Terms and Conditions of Purchase

1. Documents.  These Terms and Conditions are being issued in connection with a request for quotation, blanket purchase order, release, purchase agreement, or similar document issued to Seller by Seller, Inc., or one of its affiliated companies (“Buyer”).  The term “Buyer” includes all of its affiliated companies.  Any reference to an “Order” in these Terms and Conditions includes any request for quotation, blanket purchase order, release, purchase agreement, or similar document issued to Seller by Buyer.  In connection with an Order issued to Seller, Buyer has also delivered to Seller a copy of its Customer Specific Requirements.  Unless the context requires otherwise, the term “Order” includes these Terms and Conditions and the Customer Specific Requirements.  Seller agrees to comply with all of the requirements of the Customer Specific Requirements.  If these Terms and Conditions are not consistent with any of the requirements of the Customer Specific Requirements, then the requirements of these Terms and Conditions will control.  If these Terms and Conditions are inconsistent with the specific provisions of any Order, then the specific provisions of the Order will control.  If the specific terms of any Order are inconsistent with the Customer Specific Requirements, then the specific provisions of the Order will control.  These Terms and Conditions, together with the Customer Specific Requirements and any request for quotation, blanket purchase order, release, purchase agreement, or similar documents issued to Seller by Buyer, constitute one agreement and may not be treated as separate contracts.

2. Acceptance.  Any Order is an offer to Seller by Buyer and does not constitute an acceptance of any offer to sell or proposal made by Seller.  Any reference to any offer to sell or proposal made by Seller is solely for the purpose of incorporating the description and specifications of goods and services contained in the offer to sell or proposal to the extent that the description and specifications do not conflict with the description and specifications contained in the Order.  Seller’s delivery of goods, written acceptance, commencement of any work under the Order, or any other conduct by Seller recognizing the existence of a contract with respect to the subject matter of the Order will constitute Seller’s acceptance of an Order (including these Terms and Conditions) and constitutes Seller’s agreement to provide the goods or services described in the Order at the prices specified in the Order.  No price increases will be permitted without the written consent of Buyer, including but not limited to price increases to cover increases in the cost of raw materials, parts, components, fuel, energy, labor, supplies, overhead, or transportation.  Any additional or different terms and conditions proposed by Seller are rejected by Buyer and are not part of the Order, unless specifically accepted by Buyer in writing.  Seller’s failure to obtain written acceptance of additional or different terms from Buyer will be conclusive evidence of acceptance of these Terms and Conditions by Seller and rejection by Buyer of Seller’s terms and conditions.

3. Shipping.

(a) Seller must properly pack, mark, and store the goods that are the subject matter of the Order (the “Goods”) in accordance with Buyer’s requirements (as specified in the Customer Specific Requirements and any Order) and any carrier.

(b) Seller will bear all costs of packing, marking, and storing the Goods, including any expenses incurred by Buyer as a result of improper packing, marking, or storing, unless otherwise stated in the Order.

(c) Seller will reimburse Buyer for expenses incurred by Buyer as a result of improper packing, marking or shipping and for the return of rejected Goods.

(d) Unless otherwise provided in the Order, Buyer will arrange for and bear all costs of shipping the Goods, including, but not limited to, the cost of customs duties, insurance, and freight.

(e) Packing slips showing Seller’s name, order numbers, and quantities must accompany all shipments.

(f) Original shipping documents (bills of lading, express receipts, etc.), signed by the carrier, must be attached to Seller’s invoice and mailed not later than the day after shipment.

(g) Risk of loss will pass to Buyer upon delivery to Buyer’s facility or any other location specified on the face of the Order, except that risk of loss for excess quantities delivered to Buyer will only pass upon acceptance of the excess quantities by Buyer.

(h) Buyer may require shipment by more expeditious method, at Seller’s expense, if Seller fails to meet required time for delivery.

4.Invoices and Payment.  Invoices must include order number, symbol number, plant, and other information sufficient to enable Buyer to easily identify Goods or services provided under the Order (the “Services”).  Separate invoices are required for each individual shipment.  If time for payment is not otherwise stated on the Order, the payment terms will be net 60 days.  Time for payment will not begin until Buyer receives correct and complete invoices and Seller’s cash discount privileges to Buyer will be extended until payment is due.  Buyer may withhold payment until Buyer has received evidence, satisfactory to the Buyer, of the absence of any liens, encumbrances, or claims on the Goods or Services.  Seller agrees that all of its accounts with Buyer (whether arising under an Order or any other agreement or arrangement between Buyer and Seller) will be administered on a net settlement basis.  Buyer may set off and recoup debits and credits, including Buyer’s attorney fees and costs of enforcement, against any of Seller’s accounts regardless of the basis for the debits or credits and without additional notice.  Seller warrants that the prices for the Goods or Services are no less favorable than those that Seller currently extends to any other customer for the same or similar goods or services in similar quantities.  If Seller offers a lower price for the same or similar goods or services to any other customer during the term of an Order, then Seller will immediately offer Buyer the same price for the Goods or Services on the same terms and conditions offered to the other customer.  Seller warrants that the prices shown on the Order are complete and that no additional charges of any type, including but not limited to sales taxes, value-added taxes, other taxes, or fees may be added without Buyer’s express written consent.

5.Time and Quantity; Excusable Delay.  Delivery or performance must be made at the time and in the quantities specified in the Order.  If no delivery date is specified or otherwise provided for, delivery must be made within a reasonable time.  Time and quantities are of the essence of the Order.  Neither party will be liable for a failure to perform that arises from causes or events beyond its reasonable control and without its fault or negligence (sometimes known as “force majeure”), provided (i) the delayed party must give prompt notice of the delay and (ii) during the period Seller is delayed, Buyer, at its option, may purchase Goods from other sources and reduce the quantities set forth in the Order without any liability to Seller, or have Seller provide the Goods from other sources in quantities and at times requested by Buyer and at the price specified in the Order.  If any delay lasts for more than 30 days, or if Seller cannot provide adequate assurance that any delay will cease within 30 days, Buyer may immediately cancel the Order without liability.  Changes in general economic conditions, increased costs, and a party’s own labor difficulties will not excuse timely performance under the Order.

6. Inspection and Audit; Other Information.  Buyer will have the right to enter Seller’s facility at reasonable times to inspect the facility, Goods, material, and any property of Buyer covered by the Order and Seller’s books and records relating to the Order and the Seller’s performance under the Order.  The fact that Buyer may have inspected, tested, or failed to inspect or test any Goods will not affect any rights of Buyer under the Order.  Buyer’s inspection of the Goods, whether during manufacture, prior to delivery, or within a reasonable time after delivery, will not constitute acceptance of any work-in-process or finished Goods.  Nothing in the Order will relieve Seller from any obligation to inspect or test the Goods.  Buyer will have the right at reasonable times and upon reasonable notice to audit those books and records of the Seller reasonably necessary to verify the amounts due Seller.  Seller must make those books and records available to Buyer or its designees and provide copies of those books and records to Buyer or its designees upon request.

Upon request by Buyer, Seller must promptly deliver to Buyer the following financial and other information:

(a) upon receipt of the Order, Seller’s financial statements for the two most recently ended fiscal years (audited, if available);

(b) within 90 days after the end of each fiscal year, Seller’s financial statements for the most recently ended fiscal year (audited, if available);

(c) within 15 days after the end of each fiscal quarter, Seller’s financial statements for the most recently ended fiscal quarter; and

(d) any other information that Buyer may reasonably require to demonstrate that Seller will be able to perform its obligations under the Order (including but not limited to production schedules, accounts receivable agings, accounts payable agings, and organizational charts).

All financial statements (including interim financial statements) delivered to Buyer under this paragraph:

(e) must be certified to Buyer by Seller’s chief executive officer and chief financial officer unless they are audited financial statements;

(f) must include a balance sheet, income statement, and cash flow statement;

(g) must be prepared in accordance with generally accepted accounting principles consistently applied;

(h) if Seller is a subsidiary or other business unit of another organization, must include financial statements (consolidated or combined) for the total organization and separate financial statements for the specific business unit.

7. Changes.

(a) Changes to the Order, changes to the design or specifications of the Goods or Services, and payment of extra charges will be permitted only when authorized by Buyer in a written instrument signed by Buyer.

(b) Buyer at any time in writing may change the design or specifications of the Goods or Services or other matters affecting the scope of Seller’s work, or the method of packing and shipping, or the place of delivery, and Seller agrees to comply with the changes promptly.  If any change affects cost or time of delivery or performance, Buyer will equitably adjust the price or delivery terms of the Order after Buyer has received documentation satisfactory to Buyer.  Any changes to the Order will be made in accordance with paragraph 18.

8. Optional Termination.

(a) In addition to any other rights of Buyer to cancel or terminate the Order, Buyer may terminate all or any part of its purchase obligations, at any time and for any reason, by written notice of termination to Seller.  Buyer will have this right of termination notwithstanding the existence of an excusable delay under paragraph 5.

(b) Upon termination under this paragraph 8, Buyer’s obligation to Seller will be to pay to Seller:  (i) the order price for finished work and completed Services that conform to the requirements of the Order; (ii) Seller’s actual costs of work-in-process and parts and materials that Seller produced or acquired under the Order and transferred to Buyer; (iii) Seller’s actual costs of immediately terminating subcontracts and settling claims of subcontractors; and (iv) Seller’s actual costs of protecting Buyer’s property in Seller’s possession.  Buyer will make no payments for finished Goods, work-in-process, or raw materials fabricated or procured by Seller in amounts in excess of those authorized in delivery releases or schedules nor any undelivered Goods that are in Seller’s standard stock or are readily marketable.  Buyer’s obligations upon termination may not exceed those Buyer would have had to Seller in the absence of termination.

(c) Seller must furnish to Buyer, within one month after the date of termination, Seller’s termination claim, which must consist exclusively of the items for which Buyer may be responsible under paragraph 8(b).  Buyer may audit Seller’s records and physical inventory, before or after payment, to verify Seller’s termination claim.

(d) Buyer will have no obligation to Seller if Buyer terminates its purchase obligations because of default by Seller under paragraph 10.

9. Warranties; Recalls.  In addition to any warranties required or implied by applicable law, Seller warrants that all Goods and Services will:

(a) conform to the specifications, drawings, samples or descriptions furnished to or by Buyer;

(b) be of good quality and workmanship;

(c) be free of defects in design (except to the extent that Buyer provided the design), materials and workmanship;

(d) be merchantable;

(e) be fit for the particular purposes intended by Buyer; and

(f)comply with all applicable environmental, occupational, safety, health and other laws, rules and regulations applicable to the design, function, or use of the Goods.

Seller acknowledges that Seller knows of Buyer’s intended use of the Goods.  Seller expressly warrants that all Goods that have been selected, designed, manufactured or assembled by Seller based upon Buyer’s stated use will be fit and sufficient for the particular purposes intended by Buyer and will have been tested to, and comply at all times with, the standards provided by Buyer.  Seller must immediately notify Buyer of any errors in specifications or drawings provided by Buyer.  Seller further warrants that it has clear title to the Goods and that the Goods will be delivered free and clear of liens, encumbrances, and claims.  Seller is aware that any components or assemblies that Seller sells to Buyer will be sold, either separately or incorporated into other products manufactured by Buyer, to original equipment manufacturers.  In addition to the other warranties made by Seller in this paragraph 9, Seller warrants that all Goods will comply with all warranties made by Buyer in connection with the resale of the Goods to the original equipment manufacturer, whether separately or incorporated into other goods.  If an original equipment manufacturer makes a claim against Buyer regarding Goods that arises out of, results from, or otherwise relates (directly or indirectly) to a breach of any warranty made by Seller in these Terms and Conditions or in the Order, then (i) Seller will have, in addition to any other obligations Seller may otherwise have under these Terms and Conditions or the Order, all of the obligations that Buyer would have to the original equipment manufacturer and (ii) Buyer will have, in addition to any other remedies it may otherwise have, all of the rights and remedies with respect to Seller resulting from the breach that the original equipment manufacturer has against Buyer.  Seller will indemnify and hold Buyer harmless from the cost of any recall campaigns or other corrective service actions (whether initiated by Buyer, Buyer’s customer, or any governmental agency) that are required to rectify nonconformities in the Goods that are the result of defects in design (to the extent that Seller provided the design), materials, and workmanship.

10. Breach.  The following will constitute events of default by Seller:

(a)  any failure by Seller to timely perform Services or deliver conforming Goods as specified by Buyer;

(b) any other failure by Seller to timely perform, observe or comply with any material provisions of the Order, including Seller’s warranties;

(c) any repudiation by Seller of any material provisions of the Order, including Seller’s warranties;

(d) Seller’s failure to make progress so as to endanger timely and proper completion of Services or delivery of Goods;

(e) Seller’s failure to be competitive in terms of cost, quality, service, or delivery;

(f) Seller’s insolvency or the filing of a voluntary or involuntary petition of bankruptcy by or against Seller, or the appointment of a receiver or trustee for Seller, or the execution of an assignment for the benefit of Seller’s creditors, provided that the petition, appointment, or assignment is not vacated or nullified within 15 days of the event.

Seller may correct a failure or breach described in (b), (c), or (d) above within 10 days or any shorter commercially reasonable period specified by Buyer after receipt of notice from Buyer specifying the failure or breach.

11. Buyer’s Remedies.  If an event of default by Seller occurs, Buyer will:

(a) have all rights and remedies afforded by applicable law;

(b) be entitled to reduce quantities under the Order to the extent Buyer rejects Goods as nonconforming;

(c) have the right to cancel all or any part of the Order, and Buyer will have no liability to Seller;

(d) be entitled to collect from Seller all of its damages, costs, and expenses associated with Seller’s breach, including incidental and consequential damages, court costs and attorneys’ fees.

All rights and remedies reserved to Buyer under the Order are cumulative and in addition to any other remedy provided in law or equity.  Buyer’s payment for or acceptance of any Goods will not discharge Seller from its obligations or constitute a waiver of any of Buyer’s rights.  Unless Buyer makes a written request, Seller may not replace nonconforming Goods.  Buyer must hold nonconforming Goods for disposition in accordance with Seller’s instructions at Seller’s risk and expense.  Seller’s failure to provide written instructions within 10 days, or any shorter period as may be commercially reasonable under the circumstances, after notice of nonconformity, will entitle Buyer, at Buyer’s option, to charge Seller for storage and handling, or to dispose of the Goods, and Buyer will have no liability to Seller.  Payment for nonconforming Goods will not constitute an acceptance of the Goods, limit or impair Buyer’s right to assert any legal or equitable remedy, or relieve Seller’s responsibility for latent defects.

12. Bailed Property.  As used in this Order, “Bailed Property” means any supplies, materials, tools, jigs, dies, gauges, fixtures, molds, patterns, equipment and other items used by Seller to perform the Order, if:

(a) the property was furnished by Buyer (directly or indirectly);

(b) Buyer has reimbursed Seller for the property, or

(c) the Buyer has specifically identified the property as “Bailed Property” or as the property of the Buyer, its customer, an OEM, or another party.

The Seller acknowledges and agrees that the Seller has no ownership interest in any Bailed Property and that the Bailed Property remains the property of its owner, whether the Buyer, its customer, an OEM, or another party.  The Seller agrees to execute and deliver a bailment agreement in a form requested by the Buyer with respect to any Bailed Property in the Seller’s possession.  The Seller further acknowledges that its rights in the Bailed Property are limited to the rights to possess and use the Bailed Property in accordance with this Order and any bailment agreement requested by the Buyer.  Seller acknowledges that the Buyer’s rights to possess and control the Bailed Property (whether or not the Buyer is the owner of the Bailed Property) are superior to the Seller’s rights to possess and control the Bailed Property.  Seller will not move the Bailed Property to another location without the prior written consent of Buyer.  All Bailed Property must be clearly marked as the property of Buyer or another party designated by the Buyer.  Seller will bear the risk of loss of the Bailed Property and must take all necessary measures to preserve the title of the owner of the Bailed Property.  Seller will be responsible for any damage to the Bailed Property in Seller’s possession or control, including damage that occurs despite Seller’s exercise of reasonable care, other than reasonable wear and tear.  The Bailed Property must be properly maintained by Seller and used only to perform the Order.  Upon the request of Buyer, the Bailed Property must be immediately released to Buyer or delivered to Buyer by Seller, either (i) Delivered Duty Paid, F.O.B. transport equipment at Seller’s plant, properly packed and marked in accordance with the requirements of the carrier selected by Buyer, or (ii) to any location designated by Buyer, in which event Buyer will pay to Seller the reasonable cost of delivering the Bailed Property to the designated location.  Seller will cooperate with Buyer’s removal of the Bailed Property from Seller’s premises.  Buyer will have the right to enter onto Seller’s premises at all reasonable times to inspect the Bailed Property and Seller’s records with respect to the Bailed Property.  Where permitted by law, Seller waives any lien Seller might otherwise have on any of Buyer’s property.

13. Security Interest.  Seller grants to Buyer a security interest in all inventory (including materials, work-in-process, and finished Goods) held by buyer in connection with the Order.  Seller agrees that Seller’s interest in the collateral is subordinated to Buyer’s security interest.  In the event of default by Seller, Buyer will have all rights of a secured party under applicable law.  Seller authorizes Buyer to make filings of all financing statements necessary to perfect the security interest and to protect Buyer’s rights to the Bailed Property as described in paragraph 12.

14. Proprietary Rights.  Seller will indemnify, defend and hold harmless Buyer, its officers, directors, employees, agents, representatives, or successors and its customers and users from and against any claims, demands, losses, suits, damages, liability and expenses (including reasonable attorneys’ fees) arising out of any suit, claim, or action for actual or alleged, direct or contributory, infringement of, or inducement to infringe on, or misuse or misappropriation of any present or future patent, patent application, copyright, trademark, industrial design right, utility right, chip mask right, trade secret or other proprietary right by reason of the manufacture, use or sale of the Goods or Services.  Seller’s obligations will apply even though Buyer furnished all or any portion of the design.  Seller grants Buyer, with respect to (i) the Goods, (ii) any inventions or operating software developed in the course of Seller’s activities under the Order, and (iii) any patents owned or controlled by Seller which cover any application of the technology embodied in the information or data Seller acquires or develops in the course of Seller’s activities under the Order, a worldwide, nonexclusive, royalty-free, permanent, paid-up, irrevocable license, with a right to sublicense, to repair and have repaired, to reconstruct and have reconstructed, to make and have made, to sell and have sold, to market and have marketed, and to use and have used, the goods, inventions, operating software and patents, and additionally in the case of software, to decompile and reverse engineer.  When Goods are made to Buyer’s plans or specifications, the design, plans, and specifications will be Buyer’s property, may not be used by Seller for any purpose except the performance of the Order, and may not be disclosed to any other person without Buyer’s written permission.  If the Goods bear a trademark or trade name or other identifying mark of Buyer, no Goods, whether the result of rejects or overruns or otherwise, may be sold or otherwise disposed of to anyone other than Buyer.

15. Service and Replacement Parts.  For a period of seven to fifteen years after the expiration or termination of the order, at Buyer’s request, Seller will sell to Buyer:

(a) the Goods necessary to fulfill Buyer’s service and replacement requirements for the Goods at the prices specified in the Order plus any actual cost differential for packaging, and

(b) if the Goods are assemblies, service and replacement parts of the assemblies at prices that do not cause the total price of all parts of the assembly to exceed the price of the assembly specified in the Order less assembly costs, plus any actual cost differential for packaging.

(c) Obsolescence held by the seller at the end of the service term, is the responsibility of the Buyer for up to, but no greater than the twelve weeks as authorized by Buyer’s formal release schedule.

16. Liability and Indemnification.

(a) Seller will indemnify, defend and hold Buyer, its officers, directors, employees, agents, representatives, successors, customers, and users harmless from all claims, damages, and expenses (including attorneys’ fees) arising out of (i) Seller’s breach, (ii) any defect in the Goods or Services, (iii) the design of the Goods (whether or not defective), and (iv) errors, omissions, negligence or other wrongful conduct of Seller or its agents or subcontractors.  In any matter to which this paragraph applies, Buyer and its customers and users will have the right to select and retain counsel of their own choosing, all at Seller’s expense, and to participate in the defense.

(b) If Seller’s performance under an Order requires the Seller or its agents or subcontractors to be present on the premises of Buyer or one of its customers, Seller must take all necessary precautions to prevent the occurrence of any injury to persons or damage to property during the presence of the Seller, its agents, or its subcontractors on the premises of Buyer or its customers.  Seller will indemnify, defend, and hold Buyer, its officers, directors, employees, agents, representatives, or successors and its customers and users harmless from all claims, damages, and expenses (including attorneys’ fees) arising out of any act or omission of Seller, its agents, or its subcontractors during their presence on the premises of Buyer or its customers, unless the claims, damages, and expenses result solely from the gross negligence or willful misconduct of Buyer or its customer.

17. Insurance.  Seller must at all times carry and maintain insurance coverage in reasonable amounts covering workers compensation, employer’s liability, comprehensive general liability (including products/completed operations and blanket contractual liability), and automobile liability.  Seller must also insure all Bailed Property against loss or damage to the full extent of its insurable value, without deductible, at Seller’s cost, and must designate Buyer as the loss payee.  Seller must provide evidence of the coverage to Buyer upon request.

18. Entire Agreement; Modifications.  Seller agrees that the Order, including the Customer Specific Requirements, these Terms and Conditions, any attachments, exhibits or supplements attached to the Order, or any other matter incorporated into the Order by specific reference, constitutes the entire agreement between Seller and Buyer with respect to its subject matter and supersedes all prior or contemporaneous oral or written discussions, understandings, representations, and agreements.  Only a writing signed by an authorized representative of Buyer may modify the agreement.  Acceptance of deliveries or payment by Buyer will not be deemed acceptance or approval of any modifications proposed by Seller.

19. Severability.  If any provision of the Order should be determined by a court of competent jurisdiction to be invalid, the invalidity of that provision will not affect the validity of the remainder of the Order.

20. Assignment and Subcontracting.  Seller may not assign the Order, or any part of the Order, or subcontract any of its substantive duties under the Order, without Buyer’s prior written approval.  Neither Buyer’s approval nor any assignment or subcontracting by Seller will release Seller from any of its obligations under the Order.  Seller acknowledges and agrees that Buyer has issued the Order on its own behalf and on behalf of its affiliated companies.  Accordingly, Buyer and each of its affiliated companies will have the right to make purchases under the Order.

21. Taxes.  Unless otherwise specified, the price includes all taxes, duties, tariffs, and similar assessments.

22. Compliance.  Seller will comply with all applicable federal, state, local, and foreign laws, regulations, rules and orders, and agrees that the production of all Goods and the performance of Services  will comply with the requirements of the Fair Labor Standards Act of 1938, as amended, and any regulations or orders issued there under.  All invoices must certify compliance with the Fair Labor Standards Act.  Buyer will not pay any invoice that does not certify compliance with the Fair Labor Standards Act.  The equal opportunity clause set forth in 41 CFR Section 60-1.4, the employment of the handicapped clause set forth in 41 CFR Section 60-741.3, and the employment of veterans clause set forth in 41 CFR Section 60-250.3 are expressly incorporated by reference into these Terms and conditions, and Seller agrees to comply with these provisions as required by law or executive order, as they may be amended from time to time.

23. Currency; Governing Law.  Except as specifically provided, all references to currency in the Order refer to United States Dollars.  This agreement will be construed and enforced in accordance with the internal laws of the State of Michigan of the United States of America without regard to its conflict of laws principles.  Buyer and Seller agree that the United Nations Convention on Contracts for the International Sale of Goods (1980) will not apply to the Order or to the transactions contemplated by the Order.  Any legal proceeding arising under the Order must be brought in a state court sitting in Oakland County, Michigan, or in a federal district court sitting in Detroit, Michigan.  Seller consents to the personal jurisdiction of those courts and waives any defense that jurisdiction or venue is improper or inconvenient.  Seller agrees not to bring any legal proceeding arising under this agreement in any other forum.

24. Waiver.  Seller waives and releases any right to assert against Buyer consequential damages.

25.Special Provisions Applicable To Development Work.

(a) Documents produced or acquired by Seller during experimental or development work under the Order will belong to Buyer.

(b) Seller will furnish to Buyer, without restrictions of use or disclosure, the information and data (“Development Information”) Seller acquires or develops during experimental or development work specified in the Order (“Development Work”).  With respect to inventions which Seller conceives or first reduces to practice during Development Work, Seller grants to Buyer a permanent, paid-up, royalty-free, nonexclusive, worldwide, irrevocable license, with a right to sublicense, to make, have made, use, have used and sell, have sold, market, have marketed, and additionally, in the case of software, decompile and reverse engineer, manufactures, compositions, software and machines, and use and have used processes covered by patents on those inventions.

(c) At Buyer’s request, Seller will furnish to Buyer other information and data of Seller which Buyer deems necessary to understand and apply the Development Information and grant to Buyer permanent, paid-up, royalty-free, nonexclusive, worldwide, irrevocable licenses, with rights to sublicense, to make, have made, use, have used and sell, have sold, market, have marketed, and additionally, in the case of software, decompile and reverse engineer under any other patents owned or controlled by Seller which cover any application of that information and data.

26. Special Warnings.  Prior to and with the shipment of Goods, Seller must furnish Buyer sufficient warnings and notice in writing (including appropriate labels on Goods, containers and packing) of any hazardous material which is an ingredient or a part of any of the Goods, together with such special handling instructions as may be necessary to advise carriers, Buyer, and their respective employees of how to exercise that measure of care and precaution which will best prevent bodily injury or property damage in the handling, transportation, processing, use or disposal of the Goods, containers and packing shipped to Buyer.

27.No Implied Waiver.  The failure of either party at any time to require performance of the other party of any provision of the Order will in no way affect the right to require performance at any other time, nor will the waiver of either party of a breach of any provision of the Order constitute a waiver of any other breach of the same or any other provision.

28.Relationship Of Parties.  Seller is solely an independent contractor of Buyer and neither party will be the servant, agent, partner, or joint venturer of the other.

29. Quality Assurance.  Seller must comply with all quality standards and quality assurance procedures specified by Buyer, including those contained in Buyer’s Customer Specific Requirements.

30. Duty Drawback Rights.  This order includes all related customs duty and import drawback rights, if any (including rights developed by substitution and rights which may be acquired from Seller’s suppliers), which Seller can transfer to Buyer.  Seller agrees to inform Buyer of the existence of any such rights and upon request to supply such documents as may be required to obtain such drawback.

31.Advertising; Confidentiality.  Seller may not, without first obtaining the written consent of Buyer, in any manner advertise or publish the fact that Seller has contracted to furnish Buyer Goods or Services, or use any trademarks or trade names of Buyer in Seller’s advertising or promotional materials.  If Seller breaches this provision, Buyer will have the right to cancel the undelivered portion of any Goods or Services and will not be required to make further payments except for conforming Goods delivered or Services rendered prior to cancellation.  All information provided by or on behalf of Buyer to Seller or its employees, agents, subcontractors, or representatives may be used only for the purpose of fulfilling an Order, and will be held by Seller, and Seller will cause its employees, agents, subcontractors, and representatives to hold the information, in strictest confidence until the information becomes public through no fault of any of them.

32. Technical Information Disclosed to Buyer.  Seller agrees not to assert any claim (other than a claim for patent infringement) with respect to any technical information that Seller may have disclosed or may in the future disclose to Buyer in connection with the Goods or Services.  Seller must furnish to Buyer, or any other party designated by Buyer, without restrictions on use or disclosure, all information and data Seller acquires or develops in the course of Seller’s activities under the Order.

33. Labor Disputes; Additional Inventory.  Seller must notify Buyer:

(a) immediately of any actual or potential labor dispute that could be expected to delay timely performance of the Order; and

(b) six months before any of its labor contracts expire.

Not less than 30 days before any labor contract expires, or promptly upon Buyer’s request after receiving notice of any actual or potential labor dispute, Seller must establish, at its expense, a 40-day supply of the Goods subject to the Order stored at a warehouse site owned by a third party and located at least 50 miles away from any of Seller’s manufacturing locations.

34. Environmental Policy.  The goal of Buyer is to minimize or eliminate adverse environmental impacts by promoting environmental consciousness to all of our  suppliers, their employees or sub suppliers.  The specific principles of operation which support this policy require that all suppliers who do business with Buyer:  (a) have certification and compliance under the ISO 14001 program; (b) be compliant with applicable legal and other requirements subscribed to by Buyer which relate to environmental aspects; (c) have an establishment of measurable targets for environmental performance evaluation and periodic review or progress towards these objectives; (d) conduct a program of environmental audits to find and eliminate undesirable environmental conditions or practices; (e) establish and enforce environmental rules for all parties who interface with Buyer environmental management system; (f) investigation of any environmental incident to determine cause and corrective action; (g) continual improvement; and (h) all environmental records be made available to Buyer upon request.

Supplemental Provisions Applicable to Tooling

35. Tooling Order.  If the Order relates to tooling or related capital items, Seller will design and fabricate, rework, or acquire from sources approved by Buyer, and install the tools, dies, fixtures, molds, or patterns, described in the Order (“Tooling”), subject to these Terms and Conditions.  As used in these Terms and Conditions, the term “Tooling” also includes drawings, prints, designs, and models of the Tooling.

36. Samples, Status.  Seller must, at its own expense, manufacture a reasonable number of sample parts on the Tooling for inspection or testing by Buyer to ensure the capability of the Tooling to produce parts, which meet Buyer’s Customer Specific Requirements, QS 9000 or any other applicable industry standard and Buyer’s quality standards.  In addition to Seller’s obligations under paragraph 9, to the extent technically feasible, the Tooling must be designed and fabricated to be sufficiently durable to support the manufacture of all production and service requirements through the production and service lifetime of the part and permit the production of Buyer’s subsequent service and replacement requirements.  The Tooling will be deemed to be completed when the necessary samples have been submitted and approved by Buyer and run-at-rate completed.  Buyer may request Seller to furnish semi-monthly (or more frequently at Buyer’s option) status reports on the construction or acquisition of the Tooling.  Each status report must identify the Tooling, identify the subcontractors working on the Tooling, if any, and designate the percentage of completion of the work.  Seller will notify Buyer immediately upon becoming aware that the Tooling may not be completed by the completion date specified in the Order and Seller will furnish to Buyer a schedule of the actions that Seller will take, at Seller’s expense, to achieve completion on the specified completion date.

37. Title, Identification.  All right, title, and interest in and to any part of the Tooling will pass to Buyer as soon as it is acquired or fabricated in accordance with the Order.  None of the Tooling may be used in the production, manufacture, or design of any goods or materials except to the order of Buyer.  All Tooling in the possession of Seller will be Bailed Property.  At Buyer’s request, Seller agrees to sign a bailment agreement describing the bailment terms for specific tooling described in the bailment agreement.  If the parties do not execute a bailment agreement, Buyer’s records regarding the specific Tooling in Seller’s possession will control and be determinative of the existence of the bailed Tooling.  Seller authorizes Buyer to file a financing statement pursuant to Article 9 of the Uniform Commercial Code describing any or all of the bailed Tooling.  Seller will (i) properly house and maintain the bailed Tooling on Seller’s premises, (ii) prominently mark it as the property of its owner, in accordance with Buyer’s instructions, (iii) refrain from commingling it with the property of Seller or with that of a third party, and (iv) adequately insure it against loss or damage.  Seller will indemnify Buyer against any claim adverse to Buyer’s ownership of the Tooling, except any claims resulting from any acts or omissions of Buyer.  To the extent permitted by law, Seller waives its right to object to the repossession of the Tooling by Buyer in the event Seller is involved in bankruptcy proceedings.  While in its possession, Seller, at Seller’s expense, will maintain the Tooling in first class condition and immediately replace any items which are lost or destroyed or become worn out.  All repaired or replaced Tooling will be the property of Buyer.  Wear and repair of the Tooling is Seller’s responsibility.  None of the Tooling may be removed from Seller’s premises without Buyer’s written consent.  Seller will keep records in relation to the Tooling as Buyer may reasonably require.  Seller may not sell or otherwise convey any product using the Tooling to any party other than Buyer, except where specifically authorized by Buyer in writing.  Seller’s responsibility under this paragraph continues beyond the expiration date of the related parts Order.  If the Tooling is not used to produce any parts for Buyer for a period of two years, Seller must notify Buyer and request instructions for the disposition or maintenance of the Tooling.  Seller must follow Buyer’s instructions regarding the disposition or maintenance of the Tooling.  If Seller subcontracts all or any portion of the manufacture of the Tooling, Seller must notify Buyer in advance and obtain for Buyer all of the rights contained in this paragraph from each subcontractor used by Seller.

38. Tooling Invoices, Payment.  Upon (a) completion of Tooling, (b)approval by Buyer of the initial samples manufactured by Seller, and (c) satisfaction of any other conditions specified in the Order, Seller will furnish an invoice to Buyer at the billing address on the face of the Order.  Payment for Tooling will be made in accordance with Buyer’s normal payment terms unless stated otherwise on the Tooling Purchase Order.

If the Order designates that it is not competitively placed or based on affordable targets, Buyer’s payment obligation will be no more than the specified maximum, if any, for (i) Seller’s actual costs for purchased materials and services (including purchased Tooling and portions thereof), and (ii) Seller’s actual cost for direct labor and overhead.  Seller must establish a reasonable accounting system that enables ready identification of Seller’s cost.