TERMS AND CONDITIONS OF PURCHASE OF WEBER AUTOMOTIVE CORP.

TERMS AND CONDITIONS OF PURCHASE OF WEBER AUTOMOTIVE CORP.
TERMS AND CONDITIONS OF PURCHASE OF WEBER AUTOMOTIVE CORP.
1 Relationship.
1.1 The Materials. Subject to the exclusive terms and conditions of these Terms and Conditions of Purchase
(“T&C”), Seller agrees to sell to Weber Automotive Corporation or its subsidiary(ies) (“Buyer”) the goods,
services, or material identified in the order (“the Material”). As to regular production goods only, this is a
requirements contract.
1.2 Acceptance of the Agreement. The T&C shall be deemed an offer by Buyer. Seller accepts the T&C
upon its written acceptance or upon commencement of any required work or service. Seller’s acceptance
shall be limited to the express written terms of the Agreement. Any new or additional terms contained in
Seller’s acceptance documents, or otherwise proposed by Seller, shall be considered nonconforming terms
and are unacceptable and expressly rejected by Buyer and shall not become a part of the Agreement. Seller
acknowledges that: (i) a request for quotation or similar document issued by Buyer is not an offer by Buyer;
and (ii) any response by Buyer to a request for quotation or similar document issued by Buyer is not an
offer by Buyer. The Agreement may be modified or amended only as specified in the Agreement.
2 Quality.
2.1 Qualification Audit. Prior to start of business with Buyer, if requested by Buyer, Seller shall participate in a
Qualification Audit (“Audit”). The Audit shall include an on-site review of Seller's facilities by member(s) of
Buyer’s organization. If there is a determination that an unsatisfactory condition exists with respect to any
matter covered by the Audit, then Seller shall receive written notice of the condition and, within fourteen (14)
days upon receipt of such notice, shall provide Buyer with a written corrective action plan reasonably
satisfactory to Buyer. The parties agree that if Seller fails to timely provide or implement an acceptable
corrective action plan to the reasonable satisfaction of Buyer, then Buyer may rescind or terminate the
Agreement for cause.
2.2 Compliance to Quality Procedures.
2.2.1
Seller shall comply with Buyer’s Quality Guideline for Suppliers located at http://www.weberautomotive.com and additional requirements upon which both parties mutually agree in writing.
Seller acknowledges and understands that the Guideline may be periodically updated, revised
and amended and that it is Seller’s obligation to comply with the Guideline at all times. Seller's
certification regarding the Guideline is incorporated by reference into the T&C.
2.2.2
Seller must ensure that its quality assurance system is certified to ISO 9001-2000 or ISO/TS
16949:2002, as modified from time to time, or similar standards applicable to the Materials as
specified by Buyer. Seller acknowledges that Buyer is ISO/TS 16949:2002 certified and agrees
to take actions reasonably requested by Buyer to assist Buyer in maintaining its certification.
Buyer and its customers shall have the right during reasonable business hours and upon at
least two (2) days prior written notice to inspect the Seller’s facilities and to perform quality
audits with respect to the Materials provided. Seller agrees to participate in all Buyer supplier
quality and development programs and implement recommended outcomes. A positive
outcome of a compliance audit or implementation of quality recommendations shall not relieve
Seller of any liability under this part.
2.3 Verification. The Buyer's customer or customer's representative shall be afforded the right to verify at the
Seller's premises and the Buyer's premises that product and process conforms to specified requirements.
2.4 Inspection and Rejection. Buyer shall have the right to inspect any goods or services after delivery and
before acceptance and reject any goods or services which are non-conforming. If goods are rejected, the
quantities will automatically be reduced unless Buyer otherwise notifies Seller. Seller shall not replace goods
rejected by Buyer as non-conforming unless directed by Buyer to do so. Non-conforming goods will be held
by Buyer for disposition in accordance with Seller' instructions, and at its cost, within three (3) days after
notification of rejection, or such shorter period as may be commercially reasonable under the circumstances.
If Seller fails to provide timely disposition instructions, Buyer may, at its option, charge Seller for storage and
handling or dispose of such goods without liability. Payment for non-conforming goods shall not constitute an
acceptance, or impair, limit or otherwise restrict Buyer’s right to claim any legal or equitable right, nor shall it
relieve Seller of any responsibility or liability for defects or breach of warranty that are discovered after
delivery, payment or acceptance.
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2.5 Corrective Action. In the case of any defective or damaged Material, including but not limited to noncompliance with Seller’s Quality System requirements as set forth in this Section 0, Seller agrees (i) to initiate
any required corrective action within 24 hours from the date that Buyer requests such action, (ii) to provide
Buyer with a written report explaining the cause of the defect or damage within 5 business days of such date,
and (iii) to provide Buyer with a written report identifying the short and long term action being taken by Seller
to prevent or avoid similar defects or damage in the future within 15 working days of such date. The short
term action is defined as the immediate corrective action to ensure the defective, damaged or otherwise not
in conformity Material is contained within 24 hours of the occurrence. The long term action is defined to be
the root cause analysis and resulting actions to ensure the occurrence will not reoccur. Notwithstanding
anything in the T&C to the contrary, the parties agree that if Buyer is not reasonably satisfied that the short
and long term corrective action as set forth above will be sufficient to prevent or avoid similar defects or
damage in the future, or if Seller fails to take the short and long term corrective action in the manner and the
time period set forth in the submitted report, Buyer may terminate the Purchase Order with respect to the
particular part numbers of Material as applicable or the entire Agreement by providing written notice 30 days
prior to termination.
3 Specifications, Confidential Information, Intellectual Property.
3.1 Confidential Information. The following shall be considered Confidential Information of Buyer: (i) any
written specifications for the Material and processing of the Material covered under the T&C which Buyer has
or later does provide to with regard to the Materials covered under the T&C (“Purchase Specifications”); (ii)
any other business or technical information, including without limitation, all oral or written information relating
to the Materials, or information relating to Buyer's customers, suppliers, business practices, products,
designs, inventions, or research and development; and (iii) the terms and conditions of the T&C. However,
"Confidential Information" shall not include any information that Seller can establish by written documentation
was (i) in the public domain at the time of disclosure or thereafter through no fault of Seller, (ii) independently
developed by Seller, or (iii) obtained by Seller without restriction from a third party. Seller agrees to
safeguard the Confidential Information by using reasonable efforts, consistent with those used in the
protection of its own proprietary information of a similar nature, to prevent its disclosure to third parties. Seller
agrees to cause its employees, "contractors", officers, directors, agents and representatives to be bound by
and comply with the foregoing restrictions regarding the use or disclosure of such confidential and proprietary
information. Seller further agrees not to assert any claims with respect to any technical information which
Seller shall have disclosed or may hereafter disclose to Buyer in connection with the Materials.
3.2 Intellectual Property. Buyer remains the owner of Confidential Information and any drawings, models,
patterns, tools, dies, jigs, specifications of delivery or other documents (collectively “Intellectual Property”)
that Buyer provides to Seller. Without Buyer's written consent, such Intellectual Property may not be used for
the Seller's own purposes or for any other purpose or made available to third parties and may be used only
for the purpose of the delivery of Materials to Buyer. Buyer may request at any time that such Intellectual
Property be returned. Seller shall not, without first obtaining the written consent of Buyer, in any manner
publish Buyer’s name or otherwise indicate that Seller has furnished or contracted Materials to Buyer.
3.3 Production Rights. Buyer does not grant or convey to Seller and Buyer reserves all rights to use tooling,
drawings, designs, patterns or materials or other information belonging to Buyer or supplied by or on behalf of
Buyer in the production, manufacture or design of goods for third parties or for the manufacture or production
of larger quantities than those specified in this order. This, however, does not preclude Seller from producing,
manufacturing or designing goods for anyone other than Buyer if such goods are not of Buyer’s design or
specifications and if tooling is owned by Seller.
3.4 Customer Relationships. Seller agrees that it will not solicit any business from any customer of Buyer
where such business has already been sourced to Buyer, nor will it submit quotes to any customer of Buyer
regarding any business that has been sourced to Buyer, unless otherwise approved in writing by Buyer. This
provision applies to current business of Buyer and to replacement business on programs that were sourced to
Buyer. Seller agrees that during the course of the Order, it will have no communication with Buyer's
customers that is in any way damaging to Buyer, and further agrees that it will immediately report to Buyer
any communication that Seller's representatives have with any of Buyer's customers relating in any way to
Buyer.
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4 Process Change
Seller agrees to process and package all Materials in conformity with any purchase specifications supplied.
At the request of Buyer and prior to delivery of any new or changed Materials, the Seller shall provide
samples to Buyer for the purposes of inspection and testing. Once purchase specifications or a sample has
been approved, Seller may not alter the function, appearance, characteristics, material or production method
or processes, manufacturing location, subcontractors, or material suppliers without advance written approval
from Buyer. For all changes, Seller shall comply with Production Part Approval Process requirements and/or
other applicable industry requirements. Buyer's final approval of samples shall not affect the Seller's liability
for any defects in the Materials.
5 Delivery
5.1 Delivery Date. The delivery date shall be the date designated by Buyer in written material releases or
other writing. The parties agree that in the event that Seller fails to deliver any order/release for Material on
the delivery date, Buyer, in addition to other rights or remedies it may have, shall be entitled, at its option, to
cancel the order/release for the Material which was not timely delivered without any obligation or liability to
Seller and to purchase such Material from a third party.
5.2 Performance Obligation. As time is of the essence, Seller shall deliver all orders for Material 100% "on
time." The term "on time" shall mean on, or no sooner than one (1) day prior to, the delivery date.
5.3 Corrective Action. Should at any time Seller fail to deliver required Materials per the delivery date, Seller
shall incur all costs of expedited delivery and any other reasonable and verifiable cost that may be made
necessary to make such a delivery to Buyer and Buyer's customer.
5.4 Material Surplus. Material Surplus is defined to be manufacture by Seller in advance of normal flow time
or delivery of any good in advance of Buyer's schedule. Should at any time Seller have a Material Surplus
made to Buyer’s specification, Seller shall not sell the Material Surplus to anyone but Buyer. If Buyer
chooses to not purchase said Material Surplus product, Seller guarantees to destroy Material Surplus within
30 days of Buyer’s decision to not purchase. Seller will certify the destruction of the Material Surplus,
specifying the quantity of product destroyed and method of destruction, within 3 days of occurrence of
destruction. Seller shall be responsible for all costs incurred as a part of said destruction.
5.5 Fill Rate and Late Receipt. Fill Rate is defined as the total quantity of all items received divided by the
total quantity of all the items required under the Buyer’s releases. All overages (i.e. a Seller ships more of an
item than ordered by the Buyer) are factored out of this calculation. Buyer expects Seller to ship at a Fill Rate
of 100% on a monthly basis. If the monthly fill rate for the Seller falls beneath 98%, Buyer will fine Seller 10%
of that month’s invoice value, to be paid via credit memo 10 days after request of Buyer. If the Seller is
meeting the 100% fill rate but has late shipments, the Seller will be fined $100 per late shipment.
5.6 Capacity. Seller represents that the production capacity quoted to Buyer is based on a tooling and
production plan capable of supplying goods to support Buyer's peak daily and annual requirements.
6 Forecasts
From time to time, Buyer may issue forecasts of its anticipated Material Requirements. The parties
acknowledge that any forecast is an estimate only and is subject to change at any time. Seller will not
manufacture Materials or procure raw materials in excess of that required to fill Buyer’s firm releases, unless
earlier procurement (not to exceed 2 weeks fabrication, 4 weeks raw material for forecasted requirements) is
necessary to maintain orderly supply. Subject to this paragraph, at contract end, Buyer agrees to purchase
conforming Materials and raw materials in Seller's possession. If authorized by Buyer in writing, however,
Seller will use its best efforts to resell this inventory, with the resale price credited against any amount
otherwise due under this paragraph. Seller acknowledges that notwithstanding any quantity estimates
provided, Buyer’s requirements are determined largely by Buyer’s Customer and consumer demand, and
accordingly, Seller may not rely on any estimates, and instead shall reserve enough production capacity for
Buyer's actual requirements, regardless of quantity.
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7 Productivity and Price Competitiveness
7.1 Base Price. The base price and any future year over year cost reductions for each part number of
Material ordered by Buyer during the term from Seller shall be the price set forth in the Purchase Order.
Unless otherwise stated, the purchase price: (i) is a firm fixed price for the duration of the Agreement and not
subject to increase for any reason, including increased raw material costs, increased labor or other
manufacturing costs, increased development costs, or changes in volumes or program length from those
estimated or expected; (ii) is inclusive of all federal, state, provincial, and local taxes and any duties
applicable to provision of the Supplies; and (iii) is inclusive of all storage, handling, packaging and all other
expenses and charges of Seller.
7.2 Maintaining Price Competitiveness. Seller shall be, at all times, competitive in price, quality, performance
and fulfillment of obligations. If Seller is determined by the Buyer not to be competitive, especially on pricing,
Buyer shall be entitled to re-source any or all parts to a more competitive source.
7.3 Productivity. Seller agrees to lower its price at the end of each one (1) year period for the term of this
contract as specified in the PO or other agreement.
8 Shipment and Payment Terms
8.1 Premium Charges. Seller shall be responsible for any premium freight charges required in order for
Seller to deliver an order by the applicable delivery date or remedy a past due situation found to be the
responsibility of Seller.
8.2 Invoices. Seller shall invoice Buyer upon shipment of an order unless implementing Evaluating Receipt
System (ERS) or other non-invoice process. Invoices and packing lists must be sent to locations identified by
Buyer. For shipments that will cross national borders (exports) the required documentation must be provided
to parties identified by the Buyer no later than the time of shipment.
8.3 Payment. Buyer shall make payment for conforming Materials at the price stated in the Agreement.
Payment terms shall be within 14 days with a discount of 3%, or net 60 prox. The price of any releases shall
be the limit of the liability of Buyer for the Materials. Any cash discount or payment privilege to Buyer shall be
extended until such invoice and compliance certification are received. Unless otherwise stated, all payments
are in U.S. Dollars and include all storage, handling, packing, freight, insurance, taxes, duties and any other
charge of any nature. Seller represents and warrants that the prices charged to Buyer shall be no less
favorable than those which Seller extends to its most-favored-customers for like goods and services. In
addition to any other remedy which may be available, Buyer shall have the right of set off with respect to any
sums due Seller by Buyer with any sums payable by Seller to Buyer under any agreement between the
parties
9 Warranty
9.1 Warranty. The Seller warrants that the Materials:
9.1.1 will conform to drawings, materials, descriptions and specifications designated by Buyer and with
all samples approved by Buyer;
9.1.2 will be of merchantable quality and fit and sufficient for the particular purposes intended, new, best
available technology, safe, of first-class materials and workmanship and free from defects,
contamination and rust;
9.1.3 will be packaged and marked correctly.
9.1.4 if designed by Seller, free from defects in design.
9.1.5 will comply with all Laws, in accordance with Section 0.
9.1.6 will not infringe any patents, copyrights or other proprietary rights of Seller or others, and
9.1.7 will be free from all liens and encumbrances.
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9.2 Warranty Period. All warranties of Seller extend to future performance of the Materials and are not
modified, waived or discharged by delivery, inspection, tests, acceptance and payment. Buyer's approval of
any design, drawing, material, process or specifications will not relieve Seller of these warranties. Seller
waives any right to notice of breach. The warranty period is the longest of: four years from the date Buyer
accepts the Materials, the warranty period provided by applicable law, or the warranty period offered by Buyer
or its Customer to end-users for the products into which the Materials are incorporated.
9.3 Non-conformity. In the event that Buyer determines that any Material is defective, damaged or otherwise
not in conformity, Buyer may reject the Material and in such case, Buyer shall not be obligated for payment of
the purchase price and may cancel the order/release without obligation or liability. Should Seller not make
whole on promised goods and services or, if Buyer has already paid for the Material in question, Seller shall,
at Buyer's option, either: (i) replace or reprocess the Material, or (ii) reimburse Buyer for the purchase price of
the Material. In either case, Seller shall pay for incidental and verifiable costs including but not limited to,
Buyer's cost of repackaging, manufacturing and transporting the defective Material and/or replacement
Material to and from Buyer's or Buyer’s customer’s facility.
9.4 Damages. The Seller is liable for all direct, incidental and consequential damages, losses, costs, and
expenses incurred by the Buyer resulting from Seller’s failure to deliver conforming and non-defective
Materials or to comply with the shipping and delivery or other requirements of the Buyer, even if the Seller
has cured the failure. This includes but is not limited to compensating Buyer for:
9.4.1 any amounts charged by Customer(s) to Buyer;
9.4.2 all costs of containment, sorting, repair, replacement, cure, cover, or any other costs incurred by
Buyer, determined in such manner and in such amount as reasonably determined by Buyer;
9.4.3 all costs of any recall campaign, corrective service action, or other voluntary or involuntary action
in which Buyer or any Customer participates related to the Materials
10 Insurance
Without limiting Seller’s liability, Seller and its subcontractors agree to furnish certificates from their insurance
carriers showing that they carry Worker's Compensation, Commercial General Liability, including Products
Liability (at a minimum of $5,000,000 per occurrence), Completed Operations and Contractual Liability, "All
Risks" Property (including, but not limited to, coverage for tooling and material maintained by Seller and
owned by Buyer), and Comprehensive Automobile insurance coverage within 10 days of Buyer’s written
request. Certificates must show the amount of coverage, number of policy, and date of expiration, and in
respect to Product Liability coverage, must name Buyer as an additional named insured. Seller may not
terminate or modify insurance coverage without informing Buyer in advance and showing new equivalent
coverage.
11 Bailed Property
11.1 Property Damage. Seller bears all responsibility for loss of and damage to any property owned by Buyer
and in Seller’s possession or control for use in performing under the T&C, including responsibility for loss and
damage which occur despite Seller’s exercise of reasonable care. Seller will: (i) Properly house and maintain
such property on Seller’s premises; (ii) Prominently mark it property of Buyer; (iii) Adequately insure such
property against loss or damage; and (iv) Refrain from commingling it with the property of Seller or with that
of a third party.
11.2 Liens. Seller affirmatively waives any lien, whether based in statute or common law, that Seller might
otherwise have on any Materials or Buyer’s property for work done thereon or otherwise. Seller will assign to
Buyer any claims against third parties with respect to Buyer’s property. Upon request, Seller will immediately
deliver such property at Buyer’s option F.O.B. Buyer’s premises (CIF Buyer Plant/Delivered Buyer Plant),
properly packed and marked in accordance with the requirements of the carrier and Buyer. Seller will
cooperate with Buyer’s removal of the property from Seller’s premises. Seller’s cooperation with delivery and
removal of Buyer’s property is not contingent on final payment unless final payment is both undisputed and
overdue.
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11.3 Tooling. Special dies, jigs, tools and patterns and/or other equipment that is dedicated to the production
of Materials (collectively “Tooling”) used in connection with the Materials for which Buyer has agreed to pay
Seller (whether paid separately or amortized in the price of the Materials) shall be or become the property of
Buyer upon fabrication or acquisition by the Seller, regardless of payment.
12 Indemnification and Products Liability
12.1 General. Seller shall indemnify and hold Buyer and Buyer’s customers harmless from and against any
and all claims, damages, recall and other costs, liabilities and expenses (including without limitation,
reasonable attorneys' fees) incurred by reason of any breach of warranty made by Seller or other obligation
by Seller under the T&C or other defect or unsafe condition with respect to any material. If Seller is obligated
to indemnify under this Section, then Buyer may at its option participate in the defense of any claim with its
own counsel, at Seller's expense.
12.2 Infringement. The Seller shall defend, indemnify and hold Buyer and Buyer’s customers harmless
against any and all liabilities, damages or expenses (including reasonable attorney fees) which may be
incurred in connection with any suit, claim, judgment or demand asserting that any Material purchased by
Buyer infringes upon any patent or other intellectual property rights, whether such infringement is caused by
the manufacture, purchase, use or disposition of the Material along or in combination with use of the Material
with other products except to the extent that such infringement or alleged infringement arises from a design
furnished completely by Buyer. Tolerance modifications to Seller's design shall be considered Seller's design
for purposes of the T&C. Buyer shall notify the Seller promptly upon receipt of any written claim or notice of
any infringement of third party intellectual property rights in connection with the T&C. The Seller shall
immediately take all steps to prevent or settle such dispute on its own authority and shall hold the Buyer
harmless against all effects whatsoever in respect thereof. Buyer may retain counsel of its choice at its
expense to participate in any suit, claim, or proceeding. Seller shall have the right to settle or compromise any
suit, claim or proceeding at its discretion, provided that the terms of the settlement or compromise provide for
the unconditional release of Buyer, and the settlement or compromise requires the payment of monetary
damages only. Seller shall not settle, without Buyer’s prior written consent, any suit, claim or proceeding
which imposes upon Buyer any obligation, or in any way prejudices the rights of Buyer, other than as set forth
herein. Any other settlement or compromise requires prior written approval from Buyer.
13 Term and Termination
13.1 Term. The T&C shall commence upon acceptance under Section 1.2. Subject to Buyer’s termination
rights, the agreement formed by the Order is binding on the parties for the length of the applicable Original
Equipment Manufacturer (“OEM”) vehicle program production life (including model refreshes as determined
by the applicable OEM customer), and both Buyer and Seller acknowledge the risk of the vehicle program
production life being cancelled or extended by the OEM. If the Material is not utilized by Buyer for the
production of automotive parts or systems, the agreement formed by the Order will be binding for one year
from the date the Order is transmitted to Seller. In such case, subject to Buyer’s termination rights, the Order
will automatically renew for successive one-year periods after the initial term unless Seller provides written
notice at least 180 days prior to the end of the current term of its desire that the Order not be renewed.
Notwithstanding the foregoing, if an expiration date is stated in the Order or an Agreement, the term of the
Order will continue until that date. Unless specifically waived in writing by an authorized representative of
Buyer, Seller’s obligations with respect to service and replacement parts will survive the termination or
expiration of the Order as set forth below.
13.2 Termination by Buyer. In addition to any other termination right which Buyer has, it may terminate the
T&C, or any Purchase Order issued under it:
13.2.1
for convenience, with thirty days advance notice, except that advance notice is not required if
Buyer’s customer terminates its order with Buyer for any reason, or if Buyer exits the business
and/or closes a plant which is the recipient of the Material
13.2.2 for breach by Seller, including if a) Seller repudiates or defaults on any material term, including
Seller's warranty or b) Seller fails to perform services of deliver goods as specified by Buyer or
fails to make progress so as to endanger timely and proper completion of services or delivery of
goods. Seller’s default shall constitute a breach if, after receipt of notice from Buyer specifying
the nature of the default, it does not correct such default to Buyer’s satisfaction within 10 days,
or such shorter period of time that is commercially reasonable under the circumstances.
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Declaring a default or breach under this Paragraph 13 shall be in addition to any other remedy
available to Buyer and shall not relieve Seller of its obligations under the Agreement or imposed
by law.
13.3 Termination by Seller. The Seller may terminate the T&C only for non-payment of the purchase price
for Materials which are thirty or more days past due and material in amount, and then only if: (i) Seller first
provides Buyer written notice specifying the amounts past due and Seller’s intent to terminate if the past due
amount is not paid; and (ii) Buyer, within 60 days of such notice, does not either: (x) pay the past due
amounts; or (y) notify Seller that the amount claimed to be unpaid are disputed by Buyer. Seller shall
terminate under this Section by delivering a Termination Notice to Buyer. Seller may not terminate or cancel
for any reason except as permitted under this Section. Seller may not suspend performance for any reason.
13.4 Obligations on Termination. In the event of any termination, unless otherwise agreed by Buyer and
Seller, Buyer shall pay to Seller the following amounts, without duplication: a) the Agreement price for all
goods or services that have been completed and delivered in conformance with the Agreement and not
previously paid for, and b) the actual and reasonable costs of work-in-process and raw materials incurred by
Seller, as permitted under Section 0, less, the sum of the reasonable value or costs (whichever is higher) of
any goods or materials used or sold by Seller with Buyer’s written consent, and the cost of any damaged or
destroyed goods or materials. Buyer will make no payment for finished goods, work-in-process or raw
materials fabricated or procured by Seller in amounts in excess of those authorized or necessary to meet the
then existing delivery schedules nor for any undelivered goods that are in Seller’s standard stock or that are
readily marketable. Buyer’s maximum liability for payments pursuant to this paragraph shall not exceed the
total of all required payments under the T&C minus those actually made.
In no event shall Buyer be liable
for payments owed to Seller’s subcontractors or for loss of anticipated profits, unabsorbed overhead, interest,
product development or engineering costs, facilities and equipment costs or rental, unrecovered depreciation
costs, or general and administrative burden charges. Seller shall submit its claim for payments under this
paragraph, with supporting documentation, within 60 days of the effective termination date. Buyer shall have
the right to audit the relevant books and records, facilities, work, material, inventories and other items relating
to Seller’s claim.
13.5 Transition of Materials Following Termination or Expiration. Following expiration or is termination of the
Agreement by either party for any reason (including termination by Seller) and notwithstanding any claimed or
actual breach of any obligation by Buyer, Seller will cooperate in the transition of supply to a successor
supplier, including the following, which will collectively be referred to as "Transition Support":
13.5.1
Seller will continue production and delivery of all Materials as ordered by Buyer, at the prices
and other terms stated in the Agreement, without premium or other condition, during the entire
period reasonably needed by Buyer to complete the transition to the alternate supplier(s), such
that Seller's action or inaction causes no interruption in Buyer's ability to obtain Materials as
needed;
13.5.2
At no cost to Buyer, Seller will promptly provide all requested information and documentation
regarding and access to Seller's manufacturing process, including on-site inspections, bill-ofmaterial data, tooling and process detail and samples of Materials and components; and
13.5.3
Seller will provide overtime production, storage and/or management of extra inventory of
Materials, extraordinary packaging and transportation and other special services as expressly
requested by Buyer in writing. If the transition occurs for reasons other than Seller's
termination for Default, Buyer will, at the end of the transition period, pay the reasonable, actual
cost of the assistance under this Section, provided that Seller has advised Buyer prior to
incurring such amounts of its estimate of such costs. If the parties disagree on the cost of
Transition Support, Buyer will pay the agreed portion to Seller, and Seller will accept the
agreed portion without prejudice to Seller’s right to seek to recover any disputed amounts, and
complete Transition Support.
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14 Remedies
14.1 The rights and remedies reserved to Buyer will be cumulative with and in addition to all other legal or
equitable remedies.
14.2 In any action brought by Buyer to enforce Seller's obligations in connection with the production or
delivery of Materials or transition support, or for possession of property, the parties agree that Buyer does not
have an adequate remedy at law and Buyer is entitled to an immediate order for specific performance of
Seller's obligations (including related temporary and preliminary injunctive relief).
14.3 Seller shall reimburse Buyer for all actual attorney’s fees (including the cost of in-house counsel) in any
action arising out of this Order, unless Seller is the prevailing party.
15 Other Provisions
15.1 Compliance with Laws. Seller and its subcontractors shall comply with all applicable laws, regulations,
directives, guidelines, rules, orders, conventions, ordinances and standards of the country(ies) of origin and
destination or that relate to the manufacture, labeling, transportation, importation, exportation, licensing,
approval or certification of the goods or services, including, but not limited to, those relating to environmental
matters, data protection and privacy, wages, hours and conditions of employment, subcontractor selection,
discrimination, occupational health/safety and motor vehicle safety (collectively, “Laws”). Seller further
represents that neither it nor any of its subcontractors will utilize child, slave, prisoner or any other form of
forced or involuntary labor, or engage in abusive worker treatment or corrupt business practices, in the supply
of goods or provision of services under the T&C. At Buyer’s request, Seller shall certify in writing its and its
subcontractors compliance with the foregoing. Seller shall indemnify and hold the Buyer harmless from and
against any liability claims, demands or expenses (including attorney’s or other professional fees) arising from
or relating to Seller or Seller’s subcontractor’s non compliance.
15.2 Notice. Whenever written notice is required or permitted to be given hereunder, it shall be deemed
given on the date the same is delivered, personally or by Federal Express or comparable commercial service,
or sent by facsimile or email with confirmation, or three (3) working days after the mailing thereof, to the party
to whom the notice is to be given at its last known address
15.3 Directed Seller. If Buyer's customer directed, recommended, requested, suggested or otherwise
identified Seller as a source of the Materials: (a) Buyer will pay Seller for the Materials only following and to
the extent of Buyer's actual receipt of payment from that customer for those goods in which the specific
Materials are incorporated; (b) within three business days of any change in price, specifications or other
terms negotiated or proposed between Seller and the customer, Seller will notify Buyer in writing and will
immediately adjust its invoices to reflect any price reduction, provided that no change will be binding on
Buyer without Buyer's specific written consent.
15.4 No Agency. Nothing in the T&C shall constitute or be deemed to constitute an agency relationship
between the parties. No party hereto is authorized or empowered to act as an agent for the other.
15.5 Force Majeure. Except as set forth herein, neither party shall be liable for failure to perform or delay in
performance hereunder if such failure or delay is due to fire, storm, flood, war, embargo, or any act of God or
other cause or contingency beyond such party's reasonable control; provided that, if any act or event
described in this Section prevents or will prevent Seller from performing its obligations under the T&C, Buyer
shall have the right, without obligation or liability to Seller, to purchase Material from another supplier until
Seller is able to resume performance of its obligations hereunder. Under such circumstances Seller shall
reimburse Buyer for any premium reasonably and verifiably paid by Buyer for such Material.
15.6 No Assignment. Seller may not assign its rights or obligations under the T&C to any other party without
the prior written consent of Buyer.
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15.7 Governing Law; Arbitration; Jurisdiction. The T&C shall be governed by and construed in accordance
with the laws of the State of Michigan. The provisions of the United Nations Convention on Contracts for the
International Sale of Goods, and any conflict-of-laws provisions that would require application of another
choice of law, are excluded. Any action hereunder shall be subject to the exclusive jurisdiction of state and
federal courts sitting in Michigan without giving effect to the principles thereof relating to conflicts of law. The
arbitration provisions of this Section will be governed by the United States Federal Arbitration Act. At Buyer’s
option, exercised by written notice any time before or within 30 days following the service of process in a legal
action, any dispute regarding the Supplies, the Order, the validity of the Order or any of these Terms, or any
other matter between the parties (other than requests for equitable or injunctive relief or specific performance)
will be resolved by binding arbitration, conducted in the English language using a single arbitrator. The
location and rules of the arbitration will be as stated in the applicable Country Supplement. If such location
and/or rules are not identified: (a) the arbitration will be conducted under the commercial arbitration rules of
the American Arbitration Association (AAA) and under Rules 26 through 37 of the U.S. Federal Rules of Civil
Procedure, in a location agreed by the parties; (b) if the parties cannot agree on a location within 30 days of
either party’s written request for arbitration, the arbitration will be conducted in Auburn Hills, Michigan, USA;
and (c) the arbitrator will be selected from an AAA list using the AAA-recommended selection method. The
arbitrator will issue written findings of fact and conclusions of law. Each party will bear equally the costs and
expenses of AAA and of the arbitrator, and each party will bear its own costs and expenses – provided,
however, (1) that the failure by one party to pay its share of arbitration fees constitutes a waiver of such
party’s claim or defense in the arbitration, and (2) that the arbitrator may award attorneys’ fees and costs to
the substantially prevailing party. In no event will any party be awarded punitive or exemplary damages or
any other damages not measured by the prevailing party’s actual damages. All arbitration proceedings shall
be confidential, except to the extent that disclosure is necessary to enforce an arbitration award in a court of
competent jurisdiction. The award of the arbitrator will be enforceable in any court of competent jurisdiction,
provided that either party may appeal to the court identified in the Country Supplement, or if no court is
identified, then to the U.S. District Court for the Eastern District of Michigan, for correction of any clear error of
fact or law by the arbitrator (provided that the appealing party must first post an appropriate bond and that the
prevailing party in any such action will be entitled to its attorneys’ fees and costs). In all other cases, including
any request for equitable or injunctive relief, the parties agree and consent to the exclusive jurisdiction of the
Circuit Court for Oakland County, Michigan or the U.S. District Court for the Eastern District of Michigan, as
applicable, provided that Buyer may elect to bring an action against Seller in any court having jurisdiction over
Seller.
15.8 Survival. The provision of Sections 3, 9, 12, 13.4, 13.5, 14 and 17 contained in the T&C shall survive
the termination of the T&C for any reason. The termination of the T&C shall not affect in any manner the
rights and obligations of the parties accruing prior to the date of such termination nor any rights or remedies
existing at law or in equity by reason of any breach of any term of the T&C which occurred prior to such
termination.
15.9 No Waiver. NO WAIVER OF ANY BREACH OF ANY PROVISION OF THESE TERMS WILL
CONSTITUTE A WAIVER OF ANY OTHER BREACH OR OF SUCH PROVISION. THESE TERMS MAY BE
MODIFIED ONLY IN WRITING SIGNED BY AUTHORIZED REPRESENTATIVES OF Buyer AND
SUPPLIER. HOWEVER, Buyer MAY, AT ANY TIME, BY WRITTEN CHANGE ORDER, MAKE CHANGES IN
(A) QUANTITIES ORDERED, (B) THE DRAWINGS, DESIGNS OR SPECIFICATIONS APPLICABLE TO
THE GOODS OR SERVICES COVERED BY THIS ORDER, (C) THE METHOD OF SHIPMENT AND
PACKING, AND/OR (D) THE PLACE OF DELIVERY. IF SUCH CHANGES MATERIALLY AFFECT THE
TIME FOR PERFORMANCE, THE COST OF MANUFACTURING THE GOODS, OR THE COST OF
FURNISHING SERVICES, Buyer WILL MAKE AN EQUITABLE ADJUSTMENT IN THE PURCHASE PRICE
OR THE DELIVERY SCHEDULE OR BOTH. ANY DISPUTE WITH RESPECT TO AN EQUITABLE
ADJUSTMENT SHALL NOT RELIEVE SELLER OF ITS OBLIGATION TO PERFORM IN ACCORDANCE
WITH A WRITTEN CHANGE ORDER.
15.10 Entire Agreement. The T&C is intended as a final expression and a complete and exclusive statement
of the agreement between the parties respecting the subject matter hereof and supersedes all prior and
contemporaneous agreements, representations and understandings of the parties. No amendment to or
modification of the T&C shall be valid or binding upon either party unless it is made in writing and signed by a
duly authorized representative of both parties unless otherwise required by law.
15.11 Severability. In the event that any provision of the T&C is held illegal or invalid for any reason, such
illegality or invalidity shall at the option of the party against whom the same is asserted not affect the
remaining parts of the T&C but the T&C shall be construed and enforced as if that illegal and invalid provision
had never been inserted herein.
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15.12 Communication and Technology. When notified of availability by Buyer, the Seller shall be required to
connect to Buyer’s EDI systems to provide two way electronic communication for items that include, but are
not limited to ASNs, invoices, schedules, etc. All costs associated with the connection and use of the systems
will be borne by the Seller.
15.13 No License. Nothing in the T&C will be construed as granting any right or license to the Seller, either
express or implied, to any Intellectual Property right of the Buyer or any right to use Confidential Information
except for the purposes of the T&C. Upon expiration or termination of the T&C, Seller shall immediately
cease all use of Buyer’s Intellectual Property or Confidential Information. All copies of Buyer’s Confidential
Information shall be immediately returned to Seller or destroyed at Buyer’s discretion.
15.14 Trade Remedy Proceedings. Seller understands that the goods it produces may be, either now or in
the future, subject to one or more trade remedy proceedings (e.g., anti-dumping, countervailing duty,
safeguard) in the United States or another country, which may result in the imposition of additional duties or
other charges on the goods. If such proceedings are initiated, Seller agrees that, at Buyer’s request, it will
cooperate fully with Buyer and with requests for information from the competent government authorities in the
importing country. Seller further understands and agrees that such cooperation may require it to provide
confidential sales and cost information to the competent authorities so that they can calculate the amount of
the duty or other charge on the goods.
At all times before, during, or after the initiation of a trade remedy proceeding in the United States or another
country, Seller agrees to take all available steps necessary to minimize the risk that additional duties or other
charges may be imposed on its goods sold to Buyer. Seller also provides Buyer with a warranty of nonapplicability of any future additional duties or other charges (e.g., anti-dumping duties) covering the goods
sold to Buyer, so long as the goods are: (1) sold before the date of publication of the official government
notice that establishes the authority of the competent authorities to impose additional duties or other charges
(i.e., the "order"); and (2) exported before the date of publication of the official government notice concluding
the investigation phase of the trade remedy proceeding. The purpose of this provision is to comply with U.S.
regulation 19 C.F.R. 351.402(f) (2006). Buyer retains the right to terminate the T&C if additional duties or
other charges are imposed on the goods produced by Seller.
16 Import Laws
For Seller’s goods to be imported into the United States, Seller shall comply with all applicable
recommendations or requirements of the United States Bureau of Customs and Border Protection’s
Customer-Trade Partnership Against Terrorism (“C-TPAT:) initiative (for information go to http;//www.cbp.gov/
and find the link to the C-TPAT section). At the Buyer’s or the Bureau of Customs and Border Protection’s
request, Seller shall certify in writing its compliance with the forgoing. Seller shall indemnify and hold the
Buyer harmless from and against any liability, claims, demands or expenses (including attorney’s or other
professional fees) arising from or relating to Seller’s noncompliance.
17 Trademark and Marks
17.1 Trademark Protection: Buyer may require Seller to place Buyer's trademarks (MARKS) on the Material.
If Buyer makes such a request, Buyer grants to Seller a limited, revocable, nonexclusive royalty free license
for the term of the T&C to use the MARKS on products and packaging materials in connection with the sale of
Material to Buyer only. This license grant is limited to sales made to Buyer or at the direction of Buyer. The
license granted in the T&C is limited to Material manufactured and/or produced by Seller at the direction of
and for Buyer, or Buyer’s authorized subsidiaries or affiliates. Seller is not authorized to use the MARKS in
connection with the sales, manufacturing or distribution of any products or services unless expressly
authorized by Buyer in writing. Upon expiration or termination of the T&C for any reason, Seller will
immediately refrain from further use of the MARKS or any further reference to them, direct or indirect, or
anything deemed by Buyer to be similar to the MARKS in connection with the manufacture, sale or
distribution of any of Sellers’s products.
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17.2 Ownership of Marks
17.2.1
Seller recognizes there is significant value and good will associated with the MARKS, and
acknowledges that the MARKS and all rights and good will associated with the MARKS belong
exclusively to Buyer.
17.2.2
Seller’s every use of the MARKS shall inure to the benefit of Buyer and Seller shall not at any
time acquire any rights in the MARKS by virtue of any use it may make with of the MARKS.
17.2.3
Seller shall cooperate fully and in good faith with Buyer for the purpose of securing and
preserving Buyer’s rights to the MARKS.
17.2.4
Upon the termination or expiration of the T&C, Seller will be deemed to have assigned,
transferred, and conveyed to Buyer any rights or good will to the MARKS that may have been
obtained by Seller. Seller shall cooperate with and do all acts necessary so that Buyer can
accomplish or confirm the foregoing. Any such assignment, transfer, or conveyance shall be
without other consideration than the mutual covenants and considerations of the T&C.
17.2.5
Seller and its parent company, subsidiaries, and divisions, if any, and its subcontractors, agents,
and representatives agree not to attempt to register the MARKS on any product or service
either during the terms of or after termination of the T&C.
Edition 08/2010
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