GENERAL PURCHASE ORDER TERMS AND CONDITIONS

The following provisions with their terms and conditions become part of the purchase order when specified in the purchase order. Compliance with the provisions of these clauses in no way relieves the Supplier from furnishing acceptable supplies or services as specified in the purchase document.

As used herein, “Seller” includes Seller, its subsidiaries and affiliates; “LMI” means LMI Technologies Inc.

Seller and LMI hereby agree as follows:

1. SERVICES & DELIVERABLES

Seller agrees to perform the services (“Services”) and/or provide the goods (and any services ancillary thereto) (collectively referred to as “Goods”), described in the purchase order to which these Purchase Order Terms and Conditions are attached or referenced, in accordance with the applicable purchase order, scope of work described in the applicable purchase order and with these Purchase Order Terms and Conditions (collectively, this “Agreement”). Upon acceptance of a purchase order, shipment of Goods or commencement of Services, Seller will be bound by the provisions of this Agreement.

This Agreement does not constitute an irrevocable offer by LMI and may be revoked at any time by LMI prior to acceptance by Seller. Any terms or conditions contained in any acknowledgment, invoice or other communication of Seller, which are inconsistent with this Agreement, are hereby acknowledged by Seller as being without effect. LMI hereby reserves the right to reschedule any delivery or cancel any purchase order issued at any time and be liable only for that material and labour actually incurred in the performance of the work as of the date of cancellation. Notwithstanding the foregoing and unless stated otherwise in the Agreement LMI may reschedule or cancel (in whole or part) the purchase order without any charges or other fees as a result of such cancellation provided it gives 30 (thirty) calendar days’ notice to the Seller prior to the delivery date identified on the purchase order for the Goods.

2. DELIVERY 

Time is of the essence. Goods must be consigned to the destination specified in this Agreement and, except as otherwise stated herein, delivered per the Incoterm and delivery date(s) stated on the purchase order at LMI’s designated premises per Incoterms 2010. LMI reserves the right to return, shipping charges collect, all Goods received earlier than one week in advance of the delivery schedule. In the event Seller fails to deliver the Goods within the time specified, LMI may, at its option, decline to accept the Goods and terminate this Agreement without penalty or may demand its allocable fair share of Seller’s available Goods and terminate the balance of the Agreement without penalty. Acknowledgment of delivery of Goods by LMI will not constitute acceptance. Seller will package all Goods in suitable containers to permit safe transportation and handling. Each delivered container must be labeled and marked to identify contents, including quantities and weight, without opening, and all boxes and packages must contain packing sheets listing the contents of the box or package. Seller’s name and address, the packing slip number, and LMI’s purchase order number must appear on all shipping containers, packing sheets, delivery tickets and bills of lading.

2.1 SHIPPING INSTRUCTION: Do not insure the shipment

LMI PO number is required on the shipment waybill. Purchaser to provide required information to supplier.

2.2 Order Confirmations

Supplier will provide PO confirmation within two business days.

3. PAYMENT; INVOICING

As full consideration for the performance of the Services, delivery of the Goods and the assignment of rights to LMI as provided herein, LMI will pay Seller, less withholding taxes, if applicable, the amount agreed upon and specified in the applicable purchase order. Applicable taxes and other charges such as shipping costs, duties, customs, tariffs, and government imposed charges will be stated separately on Seller’s invoice. Payment by LMI will not constitute acceptance of the Services or Goods. All taxes assessable upon the Goods prior to receipt by LMI of Goods will be borne by Seller. Each invoice must reference the applicable purchase order, LMI reserves the right to return all incorrect invoices and such incorrect invoice will be deemed not to have been delivered. Each invoice will include a sufficient description of the Goods and/or Services supplied, as well as LMI’s purchase order number (shown on the face of the purchase order). When shipment is made from outside of Canada, customs invoices must be certified in accordance with Canada Border Services Agency rules and regulations. Seller is responsible for all customs, duties and other charges applicable on importation into Canada unless otherwise agreed between the parties in writing.

4. WARRANTIES

4.1 Services: Seller represents and warrants that all Services will be completed in a professional, workmanlike manner, with the degree of skill and care that is ordinarily exercised by a prudent, competent and experienced professional person performing the same services as the Services. Further, Seller represents, warrants and covenants that the Services will be completed in accordance with applicable specifications and will be correct and appropriate for the purposes contemplated by this Agreement. Seller represents and warrants that the performance of Services under this Agreement does not, and will not, conflict with, or be prohibited in any way by, any other agreement or statutory restriction by which Seller is bound.

4.2 Goods: Seller warrants that all Goods provided will be new, have never been in service, conform to the latest issue of the applicable drawing, specifications and part number, are of current production or manufactured less than 2 years before the date of the purchase order, do not contain any recycled, surplus or remanufactured materials or components, will be free and clear of all charges, liens, claims and encumbrances. Seller has good and marketable title to the Goods and any goods delivered ancillary to the Services. Seller is aware of the intended use of the Goods and warrants that the Goods supplied are reasonably fit for their intended use. Seller warrants that all Goods delivered will be free from defects in design, materials and workmanship and will conform to all specifications and requirements of this Agreement for a period commencing on the date of delivery to LMI and ending one year from the acceptance of the Goods.

4.3 Warranty Remedies: If LMI identifies a warranty problem with the Goods during the warranty period, LMI will promptly notify Seller of such problems and will return the Goods to Seller, at Seller’s expense. If Goods are returned, then within five (5) business days of receipt of the returned Goods, Seller will, at LMI’s option and Seller’s expense, either (i) repair or replace such Goods, (ii) credit LMI’s account for the same or (iii) refund the amount paid by LMI for the refund Goods. Replacement and repaired Goods will be warranted for the remainder of the warranty period plus the time during which the Goods were unavailable for use or six (6) months from the date of repair or replacement, whichever is longer.

5. QUALITY 

5.1 Control of Quality (ISO 9001): The Supplier shall provide evidence of registration to a Quality Management System that complies with the current revision of IATF 16949 or ISO9001or an equivalent system. The Quality Management System must demonstrate that the supplier is able to consistently provide products or services that meets the standards as approved by LMI Technologies Inc. The Quality Management System shall be subject to audit by an LMI Technologies Inc. representative. A waiver for demonstrating a QMS will be LMI’s prerogative based upon evidence that the supplier can provide goods and services that meets LMI’s design specifications.

5.2 Supplier’s Quality Management System evaluation (ISO 9001 or IATF 16949): The Supplier shall submit to LMI Technologies Inc. a complete Supplier Evaluation Form as a selfevaluation of the Quality System and its “Certificate” (if applicable) as required in LMI’s Supplier Evaluation Form (available from LMI Purchasing [email protected]). The copies shall be provided to LMI Technologies Inc. a minimum of two weeks prior to the commencement of the work.

Nonconforming Material – Supplier is responsible for establishing the process to control products that are segregated to prevent inadvertent use. Depending on the severity of the issues caused by the supplier, a Corrective Action may be requested to determine containment, root cause and prevent recurrence.

The Supplier is subject to audit by LMI Technologies Inc.

5.3 Advanced Product Quality Planning (APQP): When possible, Suppliers shall use the appropriate Advanced Product Quality Planning techniques for control of applicable processes. When critical and/or significant characteristics are noted on drawings.

5.4 Production Part Approval Process (PPAP) & First Article Inspection

5.4.1 PPAP: When required by the Purchase Order, parts or products are subject to LMI’s Production Part Approval process (PPAP) process. The PPAP process allows for a controlled evaluation of the supplier’s production process to meet the part new or revised design specifications that are released in change order.

The Supplier must provide evidence of the part meeting design specification and supplier’s process capabilities as requested through the LMI Production Part Approval Process (PPAP) submission checklist.

Following submission of the PPAP documentation and/or samples to LMI, the supplier must ensure that a signed off PPAP warrant is received from LMI prior to shipment against LMI Purchase Orders.

5.4.2 First Article Inspection: In some instances, First Article Inspection will be requested for non-production parts: prototype parts or supplier’s samples. The PO will indicate in the comments section to provide a First Article Inspection report with labelled samples and any other supporting documentation. The Supplier’s test data and manufacturing records shall accompany the first article. If the first pieces delivered fail to meet the drawing/specification and purchase order requirements, LMI may require another batch before moving to production. This procedure shall be followed until an acceptable first article has been provided. Acceptance of this first article shall not be considered as acceptance of subsequent items.

5.5 Identification and traceability: The supplier shall prescribe and implement suitable means for identifying products, components, and material in written procedures throughout all stages from acceptance, to manufacture, release and logistics (including secondary sources and after).

The supplier shall stipulate and implement the procedures for identifying process stages (Ex. before or after powder coating, anodizing, heat treatment, etc.)

The supplier shall prescribe and implement the procedures for identifying whether inspection has been conducted, product is accepted or rejected or withheld.

5.5.1 Changes in Manufacturing Process: When Supplier desires to change the fundamental manufacturing process, the Supplier shall notify LMI in writing within a reasonable period (no less than thirty (30) days under normal circumstances) prior to the effective date of the proposed change. The minimum thirty (30) days notice may be waived by LMI should an emergency change be required. Example of changes which require notification include, but are not limited to, the following:

  • Changes in material
  • Changes in major fabrication, processing or manufacturing equipment
  • Changes in major test equipment
  • Changes in test methods or environment
  • Changes in manufacturing facility locations
  • Changes in production line layout
  • Changes in sourcing (when second sourcing / re-sourcing)
  • When part resubmission is required due to supplier inactivity over all parts or for a specific part when inactivity has been more than 12 months.

 

Part or manufacturing process must be submitted for PPAP when the purchase order is placed.

Supplier shall implement such changes in the process only if collected quality/evaluation data verifies that quality and reliability levels would be sustained and/or improved as a result of such change.

Note: Supplier shall make no changes to Processes without prior written authorization from LMI.

5.5.2 Changes to Parts/Product: Supplier shall notify LMI in writing as set forth in Error! Reference source not found. above prior to implementing any of the following types of changes to the Products:

  • Any changes that affect the fit, form (including appearance) or function of the Products
  • Any change of a programmed part on the Products
  • Any changes to the Products affecting clock speeds
  • Any change to a custom or semi-custom Integrated Circuit (IC)
  • Any change made to correct a problem in an LMI applications, made at the request of LMI Solutions
  • Any changes made to the circuit board fabrication
  • Any changes to critical component specification or approved Supplier. Critical components
  • will be determined by mutual agreement between LMI and Supplier.
  • Any changes in reliability or product life
  • Any update of specified compliance standards that impacts product design or labelling

 

Note: Supplier shall make no changes to Products without prior written authorization from LMI Solutions.

5.5.3 Engineering Change Orders.: Supplier shall have the capability to manage Engineering Change Orders (ECO). This capability shall be managed throughout all stocking locations and implemented in a timely manner. Supplier shall co-ordinate with LMI in writing, prior to implementing any change to the Product that may impact form, fit, function, quality, reliability, serviceability or safety.

5.5.4 Re-Qualification: Major changes in manufacturing process or product construction/design will require requalification and/or process re-certification to the Product Specification. Where a Supplier seeks to make a change for its own purposes, LMI may require at its sole discretion that the Supplier perform reliability tests at its own expense to confirm an equivalent or improved reliability of the Products. Supplier shall coordinate notification of planned major changes with LMI. At LMI request, Supplier shall run a pilot production.

PPAP re-submission will be required if requested by LMI.

Note: Changes initiated by LMI are communicated to suppliers with Change Order (CO) and LMI is responsible for reasonable expense necessary to implement such requested change, including provision of Purchase Orders for PPAP parts.

5.6 Labelling / Packaging: Supplier shall comply with the requirements specified in the drawings and engineering specification documents for Part Identification Label, Bar Coding Marking Standard and packaging procedures. These requirements apply for new units as part of new orders and for reworked, repaired or new units shipped to replace failed units at LMI facilities or in the field.

5.7 Appearance Items: Supplier shall comply with the requirements specified in the Drawings and engineering documents for cosmetics requirements.

For the supplier producing parts designated by LMI as an appearance item, the following controls are required;

  • Designated on the process control plan as an appearance item
  • Provide appropriate lighting for evaluation
  • Provide masters for color, grain, gloss metallic brilliance, texture, as appropriate, with one set of master samples to be submitted to LMI for approval
  • Adequate maintenance and control of appearance masters
  • Verification that personnel making appearance evaluations are competent and qualified

 

5.8 Source Inspection – LMI Technologies Inc.: LMI Technologies Inc. reserves the rights to inspect any or all of the work related to products/services provided to LMI Technologies Inc. This can be in the form of LMI audits as stated in clause 5.1 or a site visit

5.9 Purchased (OEM) Components: Each shipment shall be accompanied by a Certificate of Conformance signed by an authorized representative, stating that all articles furnished meet the applicable specifications, in accordance with the purchase order. If the Supplier is not the manufacturer, the certification must show the name and address of the manufacturer.

Certificate of Origin, REACH and RoHS Compliance Certificates to be submitted to LMI ([email protected]) on an annual basis.

5.10 Objective Data – Manufacturing (LMI Custom) Components: Each shipment must be accompanied by one (1) copy of the Test Data Sheets / Inspection Reports, signed by a responsible representative of the Supplier. It must be traceable to each material and LMI part number, attesting conformance to the requirements. The data sheets should contain actual and specified parameters.

Certificate of Origin, REACH and RoHS Compliance Certificates to be submitted to LMI ([email protected]) on an annual basis.

5.11 Subcontracts: The subcontracting of any part of the specified services or purchase of materials or components from the secondary market by the Seller will require LMI Technologies prior written permission.

5.12 Materials and Workmanship: The materials and workmanship shall conform to industry/regulatory accepted practice, or as specified in the applicable specification/drawing. Supplier must advise with regards to dimensions or specifications if it is unable to meet final drawing specifications prior to contractual agreement. Any requested deviations are subject to LMI’s stakeholder acknowledgment for concession waiver. For all PCB Assemblies, compliance with Class II of the latest IPC-A-610 is required. For all metal parts, Mill Certificate of material to be submitted. Material specified in drawings must be used.

5.13 Electrostatic Sensitive Devices (ESD): Any parts supplied on this order, which are susceptible to damage by electrostatic discharge, must be packaged in conductive ESD protective packaging in accordance with industry accepted practice. Labels indicating ESD sensitivity must be affixed to the packaging. Evidence of an effective ESD program for handling, packaging and storing such devices must be available to LMI Technologies Inc. representative.

5.14 Product Finishing: LMI Technologies Inc manufactures imaging related products, the supplied parts/products must be free from burrs, dusts, oil or other contaminants. In case of special cleaning requirements, LMI will identify the requirements in the drawing (i.e. OPTICAL PART – MUST BE FREE OF DIRT, DEBRIS AND CONTAMINATION). As the level of cleanliness is always subjective, the supplier is responsible to clarify the requirements with LMI and determine the requirements for conformance.

5.15 Product Packaging Requirements: LMI Technologies requires a standard documented packaging instruction from its suppliers. It is the supplier’s responsibilities to make sure the parts are protected from all types of damage during transit. Paper material for wrapping of parts is unacceptable.

5.16 Transport Documentation: LMI requires all shipments to include NAFTA certification, Certificate of Origin, commercial invoice(s), and any other necessary documents to ensure the goods are cleared efficiently and quickly. Any custom/transportation charges relating to the lack of the above documents will be charged to the supplier for the amount of the charge invoiced to LMI.

5.17 INSPECTION: Goods received prior to inspection will not be deemed accepted until LMI has run an adequate test to determine whether the Goods conform to the specifications or sample provided. Use of a portion of the Goods for the purpose of testing will not constitute an acceptance of the Goods. If Goods supplied do not wholly conform to the specifications or samples, LMI will have the right to reject such Goods. Nonconforming Goods will be returned to Seller freight collect and risk of loss will pass to Seller upon LMI’s delivery to the common carrier or Seller, whichever is earlier.

6. INDEPENDENT CONTRACTOR

Seller is an independent contractor for all purposes, without express or implied authority to bind LMI by contract or otherwise. Neither Seller nor its employees, agents or subcontractors (“Seller’s Assistants”) are agents or employees of LMI, and therefore are not entitled to any employee benefits of LMI, including but not limited to, coverage under any type of insurance. Seller will be responsible for all costs and expenses incidental to performing its obligations under this Agreement and will provide Seller’s own supplies and equipment.

7. SELLER RESPONSIBLE FOR TAXES

Seller will be solely responsible for paying all federal, provincial and municipal taxes, levies or fees, including estimated taxes and employment taxes, due with respect to Seller’s receipt of payment under this Agreement. LMI will have no responsibility to pay or withhold from any payment to Seller any federal, provincial or municipal taxes or fees.

8. INDEMNITY 

Seller will indemnify, hold harmless, and, at LMI’s request, defend LMI, its officers, directors, customers, agents and employees, against all claims, liabilities, damages, losses and expenses, including legal fees and the costs of any action arising out of or in any way connected with the Goods or Services provided under this Agreement, to the extent such is caused in whole or part by Seller or any of its suppliers or agents, including, without limitation: (i) any claim based on the death or bodily injury to any person, destruction or damage to property, or contamination of the environment and any associated clean-up costs; (iii) any claim based on the negligence, omissions or willful misconduct of Seller or any of Seller’s Assistants; (iv) any claim by a third party against LMI alleging that the Goods or Services, the results of such Services, or any other products or processes provided under this Agreement, infringe a patent, copyright, trademark, trade secret or other proprietary right of a third party, whether such are provided alone or in combination with other products, software or processes; (v) any lien filed or claimed by Seller or any supplier or permitted subcontractor against real or personal property of LMI; and (vi) any breach of this Agreement by Seller. Seller will not settle any suit or claim involving LMI without LMI’s prior written approval.

9. CONFIDENTIALITY 

Seller may acquire knowledge of LMI Confidential Information (as defined below) in connection with its performance hereunder and agrees not to disclose and to keep such LMI Confidential Information in confidence during and following termination or expiration of this Agreement. “LMI Confidential Information” includes but is not limited to all information, whether written or oral, in any form, including without limitation, information relating to the research, development, products, methods of manufacture, trade secrets, business plans, customers, vendors, finances, personnel data, Work Product (as defined herein) and other material or information considered proprietary by LMI relating to the current or anticipated business or affairs of LMI which is disclosed directly or indirectly to Seller. In addition, LMI Confidential Information means any third party’s proprietary or confidential information disclosed to Seller in the course of providing Services or Goods to LMI. LMI Confidential Information does not include any information (i) which Seller lawfully knew without restriction on disclosure before LMI disclosed it to Seller, (ii) which is now or becomes publicly known through no wrongful act or failure to act of Seller, (iii) which Seller developed independently without use of the LMI Confidential Information, as evidenced by appropriate documentation or (iv) which is hereafter lawfully furnished to Seller by a third party as a matter of right and without restriction on disclosure. In addition, Seller may disclose Confidential Information which is required by law to be disclosed so long as Seller provides prompt notice to LMI of such requirement prior to disclosure.

Seller agrees not to copy, alter or directly or indirectly disclose any LMI Confidential Information. Additionally, Seller agrees to limit its internal distribution of LMI Confidential Information to Seller’s Assistants who have a need to know such information. In no event will Seller use less than the degree of care and means that it uses to protect its own confidential information, but in any event not less than all reasonable and prudent care to prevent the unauthorized use or disclosure of LMI Confidential Information.

10. TERMINATION 

LMI may terminate this Agreement, by written notice to Seller, upon or if Seller takes any step to do any of the following: (i) if Seller fails to perform or otherwise breaches this Agreement; (ii) Seller avails itself of any creditor protection legislation; or (iii) Seller becomes insolvent or dissolves. In the event of such termination, LMI will pay Seller for the portion of the Services satisfactorily performed and those conforming Goods delivered to LMI through the date of termination.

LMI may terminate this Agreement for any other reason upon thirty (30) days’ written notice to Seller. Seller will cease to perform Services and/or provide Goods under this Agreement on the date of termination specified in such notice. In the event of such termination, LMI will be liable to Seller only for those Services satisfactorily performed and those conforming Goods delivered to LMI through the date of termination.

Upon the expiration or termination of this Agreement for any reason: (i) each party will be released from all obligations to the other arising after the date of expiration or termination, except for those obligations which by their nature survive such termination or expiration.

11. SEVERABILITY

If any provision of this Agreement is deemed to be invalid, illegal or unenforceable, the validity, legality and enforceability of the remaining provisions will not in any way be affected or impaired thereby.

12. LIMITATION OF LIABILITY 

IN NO EVENT WILL LMI BE LIABLE TO SELLER, SELLER’S ASSISTANTS OR ANY THIRD PARTY FOR ANY INCIDENTAL, INDIRECT, SPECIAL OR CONSEQUENTIAL DAMAGES (WHICH ARE DEEMED TO INCLUDE LOST PROFITS) ARISING OUT OF, OR IN CONNECTION WITH, THIS AGREEMENT, WHETHER OR NOT LMI WAS ADVISED OF THE POSSIBILITY OF SUCH DAMAGES. LMI’S LIABILITY IS LIMITED TO THE AMOUNT SHOWN ON THE FACE OF THE ATTACHED PURCHASE ORDER.

13. ASSIGNMENT; WAIVER

Seller may not assign this Agreement or any of its rights or obligations under this Agreement, without the prior written consent of LMI. Any assignment or transfer without such written consent will be null and void.

14. NON-EXCLUSIVE AGREEMENT

This is not an exclusive agreement and does not give Seller a right of first offer with respect to the future provision of goods or services to LMI. LMI is free to engage others to perform Services or provide Goods which are the same as or similar to those provided by Seller. Seller is free to, and is encouraged to, advertise, offer and provide Seller’s services and/or goods to others; provided that Seller does not breach this Agreement.

15. NOTICES

Except for purchase orders, which may be sent by local mail, facsimile transmission, or electronic mail, all notices and other communications hereunder will be in writing, and will be addressed to Seller or to an authorized LMI representative, and will be considered given: (i) when delivered personally; (ii) when sent by commercial overnight courier with written verification receipt; (iii) three (3) days after having been sent, postage prepaid, by first class or registered mail or (iv) electronically mailed with written confirmation of receipt.

16. SURVIVAL OF OBLIGATIONS 

Any obligations and duties which by their nature extend beyond the expiration or termination of this Agreement will survive the expiration or termination of this Agreement.

17. GOVERNING LAW 

This Agreement and performance hereunder will be governed and interpreted by the laws of British Columbia and laws of Canada applicable therein. The applicability of the UN Convention on Contracts for the International Sale of Goods and the International Sale of Goods Act (British Columbia) are hereby expressly waived by the parties and will not apply to the terms and conditions of this Agreement.

18. ENTIRE AGREEMENT; MODIFICATION 

This Agreement is the complete, final and exclusive statement of the terms of the agreement between the parties regarding the subject matter of this Agreement, and except where specified herein, supersedes any and all other prior and contemporaneous negotiations and agreements, whether oral or written, between them relating to the subject matter hereof. If there is any conflict between the purchase order and any other portion of the Agreement then the order of precedence shall be: 1) the purchase order, 2) technical documentation, 3) these General Terms and Conditions 4) Any other referenced document. Any and all changes to the Agreement must be authorized in writing by an authorized representative of LMI.

19. COMPLIANCE WITH LAWS

Seller will comply fully with all applicable federal, provincial and municipal laws in the performance of this Agreement including, but not limited to, all applicable employment, tax, export control and environmental laws. If Goods include hazardous materials, Seller represents and warrants that Seller understands the nature of any hazards associated with the manufacture, handling and transportation of such hazardous materials.

20. TKH CODE OF SUPPLY

Where requested, Supplier will complete and return a copy of the TKH Code of Supply, located here:

https://www.tkhgroup.com/en/csr/integrity