CORRUPT PRACTICES ACT, AND THAT
THE APPROPRIATE VISA, EXPORT LICENSES, ETC. ARE USED IN CONNECTION WITH THE
EXPORTATION OF THE GOODS TO THE COUNTRY DESIGNATED BY PRINCIPAL FOR DELIVERY.
(16)
AGENT SHALL ITSELF COMPLY WITH AND SHALL REQUIRE THAT FACTORIES ARE IN
COMPLIANCE WITH PRINCIPAL'S CODE OF CONDUCT (THE "CODE"), WHICH IS ATTACHED
HERETO AS EXHIBIT A, INCLUDING ANY MODIFICATION OF SUCH AS MAY BE PROVIDED BY
PRINCIPAL FROM TIME TO TIME.
SUCH STEPS SHALL INCLUDE, BUT ARE NOT LIMITED TO:
(A)
ENSURING THAT ALL MANUFACTURERS, SUBCONTRACTORS AND SUPPLIERS
WORKING ON, PRODUCING GOODS FOR OR SUPPLYING GOODS TO PRINCIPAL EXECUTE AND
RETURN TO PRINCIPAL OR TO ITS REPRESENTATIVE ALL DOCUMENTS REQUIRED TO ENSURE
COMPLIANCE WITH THE CODE.
SUCH DOCUMENTS INCLUDE, BUT ARE NOT LIMITED TO,
MANUFACTURING ACKNOWLEDGEMENTS AND SUBCONTRACTOR MANUFACTURING ACKNOWLEDGEMENTS,
IN SUCH FORM AS PRINCIPAL OR ITS REPRESENTATIVE SHALL PROVIDE TO AGENT FROM TIME
TO TIME AND AS OFTEN AS PRINCIPAL DEEMS NECESSARY TO ENSURE COMPLIANCE WITH THE
CODE.
3
(B)
PERIODICALLY INSPECTING THE FACILITIES OF ALL MANUFACTURERS
AND SUBCONTRACTORS EVERY THREE MONTHS AND PROVIDING A WRITTEN EVALUATION OF
THESE INSPECTIONS TO PRINCIPAL OR TO ITS REPRESENTATIVE IN SUCH FORM AS MAY BE
REQUIRED BY PRINCIPAL OR ITS REPRESENTATIVE FROM TIME TO TIME.
(C)
FOR ALL MANUFACTURERS AND SUBCONTRACTORS TO BE USED BY AGENT
TO PRODUCE PRODUCTS AT THE TIME OF THE EXECUTION OF THIS AGREEMENT, CONDUCTING A
DETAILED EVALUATION OF THE PRODUCTION AND RESIDENTIAL FACILITIES AND PROVIDING A
WRITTEN EVALUATION OF THESE INSPECTIONS IN SUCH FORM AND AS OFTEN AS IS REQUIRED
BY PRINCIPAL OR ITS REPRESENTATIVE FROM TIME TO TIME.
(D)
IN THE EVENT THAT AGENT HAS KNOWLEDGE THAT ANY MANUFACTURER IS
NOT PRODUCING THE PRODUCTS IN COMPLIANCE WITH APPLICABLE LOCAL LAWS AND/OR THE
CODE OF CONDUCT, AGENT SHALL IMMEDIATELY NOTIFY PRINCIPAL.
FURTHER, AGENT SHALL
PROVIDE TO PRINCIPAL A CERTIFICATE AS TO THE COUNTRY-OF-ORIGIN OF THE PRODUCTS.
(E)
AGENT IS RESPONSIBLE FOR COSTS ASSOCIATED WITH A THIRD PARTY
AUDITING FIRM PROVIDING SOCIAL ACCOUNTABILITY AND SECURITY, INCLUDING WITHOUT
LIMITATION CTPAT AUDITS. HOWEVER, AGENT ACKNOWLEDGES THAT AUDITS AS REQUESTED BY
PRINCIPAL WILL BE NO MORE FREQUENT THAN EVERY SIX (6) MONTHS, HOWEVER ADDITIONAL
AUDITS OF AGENT REQUESTED BY PRINCIPAL MAY BE MORE FREQUENT, IN WHICH CASE THE
COSTS SHALL BE BORNE BY PRINCIPAL. COSTS FOR THE INITIAL AUDIT, EXCEPT
ASSOCIATED TRAVEL EXPENSES, AND ALL COSTS ASSOCIATED WITH REMEDIATION OF
DEFICIENCIES AS IDENTIFIED AS A RESULT OF THE AUDIT SHALL BE INCURRED
EXCLUSIVELY BY AGENT. PRICING OF PRODUCTS HEREUNDER SHALL NOT INCREASE AS A
RESULT OF ANY AUDIT ACTIVITIES OR REMEDIATION COSTS. PRINCIPAL WILL PROVIDE
AGENT WITH AN INVOICE FROM A THIRD-PARTY AUDIT FIRM, AUDIT RESULTS, AND
REMEDIATION REQUIREMENTS FOLLOWING ANY SUCH AUDIT. PRINCIPAL SHALL ASSUME
FINANCIAL RESPONSIBILITY TO MAKE PAYMENT OF SAID INVOICE WITHIN TERMS. IF
PRINCIPAL PAYS ANY INVOICE, PRINCIPAL WILL BE ENTITLED TO OFFSET THAT AMOUNT
FROM ANY AMOUNTS OWING TO AGENT. IF ANY SUCH SIX-MONTH AUDIT REVEALS ANY
MATERIAL NON-COMPLIANCE ON THE PART OF AGENT OR ITS MANUFACTURERS IN RESPECT OF
SOCIAL ACCOUNTABILITY AND SECURITY