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FXI Specialty Terms

Specialty Terms to Blanket Purchase Order between Direct Supply Manufacturing, Inc. and FXI DE CUATITLAN, S.A. DE C.V. (formerly known as FOAMEX DE MEXICO)

Costing and Payment. Except as set forth herein, costing is firm through the term of the Blanket PO. Payment terms are net 30 after Product shipment and receipt of your invoice.

Communication and Invoicing. You will accept and acknowledge our purchase orders within one business day by Nucleus (DSM electronic supplier interface system). You agree to electronically communicate all invoices to us on the day the Products are shipped or by 4:00 (CST) the day after the Products are shipped. There is no minimum purchase commitment or requirement. The invoice will include the costs and other terms on our purchase order. If the costs or terms are incorrect, you will notify us prior to shipment; you agree to ship and invoice us per the purchase order if you fail to notify us prior to shipment of any discrepancy. Our account will not be placed on credit hold without at least three business days’ notice and an opportunity to cure. Your invoices will include the tracking number and either the carrier name or Standard Carrier Alpha Code and product serial numbers.

Lead Times/Disruptive Events. You agree to proactively notify us when any Product is unavailable for shipment within the agreed-upon leadtime and you are responsible for freight charges on any late shipments should you fail to notify us of the delay prior to shipment. Notwithstanding the foregoing, you may change the mode of shipment to meet expected delivery dates so long as we are notified prior to shipment. If a delay results from fault on your part and you fail to notify us of such delay in a timely manner, you agree to pay for and not charge us or our customer for any freight charges in excess of the amount associated with the originally requested method of shipment. You agree to ship Products FIFO, i.e. ship those Products identified in the oldest of our purchase orders first if such Products are available. You agree not to split orders without our request or approval. Time is of the essence for each order.

Return Goods. Products may be returned at our request; Products covered under warranty will be accompanied with a photo of the Product to be returned (unless otherwise agreed). For large order returns and upon your reasonable request, we shall coordinate for shipment back to you a sampling of those Products which will be returned. Restocking fees do not apply to return of defective Products but shall apply to Products that meet the Feature Guideline and are unused by us. We shall pay return shipping on returned Products, and you shall refund to us the shipping cost for all Products determined to be defective. All other Products can be returned to you, and you will issue credits in an amount agreed to by the parties within 10 business days of return. You agree to notify us of credits using Nucleus with all such credits referencing our original purchase order number.

Quality & Audits. Supplier will manufacture quality Products consistent with specifications, legal requirements, and meeting or exceeding industry standards. Supplier has a quality control and assurance program in place and is IOS 9000 (or equivalent) in place or has received an exemption from this requirement from DSM’s Quality Manager. Supplier will permit and cooperate with regular and ongoing quality and compliance audits by DSM or its representatives at Supplier’s or its subcontractor’s (as applicable) manufacturing facility(s) at DSM’s sole cost and in such a manner as not to unreasonably interfere with Supplier’s operations.

Shipping. All products will be drop shipped, F.O.B. shipping point, from a U.S. location. There is no drop ship penalty, minimum order, handling charge or cancellation fee. You agree to reference on all shipping labels and packing slips our name, the ship-to information, our customer PO number, and any other shipment notes (except Supplier-only notes) in our purchase order.

Third Party Freight Program. Our Third Party Freight (“TPF”) program consists of: (1) a parcel program in which Products are shipped through our designated parcel carrier; and (2) a less-than-truckload (“LTL”) program in which Products are shipped through our designed transportation provider. The following terms apply to TPF:

  1. Third Party Billing. You will ship Products to our customers utilizing third party billing. The TPF provider will invoice us directly for the freight charges. You will provide the following information to us so that we can accurately calculate freight costs: the weight and carton dimensions of each Product when packaged for shipment and the freight class of each item. In addition, for “parcel” shipments, you will identify the quantity of Products to be shipped by common carrier.
  2. Claims Filing. We will file claims on our behalf and/or on behalf of our customers. Unless otherwise requested by our operations team, we will be responsible for initiating call tags, ARS labels, or LTL pick-ups for TPF shipments. However, if a claim or return involves some error on your or your Staff’s part, then you will reimburse us for any excess charges.
  3. Late TPF Shipments. You agree to pay for all freight charges on late TPF shipments unless caused by the TPF carrier in which case we will review the applicable late TPF shipment with you and agree upon the credit amount. Notwithstanding anything to the contrary herein, we may collect after-shipment TPF charges from you for if such charges were caused by you or your Staff.
  4. Freight Quotes. You will have a reduced role in executing freight quotes for TPF shipments. We or our affiliated company’s Logistics team will manage and provide all freight quotes for TPF shipments. You will provide us Product information in order to successfully complete the freight quote. For orders of Products $5,000 or more, we have authorized our affiliated company’s sales team to directly contact you to request a competitive supplier freight quote for LTL shipments. If contacted, you may provide a freight quote at your reasonable discretion. If a freight quote is provided and our affiliated company’s sales team decides to ship the Product order with that quote, then your network of carriers will arrange for shipment as F.O.B. shipping point, reasonable freight prepaid and added to the invoice.

If you arrange for or are responsible for arranging for freight of a Product order, then we will only be responsible for the actual freight amount charged by the carrier. Any freight charges in excess of your quote or not set forth on the original invoice for the applicable Products are your sole responsibility. In addition, if you arrange for or are responsible for arranging for freight of a Product order, then in the event of damage, concealed damage or lost shipment, you will file claims on our behalf or on behalf of our customer as we may advise you. Unless we request otherwise, you agree to initiate call tags, ARS labels, and/or LTL pick-ups within one business day of request. We will reimburse you for all call tags and freight charges, unless the return is a result of your error.

Product Ownership; Inventory Responsibility. Title to all raw materials, sub-assemblies and Products are Supplier’s property and will be held in Supplier’s or its subcontractor’s inventory until Products have been loaded for shipment at the agreed-upon shipping location within the United States at which point title to such Products will transfer to DSM. There are no minimum quantities or order commitments for Products by DSM from Supplier.

Indemnity/Limitation of Liability/Insurance. DSM agrees to defend, reimburse, indemnify, and hold harmless Supplier from and against all assessments, claims, demands and judgments for liability, damages (including without limitation punitive damages), costs (including attorneys’ fees and litigation expenses through trial and appeal), and fines (collectively “Liability”) made or recovered against Supplier arising out of or relating to: a) any misrepresentations to DSM’s Customers to the extent caused by DSM or its Employees; b) any intentional misconduct or gross negligence by DSM or its employees; c) violation of any third party intellectual property rights caused by the Product Trade Name (defined below) (if provided by DSM); or d) violation of any law by DSM. Supplier agrees to defend, reimburse, indemnify and hold harmless DSM and all of its agents, employees, customers, and insurers and Suppliers from and against all Liability made or recovered against a DSM lndemnitee for any of the following caused by Supplier, Supplier’s employees, agents, representatives, principals, subcontractors or related entities (collectively “Staff’), or arising out of or relating to the manufacture, production, design, or shipment of any Product Supplier provides a:) bodily injury or death to any person or property damage; b) violation of any intellectual property rights; or c) violation of any law, misrepresentation or breach of the Agreement. An indemnitee shall promptly notify the indemnifying party in writing of any claim and cooperate in its defense. “Trade Name” means the Product name, trademark, and logo. Except for any obligations of indemnification or otherwise expressly provided herein, UNDER NO CIRCUMSTANCE WILL A PARTY BE LIABLE FOR ANY INDIRECT, INCIDENTAL, CONSEQUENTIAL, SPECIAL OR PUNITIVE DAMAGES OR LOST PROFITS NO MATTER HOW ARISING OR WHETHER SUCH PARTY HAS BEEN ADVISED OF THE POSSIBILITY OF SUCH DAMAGES. Except for any obligations of indemnification or otherwise expressly provided herein, THE TOTAL LIABILITY, lF ANY, OF DSM WILL BE LIMITED TO THE COST OF THE PRODUCT(S) GIVING RISE TO THE CLAIM. You shall name Direct Supply Manufacturing, Inc. as an additional insured on all insurance policies required by this Blanket PO and its terms. This Section shall survive the termination or expiration of this Blanket PO for any reason.

Medical Device Information. Some or all of the Products are medical devices as that term is used by the U.S. Food and Drug Administration (“FDA”) under the Safe Medical Device Act and U.S. Food, Drug & Cosmetics Act (collectively the “Acts”). Except for Joerns-branded Products, FDA requirements for Products will be further described in the applicable Feature Guidelines for each Product. For Joerns branded Products, you are the Contract Manufacturer and agree to produce Products that meet the specifications provided by the Specification Developer (e.g., Joerns). For all non-Joerns branded products, DSM is solely a domestic distributor of the Products as is not the Specification Developer, Contract Manufacturer, Initial Importer, or Repackager/Relabeler (as those terms are defined in the Acts). Supplier, as the Product Manufacturer, agrees to (i) comply with all relevant laws and regulations relating to the specification, manufacture, importation and initial sale of the products, including but not limited to relevant FDA laws and regulations; (ii) maintain all applicable FDA registrations and listings throughout the term of the Blanket PO. All FDA Product listings shall be marked “Confidential” so they are not included on the FDA’s publicly available database; (iii) ensure the Products are not and will not become adultered or misbranded; (iv) implement, follow and provide certification of all Good Manufacturing Product’s (“GMP’s”) to the extent applicable to any Products; (v) maintain compliance with all post-sale requirements of the Act, including but not limited to Medical Device Reporting, Medical Device Reports of Corrections and Removals, and those record keeping requirements set forth in the Act, and (vi) obtain and maintain tests from recognized third-party laboratories which support all Product claims, in cluing but not limited to flammability, Underwriters Laboratory (UL) certifications, and ETL listings, if we agree to assist in procuring such tests, you agree to provide samples free of charge. FDA Establishment Registration 3004728444 (manufacturer). Upon our request, you agree to provide us documentation evidencing your compliance with these requirements and you agree to promptly notify us of any breach of these requirements.

Professionalism and Compliance. Each party represents and agrees that it and its Staff will comply with all applicable international, federal, provincial, state and local laws, rules and regulations applicable to this Blanket PO and the products provided hereunder including, without limitation, the U.S. Foreign Corrupt Practices Act, antitrust laws, local employee health and safety laws, and any applicable trade restrictions, export controls, and anti-boycott laws and regulations. Each party represents that it will not pay, offer, promise to pay, or authorize payment of any bribe or other unlawful benefit or remuneration to any government official, political party official, candidate for office, or representative of any public international organization to obtain or retain business or to secure any improper advantage. This includes without limitation any payment, offer, benefit, solicitation, or remuneration which is unlawful under the laws of the United States, a treaty to which the U .S. is a party, or the Supplier’s country of operation. Supplier certifies that it is not and has not been subject to any investigation (other than previously disclosed to DSM), prosecution, litigation, conviction, assessment or finding of liability by any governmental authority involving the design, manufacture, import or export of any products, materials or software; the unlawful treatment or employment of employees including without limitation any children; or any other law, regulation or treaty which is materially related to the Supplier’s obligations under this Blanket PO.

Export/lmport. Each party agrees that it and its subsidiaries, employees, agents, and Contractors, and, as to Supplier, additionally Supplier’s Staff, will comply with all export control laws and not export any product, equipment, software, data, device, information, or work product to any country in violation of such export laws. Supplier will be the importer and exporter of record and/or prepare all customs filings for any such importation or exportation. Supplier will be responsible for all duties, taxes, tariffs, and fees as well as proper filing of country of origin, U .S. and all other country’s customs documents and reports associated with the import and export of the Products in and from the U.S. and country of origin (or any other country). Supplier will be listed as the consignee on all documents, and only Supplier will be listed as “in care of” party for import in to the United States. DSM will cooperate with and assist Supplier with any information known or readily available to DSM necessary for Supplier to perform its obligations under this Blanket PO.

Miscellaneous. These Specialty Terms, our Standard T&Cs, the Blanket PO, and our individual POs are the full, final, and integrated Agreement (“Agreement”) between the parties and supersede all prior contracts or understandings which relate to the subject matter of the Agreement. This Agreement does not amend, supersede, or affect any “Approved Supplier Relationship Agreement (or similar contract) for the Supplier’s branded products nor does it amend, supersede, or affect ay contract DSM may have with any of your subsidiary or affiliated entities which remain in full force and effect. You may not assign or subcontract this Agreement or any right or obligation thereunder without our prior written consent.

Last updated 11.11.2020