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Purchase Order Standard Terms & Conditions

Purchase Order Standard Terms & Conditions

ACCEPTANCE AND AGREEMENT: Seller’s acceptance of the Purchase Order shall be deemed by its provision of the items listed therein (the “Goods”). In the event of any conflicts, the Purchase Order documents will have priority as follows (1) Purchase Order cover, (2) Supplementary Terms and Conditions, if any, (3) these Terms and Conditions, (4) Buyer’s specifications, and (5) any other Purchase Order attachments, exhibits or referenced documents. The foregoing documents shall collectively be referred to as the “Purchase Order”.

TERMINATION FOR CONVENIENCE: Buyer reserves the right to terminate the Purchase Order, or any part thereof, for Buyer’s sole convenience. In the event of such termination (other than for cause), Buyer will pay Seller a reasonable termination charge for the value of Goods provided prior to the date of the notice of termination, plus actual direct costs resulting from termination. Upon payment of the termination charge, title to Goods and all materials received prior to termination related thereto shall vest with Buyer.

TERMINATION FOR CAUSE: Buyer may terminate the Purchase Order, or any part thereof, for cause including, but not limited to the following Seller’s actions (1) any default or breach of any of the terms and conditions of the Purchase Order, (2) failure to ship or deliver the Goods at the stipulated time or exceeding the maximum liquidated damages for late shipment or delivery permitted under the Purchase Order, (3) furnishing defective Goods or Goods that do not conform to the terms of the Purchase Order, (4) failure to provide Buyer, upon request, a reasonable assurance of future performance, or (5) bankruptcy, dissolution, or suspension of payments by judicial decree, if Seller does not cure such failure within a period of five (5) days or such longer period as Buyer may authorize in writing after the date such notice is sent to Seller.

PURCHASE ORDER CHANGES: Buyer reserves the right to modify the Purchase Order as needed and will advise Seller in writing of such changes. Seller shall not proceed with any changes without Buyer’s written authorization. Any claim by Seller for an adjustment hereunder must be asserted within thirty (30) days from the date Buyer notifies Seller of said change or the date Seller receives a written or verbal request, instruction or recommendation from Buyer or its representative that Seller believes constitutes a change to the requirements of the Purchase Order.

PROPRIETARY INFORMATION, CONFIDENTIALITY AND ADVERTISING: All commercial, financial or technical information in any form that Buyer provides to Seller shall be deemed proprietary and confidential and Seller shall not disclose such information to third parties without Buyer’s written consent. Seller shall not advertise or publish that Buyer has contracted to purchase the Goods from Seller without Buyer’s written consent. Termination of the Purchase Order shall not relieve Seller of this confidentiality obligation. Upon Buyer’s request, Seller shall return all confidential information to Buyer along with any reproductions, in whole or in part. The confidentiality obligation does not apply to information that is in the public domain through no fault of Seller or to information lawfully within Seller’s possession prior to the date of the Purchase Order, as evidenced by Seller’s written records.

DELIVERY OF GOODS: Seller has informed Buyer on its production schedule and provided completion dates. It is the Seller’s responsibility to perform within this schedule. Goods shipped to Buyer in advance of schedule without Buyer’s written consent may be returned to Seller at Seller’s expense. Therefore, Buyer and Seller have agreed to the shipping and delivery dates stipulated in the Purchase Order and Seller will make every effort to ship and deliver Goods on the stipulated dates. Buyer’s acceptance of the Goods after the stipulated shipping or delivery dates will not waive Buyer’s rights with respect to such late shipment or delivery. If Buyer should need shipment or delivery of Goods delayed for any reason whatsoever, Buyer will advise Seller to (A) store completed Goods at Seller’s facility, (B) arrange storage of completed Goods at a location in the vicinity of the shipping point, (C) continue production of any uncompleted Goods, and/or (D) delay or discontinue production of any uncompleted Goods. Each such recommendation shall be priced appropriately and Buyers decision shall be the subject of a written amendment to the Purchase Order of price, schedule and scope as applicable. Transfer of risk of loss and title to the Goods shall be as stated in the written amendment to the Purchase Order relating to Buyer’s instruction for Seller’s storage of the Goods.

WARRANTIES: Seller warrants that the Goods (1) have no history of material failure or malfunction, (2) are furnished in strict accordance with the terms of the Purchase Order, any drawings, designs or other requirements (including performance specifications) approved or adopted by Buyer, and good industry practices, (3) are fit for the use intended, (4) are new and un-repaired (unless Buyer purchases used Goods as specified in the Purchase Order), (5) are the best quality and workmanship and, (6) are free from any defects from whatever source, excepting any Buyer faulty specifications. Seller, at its sole expense, shall repair, replace or correct any defects in the Goods whether originating from design (excepting Buyer’s faulty design or specifications), material, type, workmanship, or performance, within 18 months after shipment from Seller’s factory, or within 12 months after first commercial use at the final destination point, whichever is earlier. In the event of repair or replacement, the above warranty shall apply to the repaired or replaced work for a period of 12 months or until the expiration of the original warranty period, whichever is later. Buyer and/or the ultimate owner of the Goods shall have the right to enforce the foregoing warranties. Seller’s liability shall extend to and include all reasonable costs incurred in the repair and/or replacement of the Goods or other proximate equipment that incurs damage during the warranty period. The enforcement of warranties shall not prejudice any other rights Buyer and/or the ultimate owner of the Goods has against Seller under the Purchase Order. Any attempt by Seller to limit, disclaim or restrict any such warranties or any remedies of Buyer, by acknowledgement or otherwise, in accepting or performing the Purchase Order, shall be null, void and ineffective without Buyer’s written consent.

INDEMNIFICATION: Seller shall fully release, indemnify, defend and hold harmless Buyer, its co-venturers, its contractors, its and their respective affiliates and its and their respective directors, officers and employees (including agency personnel) (“Buyer Group”) harmless from and against any and all claims arising out of the Buyer Group’s purchase, use, sale or incorporation of any Goods purchased from Seller into Buyer Group’s products or equipment wherein it is claimed or alleged that Seller’s Goods are defective or violate any warranty, stand of care, industry standard or governmental regulation or term or condition of any Purchase Order without regard to any allegation of negligence on the part of the Buyer Group as it pertains to Seller’s Goods.

PATENT, TRADEMARKS AND COPYRIGHTS: Seller warrants that Buyer’s use or sale of the Goods delivered shall not infringe on any patent, trademark, copyright or other intellectual property right or interest. Seller shall fully and without limitation hold harmless, defend and indemnify Buyer on any claim for, or cost damage or expense incurred or resulting from, any such infringement. In case use of said Goods is enjoined, Seller shall, at its own expense and at the election of Buyer, remedy any infringement by correction, replacing with non-infringing goods or securing approval to use, at Seller’s sole cost, or remove said Goods and refund the purchase price, the transportation and installation costs associated therewith and any costs associated with removal of the infringing Goods.

FORCE MAJEURE: A force majeure delay shall mean any delay or other unforeseeable causes beyond the reasonable control of the party affected; provided that any such delay is not caused, in whole or in part, by the acts or omissions of the party so delayed and further provided that such party is unable to make up for such delay with reasonable diligence and speed. If any such cause delays Seller’s performance, the delivery date or time for completion may be extended by a period of time reasonably necessary to overcome the effect of such delay; however, Seller shall take all reasonable measures to mitigate the effects of the force majeure event and to minimize such delay. A party affected by a force majeure event shall notify the other party of such force majeure event within forty-eight (48) hours of its knowledge of such event for the event to be considered a bona fide force majeure event.

COMPLIANCE WITH LAW AND STANDARDS: Seller certifies that, unless specifically exempted, all Goods furnished under the Purchase Order have been manufactured, processed, delivered and/or sold in full compliance with all applicable laws, acts, rules, orders and regulations.

TITLE AND RISK OF LOSS: Title to the Goods shall transfer to Buyer upon receipt of Goods by Buyer or its agent unless otherwise stated in the Purchase Order. Notwithstanding the above, risk of loss of the Goods shall remain with Seller until delivered to Buyer as specified in the Purchase Order.

WAIVER: Buyer’s failure to exercise or enforce any right in the Purchase Order, or any other right or privilege under law, or Buyer’s waiver of any breach by Seller shall not constitute a waiver or modification of any terms, conditions, privileges or rights whether of the same or similar type, unless Buyer gives such waiver in writing.

LIENS: Seller waives and relinquishes all existing and future liens and claims (statutory or otherwise) for the Goods specified in the Purchase Order, and warrants that the Goods will be free and clear of all liens, claims or encumbrances of any kind.

SETOFF: All claims for money due, or to become due to Seller shall be subject to setoff by the Buyer by reason of any counterclaim arising out of this transaction with Seller, including, but not limited to (i) the failure to remedy the provision of defective, deficient or non- conforming Goods, and (ii) material failure to carry out the obligations set forth in the Purchase Order.

SHIPMENT: Seller will ship the Goods in accordance with the shipping instructions and freight terms outlined in the Purchase Order, unless Buyer advises Seller otherwise in writing. If no packing and freight terms are stated, Seller shall package the Goods to the highest commercial standard practices of the industry in order to prevent damage during shipment/delivery and use only properly licensed and insurable carriers. Seller must use Buyer’s designated corporate- contract carriers if such carriers are indicated in the Purchase Order. If Seller is responsible for transporting the Goods, then risk of loss in transit lies with Seller until the Goods are transported to the location set forth in the Purchase Order. Any unauthorized shipment that results in transportation charges must be fully prepaid by Seller. All freight and delivery terms shall be interpreted in accordance with INCOTERMS 2010. Prior to the day of any shipment, Seller shall notify Buyer and Buyer’s expeditor of the details of the shipment, including quantities, descriptions, weights, dimensions, carrier and approximate arrival date of the shipment at the “ship to” destination. On the day of shipment, Seller shall provide Buyer’s expeditor with sufficient information to permit tracing of the delivery. In addition, Seller shall provide advance notification to Buyer and Buyer’s warehouse supervisor at the destination, of all deliveries via carrier or dedicated hauler at least twenty-four (24) hours prior to delivery when unloading does not require specialized equipment, and a minimum of forty-eight (48) hours advance notice when specialized equipment will be required. Buyer’s standard hours for receiving shipments are Monday through Friday between the hours of 7:30 a.m. and 3:00 p.m. Delivery at other times will be subject to appropriate coordination and Buyer’s written approval.

INSPECTION, REVIEW AND WITNESSING: Buyer and/or the ultimate owner of the Goods reserve the right to inspect and attend testing of the Goods at Seller’s premises (or its supplier’s or subcontractor’s premises) with reasonable advance notice. If any inspection is made on the premises of Seller or its supplier, Seller, without additional charge, shall provide all reasonable facilities and assistance for the safety and convenience of the inspectors in the performance of their duties. Inspection or non-inspection of the Goods shall neither relieve Seller from responsibility for such Goods nor impose liabilities on Buyer thereof. Records of all work by Seller shall be kept complete and available to Buyer and Owner for a minimum of three (3) years after the completion of delivery. Any check or approval of drawings by Buyer will be for Seller’s convenience and will not relieve Seller of its responsibility to meet all requirements of the Purchase Order.

MODIFICATION OR RESCISSION: Buyer and/or Seller shall modify the Purchase Order only if they agree to do so in writing. Buyer may rescind or terminate the Purchase Order in whole or in part by giving written notice to Seller.

APPLICABLE LAW AND VENUE: The Purchase Order shall be governed and interpreted in accordance with the laws of the State of Texas, without reference to any principle of conflict of laws. Seller and Buyer expressly exclude the application of the Convention on International Sale of Goods to the Purchase Order. Venue for all judicial, administrative, or regulatory proceedings shall be Houston, Texas.

ASSIGNMENT, SUBCONTRACTING AND SUBSTITUTIONS: All services, materials, manufacturing, fabrication or assembly relating to the Goods shall be Seller’s own, or that of an authorized equivalent authorized by Buyer. Seller shall not substitute materials or services or assign or subcontract the Purchase Order in whole or in part (including Seller’s right to receive payment), without Buyer’s prior written consent. Any substitution, assignment or subcontracting without the prior written approval of Buyer shall be null and void and of no force or effect.

OWNERSHIP OF DOCUMENTS: Title to all drawings, specifications, calculations, technical data and other documents that Seller submits in accordance with the Purchase Order shall vest with Buyer. Buyer shall have the right to use such documents for any purpose pertaining to the installation, operation and maintenance of the Goods.

FACTORY ASSEMBLY: For engineered equipment assembled in Seller’s facility, unless Buyer and Seller agree otherwise, Seller shall: (1) pre-install wiring, piping or other integral components, as appropriate, to the greatest extent possible up to the maximum shipping weight and size limits; (2) design and configure such equipment in a manner that reduces the field installation and commissioning time to a minimum; if Seller ships such equipment in a manner that causes unnecessary excess time to install and/or commission the equipment, Seller shall bear the costs of such time; (3) ship/deliver equipment charged and/or loaded with all lubricants, oils, fluids, media, etc. required for startup and operation of the field performance test; if Buyer and Seller agree, for whatever reason, that the equipment should be shipped without such fluids charged/loaded, Seller will ship/deliver fluids separately in suitable containers for ease of handling at the site; (4) advise Buyer of the number of person-hours required to install and commission the equipment; and (5) provide sufficient drawings and other information required to determine accurate weights and dimensions, center of gravity and lifting points and placement of shipping saddles, if deemed necessary.

CARRIERS, EXPORT PACKING AND INSURANCE SURVEYORS: If the Purchase Order stipulates that Seller is required to ship and/or export package the Goods, Buyer reserves the right to inspect and review Seller’s logistics, transportation and packing plan. In addition, Seller shall as appropriate (1) use only properly licensed and insurable carriers for required transportation logistics services; (2) export package the Goods to the highest commercial standard practices of the industry in order to prevent damage during shipment/delivery; (3) respond to Buyer’s insurance representative’s (Salvage Association or similar insurance surveyor that Buyer appoints) (the “Insurance Representative”) reasonable recommendations regarding export packaging of the Goods and loading plan on the vehicle or vessel to prevent damage of Goods during transit; (4) expressly acknowledge and agree to defer shipping the Goods until the Insurance Representative conducts a load and stowage survey and issues an insurance certificate attesting that its recommendations were implemented for such shipment or the Insurance Representative expressly waives in writing such requirement for shipment. Reasonable prior written notice of shipments shall always be provided.

LIQUIDATED DAMAGES: Buyer and Seller recognize that Buyer may suffer damages or losses if Seller fails to (1) ship/deliver Goods on the date(s) stipulated in the Purchase Order, (2) deliver certain documents on the dates stipulated in the Purchase Order, and/or (3) meet certain performance guarantees stipulated in the Purchase Order (all defined as “Liquidated Damages Events”). Therefore, Buyer and Seller agree that (A) actual damages resulting from Liquidated Damages Events are impractical or difficult to assign, (B) any liquidated damages are not considered a penalty and are fair and reasonable, (C) such payments represent Buyer’s reasonable estimate of fair compensation that Buyer may anticipate from such Liquidated Damages Events. Except as stipulated in Paragraph 4 of these Terms and Conditions such payments are compensation solely for the Liquidated Damages Events and shall not prejudice any other Buyer’s rights and shall not relieve Seller of its obligations. Buyer has the right to offset any liquidated damages from any amount otherwise due to Seller under the Purchase Order, if the above obligations are not met. Seller shall pay liquidated damages as agreed to and stipulated in the Purchase Order.

INSURANCE: At a minimum Seller and its subcontractors shall comply with the project insurance requirements for which the Goods are being provided. Buyer shall provide specific reasonable levels as soon as such levels are available, which shall not be required in excess of $1,000,000 for any non-statutory category other than excess liability umbrella, which shall not be required in excess of $5,000,000. When requested by Buyer, Seller shall provide certificates showing project related parties as additional insured with waivers of subrogation by Seller’s carriers, as Buyer shall identify to Seller.

HAZARDOUS AND TOXIC SUBSTANCES: Seller hereby swears and affirms that the material furnished in accordance with the Purchase Order does not, to its best knowledge, contain any toxic substances or harmful physical agents as defined under 29CFR 1910.20. In the event Seller discovers that such hazardous and toxic substances or agents are to be supplied, an appropriate Material Safety Data Sheet (Form OSHA-20), or equivalent shall be immediately supplied to Buyer.

INVOICING: Seller shall submit one (1) original and one (1) copy of its invoice. The invoice shall include the items listed in the same way as the original Purchase Order, properly identified with Buyer’s Purchase Order Number and Project Number. All invoices shall be sent to the Accounting Department at the following address:

Frazer Ltd.
7219 Rampart St.
Houston, TX 77081

Acceptance of invoices is contingent upon receipt by Buyer of all required waivers of liens, partial and/or final, all materials, services and technical documentation required by the Purchase Order, and the compliance with all commercial and financial terms and conditions of the Purchase Order. Unless otherwise stated upon the face of the Purchase Order, payment shall be due only after Buyer’s receipt of all documentation, data, reports, and delivery of the Goods. If the Purchase Order provides for any progress (or advance) payments based on specific milestones or activities, Seller’s invoice shall certify to the accomplishment or performance by Seller of said milestone or activity, and that Buyer has obtained a security interest in such Goods to the extent of such payment. All payments shall be due net thirty (30) days after receipt of a properly prepared invoice. Amounts not paid when due shall accrue interest at the rate of 1.5% per month on the overdue amount, subject to written notice of such lateness and five (5) business days allowance thereafter to effect such late payment.

EXPORT COMPLIANCE: Seller agrees that it is responsible for required compliance with the import and export laws and regulations Canada, and those of any other jurisdiction or country as may be applicable, in its performance under the Purchase Order. Seller understands and acknowledges that (a) Buyer will rely on the information provided by Seller, including making a determination whether any Canadian or foreign export or import license is required for the export of the supplied materials to the country of destination; (b) Seller is responsible for compliance with local import and export control laws of any jurisdiction, and is responsible for compliance with applicable Canadian re- export laws; and (c) Seller shall be fully responsible for the accuracy and completeness of import and export documentation prepared or executed by Seller as part of Seller’s performance of the Purchase Order, including that required for the import of any materials used in the production or manufacture of the Goods and of any documents prepared by Seller’s employees, agents and brokers.

ENTIRE AGREEMENT: The Purchase Order shall constitute the entire agreement between Buyer and Seller and shall supersede all prior proposals, negotiations and counterproposals. The invalidity, in whole or in part, of any of the provisions of the Purchase Order shall not affect the remainder of such provisions or any other sections of the Purchase Order.

SURVIVAL: The provisions of the following Paragraphs of these Terms and Conditions shall survive any cancellation or termination of the Purchase Order: (Proprietary Information, Confidentiality and Advertising), (Warranties), (Indemnification), (Limitation on Actions and Buyer’s Liability), (Hazardous and Toxic Substances), (Patents, Trademarks and Copyrights), (Compliance with Laws and Standards), (Liens), and (Applicable Law and Venue).

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