GENERAL PURCHASE ORDER
TERMS AND CONDITIONS

Last Updated: February 7, 2019

The purchase of product(s) (“Products”) and services (“Services”) from the supplier stated on the Purchase Order (“Supplier”) by Brain Corporation, a California corporation, and/or any of its subsidiary or affiliated companies (“Brain”) are conditioned upon the following documents (listed in order of priority starting with the highest priority): (i) a mutually agreed and signed agreement; (ii) a purchase order provided by Brain (a “Purchase Order”); and/or (iii) these General Purchase Order Terms and Conditions (collectively, as applicable, the “Contract”). In the event of any conflict between the terms and conditions of the documents of the Contract, the document with the higher priority shall prevail. Buyer and Supplier are individually referred to herein as a “Party” and collectively as “Parties”.

1. Supply of Products and Services. Supplier shall supply to Brain the Products and Services at the pricing and quantity, along with any additional requirements, listed in the Contract pursuant to the terms and conditions provided in the Contract. Supplier shall supply the Products and Services pursuant to Brain’s directions and instructions and in accordance with any sample(s) of the Products that are provided to and approved by Brain. Supplier shall conduct in-process and final inspections and testing of the Products as mutually agreed upon by the Parties to ensure that the Products are manufactured in compliance with Brain’s directions and instructions. Supplier shall be responsible (whether done directly or through its third-party suppliers, contractors, or agents) for all manufacturing, packaging, labeling and transporting of the Products delivered by Supplier under this Contract. The manufacture, storage, packaging, labeling, and transportation of the Products shall be performed in a good and workmanlike manner and in compliance with all applicable laws, rules and regulations. Upon request by Brain, Supplier shall provide Brain with certification(s) stating its compliance status. Supplier will notify Brain immediately of any recall, product safety, or quality issues of any goods sold by Supplier that incorporate the Products, or any recall, product safety, or quality issues of the Products themselves. Supplier shall conduct appropriate drug screening and criminal background checks to any of its employees or subcontractors that will perform the Services for Brain. Supplier agrees that if any of its employees or subcontractors do not meet background qualifications, he/she shall not be assigned any Services under this Agreement. Supplier shall put commercially reasonable best efforts to fulfill all Services.

2. Acceptance. Any of the following acts by Supplier will constitute acceptance of the Contract: (i) electronic acceptance; (ii) acknowledgment of the Contract; (iii) commencement of performance or Supplier’s notice to Brain of commencement of performance; (iv) acceptance or fulfillment of a Purchase Order referencing the Contract or to which the Contract is attached. The Parties agree that the terms of the Contract shall prevail over any conflicting terms and conditions in any acknowledgment or other responsive document provided by the Supplier. Any additional or different terms or conditions in any acknowledgment or other instrument or response of the Supplier shall be deemed objected to by Brain without need of any further or additional notice of objection, and such additional or different term shall be of no effect or in any way binding upon Brain. A Purchase Order shall be deemed accepted by the Supplier unless the Supplier provides written notice of rejection within five (5) business days of its receipt of the Purchase Order.

3. Invoices and Payment Terms. Supplier shall send Brain invoices for the Products and Services. Undisputed invoices shall be due and payable within forty-five (45) days from the date of Brain’s receipt of the invoice. Payments due hereunder shall be made, at Brain’s option, by wire transfer, certified check, bank check or such other method as may be agreed upon by the Parties.

4. Shipments of Products.

a. Shipment Terms; Title and Risk of Loss. Supplier shall immediately notify Brain if Supplier has any reason to believe that any Products will not be delivered by the receipt date set forth in the Contract or if any shipment will not be made as scheduled. Unless otherwise agreed upon, shipment of Products under the Contract shall be F.O.B. destination. Supplier shall use its commercially reasonable best efforts to ship Products to Brain on or before the requested receipt date designated in the Contract. Any expense for any special packaging or any special delivery requested by Brain shall be borne by Brain. Supplier shall advise Brain regarding any such extraordinary packaging or delivery expenses in advance and Brain shall agree to same before incurring any liability for such expenses. Title and risk of loss will pass F.O.B. destination.

b. Time of the Essence. Supplier acknowledges that timely performance of Services and delivery of conforming Products for all Purchase Orders submitted by Brain to Supplier is of the essence.

c. Acceptance of Shipments. Brain shall have a reasonable number of days from the date of arrival of the shipment of the Products at the shipping location designated by Brain to inspect the Products and notify Supplier of any discrepancies with respect to shipments of the Contract, including, but not limited to any discrepancies in the quantity or quality of the Products. Brain shall notify Supplier of any such discrepancies within ten (10) business days of its inspection of the shipment. Any Products found to be defective or non-conforming shall be returned to Supplier, at Supplier’s expense, and Supplier will either credit Brain’s account for all amounts paid for the non-conforming Products or replace the returned Products.

5. Warranty.

a. Products. Supplier represents and warrants that the Products will (i) be owned by Supplier free and clear of any liens, claims or encumbrances; (ii) conform to all of Brain’s specifications, instructions and directions; (iii) be fit and sufficient for the purposes for which the Products were manufactured and sold to Brain; (iv) be new and merchantable; (v) be priced in manner not less favorable than other customers receive purchasing like products in comparable or less quantities, and (v) for a period of 1 year from the date of acceptance, be free from defects in design, material and workmanship.

b. Services. Supplier represents and warrants that the Services will be provided in a professional and workmanlike manner, consistent with applicable industry standards, but in no less than with a reasonable degree of care. Supplier further warrants the Services and workmanship thereof for a period of 1 year from the date of completion of the Services.

Upon any of Supplier’s breach of the foregoing warranties, Brain’s remedy will be either, at Brain’s option, (i) Supplier’s replacement of the deficient portion of the Products, or Supplier’s reperformance of the deficient portion of the Services, at no cost to Brain, (ii) Supplier’s reimbursement to Brain for the fee(s) paid to Supplier for the deficient portion of the Products or Services. Notwithstanding the foregoing, this paragraph does not limit Brain’s ability to exercise any other remedy to which Brain may be entitled to at law or in equity.

Supplier acknowledges and agrees that these representations and warranties shall survive the inspection, testing, acceptance and/or use of the Products by Brain, are provided for the benefit of Brain and its successors, assigns and end-users of the Products purchased hereunder by Brain, and are in addition to any warranties and remedies to which the Parties may otherwise agree upon, which are provided by law, or are contained in any of Supplier’s standard Products warranties that accompany the Products. Supplier shall be responsible for all liabilities, costs and expenses arising out of any failure of Supplier to meet the representations and warranties contained herein.

6. Work Made For Hire. Supplier expressly acknowledges and agrees that any work prepared by Supplier under this Contract shall be considered “work made for hire” under U.S. Copyright Law, and Supplier herby assigns to Brain all of its right, title, and interest in and to such work. Supplier shall execute and deliver to Brain any instruments of transfer and take such other action that Brain may reasonably request, including without limitation, executing and filing, at Brain’s expense, copyright applications, assignments, and other documents required for the protection of Brain’s rights to such materials.

7. Confidentiality. All confidential or proprietary information of Brain, including but not limited to, specifications, samples, patterns, designs, plans, drawings, documents, data, business operations, customer lists, pricing, discounts or rebates, disclosed by Brain to Supplier, whether disclosed orally, or visually, or disclosed or accessed in written, electronic or other form or media, and whether or not marked, designated or otherwise identified as "confidential" in connection with the Contract is confidential, solely for the purpose of performing the Contract and may not be disclosed or copied or used for any purpose other than the fulfillment of Supplier’s obligations under the Contract unless authorized in advance by Brain in writing (which authorization may be granted or withheld by Brain in its sole discretion). Upon Brain's request, Supplier shall promptly return all documents and other materials received from Brain. Brain shall be entitled to injunctive relief for any violation of this Section. Notwithstanding the terms herein, if Supplier has previously executed a non-disclosure contract with Brain (the “NDA”) it shall remain in full-force and effect and in the event of any conflict between the terms of this Contract and the NDA, the terms and conditions of this Contract shall control.

8. Indemnification.

a. Supplier’s Indemnity Obligations for Intellectual Property Infringement. Supplier agrees to defend, indemnify and hold harmless Brain from and against any and all third-party losses, damages, suits, expenses (including reasonable attorneys’ fees) and costs (collectively “Infringement Claims”) alleging that the Products sold to Brain infringe any intellectual property rights, including rights associated with any patent, trademark, trade secret, and/or copyright. If the use or sale of any Products furnished under the Contract is enjoined as a result of an Infringement Claim, Supplier shall, at its own expense, either obtain on behalf of Brain the right to continue to use or sell such Products, substitute an equivalent Products reasonably acceptable to Brain in its place, or reimburse Brain the purchase price of such Products.

b. Supplier’s Additional Indemnity Obligations. Supplier hereby agrees to defend, indemnify and hold harmless Brain, its subsidiaries, parents and affiliates and their officers, directors, shareholders, agents, servants and employees from and against all third party claims, losses, damages, suits, expenses (including reasonable attorneys’ fees) and costs (collectively “Claims”) in connection with or arising out of (i) any failure of Supplier to manufacture, test, assemble, package, store, ship and deliver the Products, and perform the Services in accordance with Brain’s specifications and instructions, (ii) any defects in any Products sold by Supplier to Brain, (iii) Supplier breach of any of its representations, warranties or obligations contained in the Contract; (iv) any negligent act or omission, willful misconduct or fraud of Supplier or its subcontractors or agents, (v) Supplier’s failure to fully conform to all laws, ordinances, rules and regulations which affect the Products; or (vi) any inaccurate, erroneous or incomplete NAFTA Certifications, country of origin information, or export control classification numbers supplied to Brain for Products furnished by Supplier under the Contract. This indemnification shall be in addition to any warranty obligations of Supplier.

c. Procedures for Indemnification. Promptly after receipt of any written claim or notice of any action giving rise to a claim for indemnification as described in Section 8.a. and 8.b., Brain will provide Supplier with written notice of the claim or action. Brain will provide Supplier with reasonable cooperation and assistance in the defense or settlement of any Claim, and grant Supplier control over the defense and settlement of the same, provided that Brain shall be entitled to participate in the defense of the Claim and to employ counsel at its own expense to assist in the handling of the claim. Supplier shall not agree to any settlement which results in an admission of liability by Brain without Brain’s prior written consent, which consent shall not be unreasonably withheld or delayed. If Supplier fails to assume the defense of any Claim, or does not diligently pursue such defense, Brain may retain counsel and assume the defense of such Claim at the cost of the Supplier, and in that case, Supplier shall reimburse Brain for all of its reasonable attorneys’ fees, costs and damages incurred in settling or defending such claims within thirty (30) days of each of Brain’s written requests.

9. Insurance. During the term of the Contract and for a period of twelve months thereafter, Supplier shall, at its own expense, maintain and carry insurance which includes, but is not limited to, commercial general liability (including Products liability), automotive, and employment liability in a sum no less than one million USD per occurrence and two million USD in aggregate, with financially sound and reputable insurers. Supplier Upon Brain’s request, Supplier shall provide Brain with a certificate of insurance from Supplier's insurer evidencing the insurance coverage specified in this paragraph. The certificate of insurance shall name Brain as an additional insured.

10. Non-Solicitation. Supplier will not, during the performance of this Contract and for a period of one (1) year following any termination, solicit or in any manner encourage employees or consultants of Brain to leave its employment with Brain.

11. Termination. Brain may cancel any Contract, in whole or in part, at any time and for any reason. In the event of such cancellation, Supplier will immediately stop all work on that Contract and notify its suppliers or subcontractors to stop work. Brain will pay Supplier a reasonable termination charge reflecting the percentage of the work performed prior to the notice of cancellation, plus actual documented direct costs resulting from the cancellation, but less amounts saved by Supplier as a result of the cancellation or recoverable by Supplier in mitigation of its damages. Brain will not pay Supplier for any work done after receipt of the notice of cancellation or for any costs incurred by Supplier’s suppliers or subcontractors which could have reasonably avoided. Any payment under this provision will not be deemed to waive of any of Brain’s other rights. Cancellation of the Contract for any reason shall not discharge either Party's liability for obligations incurred hereunder and amounts unpaid at the time of such termination. Brain shall be responsible for the payment of any delivered Products that were shipped to Brain prior to termination.

12. General.

a. Force Majeure. Neither Party shall be liable hereunder for any failure or delay in the performance of its obligations under the Contract, if such failure or delay is on account of causes beyond its reasonable control, including civil commotion, war, fires, floods, accident, earthquakes, inclement weather, telecommunications line failures, electrical outages, network failures, governmental regulations or controls, casualty, strikes or labor disputes, terrorism, acts of God, or other similar or different occurrences beyond the reasonable control of the Party so defaulting or delaying in the performance of the Contract, for so long as such force majeure event is in effect. Each Party shall use reasonable efforts to notify the other Party of the occurrence of such an event within five (5) business days of its occurrence. Should a Party experience a force majeure event, it shall take all reasonable measures to mitigate any impact that such event has on its performance of the Contract, and shall take all reasonable steps to perform despite such event. If Supplier’s performance is delayed over thirty (30) days, Brain may terminate the Contract.

b. Compliance with Laws. Supplier represents, warrants and covenants that it shall comply with all applicable international, national, state, regional and local laws and regulations with respect to performance of the Services, the manufacture, sale, handling, and disposal of any Products subject to the Contract and its performance of the Contract.

c. Governing Law and Venue. The Contract shall be governed by the laws of the State of California without regard to its conflict of laws provisions. Any controversy or claim arising out of or relating to the Contract, or the breach thereof, shall be settled by arbitration administered by the American Arbitration Association in accordance with its Commercial Arbitration Rules and judgment on the award rendered by the arbitrator(s) may be entered in any court having jurisdiction thereof. Claims shall be heard by a single arbitrator, unless the claim amount exceeds $500,000, in which case the dispute shall be heard by a panel of three arbitrators. The place of arbitration shall be San Diego, California. The arbitration shall be governed by the laws of the State of California. Hearings will take place pursuant to the standard procedures of the Commercial Arbitration Rules that contemplate in person hearings. The standard provisions of the Commercial Rules shall apply. Arbitrators will have the authority to allocate the costs of the arbitration process among the Parties, but will only have the authority to allocate attorneys' fees if a particular law permits them to do so. Except as may be required by law, neither a party nor an arbitrator may disclose the existence, content, or results of any arbitration hereunder without the prior written consent of both Parties. The Parties agree that failure or refusal of a Party to pay its required share of the deposits for arbitrator compensation or administrative charges shall constitute a waiver by that Party to present evidence or cross-examine witness. In such event, the other Party shall be required to present evidence and legal argument as the arbitrator(s) may require for the making of an award. Such waiver shall not allow for a default judgment against the non-paying Party in the absence of evidence presented as provided for above. Notwithstanding the foregoing, the Parties agree that each Party shall still be allowed to apply for injunctive remedies (or an equivalent type of urgent legal relief) in any jurisdiction.

d. Supplier’s Representations and Warranties. Supplier represents and warrants to Brain that (i) Supplier is duly formed, duly organized, validly existing, and in good standing under the laws of the state of its corporate domicile and is authorized to do business in each jurisdiction in which it conducts its business; (ii) its sale of Products and Services under the Contract does not violate any existing obligations or contracts of the Supplier; (iii) it has the full legal right, power, and authority to enter into and perform the Contract and that all requisite corporate and other approvals have been obtained; and (iv) there are no pending or threatened actions or proceedings or government investigations against it that may affect its performance of the Contract.

e. Assignment. Supplier will not transfer, assign, or sublicense any of its rights, obligations or interests under these terms and conditions without Brain’s prior written consent. Supplier is responsible for subcontractor’s noncompliance with these terms and conditions and will obtain a signed agreement from each subcontractor binding the subcontractor to these terms and conditions Brain will not be liable for any damages and costs caused by Supplier’s failure to pay a subcontractor.

f. Independent Contractors. The Parties are independent contractors to each other with respect to each and every aspect of the Contract. Neither Party shall incur any obligations for or in the name of the other Party, or have the authority to bind or obligate the other Party.

g. Severability. If any provision or portion of the Contract shall be held by a court of competent jurisdiction to be illegal, invalid, or unenforceable, the remaining provisions or portions shall remain in full force and effect.

h. Headings; Construction. The headings/captions appearing in the Contract have been inserted for the purposes of convenience and ready reference, and do not purport to and shall not be deemed to define, limit or extend the scope or intent of the provisions to which they appertain.

i. Survival. Each term and provision of the Contract that should by its sense and context survive any termination or expiration of the Contract, shall so survive regardless of the cause and even if resulting from the material breach of either Party to the Contract. Notwithstanding the foregoing, Sections 5, 7, 8, and 11, together with any outstanding payment obligation, shall survive termination of the Contract.

j. Notice. All notices, requests, claims, and other communications hereunder (each, a "Notice") shall be in writing and addressed to the parties at the addresses set forth on the face of the Contract or to such other address that may be designated by the receiving party in writing. All Notices shall be delivered by personal delivery, nationally recognized overnight courier, facsimile, or certified or registered mail. Except as otherwise provided in the Contract, a Notice is effective only upon receipt of the receiving party.

k. Waiver. No waiver of any term or right in the Contract shall be effective unless in writing, signed by an authorized representative of the waiving Party. The failure of either Party to enforce any provision of the Contract shall not be construed as a waiver or modification of such provision, or impairment of its right to enforce such provision or any other provision of the Contract thereafter.

l. Entire Contract; Modification. The Contract (including any attached Exhibits as applicable) is the entire contract between the Parties with respect to the subject matter hereof and supersedes any prior contract or communications between the Parties, whether written, oral, electronic or otherwise. No change, modification, amendment, or addition of or to the Contract or any part thereof shall be valid unless in writing and signed by an authorized representative of the Parties. Each Party hereto has received independent legal advice regarding the Contract and their respective rights and obligations set forth herein. The Parties acknowledge and agree that they are not relying upon any representations or statements made by the other Party or the other Party’s employees, agents, representatives or attorneys regarding the Contract, except to the extent such representations are expressly set forth in the Contract.

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