Digital Ally PURCHASE ORDER GENERAL TERMS AND CONDITIONS
These Digital Ally Purchase Order General Terms and Conditions (“Terms”) constitutes a contract between the vendor, supplier, or seller named herein (“Seller” or “you”) and DIGITAL ALLY, INC. (hereafter referred to as “Buyer” or “Digital Ally”), that will apply to all Purchase Orders (“Purchase Order(s)”) issued to you by Buyer. These Terms, together with the terms of all Purchase Orders submitted from time to time by Buyer to Seller, will govern the contract for sale of goods between Seller and Buyer and, except as modified in writing and accepted by an authorized officer of Buyer, constitute the entire agreement between Seller and Buyer. BY ACCEPTING BUYER’S PURCHASE ORDERS FROM TIME TO TIME, YOU, ON BEHALF OF YOURSELF AND THE ENTITY THAT YOU REPRESENT, AGREE TO BE BOUND BY THESE TERMS.
1. PURCHASE ORDERS AND ACCEPTANCE: Seller agrees that the Digital Ally Purchase Order governs the scope of work that Seller shall provide to Buyer, including, without limitation, Digital Ally’s part number, and Digital Ally’s price, quantity, and delivery requirements. All changes to a Purchase Order must be documented on a follow-up Digital Ally Purchase Order to be valid and authorized. Seller agrees to communicate acceptance of all Purchase Orders to Buyer. Buyer hereby rejects any different or additional terms in Seller’s acceptance of a Purchase Order or in any Seller provided documentation, including without limitations, any preprinted terms on the back of Seller’s invoice or on Seller’s website.
2. INVOICING: Seller agrees to submit a sales invoice with each shipment of goods showing Buyer’s Purchase Order number, quantity and description of each good shipped. All invoices will be issued to Digital Ally, Inc., c/o Accounts Payable, 14001 Marshall Drive, Lenexa, KS 66215. The period of any cash discount period available to Buyer will begin from the date the invoice is received by Digital Ally Accounts Payable. When freight is prepaid for account, Seller must show freight charges separately and sales tax, if any, must be computed before adding freight charges. A copy of the freight bill must be submitted with the invoice. Buyer’s Purchase Order number must appear on all manifests, bills of lading, packages and in all correspondence regarding the order. The invoice quantities cannot be greater than the Purchase Order quantities, and the price must be less than, or equal to, the Purchase Order unit price authorized on the Purchase Order.
3. TITLE, RISK OF LOSS: Unless otherwise provided in the Purchase Order, goods will be shipped to Buyer FOB destination. Title to goods purchased by Purchase Order remains with Seller until they are off loaded at Buyer’s facility or a site otherwise specified on the face of Buyer’s Purchase Order. In all cases, Seller shall bear all risks of loss or damage in transit.
4. FREIGHT: Seller must comply with the shipping terms and instructions stated on the face of Buyer’s Purchase Order. Failure to accurately follow the shipping terms and instructions as stated may result in one of the following, at Buyer’s discretion: (1) a chargeback for the freight cost difference; (2) a chargeback for the freight cost difference plus an administrative charge; or (3) a chargeback for the full cost of the freight. From time to time, Buyer may require expedited delivery. In such case, written authorization from Buyer for each shipment change is required. As an example, a Purchase Order may require Seller to ship by ground but Buyer has issued a written request for Seller to ship RED (next business day delivery). This is a permitted modification under these Terms. However, should the Seller ship RED to meet schedule dates when RED is not requested by Buyer, then Seller shall bear the costs of expedited shipments.
5. INSPECTION: All goods purchased are subject to inspection, test and approval at destination by Buyer, notwithstanding prior payments or inspections at the source. Buyer, without limitation to its other rights and remedies, may reject any goods that contain defective materials or workmanship, do not meet the specifications, or otherwise do not conform to its Purchase Order. Defective materials or goods that are not manufactured or supplied in accordance with Buyer’s specifications will be rejected and held for Seller’s instructions, at Seller’s risk and expense. Acceptance of any goods shall not be deemed to alter or affect the obligations of Seller or the rights and remedies of Buyer under any other provision of Buyer’s Purchase Order, these Terms, or applicable law. Buyer reserves the right, at Seller’s expense, to inspect before shipment, or during the process of manufacture, any goods on order; however, the failure of Buyer to inspect the goods before shipment, or during the process of manufacture, shall not be deemed to constitute acceptance of any goods which do not conform to Buyer’s specifications, or to waive any of the Buyer’s rights or remedies arising by virtue of such defects or non- conformance. Seller shall inspect and test all raw materials for quality and purity prior to manufacture, and will use, or cause to be used, only those materials meeting its quality and purity standards in the manufacture of goods for Buyer.
6. RETURN MATERIALS: Seller agrees that defective materials will be returned using an authorized RMA process that assigns a specific number for tracking of the defective materials within five (5) business days of notice of defect from Buyer and for the handling of credit and issuance of new RMA PO’s for returned materials. Seller agrees that RMA’s will be at Seller’s expense for the repair and/or other disposition of materials. Seller further agrees that a credit memo will be sent with each RMA number for the total cost of the items being returned. Buyer reserves the right to assess a penalty fee of 5% if Seller has three or more of the same defects in different lots demonstrating no preventative actions. These fees are for processing multiple defective returns.
7. OVER SHIPMENT: Quantities in excess of that shown in the Purchase Order, if rejected by Buyer, will be returned at Seller’s risk and expense. Any excess quantities that Buyer accepts shall be at the Purchase Order price. If any over shipment of product results in cost of less than $50, Buyer reserves the right to ignore the difference and cost of resolution. If the cost of the over shipment is greater than $50, Seller will be contacted for resolution.
8. CHANGES: Buyer shall have the right at any time to make changes in drawings, designs, specifications, materials, packaging, time and place of delivery, and method of transportation for a particular Purchase Order. If any such changes cause an increase or decrease in the costs or the time required for the performance, an equitable adjustment shall be made and the Purchase Order shall be modified in writing accordingly. Seller agrees to accept any such changes subject to this paragraph. Seller shall not make changes in drawings, designs, specifications, materials and/or packaging without the prior written approval of Buyer. Purchase Order changes, including, without limitation, scheduling and pricing terms, cannot be modified by or through verbal communications. Scheduling changes and partial shipment arrangements can be made through electronic mail; pricing changes may only be made in writing through a revised Purchase Order, approved by an authorized representative of Buyer.
9. FIRST ARTICLE REQUIREMENTS: Any time a new custom part is purchased for the first time by Buyer, Seller will be required to submit a first article of some determined quantity on the Purchase Order for evaluation and qualification by the Buyer (“First Article”). Additionally any Engineering Changes (“EC”) will require Seller to submit a complete new First Article for Buyer approval based on the requirements of Buyer.
10. NON-CANCELABLE/NON-RETURNABLE MATERIALS (“NCNR”) AND EXCESS INVENTORY: Buyer may, without liability, cancel any Purchase Order in advance of the lead time required by the Seller to timely fulfill said Purchase Order (“Lead Time”). If a Purchase Order authorizes a minimum order quantity (“MOQ”) and Buyer elects to cancel said Purchase Order before the MOQ has been reached, Buyer shall not be responsible to Seller for any amount in excess of the actual advance expenditure made and documented by Seller on said MOQ Purchase Order. If there is a design change and Buyer cancels a Purchase Order after components have been purchased in order to meet the Lead Time, Buyer will buy the obsolete components that represent the demand quantities. No NCNR provision shall be valid unless the provision is submitted to Buyer’s Material Manager for approval and receives Buyer’s written authorization. Buyer shall not be responsible for general or special purchases made by Seller that Seller requires to protect future scheduled deliveries to Buyer unless Seller obtains the prior written authorization of Buyer’s Materials Manager prior to making such expenditures.
11. PURCHASE PRICE VARIANCES (“PPV”): Seller shall provide Buyer with both Positive and Negative PPV evaluations so that Buyer has advance notice of market place changes that may affect material lead times, availability and pricing for future purchase orders that Buyer may consider making. It is the expectation of Buyer that Seller will have negotiated pricing with its suppliers to keep current material lead times, availability and pricing quotes to Buyer level for up to a year in the future. When it appears to Seller that pricing for future purchase orders from Buyer may need to be increased due to unforeseen market changes, Seller shall negotiate with Seller’s suppliers, and permit Buyer to assist in negotiations with Seller’s suppliers, prior to escalating pricing to Buyer on future purchase orders.
12. INTELLECTUAL PROPERTY AND LIEN INDEMNIFICATION: Seller warrants that there has been no misappropriation or infringement of any third party’s copyright, trademark, patent, trade secret or similar intellectual property or proprietary right as a result of Seller’s manufacturing, producing, supplying, or selling the goods to Buyer. Seller agrees to defend, indemnify, and hold harmless Buyer, and Buyer’s parent, subsidiaries, affiliates, successors or assigns and their respective directors, officers, shareholders, agents, and employees (collectively with Buyer, “Indemnitees”), from all claims, expenses and liabilities arising from any actual or alleged misappropriation or infringement of a third party’s copyright, trademark, patent, trade secret or similar intellectual property or proprietary right. Seller further agrees to defend, indemnify, and hold harmless the Indemnities against all liens, security interests, and/or encumbrances whatsoever asserted against the goods specified in a Purchase Order, including claims to said merchandise, asserted by others.
13. BUYER’S CONFIDENTIAL INFORMATION. All Confidential Information furnished by Buyer to Seller, for rendering or production or any other purposes, shall be considered the proprietary information of Buyer. As used herein, “Confidential Information” means all nonpublic, confidential, proprietary, or trade secret information, including, without limitation: the existence and terms of any Purchase Order, current and planned methods and processes of business or operation; identities of current and prospective customers, distributors, vendors, and suppliers; cost and expense information; production information; trade secrets; confidential processes and technologies; pricing information; marketing, advertising and other promotions; computer code, flow charts, blue prints, product designs, product specifications, methods; know-how, research, ideas, discoveries, test results and inventions; software, system specifications, and data file layouts; financial statements and other financial information; all Improvements; and all other information of Buyer that is not made generally available to persons outside Buyer’s company, and information of another party that Buyer has or may have in its possession under an obligation of confidentiality, whether such Confidential Information is tangible or intangible, and no matter how stored, compiled or memorialized. Seller shall not publish or disclose in any way any of Buyer’s Confidential Information to any third party, or use any of Buyer’s Confidential Information for any purpose other than to perform Seller’s obligations under these Terms for the purpose as contemplated by the Purchase Order.
To the extent that changes, modifications, or improvements are made by Seller to the designs and other Confidential Information originated by Buyer (“Improvements”), such Improvements shall be deemed work for hire and shall be owned by Buyer. Seller hereby assigns to Buyer, without reservation, all patent rights, copyrights and trademark rights relating to the Improvements and all related documents, models, computer drawings and other electronic expression, photographs, specifications or other such materials (“Protected Material”). Buyer, in turn, grants to Seller a non-exclusive, non-transferable license to reproduce the Protected Materials for purposes related solely and directly to the Seller’s performance of its obligations to Buyer hereunder. This non-exclusive license shall terminate immediately upon termination of the Purchase Order. Seller further agrees to execute any documents necessary to effectuate the assignment of the Improvements to Buyer.
All of Buyer’s Confidential Information and all copies thereof (including, without limitation, all materials containing or embodying any of Buyer’s Confidential Information) are and shall remain the sole property of Buyer and shall be returned promptly to Buyer upon completion or termination of the activity for which Seller has obtained such Confidential Information. Furthermore, Seller shall not make use of Buyer’s name, or the name of companies associated with Buyer, for publicity purposes without the consent of Buyer.
14. WARRANTY: Seller expressly warrants that all goods furnished pursuant to Buyer’s Purchase Order will be free from defects in design, materials, workmanship and the title. Further, Seller warrants that all goods will comply with applicable law, will conform to all applicable specifications and drawings, and will be merchantable and fit for their intended use. If it appears within two years of the date of delivery that the goods delivered hereunder do not meet the warranty specified above, Buyer will promptly notify Seller; Seller shall thereupon correct any defect either by repair or replacement of the defective goods at Seller’s expense, subject to the approval of Buyer. Buyer’s continued use of said defective goods pending repair or replacement shall not constitute a waiver by Buyer of its rights hereunder. Seller further warrants that all goods covered by Buyer’s Purchase Order and these Terms will meet or exceed the safety standards established and promulgated under the Federal Occupational Safety and Health Law (Public Law 91-956) and its regulations in effect as of the date of the Purchase Order. Seller further warrants that all goods covered by Buyer’s Purchase Order and these Terms will meet or exceed all provisions, standards, conditions and requirements contained in any government law or regulations which may be required for, or be legally applicable to, the goods so covered by Buyer’s Purchase Order and these Terms. If Seller institutes a product recall due to latent defects, Buyer reserves the right to pass on rework fees to Seller for disassembling the product already in process containing the defective material.
15. TIME: Time is of the essence for all Purchase Orders, and Buyer reserves the right to cancel a Purchase Order or any portion thereof without penalty in the event that deliveries of ordered goods are not made within the specified time. Retention of goods that are not timely delivered will not be considered acceptance. Schedule changes may be approved by the authorized representative of the Buyer by electronic mail. A revised Purchase Order is the only authorized method to change delivery performance other than schedule changes; measurement of timely performance will be based on when the goods are received on Buyer’s dock or such other location specified in the Purchase Order.
16. TERMINATION FOR CONVENIENCE: Buyer, by written notice, may terminate the Purchase Order at any time, in whole or in part, without cause and/or for Buyer’s convenience, prior to final delivery of goods and/or completion of services, and such termination shall not constitute a default. In such event, Buyer shall have all rights and remedies accruing both at law and in equity, including, without limitation, Buyer’s rights to title and possession of all goods for which payment has been made, and Seller shall be reimbursed by Buyer for actual, reasonable, substantiated and allowable costs for work performed to the date of termination, subject to the limitations contained in Paragraph 28 of these Terms. Buyer may take immediate possession of all work so performed upon notice of termination.
17. TERMINATION FOR DEFAULT: Buyer may, by written notice of default to Seller, terminate a Purchase Order in whole or in part if Seller fails (i) to deliver the goods and/or perform the services within the time specified in the Purchase Order or any authorized extension thereof, (ii) to perform any of the other provisions of these Terms or the Purchase Order or to make progress so as to endanger performance of the Purchase Order in accordance with its terms and Seller does not cure, or submit to Buyer a plan to cure, such failure to Buyer’s reasonable satisfaction within a period of ten (10) days after receipt of notice from Buyer specifying the failure; or (iii) Seller becomes insolvent or makes a general assignment for the benefit of creditors, or files or has filed against it a petition of bankruptcy or reorganization, or pursues any other remedy under any other law relating to relief for debtors, or in the event a trustee or receiver is appointed for Seller’s property or business. If Buyer terminates the Purchase Order in whole or in part, it may acquire, upon such terms as it deems appropriate, goods and/or services similar to those terminated. Seller shall be liable to Buyer for any excess cost for such similar goods and/or services, provided, however, that Seller shall continue performance of the Purchase Order to the extent not terminated under the provisions of this paragraph and, provided, further, that Buyer shall pay the price set forth in the Purchase Order for completed goods or services that have been delivered to and accepted by Buyer. The rights and remedies of Buyer in this paragraph are in addition to any other rights and remedies provided by law, in equity, and under these Terms and the Purchase Order.
18. SET-OFF: Buyer shall be entitled at all times to set-off any amount owing at any time from Seller to Buyer against any amount payable at any time by Buyer to Seller.
19. COMPLIANCE WITH LAWS: Seller warrants that all goods sold to Buyer hereunder shall have been produced, sold, delivered and furnished in strict compliance with all applicable laws and regulations.
20. INDEMNIFICATION: Seller shall defend, indemnify and hold harmless the Indemnities (as defined in paragraph 12) against any and all loss, injury, death, damage, liability, claim, deficiency, action, judgment, interest, award, penalty, fine, cost or expense, including reasonable attorney and professional fees and costs, and the cost of enforcing any right to indemnification hereunder and the cost of pursuing any insurance providers (collectively, “Losses”), arising out of or occurring in connection with the products purchased from Seller or Seller’s negligence, willful misconduct or breach of the Terms. Seller shall not enter into any settlement without the Indemnitees’ prior written consent.
21. INSURANCE: Seller shall maintain and keep in force, at Seller’s sole cost, such insurance as will protect Seller and the Buyer, who shall be covered as an “Additional Insured” in each policy required herein, from the losses and claims which may arise out of or result from liabilities that Seller or Buyer may incur related to Seller’s performance or obligations to perform under these Terms and/or a Purchase Order, whether such performance be by the Seller or by anyone directly or indirectly employed by Seller, or by anyone for whose acts Seller may be liable. The Seller shall maintain insurance written in the kinds and minimum limits of liability as follows: Commercial General Liability (GL) – US$1,000,000 per occurrence for Bodily Injury, including, without limitation, death, Property Damage, and Personal Injury, with a US$2,000,000 Aggregate, written on an occurrence based form; and products liability, worker’s compensation and employee in the amount of US$2,000,000.00, to protect Buyer against such damages, liabilities, claims, losses and expenses, including, , without limitation, incidental, special or consequential damages and including attorneys’ fees. The insurance provided by Seller shall be primary, without right of contribution, with respect to any similar insurance being maintained by, or available to, the Buyer. At Buyer’s request, Seller shall furnish Buyer certificates of insurance acceptable to Buyer evidencing the required coverage. The policies noted in this paragraph shall contain a provision that coverages afforded under the policies shall not be canceled or materially changed in a manner that adversely affects Buyer until thirty (30) days prior written notice has been provided to Buyer. The failure by Buyer to request Certificates of Insurance as proof of coverage shall not be deemed a waiver of any rights of Buyer under these Terms and/or the terms of any Purchase Order. The inclusions, coverage and limits set forth herein are minimum inclusions, coverage and limits, and shall not be construed as a limitation of Buyer’s rights under the noted policies, or other policies being maintained by Seller. Seller is responsible for determining what additional coverage, terms or limits are required to perform pursuant to these Terms and/or the terms of each Purchase Order, even though those requirements may be in addition to, or in excess of, the minimum requirements set forth herein.
22. SAFETY DATA SHEETS (also known as, “MSDS”): Seller shall submit Safety Data Sheets to Buyer upon receipt of its first order of goods from Buyer, and shall also forward any revisions thereto as soon as available.
23. ASSIGNMENT: Nothing in Buyer’s Purchase Orders, these Terms or any interest under them, shall be assigned by Seller without the prior written consent of Buyer.
24. DISPUTES: The parties will attempt in good faith to resolve any issue or dispute arising out of or relating to these Terms and the provision of goods or services set forth in the Purchase Order promptly by negotiation between managers and executives who have authority to settle the controversy, provided however, that, except as expressly authorized in writing by Buyer, no failure of Buyer and Seller to reach agreement with respect to any dispute relating to or arising under these Terms or Purchase Order will excuse Seller from proceeding diligently with the performance of the work required by the Purchase Order.
25. NOTICES: All notices required or permitted to be sent by either party shall be deemed sufficiently given when delivered by hand delivery, recognized overnight courier service, or certified mail, return receipt requested, to Buyer at Digital Ally, 14001 Marshall Drive, Lenexa, KS 66215, attn. Materials Manager, or at such other address as Buyer shall hereafter provide, and to Seller at the most recent address maintained in Buyer’s records. All notices shall be deemed given (i) on the date of delivery if delivered by hand, (ii) on the next business day if sent by recognized overnight courier service and (iii) on the third business day following the date sent by certified mail, return receipt requested. Either party may designate, in writing, a different address for notices under these Terms.
26. SURVIVAL OF OBLIGATIONS: Seller’s obligations hereunder, which by their terms might apply after the completion or termination of the Purchase Order, including without limitation, the warranty, confidential information, indemnification, insurance, intellectual property, and limitation of liability provisions, shall survive such completion or termination.
27. WAIVER, REMEDIES, AND SEVERABILITY: The failure or delay of Buyer to insist on performance of any provision of these Terms or a Purchase Order, or to exercise any right or remedy available under these Terms or a Purchase Order, shall not be construed as a waiver of that provision, right, or remedy in any later instance, nor shall any single or partial exercise of any right, remedy, power or privilege hereunder preclude Buyer from any other or further exercise thereof or from the exercise of any other right, remedy, power or privilege available at law or in equity. Further, if any provision of these Terms or a Purchase Order is or becomes void or unenforceable by operation of law, the remaining provisions shall be valid and enforceable. The rights and remedies provided hereunder are cumulative and are in addition to and not in substitution for any other rights and remedies available at law or in equity or otherwise.
28. RELATIONSHIP OF BUYER AND SELLER: The relationship between Buyer and Seller is that of independent contractors. Nothing contained in these Terms shall be construed as creating any agency, partnership, joint venture or other form of joint enterprise, employment or fiduciary relationship between the parties, and neither Buyer nor Seller shall have authority to contract for or bind the other party in any manner whatsoever. No relationship of exclusivity shall be construed from these Terms.
29. NO THIRD-PARTY BENEFICIARIES: These Terms are for the sole benefit of Buyer and Seller and their respective successors and permitted assigns and nothing herein, express or implied, is intended to or shall confer upon any other person or entity any legal or equitable right, benefit or remedy of any nature whatsoever under or by reason of these Terms.
30. LIMITATIONS OF LIABILITY: IN NO EVENT SHALL BUYER BE LIABLE FOR ANTICIPATED (ANTICIPATORY) OR LOST PROFITS OR FOR ANY INDIRECT, INCIDENTAL, SPECIAL, PUNITIVE, CONSEQUENTIAL OR EXEMPLARY DAMAGES THAT MAY BE INCURRED BY SELLER ARISING FROM OR RELATING TO THESE TERMS OR A PURCHASE ORDER, OR FROM THE PERFORMANCE OR BREACH THEREOF, WHETHER OR NOT BUYER HAS BEEN ADVISED OF OR SHOULD HAVE BEEN AWARE OF THE POSSIBILITY OF ANY SUCH LOSSES ARISING. TO THE MAXIMUM EXTENT PERMITTED BY APPLICABLE LAW, BUYER’S LIABILITY ON ANY CLAIM OF ANY KIND FOR ANY LOSS OR DAMAGE ARISING OUT OF OR IN CONNECTION WITH THESE TERMS OR A PURCHASE ORDER, OR FROM THE PERFORMANCE OR BREACH THEREOF, SHALL IN NO CASE EXCEED THE CONTRACT PRICE OF THE PURCHASE ORDER UPON WHICH SUCH CLAIM IS BASED. BUYER SHALL NOT BE LIABLE FOR PENALTIES OF ANY KIND. EACH CLAUSE OF THIS PARAGRAPH IS SEPARATE FROM THE OTHERS AND FROM THE REMEDY LIMITATIONS AND EXCLUSIONS ELSEWHERE IN THESE TERMS, AND EACH WILL APPLY NOTWITHSTANDING ANY FAILURE OF ESSENTIAL PURPOSE OF A REMEDY OR TERMINATION OF THESE TERMS OR OF A PURCHASE ORDER.
31. JURISDICTION AND VENUE: These Terms, together with all Purchase Orders submitted in accordance with these Terms, shall be interpreted, construed and enforced in all respects in accordance with the laws of the State of Kansas, without giving effect to its conflict of laws principles. For any suit or proceeding to enforce the provisions of these Terms and/or the Purchase Order, Seller irrevocably consents to the exclusive venue in and jurisdiction of the courts of the State of Kansas in Johnson County, or the United States District Court in which Johnson County, Kansas is included.
32. ENTIRE AGREEMENT: These Terms and each Purchase Order, together with any attachments and documents incorporated therein by reference, constitute the entire agreement by and between the parties regarding the subject matter contained herein and supersedes all prior and contemporaneous undertakings and agreements by and between Seller and Buyer, whether written or oral, with respect to such subject matter.
REV DATE January 1, 2022