FINE Laboratories, Inc.  Terms and General Provisions

 

1.                 FORMATION OF CONTRACT.  This proposed contract is Buyer’s offer to purchase the goods and services (Goods) described in this offer.  Acceptance is strictly limited to the terms and conditions in this offer.  Unless specifically agreed to in writing by Buyer’s Authorized Procurement Representative, Buyer objects to, and is not bound by, any term or condition that differs from or adds to this offer.  Seller’s commencement of performance or acceptance of this offer in any manner shall conclusively evidence acceptance of this offer as written. 

 

2.                 SCHEDULE

a.      Seller shall strictly adhere to the shipment or delivery schedules specified in this contract.  In the event of any anticipated or actual delay, including but not limited to delays attributed to labor disputes, Seller shall: (i) promptly notify Buyer in writing of the reasons for the delay and the actions being taken to overcome or minimize the delay; (ii) provide Buyer with a written recovery schedule; and (iii) if requested by Buyer, ship via air or other expedited routing to avoid or minimize delay to the maximum extent possible.  The added premium transportation costs are to be borne by Seller.

b.     Seller shall not deliver Goods prior to the scheduled delivery dates unless authorized by Buyer.

c.      Buyer shall, at no additional cost, retain goods furnished in excess of the specified quantity or in excess of any allowable overage unless, within 45 days of shipment, Seller requests return of such excess.  In the event of such request, Seller shall reimburse Buyer for reasonable costs associated with storage and return of the excess.  If Good are manufactured with reference to Buyer’s proprietary information or materials, Seller agrees that, pursuant to the “Confidential, Proprietary and Trade Secrets Information and Materials” article of this contract, it will not sell or offer such Goods for sale to anyone other than Buyer without Buyer’s prior written consent. 

 

3.                 PACKING AND SHIPPING

a.      Seller shall pack the Goods to prevent damage and deterioration.  Seller shall comply with carrier tariffs.  Unless this contract specifies otherwise, the price includes shipping charges for Goods sold F.O.B. destination.  Unless otherwise specified in this contract, Goods sold F.O.B. 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.

b.     Unless this contract specifies otherwise, Seller will ship the Goods in accordance with the following instructions:

(i)                 Shipments by Seller or its subcontractors must include packing sheets containing Buyer’s contract number, line item number, description and quantity of Goods shipped, part number or size, if applicable, and appropriate evidence of inspections.  A shipment containing hazardous and nonhazardous materials mush have separate packing sheets for the hazardous and nonhazardous materials.  Seller shall not include vermiculite or other hazardous substance in any packing material included with the Goods.  Items shipped on the same day will be consolidated on one bill of lading or air bill unless Buyer’s Authorized Procurement Representative authorizes otherwise.  The shipping documents will describe the material according to the applicable classification and/or tariff.  The total number of shipping containers will be referenced on all shipping documents.  Originals of all Government bills of lading will be surrendered to the origin carrier at the time of shipment.

(ii)               Seller will not insure any FOB origin shipment unless authorized by Buyer.

(iii)              Seller will label each shipping container with the contract number and the number that each container represents of the total number being shipped (e.g., box 1 of 2, box 2 of 2)

(iv)             Buyer will select the carrier and mode of transportation for all shipments where freight costs will be charged to Buyer.

(v)               Seller will include copies of documentation supporting prepaid freight charges (e.g., carrier invoices or UPS shipping log/manifest), if any, with its invoices.

(vi)             If Seller is unable to comply with the shipping instructions in this contract, Seller will contact Buyer’s Traffic Management Department referenced elsewhere in this contract or Buyer’s Authorized Procurement Representative.

 

4.                 QUALITY CONTROL.  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 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.

 

5.                 SELLER’S NOTICE OF DISCREPANCIES.  Seller shall notify Buyer in writing when discrepancies in Seller’s process of Good are discovered or suspected regarding Goods delivered or to be delivered under this contract.

 

6.                 INSPECTION

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. 

c.      If Buyer performs an inspection or test on the premises of Seller or its subcontractors, Seller shall furnish, and require its subcontractors to furnish, without additional charge, reasonable facilities and assistance for the safe and convenient performance of these duties.

d.   Seller shall perform First Article Inspections (FAI) in accordance with AS 9102, Aerospace First Article Inspection Requirement.  Seller shall maintain all FAI records and provide buyer FAI records upon request at no additional cost to buyer.

 

7.                 ACCEPTANCE AND REJECTION

a.      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.

b.     If Seller delivers non-conforming Goods, Buyer may at its option and at Seller’s expense (i) return the Goods for credit or refund; (ii) require Seller to promptly correct or replace the Goods; (iii) correct the Goods; or (iv) obtain replacement Goods from another source.

c.      Seller shall not redeliver corrected or rejected goods without disclosing the former rejection or requirement for correction.  Seller shall disclose any corrective action taken.  Repair, replacement and other correction and redelivery shall be completed within the original deliver schedule or such later time as Buyer’s Authorized Procurement Representative may reasonably direct.

d.     All costs and expenses and loss of value incurred as a result of or in connection with nonconformance and repair, replacement or other correction may be recovered from Seller by equitable price reduction or credit against any amounts that may be owed to Seller under this contract or otherwise. 

 

8.                 WARRANTY

a.      Seller warrants that all Goods furnished under this contract shall conform to all specifications and requirements of this contract and shall be free from defects in materials and workmanship.  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.  Buyer may, at its option, either (i) return for credit or refund, or (ii) require prompt correction or replacement of the defective or non-conforming Goods.  Return to Seller of defective or non-conforming Goods and redelivery to Buyer of corrected or replaced Goods shall be at Seller’s expense.  Good required to be corrected or replaced shall be subject to this article and the “Inspection” article of this contract in the same manner and to the same extent as Goods originally delivered under this contract, buy only as to the corrected or replaced part or parts thereof.  Even if the parties disagree about the existence of a breach of this warranty, Seller shall promptly comply with Buyer’s direction to:  (i) repair, rework or replace the Goods, or (ii) furnish any materials or pats and installation instructions required to successfully correct the defect or nonconformance.  IF the parties later determine that Seller did not breach this warranty, the parties shall equitably adjust the contract price.

b.     Seller warrants that any hardware, software and firmware Goods delivered under this contract shall be able to accurately process date/time data (including, but not limited to, calculating, comparing and sequencing) from, into and between the twentieth and twenty-first centuries, and the years 1999 and 2000 and leap year calculations to the extent that other information technology, used in combination with the information technology being acquired, properly exchanges date/time data with it.  The duration of this warranty and the remedies available to buyer for breach of this warranty shall be as defined in, and subject to, the other warranties contained in this contract, provided that notwithstanding any provision to the contrary in such warranties, the remedies available to Buyer under this warranty shall include repair or replacement of any non-compliant Goods discovered and made known to Seller in writing.  Nothing in this warranty shall be construed to limit any rights or remedies Buyer may otherwise have under this contract with respect to defects other than year 2000 performance.  

 

9.                 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 (Sep 96), “Termination for Convenience of the Government (Fixed Price),” which provisions, except for subparagraphs (d) and (j) 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 (1) 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.

 

10.             CANCELLATION FOR DEFAULT

a.      Buyer may, by written notice to Seller, cancel all or part of this contract if (i) Seller fails to deliver the Goods within the time specified by this contract or any written extension; (ii)  Seller fails to perform any other provision of this contract or fails to make progress, so as to endanger performance of this contract, and , in either of these two circumstances, does not cure the failure within 10 days after receipt of notice from Buyer specifying the failure; or (iii) in the event of Seller’s suspension of business, insolvency, appointment of a receiver for Sellers’ property or business, or any assignment, reorganization or arrangement by Seller for the benefit of its creditors.

b.     Seller shall continue work not canceled.  If Buyer cancels all or part of this contract, Seller shall be liable for Buyer’s excess re-procurement costs.

c.      Buyer may require Seller to transfer title and deliver to Buyer, as directed by Buyer, any (i) completed Goods, and (ii) any partially completed Goods and materials, parts, tools, dies, jigs, fixtures, plans, drawings, information and contract rights (collectively, “Manufacturing Materials”) that Seller has specifically produced or acquired for the canceled portion of this contract.  Upon direction from Buyer, Seller shall also protect and preserve property in its possession in which Buyer or its Customer has an interest.

d.     Buyer shall pay the contract price for Goods accepted.  Payment for Manufacturing Materials accepted by Buyer and for the protection and preservation of property shall be at a price determined in accordance with the “Termination for Convenience” article of this contract, except that Seller shall not be entitled to profit.  Buyer may withhold from any amount due under this contract any sum Buyer determines to be necessary to protect Buyer or Buyer’s customer against loss because of outstanding liens or claims of former lien holders.

e.      If, after cancellation, it is determine that Seller was not in default, the rights and remedies of the parties shall be as if the contract had been terminated according to the “Termination for Convenience” article of this contract.

 

11.             CONFIDENTIAL, PROPRIETARY AND TRADE SECRET INFORMATION AND MATERIALS.  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”).  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 t his contract.  Any such use, disclosure, reproduction or derivative work by Buyer shall, whenever appropriate, include a restrictive legend suitable for the particular circumstances.  The restriction 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 therefrom, 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 breach of such obligation by such subcontractor.  The 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.          

 

12.             RECORDS AND AUDIT.  Seller shall retain all records and documents pertaining to the Goods for a period of no less than three years after final payment.  Such records and documents shall date back to the time this contract was issued and shall include without limitation, catalogs, price lists, invoices, and inventory records for purposes of verification of prices or rates charged by Seller for Goods procured by Buyer.  Buyer shall have the right to examine, reproduce and audit all such records related to pricing and performance to evaluate the accuracy, completeness and currency of cost and pricing data submitted with Seller’s bid or offer to sell; and related to “Changes,” “Termination for Convenience” or “Cancellation for Default” articles of this contract.

 

13.             RIGHTS OF BUYER’S CUSTOMERS AND REGULATORS TO PERFORM INSPECION, SURVEILLANCE, AND TESTING.  Buyer’s rights to perform inspections, surveillance and tests and to review procedures, practices, processes and related documents related to quality assurance, quality control, flight safety and configuration control shall extend to the customer of Buyer that are departments, agencies or instrumentalities of the United States Government and to the United States Government Federal Aviation Administration and any successor agency or instrumentality of the United States Government.  Buyer may also, at Buyer’s option, by prior written notice from Buyer’s Authorized Procurement Representative, extend such rights to other customers of Buyer and to agencies or instrumentalities of foreign governments equivalent tin purpose to the Federal Aviation Administration.  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 United States Government access to Seller’s facilities pursuant to law or regulation.

 

14.             GRATUITIES.  Seller warrants that neither it nor any of its employees, agents, or representatives have offered or given, or will offer or give, any gratuities to Buyer’s employees, agents or representatives for the purpose of securing this contract or securing favorable treatment under this contract. 

 

15.             COMPLIANCE WITH LAWS.  Seller shall comply with all applicable statutes and government rules, regulations and orders, including those pertaining to United States Export Controls.

 

16.             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.  

 

17.             DIGITAL PRODUCT DEFINITION (DPD) / MODEL BASED DEFINITION (MBD). Seller shall be certified to Boeing's D6-51991 "Quality Assurance Standard for Digital Product Definition at Boeing Suppliers" and obtain Buyer approval as DPD Capable if Seller receives, downloads, and/or uses Buyer's DPD geometry in any format.
If Seller receives Buyer's DPD geometry in MBD format, Seller is required to obtain Buyer's approval as MBD-capable.
If Seller provides Buyer's DPD geometry to Seller's subcontractors in any format, Seller shall impose Buyer's document D6-51991 as a requirement and is responsible for its subcontractor's conformance.
If Seller provides Buyer's DPD geometry in any format to Seller's subcontractors, Seller shall comply with all applicable export laws.

 

18.             CONTERFEIT ELECTRONIC PARTS DETECTION AND AVOIDANCE SYSTEM REQUIREMENTS
• Seller shall implement a counterfeit electronic parts detection and avoidance system consistent with the requirements of the latest dated version of SAE standard AS5553.
• Seller shall include the substance of this article, including this flowdown requirement, in all subcontracts for electronic parts.