PURCHASE ORDER TERMS AND CONDITIONS
1. Buyer’s Offer and Vendor’s Acceptance. All Purchase Orders issued by O’Shaughnessy Holding Company, LLC (or its affiliates or subsidiaries, collectively “Buyer”) expressly incorporate these Purchase Order Terms and Conditions (collectively, the “Purchase Order”). The Purchase Order is an offer by Buyer to purchase from the Vendor listed on the Purchase Order (“Vendor”) the merchandise (the “Merchandise”) described on the Purchase Order pursuant to these Terms and Conditions. Buyer expressly objects to and rejects any terms proposed by Vendor that are different from those contained herein. The Purchase Order constitutes the entire agreement between the parties and supersedes all prior agreements covering the same topics; provided, however, if Buyer and Vendor have an executed, enforceable Manufacturing Agreement or Supply Agreement, such Agreement shall supersede and replace these Terms and Conditions. The Purchase Order may be amended only upon the mutual written agreement of the parties. This Purchase Order may be accepted by Vendor in any of the following ways: (a) Vendor’s execution of the Purchase Order; (b) Vendor’s shipment of the Merchandise to Buyer; or (c) Vendor’s acknowledgement or acceptance of this Purchase Order in any other commercially reasonable manner, such as confirming email, confirming fax or other action by Vendor that signifies its acceptance of this Purchase Order.
2. Purchase Price and Other Costs.
(a) Vendor’s Obligations. Vendor agrees to manufacture, sell and deliver the Merchandise to Buyer for the total purchase price set forth on the Purchase Order and subject to all covenants, terms and conditions hereof. Vendor will manufacture and deliver the Merchandise in strict compliance with the specifications and instructions provided by Buyer. Vendor will not change any specifications without the prior written approval of Buyer. Vendor will procure all materials, parts and components for the Merchandise in strict compliance with the specifications. Vendor will not manufacture, package, sell, ship or otherwise distribute any products incorporating Vendor’s specifications, or any products containing any of Vendor’s intellectual property, to any person or entity, other than Vendor.
(b) Buyer’s Obligations. Buyer agrees to purchase the Merchandise, subject to all of the covenants, terms and conditions hereof, and to pay Vendor the total purchase price set forth on the Purchase Order. In addition to any other rights of Buyer to cancel or terminate an order, Buyer may, at its option, immediately terminate for convenience all or any part of an order at any time and for any reason, by giving written notice to Vendor. Upon such termination for convenience, Vendor’s sole remedy and Buyer’s sole obligation shall be to pay Vendor the order price for conforming goods delivered through the date of termination.
(c) Quality Assurance. Vendor will take all necessary actions to ensure that the Merchandise complies in all respects with the specifications and the quality standards provided by Vendor or requested by Buyer from time to time, including, without limitation, written specifications, product samples, packaging material, and other relevant materials.
(d) Acceptance and Delivery. Vendor will provide Buyer or Buyer’s representatives with the opportunity to be present at and observe all aspects of the manufacture, assembly and packaging of the Merchandise and Buyer will have the opportunity to have a third party testing facility test a representative sample of the production Merchandise prior to Buyer’s acceptance of the Merchandise and Buyer’s delivery of the Merchandise. Buyer will not be deemed to accept the Merchandise unless and until Buyer provides Vendor with written notification of its acceptance of the Merchandise. Upon rejection or revocation of acceptance of any Merchandise, Vendor promptly shall replace or correct any unsatisfactory Merchandise at Vendor’s’ expense, including without limitation, all shipping costs. Only after Buyer has accepted the Merchandise by written notice to Vendor, will Vendor deliver the Merchandise in accordance with the Purchase Order.
(e) Shipping Terms. After the Merchandise has been inspected or approved for shipment by Buyer, Vendor will package the Merchandise for international shipment in accordance with standard commercial practices and in a manner that will minimize risk of damage in transit. Vendor will ship the Merchandise in accordance with the terms set forth in the Purchase Order. Partial shipments are not allowed, unless otherwise agreed in writing by Buyer. Deliveries must be made in a manner to ensure receipt by Buyer at the times specified in the Purchase Order. TIME IS OF THE ESSENCE IN THIS AGREEMENT WITH RESPECT TO THE SPECIFIED DELIVERY DATES. Buyer shall have the right to assess against Vendor (1) late delivery penalties for deliveries that fail to meet the delivery requirements of the Purchase Order, and (2) any other penalties or charges that are assessed against Buyer by Buyer’s customers that result from Vendor’s actions or inactions in connection with the Purchase Order.
(f) Price and Payment. Merchandise shipped against this Purchase Order shall not be invoiced at a higher price than indicated without Buyer’s prior written consent. Unless otherwise stated on this Purchase Order, payment of the purchase price shall be due according to the terms on the Purchase Order, or if none, under Buyer’s standard terms. All prices shall be in United States Dollars and are inclusive of all other charges of any type or nature that relate to the Merchandise, including, without limitation, any charges for labeling, packing or crating, finishing or inspecting, testing, royalties, duties, tariffs, or other taxes or charges of any kind.
3. Intellectual Property.
(a) Use of Trademarks. Buyer hereby grants to Vendor a nonexclusive, nontransferable and royalty-free right and license to use the Buyer Marks (as defined below) in connection with the manufacturing and packaging of the Merchandise for so long as such Buyer Marks are used by Vendor in strict accordance with Buyer’s standards, specifications and instructions, but in no event beyond the term or limits of this Purchase Order. Vendor shall acquire no right, title or interest in the Buyer Marks other than the foregoing limited license, and Vendor shall not use the Buyer Marks as part of Vendor’s corporate or trade name or on anything other than the specific Merchandise authorized by Buyer. It is understood and agreed that the all rights to sell, price, market, license, distribute, or manufacture the Merchandise or any Intellectual Property (as defined below) related thereto remain, as between Vendor and Buyer, wholly owned by Buyer. “Buyer Marks” shall mean the trademarks and trade names (whether owned or licensed by Buyer) specified in writing by Buyer that are to be used in connection with the manufacturing and packaging of the Merchandise. “Intellectual Property” shall mean any and all patents (and applications therefore), Buyer Marks, trademarks (and applications therefore), trade secrets, trade names, trade dress, mask works, copyrights, other intellectual property rights or proprietary rights, ideas, concepts, know how, techniques, inventions, discoveries, improvements, documents, products, systems, practices, procedures, means, methods, designs, devices, programs, software, drawings and sketches, and trade secrets relating to the design, development, implementation, use, maintenance and upgrading of the Merchandise. Intellectual Property includes, but is not limited to, subject matter that falls within the definition of patentable subject matter under the laws of the U.S. or any other country or within the definition of copyrightable materials under the laws of the U.S. or any other country.
(b) Buyer Intellectual Property. Buyer shall own all Intellectual Property in (i) inventions developed by Buyer whether pre-existing or developed under this Purchase Order; (ii) the design of any Merchandise developed by Buyer, or developed by Vendor at Buyer’s direction under this Purchase Order; and (iii) inventions not previously or independently developed by Vendor or any third party that are inherent in any specifications, designs, customizations or product enhancements communicated by Buyer or developed by Vendor at the specific request of Buyer (collectively, “Buyer’s Intellectual Property”). Buyer hereby grants Vendor a limited non-exclusive, non-assignable license to use Buyer’s Intellectual Property solely to manufacture and deliver Merchandise to Buyer in strict accordance with this Purchase Order. Title and ownership of Buyer’s Intellectual Property shall remain with Buyer at all times. Vendor shall be prohibited from using any of Buyer’s Intellectual Property in any product that is not manufactured pursuant this Purchase Order. Upon the expiration or termination of this Purchase Order, Vendor shall, as directed by Buyer, return to Buyer all documents, plans specifications, drawings and other materials in any form or media, relating to Buyer’s Intellectual Property, and shall retain no copy thereof. Vendor has a duty to, and hereby does, assign to Buyer any improvements and/or modifications to Buyer’s Intellectual Property made by Vendor, its employees or agents, and Vendor hereby irrevocably appoints Buyer as Vendor’s attorney-in-fact for the purpose of executing any and all documents and performing any and all other acts necessary to give effect and legality to such assignment. Vendor will promptly notify Buyer of the existence of any such improvements and/or modifications and will fully cooperate in Buyer’s pursuit of corresponding intellectual property protection. Vendor will take all reasonable steps to ensure that its employees and agents are bound by, and cooperate in enforcing, the provisions of this paragraph. Vendor shall cease all uses of Buyer’s Intellectual Property upon expiration or termination of this Purchase Order.
(c) Vendor Intellectual Property. Vendor shall own all Intellectual Property in any pre-existing inventions or other proprietary property of Vendor or any inventions Vendor develops outside the scope or independent of this Purchase Order (collectively, “Vendor’s Intellectual Property”). Vendor hereby grants Buyer a non-exclusive license to use, perform, distribute Vendor’s Intellectual Property, or to have any of these activities performed on its behalf, but only as is necessary to market, sell and support the Merchandise manufactured by Vendor under this Purchase Order. Title and ownership of Vendor’s Intellectual Property shall remain with Vendor at all times. Buyer shall be prohibited from using any of Vendor’s Intellectual Property in any product that is not manufactured by Vendor pursuant to this Purchase Order. Upon the expiration or termination of this Purchase Order, Buyer shall, as directed by Vendor, return to Vendor all documents, plans specifications, drawings and other materials in any form or media, relating to Vendor’s Intellectual Property, and shall retain no copy thereof.
(d) Joint Intellectual Property. Except as set forth above, the parties will decide on a case-by-case basis their respective rights with regard to the Intellectual Property inherent in any inventions that are jointly developed by the parties. In the event the parties are unable to agree on their respective rights with regard to any such inventions, the parties shall jointly own such inventions with no obligation of accounting. Vendor shall provide to Buyer, and maintain current, an itemized list of all trade names, trademarks, licenses, and other Intellectual Property or proprietary rights relating to the Merchandise.
(e) Vendor Restrictions. Vendor will not at any time: (i) challenge Buyer’s rights, title or interest in the Buyer Marks or Buyer’s Intellectual Property; (ii) do, cause to be done, or omit to do anything that would in any way impair the rights of Buyer in the Buyer Marks or Buyer’s Intellectual Property; or (iii) represent to any third party that Vendor has any ownership or rights with respect to the Buyer Marks or Buyer’s Intellectual Property other than any specific rights granted to Vendor herein.
(f) Trademark Registrations. Buyer will have the right, exercisable in its sole discretion, to apply to register the Buyer Marks in its name in any and all jurisdictions. Vendor will cooperate with Buyer in obtaining such registrations, including by promptly executing all requested documents. Notwithstanding anything in this Purchase Order to the contrary, Vendor will not under any circumstance seek to register any of the Buyer Marks, or any designation comprised thereof or confusingly similar thereto, as a trademark, service mark, domain name, or other designation of source during the term of this Purchase Order or at any point thereafter. Vendor acknowledges and agrees that any violation of this Section 3 will result in automatic assignment of any such applications, registrations or other rights to Buyer, at Vendor’s sole expense, and Vendor will sign any documents requested by Buyer for such purpose.
(g) Termination of Use. Vendor acknowledges Buyer’s proprietary rights in and to Buyer’s Intellectual Property and any trademarks or trade names regularly applied by Buyer to the Merchandise, and Vendor hereby waives in favor of Buyer all rights to any Intellectual Property now or hereafter originated or licensed by Buyer. Vendor shall not duplicate, adopt, use or register any words, phrases, symbols, designs, technology or anything else that is identical to or confusingly similar to any of Buyer’s Intellectual Property. Upon termination of this Purchase Order, Vendor shall cease and desist from use of Buyer’s Intellectual Property in any manner.
(h) Violation. Except as specifically set forth in this Section 3, nothing in this Purchase Order grants to Vendor any rights to any Intellectual Property owned by or licensed to Buyer. Any violation of this Section 3 shall be deemed a material violation of this Purchase Order and Buyer shall have the right to immediately terminate this Purchase Order and seek monetary and equitable damages.
(i) Vendor Duties. Vendor has a duty to, and hereby does, assign to Buyer any improvements and/or modifications to the Merchandise or Buyer Intellectual Property made by Vendor, its employees or agents. Vendor will promptly notify Buyer of the existence of any such improvements and/or modifications and will fully cooperate in Buyer’s pursuit of corresponding intellectual property protection. Vendor will take all reasonable steps to ensure that its employees and agents are bound by, and cooperate in enforcing, the provisions of this paragraph.
(j) Third Party Intellectual Property. Vendor represents and warrants that it has secured, and maintains in good standing, all third party Intellectual Property licenses that are required for Buyer’s promotion, marketing, distribution and sale of the Merchandise. Upon written request from Buyer, Vendor shall promptly (1) identify the existence of any third party Intellectual Property licenses applicable to or required by the Merchandise (“Applicable IP Agreements”); (2) provide evidence to Buyer that Vendor has executed all Applicable IP Agreements and has paid all royalties under Applicable IP Agreements for Merchandise, supplied by Vendor, including, at Buyer’s discretion, either copies of royalty reports and payment information showing that the royalties have been paid or written confirmation from licensors that royalties have been paid on Merchandise sold to Buyer. Vendor will maintain proper books and records so as to allow the verification of amounts paid or owed to licensors in accordance with the Applicable IP Agreements. If the use or sale of any Merchandise, by Buyer or any of its affiliates or customers is enjoined, or in Buyer’s opinion is likely to be enjoined, at Buyer’s request and option, and without prejudice to Buyer’s other rights and remedies, Vendor will, at its cost and expense (x) procure all appropriate licenses to permit Buyer and its affiliates and customers to continue to use and sell such Merchandise; or (y) modify the allegedly infringing Merchandise to avoid the infringement in a manner reasonably acceptable to Buyer.
4. Representations and Warranties.
(a) Vendor Representations. Vendor represents to Buyer, at the time of acceptance of this Purchase Order and at the time of each delivery of Merchandise, that (i) it has the authority to enter into this Purchase Order and to sell the Merchandise to Buyer; (ii) the Merchandise will be free and clear of all liens, charges, encumbrances or other restrictions; (iii) the Merchandise will be free from defects in manufacture, materials and workmanship, and will be fit and safe for the uses normally and reasonably intended; (iv) the Merchandise is of merchantable quality and is manufactured and will perform in strict conformance with Buyer’s specifications, instructions and Vendor-provided samples; (v) the Merchandise and all materials provided to Buyer under this Purchase Order are new products and do not contain anything used, refurbished or reconditioned; (vi) Vendor will be in compliance with and perform under all requirements set forth in the various vendor agreements for which Buyer enters into with its customers that relate to the manufacture or shipment of products; (vii) the Merchandise is manufactured, processed, packaged, labeled, tagged, tested, certified, accurately marked, weighed, inspected, shipped and sold in compliance with all applicable industry standards and all applicable federal, state, provincial and local laws, treaties and regulations, including, without limitation, all laws and regulations relating to health, safety, environment, serial and identification numbers, manufacturing, packaging, labeling and country of origin designation, all toxic substances, EPA regulations, customs and importation requirements (including anti-dumping regulations), the Foreign Corrupt Practices Act and voluntary or mandatory compliance certifications; and (viii) the Merchandise is not produced, manufactured, assembled or packaged by the use of forced labor, prison labor or illegal child labor, and that the Merchandise was not trans-shipped for the purpose of mislabeling, evading quota or country of origin restrictions or for the purpose of avoiding compliance with forced labor, prison labor or child labor laws. Vendor shall provide Buyer with evidence of all such certifications or compliance prior to delivery of the Merchandise.
(b) Merchandise Warranties. Vendor hereby warrants to Buyer, in addition to any and all warranties and implied warranties provided under the Uniform Commercial Code and in this Purchase Order, for a period of 12 months from Buyer’s direct or indirect sale to the end-user, the Merchandise will: (i) be manufactured in accordance with the specifications and Buyer’s instructions and directions, (ii) be free from any manufacturing defect and free from faults or defects in material or workmanship, (iii) be in merchantable condition and fit for the intended purpose, and (iv) operate within the specifications. Vendor agrees that if any Merchandise proves to be in violation of any representation or warranty made by Vendor in this Purchase Order, Vendor will refund the purchase price for the Merchandise and reimburse Buyer for all other costs incurred as a result of such violation. Buyer may return all defective merchandise to Vendor for a full refund, including all shipping costs.
5. Default and Remedies.
(a) Events of Default. Vendor will be deemed to be in default if it violates any of the terms hereof or fails to perform any of its covenants, duties or obligations timely, or if it performs or fails to perform any other act, whether pursuant to agreement, or otherwise, which gives Buyer reasonable grounds to feel insecure with respect to Vendor’s future performance hereunder.
(b) Buyer’s Remedies Upon Vendor’s Default. Upon default by Vendor, Buyer may exercise any or all of the following rights and remedies, in addition to such other rights and remedies as may be provided hereunder or by operation of applicable, law: (i) reject or revoke acceptance of any or all of the Merchandise, whether or not such Merchandise is defective and whether or not the condition or delivery thereof otherwise relates to, pertains to, concerns or gives rise to such event; (ii) terminate this Purchase Order without any obligation whatsoever with respect to Merchandise yet delivered to Buyer at the time of such termination; or (iii) receive reimbursement from Vendor for all consequential and incidental damages and other damages, losses or expenses, including, but not limited to, lost profits, delay damages, costs for storage and attorneys’ fees. Vendor also agrees to reimburse Buyer for any fees or penalties, including attorney’s fees and costs, which are incurred by Buyer as a result of Vendor’s violation of law or this Purchase Order.
6. General Provisions.
(a) Proprietary Materials. Unless otherwise agreed in writing, any confidential or proprietary information, including, without limitation intellectual property, furnished by Buyer for use in performance hereunder, shall remain the property of Buyer and shall not be reproduced, used for the benefit of or disclosed by Vendor to others, without Buyer’s prior written consent. Upon completion of the order or its termination, any such proprietary or confidential information shall be promptly returned to Buyer and Vendor will not keep any copies. This Purchase Order shall be expressly protected by the terms and conditions of any confidentiality or nondisclosure agreement that may exist between Buyer and Vendor.
(b) Vendor’s Indemnification. Vendor hereby agrees to indemnify Buyer against any liability, claim, demand, action, cause of action, lawsuit, loss, damage, injury, expense, cost, settlement, penalty, or judgment Buyer may suffer or incur (including reasonable attorneys’ fees and expenses) arising out of, relating to, pertaining to or concerning (i) any breach of representation, warranty, covenant or agreement on the part of Vendor in this Purchase Order; (ii) acts or omissions of Vendor relating to the manufacturing, materials or workmanship of Merchandise; (iii) any claim that the Merchandise, or use thereof, caused personal injury, death, or real or personal property damage; (vi) any claim that the Merchandise violates or infringes any intellectual property right or other right of any third party; (v) a Merchandise recall as a result of manufacturing, materials or workmanship; or (vi) the negligence or willful misconduct of Vendor. Buyer shall be entitled to set off against any amounts it owes to Vendor, pursuant to this Purchase Order or any other purchase order, any damages incurred by Buyer as a result of Vendor’s breach of this Purchase Order.
(c) Insurance. Vendor agrees to obtain and maintain at its expense Commercial General Liability insurance coverage which includes at minimum both products and completed operations coverage with the Vendor’s Broad Form Endorsement and that specifically names Buyer as an additional insured in such amounts and containing such other provisions as shall be satisfactory to Buyer. Payment of invoice is conditional upon Vendor supplying to Buyer satisfactory evidence of compliance with insurance requirements as set forth above, and Vendor agrees that Buyer shall continue to be entitled to any and all discounts and shall not be otherwise penalized due to any delay in payment attributable to the failure of Vendor to comply with Buyer’s insurance requirements.
(d) Limitation on Buyer’s Liability. In no event shall Buyer be liable for anticipated profits or for incidental or consequential damages. Buyer’s liability on any claim of any kind for loss or damage arising out of or in connection with a Purchase Order or from the performance or breach thereof shall in no case exceed the price allocable to the Merchandise thereof that gives rise to the claim. Buyer shall not be liable for penalties of any description.
(e) Non-Solicitation. During the term of this Purchase Order and for a period of 24 months following the termination, expiration or other ending of this Purchase Order, Vendor shall not directly or indirectly: (1) call upon any retailer, distributor or other person for the purpose of soliciting business or providing any product or service similar to the Merchandise; (2) conclude any sale to any retailer, distributor or any other person of any product or service similar to the Merchandise; (3) disrupt, damage, impair or interfere with the business of Buyer; (4) influence or attempt to influence any of the vendors, manufacturers, customers or agents of Buyer to stop doing business with Buyer; (5) hire, solicit or in any manner attempt to influence or induce any employee or agent of Buyer to leave Buyer; or (6) engage in any conduct or activity that would adversely affect the reputation or standing of Buyer.
(f) Governing Law; Dispute Resolution. This Purchase Order shall be governed by and construed in accordance with the laws of the State of Minnesota applicable to contracts made and to be performed wholly therein, but without regard to the conflict of law provisions thereof. The parties expressly agree that the terms of the United Nations Convention on Contracts for International Sale of Goods shall not apply to this Purchase Order. Courts located in the State of Minnesota shall have exclusive jurisdiction of any dispute related to this Purchase Order or the breach thereof, and the parties agree to the personal jurisdiction and venue of such courts.
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