Purchase Order Terms and Conditions
1. ACCEPTANCE:
Acceptance of any ArQule purchase order (a “Purchase Order”) referencing and incorporating the ArQule General Terms and Conditions is expressly limited to the terms and conditions set forth herein (the “ArQule Terms”). ArQule shall not be bound by any terms or conditions of Supplier’s order acknowledgement or acceptance forms, invoices, counter offers or other documents which propose any terms or conditions in addition to or differing from the ArQule Terms irrespective of whether any of the same are in written or electronic form, and objection is hereby made to any such terms and conditions of Supplier. ArQule’s failure subsequently to object to such terms and conditions contained in Supplier’s documents shall not be deemed a waiver of any of the ArQule Terms, which shall constitute the entire agreement between the parties. No amendment, deletion, supplement or change in the ArQule Terms shall be binding upon ArQule unless separately and specifically approved by a duly authorized officer of ArQule in a written amendment to the ArQule Terms signed by hand in ink.
2. PRICE:
Prices shall be firm and not subject to adjustment or variation. Supplier warrants that the prices herein specified are as low as any net prices now given by Supplier to any other customer for goods or services of like grade and quality in like quantities, and Supplier agrees that if at any time during the pendency of an applicable Purchase Order lower net prices are quoted under similar conditions, said lower net prices shall be from that time substituted for the prices in such Purchase Order. Supplier agrees that any price reductions made in the goods or services covered by such Purchase Order subsequent to its acceptance but prior to payment thereof will be applicable to such Purchase Order.
3. SHIPPING AND BILLING:
Supplier agrees: (a) to properly pack, mark and ship goods in accordance with the requirements of ArQule, the involved carriers, and, if applicable, the country of destination; (b) to route shipments in accordance with ArQule’s instructions; (c) to make no charge for handling, packaging, storage or transportation of goods, unless otherwise stated as an item on the relevant Purchase Order; (d) to provide with each shipment packing slips with ArQule’s Purchase Order and/or release number and date of shipment marked thereon; (e) to properly mark each package with a label/tag according to ArQule’s instructions; and (f) to promptly forward the original bill of lading or other shipping receipt for each shipment in accordance with ArQule’s instructions. Supplier will include on bills of lading or other shipping receipts correct classification and identification of the goods shipped in accordance with ArQule’s instructions and the carrier’s requirements. The marking on each package and identification of the goods on packing slips, bills of lading and invoices (when required) shall be sufficient to enable ArQule to identify the goods purchased. Payment terms are set forth in the relevant Purchase Order and the date payment is due is calculated from the date goods are received or performance of services is completed, as appropriate. ArQule may withhold payment pending receipt of evidence, in such form and detail as ArQule may direct, of the absence of any liens, encumbrances and claims on the goods or services acquired by ArQule under the ArQule Terms.
4. DELIVERY SCHEDULES:
Time is of the essence, and deliveries of goods and performance of services shall be made both as specified in ArQule’s schedules. ArQule shall not be required to make payment for goods delivered to ArQule that are in excess of quantities specified in ArQule’s delivery schedules. ArQule may change the rate of scheduled shipments or direct temporary suspension of scheduled shipments, neither of which shall entitle Supplier to a modification of the price for goods or services. Where quantities and/or delivery schedules are not specified, Supplier shall deliver goods in such quantities and times as ArQule may otherwise direct.
5. PREMIUM SHIPMENTS:
If Supplier’s acts or omissions result in Supplier’s failure to meet ArQule’s delivery requirements as originally communicated to Supplier and ArQule requires a more expeditious method of transportation for the goods than the transportation method originally specified by ArQule, Supplier shall ship the goods as expeditiously as possible at Supplier’s sole expense.
6. CHANGES:
ArQule reserves the right at any time to direct changes, or cause Supplier to make changes, to drawings and specifications of goods or to otherwise change the scope of the work covered by a Purchase Order including work with respect to such matters as inspection, testing or quality control, and Supplier agrees to promptly make such changes. Any difference in price or time for performance resulting from such changes shall be equitably adjusted by ArQule after receipt of documentation in such form and detail as ArQule may direct. Any such changes to ArQule’s Terms shall be made in conformance with the formal requirements of Section 1.
7. SUPPLIER QUALITY AND DEVELOPMENT; INSPECTION:
Supplier shall comply with all quality requirements and procedures specified by ArQule, as revised from time to time. In addition, ArQule shall have the right to enter Supplier’s facility at reasonable times to inspect the facility, goods, materials and any property of ArQule covered by a Purchase Order. ArQule’s inspection of goods, whether during manufacture, prior to delivery or within a reasonable time after delivery, shall not constitute acceptance of any work-in-process or finished goods.
8. NONCONFORMING GOODS:
Supplier acknowledges that ArQule may not perform incoming inspections of goods, and waives any rights to require ArQule to conduct such inspections. To the extent ArQule rejects goods as nonconforming, the quantities under a Purchase Order will automatically be reduced unless ArQule otherwise notifies Supplier. Supplier will not replace quantities so reduced without a new Purchase Order or an amendment to the existing Purchase Order. Nonconforming goods will be held by ArQule in accordance with Supplier’s instructions at Supplier’s risk. Supplier’s failure to provide written instructions within 10 days, or such shorter period as may be commercially reasonable under the circumstances, after notice of nonconformity shall entitle ArQule, at ArQule’s option, to charge Supplier for storage, handling or disposal of the goods without liability of ArQule to Supplier. Payment for nonconforming goods shall not constitute an acceptance of them, limit or impair ArQule’s right to assert any legal or equitable remedy, or relieve Supplier from responsibility for latent defects.
9. WARRANTY:
Supplier warrants and guarantees that goods covered by a Purchase Order shall conform to applicable specifications, drawings, samples, or descriptions furnished to or by ArQule, and shall be merchantable, of good material and workmanship and free from any defect. In addition, Supplier acknowledges that Supplier knows of ArQule’s intended use and warrants and guarantees that all such goods that have been selected, designed, manufactured or assembled by Supplier based upon ArQule's stated use shall be fit and sufficient for the particular purposes intended by ArQule. The warranty period shall be that provided by applicable law, except that if Supplier offers a longer warranty to its customers for such goods, such longer period shall apply. Seller warrants and guarantees that services covered by a Purchase Order shall conform to specifications or descriptions furnished to or by ArQule and shall be performed in a timely, expert and professional manner in accordance with applicable industry standards.
10. INGREDIENTS DISCLOSURE; SPECIAL WARNINGS AND INSTRUCTIONS:
If requested by ArQule, Supplier shall promptly furnish to ArQule in such form and detail as ArQule may direct: (a) a list of all ingredients in goods; (b) the amount of all ingredients; and (c) information concerning any changes in or additions to such ingredients. Prior to and with the shipment of goods, Supplier agrees to furnish to ArQule sufficient warning and notice in writing (including material safety data sheets and appropriate labels on the goods, containers and packing) of any hazardous material that is an ingredient or a part of any goods, together with such special handling instructions as may be necessary to advise carriers, ArQule, and their respective employees of how to exercise that measure of care and precaution that will best prevent bodily injury or property damage in the handling, transportation, processing, use or disposal of goods, containers and packing shipped to ArQule.
11. INSOLVENCY:
ArQule may immediately terminate any Purchase Order without liability to Supplier if any of the following or any other comparable events occurs: (a) insolvency of Supplier; (b) filing of a voluntary petition in bankruptcy by Supplier; (c) filing of any involuntary petition in bankruptcy against Supplier; (d) appointment of a receiver or trustee for Supplier; or (e) execution of an assignment for the benefit of creditors by Supplier, provided that such petition, appointment or assignment is not vacated or nullified within 15 days of such event. Supplier shall reimburse ArQule for all costs incurred by ArQule in connection with any of the foregoing, including, but not limited to, all attorneys’ or other professional fees and expenses.
12. TERMINATION FOR BREACH OR NONPERFORMANCE:
ArQule reserves the right to terminate all or any part of any Purchase Order, without liability to Supplier, if Supplier: (a) repudiates or breaches any of the terms of such Purchase Order, including Supplier’s warranties; (b) fails to perform services or deliver goods as specified by ArQule; (c) fails to make progress thus endangering timely and proper completion of services or delivery of goods; and does not correct such failure or breach within 10 days (or such shorter period of time if commercially reasonable under the circumstances) after receipt of written notice from ArQule specifying such repudiation, breach or failure.
13. TERMINATION OF CONVENIENCE:
In addition to any other rights of ArQule to terminate such Purchase Order, ArQule may, at its option, immediately terminate all or any part of such Purchase Order, at any time and for any reason, by giving written notice to Supplier. Upon such termination, ArQule shall pay to Supplier the following amounts without duplication: (a) the price for all goods delivered or accepted or services that have been completed in accordance with such Purchase Order and not previously paid for; and (b) the actual costs of work-in-process and raw materials incurred by Supplier in furnishing the goods or services under such Purchase Order to the extent such costs are reasonable in amount and are properly allocable or apportionable under generally accepted accounting principles to the terminated portion of such Purchase Order; less, however, the sum of the reasonable value or cost (whichever is higher) of any goods or materials used or sold by Supplier with ArQule’s written consent, and the cost of any damaged or destroyed goods or material. ArQule will make no payments for finished goods, work-in-process or raw materials fabricated or procured by Supplier in amounts in excess of those authorized in delivery releases nor for any undelivered goods that are in Supplier’s standard stock or that are readily marketable. Payments made under this Section shall not exceed the aggregate price payable by ArQule for finished goods that would be produced by Supplier under delivery or release schedules outstanding at the date of termination. Except as provided in this Section, ArQule shall not be liable for and shall not be required to make payments to Supplier, directly or on account of claims by Supplier’s subcontractors, for loss of anticipated profit, unabsorbed overhead, interest on claims, product development and engineering costs, facilities and equipment rearrangement costs or rental, unamortized depreciation costs, or general and administrative burden charges from termination of a Purchase Order. Within 60 days from the effective date of termination, Supplier shall submit a comprehensive termination claim to ArQule, with sufficient supporting data to permit ArQule’s audit, and shall thereafter promptly furnish such supplemental and supporting information as ArQule shall request. ArQule or its agents shall have the right to audit and examine all books, records, facilities, work, material, inventories and other items relating to any termination claim of Supplier.
14. INTELLECTUAL PROPERTY:
Supplier shall defend, hold harmless and indemnify ArQule, its officers, directors and stockholders against any claims of infringement (including patent, trademark, copyright, industrial design right, or other proprietary right, or misuse or misappropriation of trade secret) and resulting damages and expenses (including attorneys’ and other professional fees and expenses) arising in any way in relation to goods or services provided to ArQule, including such claims where Supplier has provided only part of the goods or services; Supplier expressly waives any claim against ArQule that such infringement arose out of compliance with ArQule’s specifications. ArQule has the right to repair, reconstruct, or rebuild goods delivered under any Purchase Order without payment of any royalty to Supplier. Goods manufactured based on ArQule’s drawings and/or specifications may not be used for Supplier’s own use or sold to third parties without ArQule’s express written authorization. To the extent that a Purchase Order is issued for the creation of copyrightable works, the works shall be considered “works made for hire”; to the extent that the works do not qualify as “works made for hire,” Supplier hereby assigns to ArQule all right, title and interest in all copyrights and moral rights therein.
15. TECHNICAL INFORMATION DISCLOSED TO BUYER:
Supplier agrees not to assert any claim (other than a claim for patent infringement) with respect to any technical information that Supplier shall have disclosed or may hereafter disclose to ArQule in connection with the goods or services covered by a Purchase Order.
16. INDEMNIFICATION:
If Supplier performs any services on ArQule’s premises or utilizes the property of ArQule, whether on or off ArQule’s premises, Supplier shall indemnify and hold ArQule, its officers, directors, employees and stockholders harmless from and against any liability, claims, demands or expenses (including attorneys’ and other professional fees and expenses) for damages to the property of ArQule or injuries (including death) to its employees or any other person arising from or in connection with Supplier’s performance of services or use of ArQule’s property, except for such liability, claim, or demand arising out of the sole negligence of ArQule.
17. INSURANCE:
Supplier shall maintain insurance coverage with carriers acceptable to ArQule in commercially reasonable amounts. Supplier shall furnish to ArQule either a certificate showing compliance with these insurance requirements or certified copies of all insurance policies within 10 days of ArQule’s written request. The certificate will provide that ArQule will receive 30 days’ prior written notice from the insurer of any termination or reduction in the amount or scope of coverage. Supplier’s furnishing of certificates of insurance or purchase of insurance shall not release Supplier of its obligations or liabilities under any Purchase Order.
18. SUPPLIER’S PROPERTY:
Unless otherwise agreed to by ArQule, Supplier, at its expense, shall furnish, keep in good condition, and replace when necessary all machinery, equipment, tools, jigs, dies, gauges, fixtures, molds, patterns and other items ("Supplier’s Property") necessary for the production of goods purchased by ArQule. Supplier shall insure Supplier’s Property with full fire and extended coverage insurance for its replacement value. Supplier grants ArQule an irrevocable option to take possession of and title to Supplier’s Property that is special for the production of the goods upon payment to Supplier of its net book value less any amounts that ArQule has previously paid to Supplier for the cost of such items; provided, however, that this option shall not apply if Supplier’s Property is used to produce goods that are the standard stock of Supplier or if a substantial quantity of like goods are being sold by Supplier to others.
19. BUYER’S PROPERTY:
All supplies, materials, tools, jigs, dies, gauges, fixtures, molds, patterns, equipment and other items furnished by ArQule, either directly or indirectly, to Supplier in connection with any Purchase Order, or for which Supplier has been reimbursed by ArQule (“ArQule’s Property”), shall be and remain the property of ArQule and held by Supplier on a bailment basis. Supplier shall bear the risk of loss of and damage to ArQule’s Property. ArQule’s Property shall at all times be properly housed and maintained by Supplier at its expense, shall not be used by Supplier for any purpose other than the performance of a Purchase Order; shall be deemed to be personalty; shall be conspicuously marked by Supplier as the property of ArQule; shall not be commingled with the property of Supplier or with that of a third person; shall not be used for any third party; and shall not be moved from Supplier’s premises without ArQule’s prior written approval. ArQule shall have the right to enter Supplier’s premises at all reasonable times to inspect ArQule’s Property and Supplier’s records with respect thereto. Upon the request of ArQule, ArQule’s Property shall be immediately released to ArQule or delivered to ArQule by Supplier, either (i) F.O.B. Supplier’s plant, properly packed and marked in accordance with the requirements of the carrier selected by ArQule to transport such property, or (ii) to any location designated by ArQule, in which event ArQule shall pay to Supplier the reasonable costs of delivering such property to such location. To the extent permitted by law, Supplier waives any lien or other rights that Supplier might otherwise have on any of ArQule’s Property for work performed on such property or otherwise.
20. REMEDIES:
The rights and remedies reserved to ArQule under any Purchase Order shall be cumulative with, and additional to, all other or further remedies provided in law or equity. Without limiting the foregoing, should any goods fail to conform to the warranties set forth in Section 9, ArQule shall notify Supplier and Supplier shall, if requested by ArQule, reimburse ArQule for any incidental and consequential damages caused by such nonconforming goods, including, but not limited to, costs, expenses and losses incurred by ArQule: (a) in inspecting, sorting, repairing or replacing such nonconforming goods; (b) resulting from production interruptions, (c) in conducting corrective service actions; and (d) from claims for personal injury (including death) or property damage caused by such nonconforming goods. If requested by ArQule, Supplier will enter into a separate agreement for the administration or processing of warranty chargebacks for nonconforming goods.
21. CUSTOMS; EXPORT CONTROLS:
Credits or benefits resulting or arising from any Purchase Order, including trade credits, export credits or the refund of duties, taxes or fees, shall belong to ArQule. Supplier shall provide all information necessary (including written documentation and electronic transaction records) to permit ArQule to receive such benefits or credits, as well as to fulfill its customs-related obligations, origin marking or labeling requirements and local content origin requirements, if any. Export licenses or authorizations necessary for the export of goods shall be the responsibility of Supplier unless otherwise indicated in a Purchase Order, in which event Supplier shall provide such information as may be necessary to enable ArQule to obtain such licenses or authorization(s). Supplier shall undertake such arrangements as may be necessary for goods to be covered by any duty deferral or free trade zone program(s) of the country of import.
22. SETOFF/RECOUPMENT:
In addition to any right of setoff or recoupment provided by law, all amounts due to Supplier shall be considered net of indebtedness of Supplier and its affiliates or subsidiaries to ArQule and its affiliates or subsidiaries; and ArQule shall have the right to setoff against or to recoup from any amounts due to Supplier and its affiliates or subsidiaries any amounts owed from ArQule and its affiliates or subsidiaries.
23. NO ADVERTISING:
Supplier shall not, without first obtaining the written consent of ArQule, in any manner advertise or publish the fact that Supplier has contracted to furnish ArQule goods or services covered by any Purchase Order, or use any trademarks or trade names of ArQule in Supplier’s advertising or promotional materials.
24. COMPLIANCE WITH LAWS:
Supplier, and any goods or services supplied by Supplier, shall comply with all applicable laws, rules, regulations, orders, conventions, ordinances or standards that relate to the manufacture, performance, labeling, transportation, importation, exportation, licensing, approval or certification of goods or services, including, but not limited to, those relating to environmental matters, wages, hours and conditions of employment, subcontractor selection, discrimination, occupational health and safety and motor vehicle safety. By delivering the goods or services covered by a Purchase Order, Supplier certifies compliance with the foregoing. Supplier shall indemnify and hold ArQule, its officers, directors, employees and shareholders harmless from and against any liability claims, demands or expenses (including attorneys’ or other professional fees and expenses) arising from or relating to Supplier’s noncompliance.
25. NO IMPLIED WAIVER:
The failure of Supplier or ArQule at any time to require performance by the other party of any provision of any Purchase Order shall in no way affect the right to require such performance at any time thereafter, nor shall the waiver of either party of a breach of any provision of any Purchase Order constitute a waiver of any succeeding breach of the same or any other provision.
26. NON-ASSIGNMENT:
Supplier may not, in whole or in part, assign its rights or delegate its obligations under any Purchase Order without ArQule’s prior written consent.
27. RELATIONSHIP OF PARTIES:
Supplier and ArQule are independent contracting parties and nothing in any Purchase Order shall make either party the agent or legal representative of the other for any purpose whatsoever, and nothing in any Purchase Order shall grant either party any authority to assume or to create any obligation on behalf of or in the name of the other.
28. GOVERNING LAW; JURISDICTION:
A Purchase Order is to be construed according to the laws of the Commonwealth of Massachusetts, excluding any conflict of law provisions that would require application of another choice of law. In addition, the provisions of the United Nations Convention on Contracts for the International Sale of Goods shall not apply to any Purchase Order. Any action proceeding by ArQule against Supplier may be brought by ArQule in any court having jurisdiction over Supplier or, at ArQule’s option, in the federal or state court of Massachusetts, in which event Supplier consents to jurisdiction and service of process in accordance with the applicable procedures of such courts. Any actions or proceedings by Supplier against ArQule may be brought by Supplier only in the federal or state courts of Massachusetts.
29. SEVERABILITY:
If any term of any Purchase Order is invalid or unenforceable under any statute, regulation, ordinance, executive order or other rule of law, such term shall be deemed reformed or deleted, as the case may be, but only to the extent necessary to comply with such statute, regulation, ordinance, order or rule, and the remaining provisions of such Purchase Order shall remain in full force and effect.
30. ENTIRE AGREEMENT:
Each Purchase Order, together with the attachments, exhibits, supplements or other terms of ArQule specifically referenced in such Purchase Order, constitute the entire agreement between Supplier and ArQule with respect to the subject matter to which such Purchase Order relates and shall supersede all prior oral or written representations and agreements with respect to such subject matter.
Revised: March 3, 2005