation, the right to pursue claims for all damages, expenses, and costs incurred directly or indirectly by the delay(s) or rejection(s), including any charges or penalties assessed to Cox by its customer, and the right to terminate the PO with Supplier, as well as a reasonable attorney fee for pursuing such remedies.
Supplier will be charged a $250.00 administrative fee each time (a) Supplier ships Goods in excess of the allowable PO tolerance without prior approval from Cox, or (b) Supplier's Goods are rejected at Cox's facility.
Payment to Supplier under the PO is subject to set-off or recoupment for any present or future claims that Cox or its affiliates may have against Supplier or its affiliates under any other contract.
Termination for Convenience
Cox may terminate all or part of a PO by written notice to Supplier. Any such written notice of termination will specify the effective date and the extent of any such termination. Notwithstanding the foregoing, Cox may only implement this provision in the exercise of good faith and solely to the extent necessary: (i) to terminate a PO erroneously entered by it or its agent; (ii) to terminate all or part of a PO with respect to Goods that Cox subsequently determines it has no actual need of in its processes and does not use in its processes; or (iii) to the extent Cox's customer has terminated all or part of its contract with Cox and such termination directly affects the Goods. Cox will not use this provision in a situation primarily to permit it to obtain for itself or its customers more favorable pricing or other terms with respect to Goods. In addition, any reimbursement to Supplier will be limited to the same extent Cox is limited to seeking reimbursement from its customer.
Event of Default; Remedies
The occurrence of any one or more of the following events will constitute an "Event of Default":
If any Event of Default occurs, Cox may in its sole and absolute discretion implement or require one or more of the following:
Applicable Law; Disputes
The interpretation of the PO and the rights and obligations of Cox and Supplier will be construed and governed by the substantive and procedural laws enacted in the state of Kansas, except that Kansas's choice of law rules will not be invoked for the purpose of applying the law of another jurisdiction. The U.N. Convention on Contracts for the International Sale of Goods will not apply to the PO. The parties agree to personal jurisdiction in the state and federal courts in the state of Kansas and that the exclusive venue for any dispute involving a PO is state and federal courts in Sedgwick County, Kansas.
Supplier acknowledges that Cox has written agreements with customers which require Cox to bind its suppliers to certain terms and conditions. Supplier agrees to be bound, to the extent applicable to Supplier, by any and all such customer agreements.
In performing work under any PO, Supplier and its subcontractors will comply with all applicable federal, state, and local laws, and the rules and regulations of any governmental authority. Specifically, Supplier agrees to comply with all applicable U.S. export control laws and regulations, specifically including, but not limited to, the requirements of the Arms Export Control Act, 22 U.S.C. 2751-2794, including the International Traffic in Arms Regulation ("ITAR"), 22 C.F.R. 120 et seq.; and the Export Administration Act, 50 U.S.C. 2401-2420, including the Export Administration Regulations ("EAR"), 15 C.F.R. 730-774; and including the requirement for obtaining any export license or agreement, if applicable.
Supplier represents and warrants that (a) it is not a representative of a foreign interest; (b) it will not employ foreign persons on the effort related to this PO; and (c) it is a U.S. firm incorporated under U.S. law. Supplier will notify Cox immediately if any of these representations or warranties changes.
Supplier will ensure that Goods that are subject to the ITAR and/or EAR will not be exported, re-exported, transferred, or released to a foreign person or country for international shipments, without first complying with all applicable U.S. export requirements; and will immediately notify Cox if Supplier is, or becomes, listed on any U.S. or other government list of restricted or prohibited persons, or if Supplier's export privileges are otherwise denied, suspended or revoked in whole or in part by any government entity or agency.