TERMS, CONDITIONS, & REQ'S

TERMS, CONDITIONS,

& REQUIREMENTS

KORMACHINE

TERMS, CONDITIONS, & REQUIREMENTS

PAYMENT TERMS

PAYMENT IN ADVANCE: A PURCHASE ORDER OR PURCHASE ORDERS PLACED WITHIN A PERIOD OF TEN (10) BUSINESS DAYS, TOTALING OVER $70,000, AT THE DISCRETION OF KORMACHINE, MAY BE SUBJECT TO UP-TO 60% DOWN-PAYMENT PRIOR TO PROCESSING.

TERMS OF PAYMENT VIA CREDIT CARD: For the customer's convenience Kormachine does accept payment from all major credit cards. Due to transaction fee's, when paying with a valid credit card a 2% convenience fee will be added to the invoice and (if applicable) the 2% Net 10 discount is void. Standard payment terms still apply.

VENDOR REQUIREMENTS

Our organization reserves the right of final approval of product, procedures, processes and equipment. All special processes required by this PO must be performed by qualified personnel.

Our organization reserves the right to review and approve the Vendors Quality Management System. Standard QMS Requirements Include: Vendors providing special processing must maintain a system for validating processes. Customer Directed sources must operate in accordance with approved specifications and standards as dictated and controlled by the customer in question. Vendors initially approved for use via Certification (ISO9001, AS9100, AS9120, NADCAP, etc.) must notify our organization of any changes to that certification.

The Vendor shall maintain the proper identification and revision status of specifications, drawings, process requirements, inspection/verification instructions and other relevant technical data. Unless noted otherwise on the face of this order, the latest revision level is to be used. Our organization reserves the right to approve or specify any designs, tests, inspection plans, verifications, use of statistical techniques for product acceptance, and any applicable critical items including key characteristics. Our organization reserves the right to designate requirements for test specimens for design approval, inspection/verification, investigation or auditing.

The Vendor is required to: Notify our organization of nonconforming product. Obtain our organization approval for nonconforming product disposition. Prevent use of counterfeit parts. Notify our organization of changes in product and/or process, changes of vendors, and changes of manufacturing facility locations. Flow down to external providers all applicable requirements, including customer requirements. The Vendor is required to retain all Records associated with the Purchase Order for a period of no less than 7 years, unless otherwise specified.
As appropriate, provide material validation reports.

Right of access by our organization, our customer and regulatory authorities to the applicable areas of all facilities, at any level of the supply chain, involved in the order and to all applicable records.

All vendors providing Calibration Services must: Maintain Certification to ISO17025, ISO10012-1, ANSI Z540-1 (or equivalent) or be otherwise approved by our organization. Provide reporting of “As Found” and “As Left” status if the item is found to be out of tolerance. Identify Calibration Standards used. Utilize Calibration Standards traceable to NIST.

PURCHASE ORDER

THESE TERMS AND CONDITIONS (THESE “TERMS”) ARE INCORPORATED IN FULL INTO THE PURCHASE ORDER TO WHICH THEY ARE REFERENCED. BY EXECUTING OR ACCEPTING THE PURCHASE ORDER, SUPPLIER ACKNOWLEDGES THE RIGHTS AND RESTRICTIONS SET FORTH IN THESE TERMS AND AGREES TO BE BOUND BY SAME. ALL CAPITALIZED TERMS NOT DEFINED HEREIN SHALL HAVE THE MEANING ASCRIBED TO THEM IN THE PURCHASE ORDER. IN THE EVENT OF ANY CONFLICT BETWEEN THESE TERMS ANS THE PURCHASE ORDER, THESE TERMS AND CONDITIONS SHALL CONTROL.

ACCEPTANCE: The Purchase Order constitutes an offer by Kormachine, its personnel, representatives, and/or customers (hereinafter collectively referred to as “Kormachine”) for the purchase of certain materials, supplies, or products (collectively, “Products”) or services from Supplier and/or its sub-vendors (collectively referred to herein as “Supplier”), as specified in the Purchase Order. The Purchase Order will be deemed to have been accepted by Supplier upon the first of the following to occur: (1) Supplier making, signing, and delivering to Kormachine a written instrument acknowledging Supplier’s acceptance hereof, (2) any performance by Supplier under the Purchase Order, or (3) Supplier’s failure to notify Kormachine in writing that it does not accept the Purchase Order within three (3) days of Supplier’s receipt thereof. SUPPLIER ACKNOWLEDGES AND AGREES THAT THESE TERMS LIMIT SUPPLIER’S ACCEPTANCE OF THE PURCHASE ORDER TO THE MEANS SPECIFIED IN THESE TERMS AND THAT THESE TERMS EXPRESSLY EXCLUDE THE APPLICABILITY OF ANY OF SUPPLIER’S TERMS AND CONDITIONS OF SALE OR ANY OTHER TERMS ISSUED BY SUPPLIER IN CONNECTION WITH THE PURCHASE ORDER.

RIGHT OF ENTRY: During the course of the Purchase Order, Supplier agrees to allow Kormachine and applicable governing regulatory authorities to enter and inspect Supplier’s facilities at any level, times during which work ordered by Kormachine is in process or fabrication and at such other times Kormachine determines to be necessary in its sole discretion. Any records archived by Supplier at any level relating to Kormachine’s Purchase Orders must be made available to Kormachine and any relevant governing regulatory authorities as soon as reasonably practicable upon request.

MATERIALS TEST REPORTS: Kormachine requires a Materials Test Report (each a “Report”) and a Certificate of Conformity (each a “Certificate”) for all supplied metal parts and assemblies (including each component on any assemblies). The applicable Report and Certificate shall be attached to the Packing Slip accompanying each shipment pursuant to the Purchase Order. In the event certain parts or assemblies are constructed, assembled or fabricated from materials sourced from multiple heats; each new lot of parts or assemblies must be stamped with the correct, corresponding heat number.

PURCHASE ORDER RECEIPT: Upon issuance by Kormachine of a Request for Quote (each “RFQ”) or a Purchase Order Supplier agrees to deliver a receipt for the RFQ or Purchase Order, as the case may be, to Kormachine via email at: quotes@kormachine.com.

KORMACHINE’S NON-CONFORMING PRODUCTS: Supplier agrees to deliver written notice to Kormachine of any non-conforming Products purchased by Supplier from Kormachine within twenty-four (24) hours of Supplier’s discovery of such nonconformity, regardless of whether Supplier’s discovery thereof occurs prior to, during, or after Supplier’s receipt of the nonconforming material, supply or product.

SUPPLIER’S NON-CONFORMING PRODUCTS: Kormachine and Kormachine’s customers, as the case may be, reserve the right to disapprove and reject any Products purchased from or delivered by Supplier, including entire shipments thereof, which possess defective material and workmanship or do not conform to Kormachine’s provided specifications or instructions, as determined by Kormachine in its sole discretion. Kormachine agrees to inform Supplier of its rejection of any Products as soon as reasonably practicable. Upon receipt of notice from Kormachine of any such rejection, Supplier shall notify Kormachine as to whether Supplier desire for Kormachine to return the shipment or defective Products to Supplier’s facilities, or simply dispose of such Products at Kormachine’s facilities with seven (7) days of its receipt thereof. In the event that Supplier fails to so notify Kormachine within this time period, or requests that Kormachine dispose of such Products on behalf of Supplier, Kormachine shall have the right to dispose of the nonconforming Products and deliver an invoice to Supplier for any costs incurred by Kormachine in the disposal thereof; and Supplier agrees to tender all amounts owed under any such invoice within thirty (30) days of its delivery to Supplier. In the event Supplier requests the return of the nonconforming Products, Supplier agrees to issue Kormachine a Return Materials Authorization (“RMA”) corresponding to the original Purchase Order number, and Kormachine agrees to return the Products to Supplier, at Supplier’s sole risk and expense and at the full invoice price for the nonconforming Products, plus any transportation charges or other costs incurred by Kormachine in returning the Products to Supplier. No Products determined by Kormachine to be defective or non-conforming shall be replaced by Supplier without Kormachine’s prior written authorization.

INSPECTION: All Products purchased by Kormachine and supplied by Supplier will be subject to final inspection and approval by Kormachine after delivery Products to Kormachine. Upon delivery to Kormachine, Kormachine shall have the right to conduct internal testing procedures on the Products in its sole discretion, and Kormachine shall only be deemed to have accepted the Products after the successful completion thereof. Supplier acknowledges that payment will not be made or tendered to Supplier by Kormachine until the Products pass Kormachine’s tests and inspections.

PACKING AND SHIPMENT: All fabricated Products be received by Kormachine shall be free of dirt, oil and any other machined and/or fabricated residues or foreign matter, unless otherwise agreed in writing by Kormachine. Supplier agrees to include Kormachine’s Purchase Order Number on all correspondence between Kormachine and Supplier, including, but not limited to, packing slips and invoices. Supplier acknowledges that no partial shipments will be accepted by Kormachine without Kormachine’s prior written approval. Without limiting the generality of the foregoing, Supplier further agrees and acknowledges that:

Kormachine will provide specific packaging requirements to Supplier for certain Products to ensure consistency.
All machined Products must be specially packaged and marked, separately with the applicable Purchase Order Number and Part Number (derived from the Purchase Order), on an attached label with each parcel numbered 1 of 1, 1 of 2 and so forth.
Unless otherwise specified, Products being shipped shall arrive to Kormachine on 40”x48” pallets with the overall shipment weight not to exceed 1,000 lbs. per pallet and the maximum height not to exceed 40” per pallet. Products shall be packaged and shipped in boxes or containers of less than 50 lbs. each and in a manner to prevent damage to any exposed threads and/or machined surfaces.

Kormachine shall, at no additional cost, be permitted to retain Products furnished by Supplier in excess of the specified quantity or in excess of any allowable overage.

FREIGHT ON BOARD-DESTINATION (WACO): Unless otherwise specified by Kormachine in the applicable Purchase Order or RFQ, all Products shipped by Supplier are to be shipped F.O.B. Waco. The title and risk of loss and damage to the Products shall remain with Supplier until delivery thereof at Kormachine’s place of business. Supplier agrees and acknowledges that Kormachine shall not be required to serve any claims against any carrier of Products.

DELIVERY SCHEDULE; FORCE MAJEURE: Supplier shall strictly adhere to the shipment or delivery schedules specified in the applicable Purchase Order. In the event of any anticipated or actual delay in shipment or delivery of Products or in either Kormachine’s or Supplier’s performance under these Terms or a Purchase Order, neither party shall be liable or responsible to the other part for such delay or failure to perform that results from any cause beyond its reasonable control, including, but not limited to, a labor dispute, industry disturbance, fires, unusually severe weather conditions, earthquakes, floods, declared or undeclared war, epidemics, computer malfunctions, civil unrest, riots, lack of supplies, delay in transportation, governmental, regulatory or legal action, act of God. Without limiting the foregoing Kormachine shall not be liable or responsible for any delay in performing hereunder that result, directly or indirectly, from acts or omissions of Supplier, including, but not limited to, Supplier’s failure to: (i) promptly notify Kormachine in writing of the reasons for the delay and the actions being taken to overcome or minimize the delay; (ii) provide Kormachine with a written recovery schedule; (iii) if requested by Kormachine, ship the Products via air or other expedited routing, at no cost to Kormachine, to avoid or minimize delay to the maximum extent possible; or (iv) deliver the Products prior to the scheduled delivery date unless authorized in writing by Kormachine.

REPORTING: In the event Kormachine delivers an open Purchase Order for Products to Supplier, Supplier agrees to provide Kormachine with a weekly status report regarding the Purchase Order and the Products purchased thereunder (the “Status Report”), which shall be emailed to Kormachine at quotes@kormachine.com by 3:00 pm each Friday while the Purchase Order remains open. A copy of the required Status Report may be obtained from Kormachine via email at the forgoing email address.

SUPPLIER’S WARRANTIES: Supplier warrants to Kormachine that all Products furnished under the Purchase Order will: (i) be free from defects in materials and workmanship; (ii) conform to the applicable specifications, drawings, samples, or other descriptions provided or requested by Kormachine; (iii) be free form defects in design; and (iv) be free of defects in title. Supplier further expressly warrants that all services performed under this Purchase Order will be free form defects in workmanship. Supplier acknowledges and agrees that the foregoing warranties shall survive inspection, testing, delivery, acceptance of or payment by Kormachine of the Products or services, as the case may be.

TOOLING: Notwithstanding anything to the contrary herein, Supplier hereby acknowledges and agrees that any tooling, regardless of purpose, that is required and paid for by Kormachine, is and shall at all times remain the proprietary property of Kormachine. Supplier shall not obtain any ownership interest in any such proprietary property as a result of either party’s performance under the Purchase Order or these Terms. Upon the termination of expiration of the Purchase Order or these Terms for any reason, Supplier agrees that the tooling will be returned to Kormachine upon request.

TERMINATION: Notwithstanding anything herein to the contrary, Kormachine may terminate the Purchase Order, in whole or in part, for any reason, upon thirty (30) days written notice to Supplier (email included). Kormachine shall also have the right to terminate the Purchase Order immediately upon notice to Supplier in the event that Supplier becomes insolvent, commences or has commenced against it any bankruptcy, receivership, or reorganization proceedings, or is involved in an assignment for the benefit of Supplier’s creditors. In the event of Kormachine’s termination of the Purchase Order in accordance with this provision, Supplier acknowledges and agrees that its sole and exclusive remedy against Kormachine shall be for payment by Kormachine for the Products or services tendered or performed by Supplier prior to Kormachine’s termination of the Purchase Order.

INDEMNIFICATION: Supplier agrees to indemnify and hold harmless Kormachine, its parents, affiliates, and subsidiaries, their respective officers, directors, employees and representatives (collectively the “Indemnified Parties”) from and against any and all fines, claims, costs, expenses (including attorney’s fees and costs, expert fees and court costs), demands, damages, penalties and/or interest and costs of audit, actions, causes of action and other liabilities of every kind and nature, whether in contract, tort, equity or otherwise, whether statutory or common law (each a “Claim”) which the Indemnified Parties may suffer or incur, directly or indirectly as a result of: (a) the negligence or willful misconduct of Supplier; (b) the breach of the Purchase Order or these Terms by Supplier, including any breach of a representation or warranty set forth herein; or (c) the violation of any law or regulation by Supplier.

ASSIGNMENT: Neither these Terms nor any Purchase Orders may be assigned by Supplier without the prior written consent of Kormachine. Any attempted assignment of any rights, duties, or obligations hereunder by Supplier without such consent shall be void and of no legal effect.

SUCCESSORS AND ASSIGNS: These Terms shall apply to, be binding in all respects upon and inure to the benefit of the heirs, executors, personal representatives, successors and assigns of Kormachine and Supplier.

WAIVER: No waiver of any provision of these Terms will be effective unless it is in a writing signed by the relevant party, and no such waiver will constitute a waiver of any other provision(s) or of the same provision on another occasion.

GOVERNING LAW; FORUM FOR RESOLUTION OF DISPUTES: These Terms will be exclusively governed by and construed under the laws of the State of Texas, United States of America (except to the extent federal law is controlling on the subject matter), without application of its conflicts or choice of law rules. All disputes brought by either party arising under these Terms will be brought exclusively in a federal or state court of competent jurisdiction in Brazos County, as permitted by law, and each party hereby submits to the exclusive jurisdiction and venue in such courts and waives and waives any objection it may now or hereafter have to venue or to convenience of forum.

SEVERABILITY: If any provision of these Terms, or the application of any such provision to any person, entity or circumstance, is held to be unenforceable or invalid by any court of competent jurisdiction or under any applicable law, the validity and enforceability of the remaining provisions of these Terms shall not be affected thereby. Without limiting the foregoing, the covenants and obligations contained in these Terms shall be construed as separate covenants and obligations, covering their respective subject matters. Each breach of a covenant or obligation set forth in these Terms shall give rise to a separate and independent cause of action.

NO THIRD PARTY BENEFICIARIES: Except as set out herein, these Terms are for the benefit of, and shall be enforceable by, the parties only. These Terms are not intended to confer any right or benefit on any third party. No action may be commenced or prosecuted against a party by any third party claiming a s third-party beneficiary of these Terms.

ENTIRE AGREEMENT: These Terms, together with applicable Purchase Orders and the other documents incorporated by reference herein constitute the entire and final agreement between the parties with regard to the matters dealt with in these Terms, and supersedes all prior representation, negotiations, understandings and agreements, oral or written, between the parties, with respect thereto. These Terms may not be amended, supplemented, or otherwise modified except by written agreement executed by Kormachine and Supplier.

Date of Last Revision: 01/01/2018