PURCHASE ORDER TERMS AND CONDITIONS
1. Governing Terms; Acceptance
The following terms and conditions shall apply to LG Electronics U.S.A., Inc.’s purchase from the seller (“Seller”) of the goods (the “Goods”) and the services (the “Services”), all as described on the Purchase Order attached hereto (the “Purchase Order”). All references to “Goods and Services” herein shall mean the Goods, the Services, or both the Goods and the Services. LG Electronics U.S.A., Inc., (“LGEUS”) will not accept nor be bound by and hereby expressly rejects any different or additional terms or conditions with respect to the Goods and/or the Services contained in any proposal, acknowledgement, invoice or other form or communication, other than those contained in a written agreement signed by both LGEUS and Seller covering the Goods and/or the Services. If there is no such written agreement, LGEUS will purchase the Goods and/or the Services only upon the following terms and conditions. Seller’s acknowledgement of the Purchase Order, shipment or delivery of the Goods or provision of the Services either in whole or in part shall constitute Seller's assent to and acceptance of the following terms and conditions.
With respect to the Purchase Order, these terms and conditions and the Goods and the Services, LGEUS shall be responsible only for taxes that LGEUS is required to pay under applicable statutes. All other taxes with respect to any of the same shall be paid by Seller. Seller shall separately state on all invoices and confirmations the applicable sales taxes imposed by Federal, State or local governments, unless an exemption is available.
Unless otherwise expressly specified on the Purchase Order, the Goods shall be transported F.O.B. destination, freight pre-paid. No charges will be allowed for transportation, boxing, crating or other packaging of the Goods unless stated herein. TIME IS OF THE ESSENCE WITH RESPECT TO SELLER’S OBLIGATIONS HEREUNDER. Supplier and the shippers selected by Seller shall comply with the safety and traffic regulations in force as communicated on respective shipping documentation. If any delivery is, or is threatened to be, delayed, Seller shall promptly give notice thereof to LGEUS’s authorized representative, together with all relevant information with respect thereto. The giving of and the terms of such notice shall not relieve Seller of any duty hereunder. Seller's failure to deliver the Goods and Services of the quality, within the time, at the place, at the rate and in the manner specified by the Purchase Order or agreed to by LGEUS in writing shall, at the option of LGEUS, without waiver of any right it has, relieve LGEUS of any obligation to accept and pay for such Goods or any undelivered installment thereof. In the event of any variance, all additional expenses to which LGEUS may be subjected as a result thereof shall be borne by and charged back to the Seller. Title to the Goods shall pass to LGEUS upon delivery of the Goods to LGEUS’s designated destination.
4. Risk of Loss
Seller assumes and shall be responsible for all risk of loss of, damage to and liability for (a) the Goods, the Services, and all works in process, materials and other property of LGEUS, Seller or third persons in connection with Seller's performance of the Purchase Order, until acceptance by LGEUS of the Goods, (b) any property received by Seller from, or held by Seller or its supplier for the account of, LGEUS, from the time of Seller's receipt or holding of same and (c) any Goods or part thereof rejected by LGEUS or as to which LGEUS has revoked acceptance, from the time of such rejection or revocation
Seller shall notify LGEUS in advance in writing of all changes in raw materials, manufacturing or testing methods, packaging, shelf life or other changes which may affect the quality of the Goods and Services delivered under the Purchase Order. Such changes must be pre-approved in writing and signed by an authorized representative of LGEUS. Seller agrees to provide LGEUS with a Certificate of Analysis for each of the Goods confirming Seller’s verification that the Goods delivered meet the specifications required hereunder.
LGEUS reserves the right (without being obligated to do so) to inspect and/or test all Goods and Services covered by this Purchase Order at any time during or after manufacture or fabrication thereof and at any place where such manufacture or fabrication is carried on. Seller shall inspect all of the Goods prior to shipment. LGEUS may reject and/or return, at Seller’s expense, any Goods or Services found by LGEUS to be defective, non-conforming or not in compliance with the Purchase Order or these terms and conditions. Seller shall bear all risks after notice of rejection and shall be liable for all damages that are caused by such defective or non-conforming goods. LGEUS’s right to exercise any remedy shall not be waived or otherwise adversely affected by LGEUS’s unloading, accepting, making payment for or using non-conforming goods.
7. Pricing; Payment
Unless the Purchase Order states otherwise, (1) the price for Goods or Services includes all taxes and other charges such as shipping and freight charges, duties, customs, tariffs, taxes and other government-imposed surcharges, and (2) the terms of payment are net 90 days, after receipt of Seller's valid invoice. Unless otherwise specified in the Purchase Order, all references to monetary amounts shall be in United States dollars. Seller must submit invoices that conform to LGEUS’s requirements: Seller shall submit all invoices and other requests for payment to LGEUS through the LGEUS’s Invoice Portal at https://invoiceportal.lge.com/VIPS/vips/common/security/index.dev, or other location as designated by LGEUS.
Seller acknowledges and accepts that non-compliance with said invoice submission requirement may result in a delay in payment. The price for the Goods and Services specified in the Purchase Order shall be Seller's lowest price currently in effect for the quantity of the Goods and Services involved, and shall not exceed current prices quoted or charged to any other customer of Seller for similar items and quantity. Should Seller quote, offer or provide any lower price or better terms for any of the Goods or Services of the same or less quantity to any other party prior to completion of the transaction contemplated by the Purchase Order, Seller shall promptly notify LGEUS, and, to the extent not unlawful, such lower price or better terms shall apply to the transaction contemplated by the Purchase Order. Time for calculation of LGEUS’s payment for the Goods and Services shall be computed from the date of LGEUS’s receipt of an acceptable invoice for same or LGEUS’s acceptance of the Goods or Services, whichever is later. Payment by LGEUS to Seller shall not constitute LGEUS’s acceptance of the Goods or Services. Seller's records shall be subject to audit by LGEUS, upon reasonable notice, at any time up to two years after payment of its final invoice; in the event of termination; other equitable adjustment; or with respect to any order for which the price is based on time and cost of materials. Upon discovery of any overpayment by LGEUS to Seller hereunder, Seller shall immediately return the full amount of such overpayment plus interest in the amount equal to two percent (2%) per month. The fees and expenses of LGEUS or its representatives performing an audit in accordance with this Section shall be borne by LGEUS. However, if an error in charges of more than three percent (3%) of the total amounts due under any billing period is discovered, then such fees and expenses shall be borne by Seller, and Seller shall promptly reimburse LGEUS for its audit expenses.
Seller hereby warrants, represents and covenants that it has good and marketable title to all of the Goods delivered to LGEUS hereunder, free and clear of all liens, encumbrances, and rights of others. Seller hereby further warrants, represents and covenants that the Goods and Services and all parts thereof and the operation thereof: shall (a) conform to the specifications, drawings, samples and descriptions attached hereto or referred to herein or in the Purchase Order, if any, or if the same are not provided, to LGEUS’s standard specifications; (b) conform to all applicable plans, drawings, samples or models furnished to and approved by LGEUS and conform to all of Seller's product literature and items referenced therein; (c) be in merchantable condition and free from all contaminants and defects in material, parts and workmanship and, to the extent not manufactured or provided according to detailed designs furnished by LGEUS to Seller, be free from all defects in design; (d) be fit for their intended purpose and for such particular uses specified by LGEUS or otherwise known by Seller; (e) be new and of established commercial operability and good quality; (f) not infringe any patent, trademark, copyright or other intellectual property right; and (g) comply with all safety, health and environmental laws and regulations applicable thereto. With respect to any Services provided hereunder, Seller warrants that such Services shall be performed in accordance with the highest standards, practices and codes of the industry applicable to such Services. Seller's warranties contained herein (and any consumer warranties, service policies or similar undertakings of Seller) shall be enforceable by LGEUS’s customers and any subsequent owner or user of the Goods or Services or products produced from or containing the Goods and/or Services as well as by LGEUS. Such warranties shall survive LGEUS’s inspection, testing, acceptance and payment for such Goods and Services. As to each of the Goods, each of the Seller’s warranties begins on the date of delivery to LGEUS and continues until the last to occur of the following: (a) the expiration of all warranties made by LGEUS to its customers concerning LGEUS’s product incorporating the Goods; or (b) the expiration of the longest period of time which LGEUS’s customer may be required, by contract or law, to repair or replace the Goods or LGEUS’s product incorporating the Goods, if the Goods are defective or nonconforming to any warranties. The statute of limitations period applicable to any breach of warranty will be the longest statute of limitation period for breach of contract, products liability, or indemnity claims in any jurisdiction of the United States, or, in the case of any recall, the longest time period dictated by the U.S. federal, state or foreign government where the Goods are used. Approval by LGEUS of Seller’s design, drawings, specifications, samples, etc. does not waive or limit any warranty.
9. Certain Remedies
Seller shall be liable for all damages, including all consequential, incidental, third party and special damages incurred by LGEUS as a result of Seller's failure to meet or otherwise comply with the warranties contained herein. Without limiting Seller's liability hereunder, if the Goods or Services are defective in any way or do not conform to such warranties or with the other provisions of these terms and conditions or the Purchase Order, LGEUS, in addition to any and all other rights and remedies it may have, may revoke its acceptance of or may reject any or all of the Goods and Services. Upon such revocation or rejection, LGEUS may return, at Seller's expense, any or all of the Goods or require prompt correction or replacement of the Goods and Services at Seller's expense.
Seller shall defend, indemnify and hold harmless LGEUS, and its subsidiaries and affiliates, officers, directors, employees, agents, customers, users, and their respective successors and assigns from and against any and all claims, losses, liabilities, damages and expenses of any nature (including reasonable attorneys’ fees) arising out of or in connection with: (a) Seller’s performance of, or failure to perform, any of its obligations hereunder or under the Purchase Order, including without limitation Seller’s breach of any warranty given herein; (b) any claim of infringement or violation of any trademark, copyright, patent or other intellectual property right relating to any of the Goods or Services; (c) any product liability or other claim or action with respect to any of the Goods or Services or any products produced from or containing the Goods or Services, except to the extent such claim or action is a direct result of LGEUS’s negligence or wrongful acts or omissions; (d) Seller's or the Goods' or Services' failure to comply with applicable laws or (e) Seller's negligent or wrongful acts or omissions. Seller shall obtain authorization from LGEUS before settlement is made of the claims, losses, liabilities, damages and expenses, suit or action if, the terms of such settlement could materially affect LGEUS.
11. Limitation of Liability
In no event will LGEUS or its subsidiaries or affiliates be liable for any lost revenues, lost profits, incidental, indirect, consequential, special or punitive damages.
Seller shall obtain and maintain worker’s compensation (with a waiver of subrogation against LGEUS) and employer's liability insurance in amounts required under the laws of the state(s) in which the Goods and /or Services are to be performed; and comprehensive general liability and automobile liability insurance for bodily injury, death or loss of or damage to property of third persons in the minimum amount of $2,000,000 per occurrence which policy shall name LGEUS as an additional insured. Seller shall, upon request, promptly furnish to LGEUS certificates of insurance, as well as copies of any endorsements thereto evidencing LGEUS being added as an additional insured. The certificate shall also indicate that LGEUS shall be given thirty (30) days’ written notice of any cancellation, termination, non-renewal or material change in coverage. Such insurance shall be primary regarding any insurance LGEUS may have in force in connection with the Goods and Services contemplated under this Agreement.
13. Force Majeure
No liability hereunder shall result to either party from any failure or delay in payment, performance, non-performance, acceptance or non-acceptance with respect to the Goods or Services caused by circumstances beyond the reasonable control of the party affected, including but not limited to acts of God, war, terrorism, fire, accident or disaster, or by reason of any law, regulation or other act of any governmental authority, including court orders, or labor problems; provided, however, that the affected party shall promptly give written notice to the other party whenever such failure or delay becomes reasonably foreseeable, and shall use its best efforts to overcome promptly the effects of such failure or delay. If Seller, by reason of a failure or delay excused under this paragraph, is unable to supply Goods or Services the same as or similar to the ones covered herein, in the quantities contracted for, Seller shall allocate its actual production among its internal needs and its customers in a fair and reasonable manner. If notwithstanding such efforts such failure or delay continues for a period of more than thirty (30) days, the other party may elect to terminate the Purchase Order. Quantities of Goods omitted due to any failure or delay excused under this paragraph shall, without liability, be deleted from the Purchase Order.
14. Compliance With Law
Seller shall comply with all applicable laws and governmental regulations which may in any way affect or be applicable to the Goods, the Services or Seller’s performance hereunder, including without limitation any applicable requirement under the Toxic Substances Control Act (the "TSCA"), the Fair Labor Standards Act, and laws concerning environmental protection and occupational health and safety. In particular, (a) Seller hereby agrees to incorporate in each invoice covering the Goods, a certification that the Goods covered by the invoice were produced in compliance with all applicable requirements of Sections 6, 7, and 12 of the Fair Labor Standards Act, as amended, and with all relevant regulations and orders of the United States Department of Labor issued under Section 14 thereof, and (b) Seller warrants that (i) all Goods delivered hereunder and all work performed and activities undertaken on Seller's premises, including the equipment used therefor, shall comply with applicable standards promulgated under the Occupational Safety and Health Act of 1970, as amended, and regulations adopted thereunder, (ii) the nondiscrimination clauses contained in Section 202 of Executive Order 11246, as amended, relative to equal employment opportunity, and the implementing rules and regulations of the Office of Federal Contract Compliance, including all applicable Federal Acquisition Regulations ("FAR") clauses or DOD FAR Supplement clauses that are required by the U.S. Government to be inserted into subcontracts will be deemed to be incorporated by reference into this Purchase Order, (iii) in accepting the Purchase Order, Seller assumes responsibility for testing, process control, labeling and other requirements of the U.S. Consumer Product Safety Commission and/or other regulatory agencies or laws, and is responsible for reporting product hazards in accordance with Section 15 of the Consumer Product Safety Act, Public Law 92-573, (iv) any food, drug, or cosmetic supplied pursuant to the Purchase Order is not at the time of shipment adulterated or misbranded within the meaning of the Federal Food, Drug and Cosmetic Act of 1938, as amended and (v) all Goods which are chemical substances and all chemical contained in the Goods, shall be, at the time of the sale and LGEUS’s receipt, on the then current list of chemical substances published by the Administrator of the Environmental Protection Agency pursuant to Section 8 of the TSCA and in compliance with all other rules and regulations of the Environmental Protection Agency. Not by way of limitation to the foregoing, Seller hereby certifies that all Goods constituting or containing chemical substances subject to the TSCA (including substances which Seller does not make or import) are correctly listed on the TSCA Chemical Substances Inventory, 15 USC 2601 et seq. and regulations thereunder, or else comply with an exemption to such Inventory listing. Seller shall inform LGEUS in advance of any TSCA restrictions known to it governing the use and disposal of the Goods, including, but not limited to, any proposed or final Significant New Use Rule restrictions. For any promotional, marketing or advertising materials, Seller shall conduct a trademark and copyright clearance process.
15. Import Requirements
Upon LGEUS’s request, Seller shall provide LGEUS with an appropriate certification stating the country of origin of the Goods and Services sufficient to satisfy the requirements of (a) the U.S. customs authorities, and (b) any applicable export licensing regulations, including those of the United States. Seller shall mark all of the Goods with their country of origin. If any Goods or Services are imported, Seller shall, when possible, allow LGEUS to be the importer of record. If LGEUS is not the importer of record and Seller obtains duty drawback rights to the Goods, Seller shall, upon LGEUS’s request, provide LGEUS with documents required by the customs authorities of the country of receipt to prove importation and to transfer duty drawback rights to LGEUS.
16. Certain Equipment and Tools; License
If LGEUS furnishes Seller with, or pays for, tools, dies, jigs, fixtures, patterns or other equipment for Seller's use in filling the Purchase Order, the same shall be and remain the property of LGEUS and shall not be used for orders of third parties without LGEUS’s prior written consent. All such property, while in Seller care, custody and control shall be held at Seller's risk and shall be insured by Seller at Seller's expense in an amount equal to replacement costs with loss payable to LGEUS. Such property shall be returned to LGEUS in the same condition as received, ordinary wear and tear excepted, upon completion of the Purchase Order, unless otherwise agreed upon by the parties. Seller hereby grants to LGEUS and its affiliates a nonexclusive, royalty-free, worldwide, perpetual license to use, make, sell, offer for sale, import or export any LGEUS product or process in any field, which incorporates or is based on the Goods and/or the Services provided to LGEUS under the Purchase Order.
All specifications, data, and other non-public information supplied by LGEUS, shall be held in confidence by Seller. Such information shall not be reproduced, used, or disclosed to others by Seller without LGEUS’s prior written consent, and shall be returned to LGEUS upon the completion of Seller's obligations under the Purchase Order or upon LGEUS’s demand. Seller shall not, without LGEUS’s prior written approval, disclose or permit to be disclosed any information contained in or related to the Purchase Order to any person to whom such disclosure is not necessary in connection with the performance of the Purchase Order. All property furnished hereunder by LGEUS shall be maintained in confidence, shall remain LGEUS’s property and, together with all copies thereof, shall be returned to LGEUS or destroyed as LGEUS may direct. Not by way of limitation to the foregoing, Seller shall not use the name, trade name, trademarks, trade dress or service marks owned by LGEUS or its affiliates, or logos of LGEUS or its affiliates in any publicity releases, news releases, annual reports, product packaging, signage, stationery, print literature, advertising or websites without securing the prior written approval of LGEUS. Seller shall not, without prior written consent of LGEUS, represent, directly or indirectly, that any product or service offered by Seller has been approved or endorsed by LGEUS or its affiliates.
LGEUS may at any time terminate or cancel the Purchase Order or any part thereof for its sole convenience and LGEUS’s sole liability upon such termination shall be payment to Seller for any Goods delivered or Services rendered by Seller prior to notice of such termination for which payment has not already been made. Any prepaid funds paid to Seller will be reimbursed. In the event of the termination or expiration of the Purchase Order, Seller shall return to LGEUS within one (1) business day after said termination or expiration all Goods owned by LGEUS. Any obligations or duties which, by their nature, extend beyond the expiration or termination of this Purchase Order shall survive such expiration or termination.
19. Governing Law; Severability; No Prejudice; No Waiver
The validity, interpretation and performance of the Purchase Order and these terms and conditions shall be governed by the law of the State of New York, without reference to its principles of conflicts of laws, and the Uniform Commercial Code as enacted therein. If any provision of the Purchase Order or these terms and conditions is or becomes illegal, invalid or otherwise unenforceable under any applicable law, such provision shall be considered severed therefrom and herefrom and all other provisions of the Purchase Order and these terms and conditions shall remain enforceable and be interpreted, as far as and if possible, so as to give effect to its intended purpose. None of the Purchase Order, these terms and conditions nor any ambiguity found therein or herein shall be construed against a party merely because such party drafted the Purchase Order or these terms and conditions. The rights and remedies set forth in the Purchase Order and these terms and conditions shall not be exclusive and are in addition to all other rights and remedies of the parties thereto or hereto provided by law. Failure of LGEUS to exercise any right it may have under the Purchase Order or these terms and conditions on one or more occasions shall not waive its right to exercise the same on another occasion.
20. Entire Agreement; Assignment; Headings
Except with respect to a written agreement between LGEUS and Seller concerning the purchase and sale of the Goods and Services, the Purchase Order and these terms and conditions set forth the entire understanding of the parties and supersede all prior understandings, negotiations, and dealings between the parties with respect to the purchase and sale of the Goods and Services. No agreement or understanding, oral or written, in any way purporting to modify the terms of the Purchase Order or these terms and conditions shall be binding upon either party unless contained in a writing signed by the party against whom enforcement of such agreement or understanding is sought. Seller shall not assign its rights or obligations under the Purchase Order or these terms and conditions without the prior written consent of LGEUS. LGEUS may assign its rights and obligations under the Purchase Order and these terms and conditions to any of its affiliates and to any purchaser of all or substantially all of its assets. Headings used herein are for the convenience of reference only and shall not control the construction or interpretation of any of the provisions of the Purchase Order or these terms and conditions.
21. Certain Sites
When the Purchase Order covers the supply of Goods or Services on the premises of LGEUS or its affiliates, or on any construction site, Seller shall be subject to such additional terms and conditions as may be imposed with respect to such premises or sites. Seller shall, and shall cause each of its employees, agents, representatives and contractors to, abide by such terms and conditions, and hereby releases and agrees to defend, indemnify and hold harmless LGEUS, and its affiliates, officers, directors, employees, agents, customers, users, and their respective successors and assigns from and against any liability or claims of any kind arising out of or relating to their presence on such premises or sites, including without limitation claims for personal injuries suffered by LGEUS’s or Seller’s employees, agents, representatives or contractors. Upon request of LGEUS, and at no cost or expense to LGEUS, Seller shall promptly remove from such premises and sites any person under the control of Seller who violates any safety, health or plant laws, regulations, ordinances or rules or who may cause or threaten to cause a breach of the peace, or who is otherwise objectionable to LGEUS for any reason.
22. Set Off
Should Seller fail to pay or refund any amounts owed by it to LGEUS pursuant to or in connection with the Purchase Order, when demanded by LGEUS, LGEUS may set-off such amounts against monies owed by it to Seller.
If this Purchase Order covers Services, labor acceptable to LGEUS must be used on the job to deliver the Services.
24. Adverse Rule of Construction Not to Apply
The words in the Purchase Order shall bear their natural or defined meaning. The Parties have each had full opportunity of obtaining legal advice. Any rule of construction to the effect that any ambiguity is to be resolved against the drafting party shall not be applicable in the interpretation of the Purchase Order.
For any Services performed, Seller shall maintain a complete set of records in accordance with GAAP for a period of at least five (5) years after completion.
26. Conflict Minerals
Seller warrants, represents and covenants that, to its knowledge, no tantalum, tin, tungsten and/or gold (“Conflict Minerals”), contained in any Good subject to this Purchase Order, originated from the Democratic Republic of the Congo or an Adjoining Country, unless the Conflict Minerals were processed by a facility listed as compliant pursuant to the CFSI Conflict-Free Smelter Program, and such Conflict Minerals contained in any Good subject to this Purchase Order do not directly or indirectly finance or benefit an Armed Group in the Democratic Republic of the Congo or an Adjoining Country. Seller further warrants, represents and covenants that Seller will communicate to its sub-suppliers its own commitment to responsible sourcing and legal compliance. Seller agrees to cooperate and work with its sub-suppliers in an attempt to ensure traceability of Conflict Minerals at least to smelter or refiner level, to maintain and record all Conflict Minerals traceability documentation for five years, and to provide such documentation to Purchaser upon request. The Seller shall also respond promptly to LGEUS’s requests for information regarding the results of Seller’s due diligence measures, including but not limited to the country of origin or smelters and refiners used to process Conflict Minerals contained in any Good subject to this Purchase Order. The terms “Conflict Minerals,” “Armed Group,” and “Adjoining Country” have the meanings ascribed to such terms in the rules and regulations of the U.S. Securities and Exchange Commission promulgated under Section 13(p) of the Securities Exchange Act of 1934, as amended.
27. Social Commitment
Seller warrants, represents and covenants that its Goods and Services are in compliance with employment rights, human rights and fundamental freedoms, including the provisions of international labor conventions and, in particular, with the eight fundamental International Labor Organization (“ILO”) Conventions with regard to trade unions rights, equality of treatment and equal remuneration, the abolition of forced labor and the elimination of child labor. Seller undertakes not to employ under age children to manufacture products or to perform any other related task and must abide by ILO standards with regard to freedom of association, the minimum age for admission to employment, and health and safety at work. Upon request, Seller must be able to prove that all of the Goods and Services provided to LGEUS comply with the aforementioned standards, and certify that they have procured the same commitments from their sub-contractors, manufacturers, service providers and traders.
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