1.              Applicability.

(a)            A purchase order is an offer by SAF-HOLLAND, Inc. ("Buyer") for the purchase of the goods specified on the face of a purchase order (the "Goods") from the party to whom the purchase order is addressed (the "Seller") in accordance with and subject to these terms and conditions (the "Terms"; together with the terms and conditions on the face of the purchase order, the "Order"). The Order, together with any documents incorporated herein by reference, constitutes the sole and entire agreement of the parties with respect to the Order, and supersedes all prior or contemporaneous understandings, agreements, negotiations, representations and warranties, and communications, both written and oral, with respect to the subject matter of the Order. The Order expressly limits Seller's acceptance to the terms of the Order. These Terms prevail over any terms or conditions contained in any other documentation and expressly exclude any of Seller's general terms and conditions of sale or any other document issued by Seller in connection with the Order.

(b)           These Terms apply to any repaired or replacement Goods provided by Seller hereunder.

(c)            Buyer is not obligated to any minimum purchase or future purchase obligations under the Order.

2.              Acceptance. The Order is not binding on Buyer until Seller accepts the Order in writing or starts to perform in accordance with the Order. If Seller does not accept the Order in writing or provide written notice that it has commenced performance within five days of Seller's receipt of the Order, the Order will lapse. Buyer may withdraw the Order at any time before it is accepted by Seller.

3.              Delivery Date. Seller shall deliver the Goods in the quantities and on the date(s) specified in the Order or as otherwise agreed in writing by the parties (the "Delivery Date"). Timely delivery of the Goods is of the essence. If Seller fails to deliver the Goods in full on the Delivery Date or up to three days before the Delivery Date (the "Delivery Window"), the Goods shall be considered "late" for Supplier On-Time Delivery performance evaluation purposes, and Buyer may terminate the Order immediately by providing written notice to Seller and Seller shall indemnify Buyer against any losses, claims, damages, and reasonable costs and expenses directly attributable to Seller's failure to deliver the Goods during the Delivery Window. Buyer has the right to return any Goods delivered outside the Delivery Window at Seller's expense and Seller shall redeliver Goods received before the Delivery Window during the Delivery Window. Repeated instances of late deliveries or disruption of shipment will result in Seller being removed from approved vendor status.

4.              Approved Supplier Status and Certification.  Seller is required to maintain the status of approved supplier.  If Seller is placed on probation, Seller will be advised and will be required to correct the outstanding issues and regain approved status in a timely manner. Buyer requires Seller to be certified to ISO 9001 or ISO/TS 16949 quality standard and to maintain certified status.

5.              Forecasts. Buyer will endeavor to create and provide twelve month forecasts that are as accurate as possible, based on information available at any given time. Because Buyer produces parts to customer order, forecasts are estimates only and are subject to change based on actual customer orders received and changes in customer order strategies with Buyer. Wherever possible, Buyer will communicate any major occurrences that would impact forecasted volumes to Seller in as timely a manner as possible.

6.              Quantity. Except as otherwise agreed in writing by Buyer, Seller must deliver the quantity of Goods ordered.  Shipments should be on-time and complete.  Buyer may debit Seller for administrative and excess freight expenses incurred resulting from partial shipments.   Buyer may reject all or any excess Goods with any such rejected Goods returned to Seller at Seller's risk and expense.

7.              Delivery Location. All Goods shall be delivered to the address specified in the Order (the "Delivery Location") during Buyer's normal business hours or as otherwise instructed by Buyer.

8.              Shipping/INCO Terms. Delivery shall be made DAP for international shipments and Ex-Works (in accordance with Incoterms 2010) for shipments within the United States except as otherwise stated on the face of the Order. Seller shall provide an Advanced Shipping Notice ("ASN") to Buyer when the Goods are delivered to a carrier for transportation. Seller shall provide Buyer all shipping documents, including the commercial invoice, packing list containing a description of Goods, bill of lading and any other documents necessary to release the Goods to Buyer within one business day after Seller delivers the Goods to the transportation carrier. The Order number must appear on all shipping documents, shipping labels, bills of lading, invoices, correspondence and any other documents pertaining to the Order. There shall be no charges for drayage, unless specifically mentioned on the face of the Order.

9.              Title Transfer. Title passes to Buyer upon delivery of the Goods to the Delivery Location. If, at some point in time, Buyer and Seller agree that Seller will provide parts on a consignment basis, title and risk of loss or damage shall transfer at time of consumption at Buyer, regardless of transportation mode or INCO term.

10.           Packaging. All goods shall be packed for shipment according to Buyer's instructions or, if there are no instructions, in a manner sufficient to ensure that the Goods are delivered in undamaged condition. Seller must provide Buyer prior written notice if it requires Buyer to return any packaging material or returnable containers. Any return of such packaging material or returnable containers shall be made at Seller's expense. Any returnable containers shall be marked "RETURNABLE" and show the name and location as to where it is to be returned. 

11.           Amendment and Modification. No change to the Order is binding upon Buyer unless it is in writing, specifically states that it amends the Order and is signed by an authorized representative of Buyer.

12.           Inspection and Rejection of Nonconforming Goods. Seller shall comply with Buyer's Supplier Quality Requirements HSQR-01 which is available on Buyer's supplier portal.  Buyer has the right to inspect the Goods on or after delivery. Buyer, at its sole option, may inspect all or a sample of the Goods, and may reject all or any portion of the Goods if it determines the Goods are nonconforming or defective. If Buyer rejects any portion of the Goods, Buyer has the right, effective upon written notice to Seller, to: (a) rescind the Order in its entirety; (b) accept the Goods at a reasonably reduced price; or (c) reject the Goods and require replacement of the rejected Goods. If Buyer requires replacement of the Goods, Seller shall, at its expense, promptly replace the nonconforming Goods and pay for all related expenses, including, but not limited to, transportation charges for the return of the defective goods and the delivery of replacement Goods. If Seller fails to timely deliver replacement Goods, Buyer may replace them with goods from a third party and charge Seller the cost thereof and terminate the Order for cause pursuant to Section 24. Any inspection or other action by Buyer under this Section shall not reduce or otherwise affect Seller's obligations under the Order, and Buyer shall have the right to conduct further inspections after Seller has carried out its remedial actions.

13.           Price. The price of the Goods is the price stated in the Order (the "Price"). If no price is included in the Order, the Price shall be the price set out in Seller's published price list in force as of the date of the Order. Unless otherwise specified in the Order or directed by the applicable INCO shipping term, the Price includes all packaging, transportation costs to the Delivery Location, insurance, customs duties and fees and applicable taxes, including, but not limited to, all sales, use, VAT or excise taxes. Seller assumes full liability for the payment of any payroll taxes, including the payroll withholding income tax, or contributions for unemployment insurance, pensions or annuities which are measured by the wages, salaries or other remunerations payable to the employees of Seller. Seller shall certify on all invoices against the Order that all prices shall be in accordance with current government price control regulations in effect at time of invoicing. No increase in the Price is effective, whether due to increased material, labor or transportation costs or otherwise, without the prior written consent of Buyer.

14.           Payment Terms. Seller shall issue an invoice to Buyer in duplicate on or any time after the completion of delivery and only in accordance with the Terms. Buyer shall schedule for payment all properly invoiced amounts due to Seller within 60 days after Buyer's receipt of such invoice, except for any amounts disputed by Buyer in good faith or as otherwise agreed in writing by the parties. All payments hereunder must be in US dollars. In the event of a payment dispute, the parties shall seek to resolve all such disputes expeditiously and in good faith. Seller shall continue performing its obligations under the Order notwithstanding any such dispute.

15.           Set-off. Without prejudice to any other right or remedy it may have, Buyer reserves the right to set off at any time any amount owing to it by Seller against any amount payable by Buyer to Seller.

16.           Warranties. Seller warrants to Buyer that for a period of twelve months from Buyer's acceptance of the Goods, all Goods will: (a) be free from any defects in workmanship, material and design (except there shall be no design warranty if Goods are solely designed by Buyer); (b) conform to applicable specifications, drawings, designs, samples and other requirements specified by Buyer; (c) be fit for their intended purpose and operate as intended; (d) be merchantable; (e) be free and clear of all liens, security interests or other encumbrances; and (f) not infringe or misappropriate any third party's patent or other intellectual property rights. These warranties survive any delivery, inspection, acceptance or payment of or for the Goods by Buyer. These warranties are cumulative and in addition to any other warranty provided by law or equity. Any applicable statute of limitations runs from the date of Buyer's discovery of the noncompliance of the Goods with the foregoing warranties. If Buyer experiences any breaches of the foregoing warranties, Buyer shall have the right, in addition to any other rights Buyer may have under the Vendor Recovery Policy, available on Buyer's supplier portal, the Uniform Commercial Code and other applicable statutes or laws, or hereunder to take the following actions, at Buyer's option: (1) retain the defective Goods in whole or in part with an appropriate adjustment in the Price; (2) require Seller to repair or replace the defective Goods in whole or in part at Seller's sole expense, including, without limitation, all shipping, transportation and installation costs; (3) correct or replace the defective Goods with similar goods and recover the total cost relating thereto from Seller, including the cost of any recalls; or (4) reject the defective Goods.

17.           Indemnification. Seller shall defend, indemnify and hold harmless Buyer and its officers, directors, employees, shareholders, subsidiaries and affiliates from and against any and all claims, losses, damages and expenses (including but not limited to warranty, product liability and recall expense as well as court costs and attorney's fees, settlements and judgments, punitive and exemplary damages, economic loss and loss of profits, administrative costs, and fines and penalties) in any way resulting from or arising out of (i) the breach or failure of any representation or warranty set forth in the Order; (ii) the failure of any Goods to conform to their specifications; (iii) any other breach or other default under the Order on the part of Seller; (iv) any personal injury, death, sickness, disease or property damage relating to possession or use of the Goods by Buyer, its customers or employees or any third parties; (v) any negligence or willful misconduct on the part of Seller or any of its employees, agents, subcontractors or suppliers; and (vi) any actual or alleged infringement or violation of any patent, trademark, copyright, trade secret or any other intellectual property rights resulting from the purchase, use or possession of the Goods (except as otherwise expressly described herein). The obligations contained in this Section shall survive and continue in full force and effect irrespective of the delivery of the products or the expiration or termination of the Order.

18.           Insurance. Seller shall obtain and maintain at its expense during the term of the Order and for a period of at least ten years after the expiration or termination of the Order, all insurance coverage required by law as well as appropriate insurance coverage to protect against any and all claims or liabilities that may arise directly or indirectly as a result of its performance under the Order. Coverage shall not contain any exclusions material to the Goods. The coverage shall apply on a worldwide basis with no limitation of where a claim is brought or occurs.  Insurance shall be placed with a carrier with an A.M. Best rating of at least A- for financial strength and a size rating of at least VIII. Coverage shall be occurrence based... If Seller uses a subcontractor to perform work under the Order, then Seller is responsible to assure that the subcontractor meets the same insurance requirements as stated for Seller. This insurance shall include the following coverage written for not less than the following limits or as required by law, whichever is greater:

 

Commercial General Liability Insurance (if excluding Products):

á      $5,000,000 U.S. Dollars per occurrence for bodily injury (including death);  and

á      $5,000,000 U.S. Dollars per occurrence for property damage

Products/Completed Operations Liability - $10,000,000 U.S. Dollars per occurrence.

NOTE: Both General and Products Liability can be a combination of primary and excess to equal at least $10,000,000 U.S. Dollars. Products/Completed Operations may be included within the Commercial General Liability Policy.

Seller shall name Buyer as an additional insured-vendor as regards the product liability insurance.

Insurance specified herein shall be minimum requirements. Seller is responsible for providing any additional insurance deemed necessary to protect against claims in excess of the minimum coverage. None of the requirements contained herein as to coverage types or limits of insurance to be maintained by Seller are intended to and shall not in any manner limit the liability of Seller to Buyer hereunder.

Seller shall deliver to Buyer upon execution of this Agreement coverage copy of the policy, as issued, in English. Said policy shall provide that no less than 30 days advance written notice be given to Buyer prior to cancellation, termination or material change of the policies. Seller is responsible for assuring that Buyer has current copies of insurance policies throughout the term of the Order and for the 10 year period thereafter.

19.           Compliance with Law. Seller is in compliance with and shall comply with all applicable laws, regulations and ordinances. Seller has and shall maintain in effect all the licenses, permissions, authorizations, consents and permits that it needs to carry out its obligations under the Order.

 

(a)        Fair Labor.  Seller agrees, in connection with the production of the Goods, to comply with all applicable requirements of Sections 6 (minimum wage), 7 (maximum hours), and 12 (child labor provisions), of the Fair Labor Standards Act, as amended and of regulations and orders of the United States Department of Labor issued under Section 14 thereof.  

 

(b)       Human Trafficking. Seller agrees to follow (i) the United Nations Protocol to Prevent, Suppress and Punish Trafficking in Persons, especially Women and Children, (ii) Federal Acquisition Regulation 52.222-50, and (iii) Executive Order 13627 dated September 25, 2012 together with the proposed and final Federal Acquisition Regulations relating thereto.

 

(c)        Import/Export.  Seller shall comply with all export and import laws of all countries involved in the sale of Goods under the Order. Seller assumes all responsibility for shipments of Goods requiring any government import clearance.  Buyer may terminate the Order if any government authority imposes antidumping duties, countervailing duties or any retaliatory duties on the Goods.

 

(d)       Use of Goods.  Seller acknowledges that the Goods ordered hereunder are for consumption or use in industrial processing or agricultural producing.

 

(e)        Equal Employment Opportunity and Non-Discrimination. Seller shall abide by the requirements of 41 CFR 60-741.5(a). This regulation prohibits discrimination against qualified individuals on the basis of disability, and requires affirmative action by covered prime contractors and subcontractors to employ and advance in employment qualified individuals with disabilities.  Seller agrees to maintain non-segregated facilities and policy of employment which does not discriminate against any employee or  applicant for  employment because  of  race,  creed, color, national origin, sex or handicap, Veteran of Vietnam Era, or disabled Veterans, and to further comply with all provisions of Executive Order 11246 of September 24, 1965, Section 503 of the Rehabilitation Act of 1973, Section 402 of the Vietnam Era Veterans Readjustment Assistance Act of 1974 (41 Code of Federal Regulations, Chapter 60), and all of which are herein incorporated by reference.

 

(f)        Conflict Minerals. Without limitation of the foregoing, on Buyer's request, Seller shall provide to Buyer all information (in sufficient detail), with written certifications thereof, to enable Buyer to timely comply with all of Buyer's and Buyer's customers' due diligence, disclosure and audit requirements under Section 1502 of the Dodd-Frank Wall Street Reform and Consumer Protection Act (the "Dodd-Frank Act") and Rule 13p-1 and Form SD under the Securities Exchange Act of 1934, and all similar, applicable statutes and regulations, including due inquiry of Seller's supply chain (and certifications by such suppliers) identifying conflict minerals (as defined in Section 1502(e)(4) of the Dodd-Frank Act) contained in each Product and the country of origin of such conflict minerals (or, following due inquiry, why such country of origin cannot be determined). 

20.           NAFTA; Country of Origin; Compliance.  Seller agrees to fulfill any customs- or NAFTA-related obligations, origin marking or labeling requirements, and local content origin requirements. Export licenses or authorizations necessary for the export of Goods are Seller's responsibility unless otherwise stated in the Order, in which case Seller will provide the information necessary information to enable Buyer to obtain the licenses or authorizations. Seller will promptly notify Buyer in writing of any material or components used by Seller in fulfilling its obligations under the Order that Seller purchases in a country other than the country in which the Goods are delivered. Seller will furnish any documentation and information necessary to establish the country of origin or to comply with the applicable country's rules of origin requirements. Seller will promptly advise Buyer of any material or components imported into the country of origin and any duty included in the purchase price. If Goods are manufactured in a country other than the country in which Goods are delivered, Seller will mark Goods "Made in [country of origin]." Seller will provide to Buyer and the appropriate governmental agency the documentation necessary to determine the admissibility and the effect of entry of Goods into the country in which Goods are delivered. Seller warrants that any information that is supplied to Buyer about the import or export of Goods is true. Seller has not and will not accept or give any illegal or unlawful gratuities or otherwise violate the United States Foreign Corrupt Practices Act in connection with the Order or the transactions or relationships contemplated by the Order. To the extent any Goods covered by the Order are to be imported into the United States of America, Seller shall comply will all applicable recommendations or requirements of the Bureau of Customs and Border Protection's Customs-Trade Partnership Against Terrorism ("C-TPAT") initiative. Upon request, Seller shall certify in writing its compliance with the C-TPAT initiative.

21.           Seller Code of Conduct.  Seller shall comply with the terms of Buyer's Supplier Code of Conduct Policy which is available on Buyer's supplier portal.

22.           Hazardous Materials. All materials used in part manufacture shall satisfy current governmental and safety constraints  on restricted, toxic, and hazardous materials; as well as environmental, electrical, and electromagnetic considerations applicable to the country of manufacture and sale.

23.           Right to Audit. Buyer reserves the right to do on site Seller audits and inspections, with our customer present if required.

24.           Termination. Buyer may terminate the Order, in whole or in part, at any time with or without cause for undelivered Goods on 90 days prior written notice to Seller. In addition to any remedies that may be provided under these Terms, Buyer may terminate the Order with immediate effect upon written notice to Seller, either before or after the acceptance of the Goods, if Seller has not performed or complied with any of these Terms, in whole or in part. If Seller becomes insolvent, files a petition for bankruptcy or commences or has commenced against it proceedings relating to bankruptcy, receivership, reorganization or assignment for the benefit of creditors, then Buyer may terminate the Order upon written notice to Seller. If Buyer terminates the Order for any reason, Seller's sole and exclusive remedy is payment for the Goods received and accepted by Buyer prior to the termination.

25.           Limitation of Liability. Nothing in the Order shall exclude or limit (a) Seller's liability under Sections 16, 17, and 28 hereof, or (b) Seller's liability for fraud, personal injury or death caused by its negligence or willful misconduct.

26.           Waiver. No waiver by any party of any of the provisions of the Order shall be effective unless explicitly set forth in writing and signed by the party so waiving. Except as otherwise set forth in the Order, no failure to exercise, or delay in exercising, any rights, remedy, power or privilege arising from the Order shall operate or be construed as a waiver thereof, nor shall any single or partial exercise of any right, remedy, power or privilege hereunder preclude any other or further exercise thereof or the exercise of any other right, remedy, power or privilege.

27.           Use of Buyer's Intellectual Property.  If Goods are to be marked with the name and/or trademark of Buyer, Seller's use of the name and/or trademark of Buyer shall be limited exclusively to the manufacture of Goods intended for Buyer and their delivery to Buyer or to third parties specified by Buyer. The name and/or trademark of Buyer shall not be used by Seller for any other purpose, in particular not to mark products for sale by Seller to third parties not specified by Buyer. To the extent that Seller is permitted the use of other intellectual property rights of Buyer for the manufacture of the Goods, in particular the use of patents, Seller shall be granted the simple, revocable, non-sublicensable and non-transferable right to exercise these rights exclusively for the purpose of fulfilling the Goods with Buyer. Any further exercise of such rights, in particular for the manufacture of products for sale by Seller to third parties not specified by Buyer, shall not be permitted.

28.           Confidential Information. All non-public, confidential or proprietary information of Buyer, including, but not limited to, specifications, samples, patterns, designs, plans, drawings, documents, data, business operations, customer lists, pricing, discounts or rebates, disclosed by Buyer to Seller, whether disclosed orally or disclosed or accessed in written, electronic or other form or media, and whether or not marked, designated or otherwise identified as "confidential," in connection with the Order is confidential, solely for the use of performing the Order and may not be disclosed or copied unless authorized by Buyer in writing. Upon Buyer's request, Seller shall promptly return all documents and other materials received from Buyer. Buyer shall be entitled to injunctive relief for any violation of this Section. This Section shall not apply to information that is: (a) in the public domain; (b) known to Seller at the time of disclosure; or (c) rightfully obtained by Seller on a non-confidential basis from a third party. If Seller is obliged to disclose information supplied by Buyer by law, as a result of the enforceable ruling of a court or as a result of an administrative action by a governmental body, this shall not constitute an infringement of Seller's confidentiality obligation. In such cases, however, Buyer shall be informed in writing prior to such disclosure. All information supplied by Buyer to Seller in conjunction with the Order and all processes or practical applications based on such information is and shall remain the intellectual property of Buyer. No provision of the Order may be interpreted in such a way that Seller gains the rights of use to the intellectual property of Buyer. Except with the prior written consent of Buyer, Seller shall not be permitted to disclose the existence of the Order or the business relationship between Buyer and Seller to any third party other than Seller's advisors, accountants, attorneys, and Seller's suppliers related to the Goods.

29.           Force Majeure. Neither party shall be liable to the other for any delay or failure in performing its obligations under the Order to the extent that such delay or failure is caused by an event or circumstance that is beyond the reasonable control of that party, without such party's fault or negligence, and which by its nature could not have been foreseen by such party or, if it could have been foreseen, was unavoidable ("Force Majeure Event"). Force Majeure Events include, but are not limited to, acts of God or the public enemy, government restrictions, floods, fire, earthquakes, explosion, epidemic, war, invasion, hostilities, terrorist acts, riots, strike, embargoes or industrial disturbances. Seller's economic hardship or changes in market conditions are not considered Force Majeure Events. Seller shall use all diligent efforts to end the failure or delay of its performance, ensure that the effects of any Force Majeure Event are minimized and resume performance under the Order. If a Force Majeure Event prevents Seller from carrying out its obligations under the Order for a continuous period of more than 30 business days, Buyer may terminate the Order immediately by giving written notice to Seller.

30.           Assignment. Seller shall not assign, transfer, delegate or subcontract any of its rights or obligations under the Order without the prior written consent of Buyer. Any purported assignment or delegation in violation of this Section shall be null and void. No assignment or delegation shall relieve Seller of any of its obligations hereunder.

31.           Relationship of the Parties. The relationship between the parties is that of independent contractors. Nothing contained in the Order shall be construed as creating any agency, partnership, joint venture or other form of joint enterprise, employment or fiduciary relationship between the parties, and neither party shall have authority to contract for or bind the other party in any manner whatsoever. No relationship of exclusivity shall be construed from the Order.

32.           No Third-Party Beneficiaries. The Order is for the sole benefit of the parties hereto and their respective successors and permitted assigns and nothing herein, express or implied, is intended to or shall confer upon any other person or entity any legal or equitable right, benefit or remedy of any nature whatsoever under or by reason of these Terms.

33.           Governing Law. All matters arising out of or relating to the Order shall be governed by and construed in accordance with the internal laws of the State of Michigan without giving effect to any choice or conflict of law provision or rule (whether of the State of Michigan or any other jurisdiction) that would cause the application of the laws of any jurisdiction other than those of the State of Michigan.  The United Nations Convention on Contracts for the International Sale of Goods shall not apply to the Order.

34.           Submission to Jurisdiction. Any legal suit, action or proceeding arising out of or relating to the Order shall be instituted in the federal courts of the United States of America located in the Western District of Michigan or the courts of the State of Michigan and County of Ottawa, and each party irrevocably submits to the exclusive jurisdiction of such courts in any such suit, action or proceeding.

35.           Cumulative Remedies. The rights and remedies under the Order are cumulative and are in addition to and not in substitution for any other rights and remedies available at law or in equity or otherwise.

36.           Notices. All notices, requests, consents, claims, demands, waivers and other communications hereunder (each, a "Notice") shall be in writing and addressed to the parties at the addresses set forth on the face of the Order or to such other address that may be designated by the receiving party in writing. All Notices shall be delivered by personal delivery, nationally recognized overnight courier (with all fees pre-paid), facsimile (with confirmation of transmission) or certified or registered mail (in each case, return receipt requested, postage prepaid). Except as otherwise provided in the Order, a Notice is effective only (a) upon receipt of the receiving party, and (b) if the party giving the Notice has complied with the requirements of this Section.

37.           Severability. If any term or provision of the Order is invalid, illegal or unenforceable in any jurisdiction, such invalidity, illegality or unenforceability shall not affect any other term or provision of this Agreement or invalidate or render unenforceable such term or provision in any other jurisdiction.

38.           Survival. Provisions of the Order which by their nature should apply beyond their terms will remain in force after any termination or expiration of the Order including, but not limited to, the following provisions: Set-off, Warranties, Indemnification, Insurance, Compliance with Law, Confidential Information, Governing Law, Submission to Jurisdiction and Survival.

 

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