Terms and Conditions

1. CONSTRUCTION – All questions arising out of or under this order shall be governed by the laws of the State of Indiana.

2. ASSIGNABILITY – This order shall not be assignable by Seller.

3. PRICES – The price specified on the face hereof shall be the total price to Buyer for all materials, goods, and services thereon specified, and any decline in prices for such materials, goods and services during the life of this order shall insure to benefit of Buyer.

4. DELIVERY – Unless otherwise stated on the face hereof, promptness of deliveries of materials and goods or performance of services is of the essence of this order. If at any time Seller has reason to believe that deliveries or performance will not be made as scheduled, written notice setting forth the cause of the anticipated delay will be given immediately to Buyer.

5. RELEASE AUTHORIZATION – When it is specified on the face hereof that deliveries are to be in accordance with Buyer’s written releases, Seller shall not fabricate or assemble any materials or goods covered by this order, or procure required materials, or ship any materials or goods to Buyer, except to the extent authorized by such written releases or special provisions of this order specifying minimum fabrication or delivery quantities.

6. FORCE MAJEURE – This order is subject to modification by Buyer in event of fire, accidents, strikes, Government Acts or other conditions beyond Buyer’s control.

7. EXCESS SHIPMENT – Buyer reserves the right to reject and return at Seller’s expense all materials or goods received which are (a) received in advance of the date or dates specified in Buyer’s shipping releases, or (b) in excess of the quantities of materials or goods which are authorized by the agreement, if any, of Seller and Buyer for over shipment.

8. RESPONSIBILITY FOR PACKING, MARKING, AND DELIVERY – Unless otherwise provided in this order. Seller, for the price stated in this order, shall (i) pack and mark the materials and goods covered by this order to be shipped in a manner satisfactory to Buyer and so as to secure the lowest transportation rates, meet carrier requirements and assure arrival at “ship to” point free of damage and deterioration, and (ii) be responsible for the materials and goods until delivered at the designated (f.o.b.) delivery point, regardless of point of inspection. Unless otherwise provided, (i) the price as stated in this order shall include all charges and expenses with respect to containers, packing and crating, and for transportation to f.o.b. point, and (ii) all containers, packing and crating material shall become property of Buyer. Seller shall process shipping documents and route shipment from f.o.b. point, as directed by Buyer.

9. DAMAGES – Notwithstanding any other conditions relating to damages stated herein it is agreed that Seller shall be liable for damage to materials or goods described herein caused by improper boxing, crating or packing.

10. TRANSPORTATION CHARGES – No charge will be the obligation of Buyer for transportation, packing, crating, dropage, storage, cartage or other reason unless expressly stated on the face hereof. All transportation charges must be prepaid if sold f.o.b. destination. Seller grants Buyer the right to specify at any time the carrier and/or method of transportation to be employed in conveying any part or all of the materials or goods covered herein.
11. PREMIUM COST SHIPMENTS – If Seller’s deliveries are so far behind the given schedule that Buyer finds it necessary to call upon Seller for premium cost shipments, Seller will allow the difference between premium and normal costs.

12. SAMPLES AND SPECIFICATIONS – Calls for samples are to assist Seller, and even though samples are approved, Seller will still be held responsible if materials and goods are not exactly to blueprints and specifications, as this order is based thereon. Defective materials and goods or materials and goods not in accordance with blueprints or specifications may be returned at Seller’s expense, including inbound transportation charges, if bought f.o.b. shipping point. Samples must be produced on production tools and setups and must be inspected and certified by Seller and approved by Buyer before production run is commenced. No replacements of defective materials or goods shall be made unless specified by Buyer.

13. WARRANTY – Seller expressly warrants that all materials, goods or services covered by this order will conform to the specifications, drawings, samples or other description furnished or specified by Buyer, and will be merchantable, of good materials and workmanship and free from defects. Seller expressly warrants that all the materials and goods covered by this order which are the product of Seller or are in accordance with Seller’s specifications, will be fit and sufficient for the purpose intended. Seller specifically agrees to defend, indemnify and hold harmless Buyer from and against any and all claims, losses, damages and settlement expenses resulting from or arising out of a breach of Seller’s warranties and of which Buyer notifies Seller at any time.

14. PATENTS – Except as to materials and goods made in accordance with a design furnished by Buyer, Seller guarantees that the sale or use of materials or goods manufactured or sold by it and delivered hereunder will not infringe on any United States or foreign patent, and Seller agrees that it will, at its own expense, defend every suit or action that may be brought against Buyer, its successors and assigns, for any alleged infringement or claim of infringement of any such patent by reason of the sale or use of materials or goods delivered hereunder, and Seller further agrees to defend, protect and save harmless Buyer, its successors, assigns, customers and users of its products, against all suits in law or in equity and from all damages, claims, and demands, for actual or alleged infringement of any United States or foreign patent or copyright by reason of the use or sale of the materials or goods ordered hereunder.

15. PROPERTY OF BUYER – Unless otherwise provided in this order or agreed to in writing, property of every description including all tools, fixtures, gauges, equipment and material furnished, built by or made available to Seller, title to which is in Buyer or Buyer’s customer, and any replacement or modification thereof, shall be and remain the property of Buyer or Buyer’s customer. Property other than material, shall not be modified without the written consent of Buyer. Such property shall be plainly marked or otherwise adequately identified by Seller as “Property of ILPEA Industries, Inc,” or as otherwise designated by Buyer and shall be safely stored separately and apart from Seller’s property. Seller shall not use such property except for performance of work hereunder or as authorized in writing by Buyer. Such property while in Seller’s possession or control shall be kept in good condition, shall be held at Seller’s risk, and shall be kept insured by Seller, at its expense, in an amount equal to the replacement cost with loss payable to Buyer. To the extent such property is not material consumed in the performance of this order, it shall be subject to inspection and removal by Buyer at any time, and Buyer shall have the right of entry for such purposes without any additional liability whatsoever to Seller. As and when directed by Buyer, Seller shall disclose the location of such property and/or prepare it for shipment and ship it f.o.b. its plant to Buyer in as good condition as originally received by Seller, reasonable wear and tear excepted and capable of performing the function for which such property was last used in carrying out this order.

16. MATERIAL FURNISHED BY BUYER – Any material furnished by Buyer on other than charge basis in connection with this order shall be deemed as held by Seller for Buyer and Seller agrees to pay for all such materials spoiled by it or not otherwise satisfactorily accounted for.

17. INCREASE IN VALUE OF MATERIAL DUE TO SELLER’S EFFORTS – Any increase in the value of material so furnished by Buyer due to action or effort of Seller shall be solely the Sellers property until final acceptance by Buyer, and until such acceptance by Buyer, the interest of Buyer is limited to the material so furnished by Buyer.

18. TERMINATION AT BUYER’S OPTION – Buyer may terminate performance of work under this order in whole or from time to time in part by written notice of termination delivered to Seller at any time after one day from Seller’s acceptance of this order, whereupon Seller will stop work on the date and to the extent specified in the notice and terminate all orders and subcontracts to the extent they relate to the terminated work. Seller will promptly advise Buyer of the quantities of applicable work and material on hand or purchased prior to termination and the most favorable disposition that Seller can make thereof. Seller will comply with Buyer’s instructions regarding transfer and disposition of title to the possession of such work and material. (Releases existing or subsequently received, against other purchase orders awarded Seller by Buyer for the same or similar goods or materials are to be considered such instructions unless Seller is otherwise notified in writing.) Within the time limit established by Buyer at the time of such notification, Seller will submit all its claims resulting from such termination. Buyer will have the right to check such claims at any reasonable time or times by inspecting and auditing the records, facilities, work or materials of Seller relating to this order. Buyer will pay Seller, without duplication, the order price for finished work accepted by Buyer and the cost to Seller of work in process and raw material allocable to the terminated work; based on any audit Buyer may conduct and generally accepted accounting principles; less however: (1) the reasonable value or cost (whichever is higher) of any items used or sold by Seller without Buyer’s consent; (2) the agreed value of any items used or sold by Seller with Buyer’s consent; and (3) the cost of any defective, damaged or destroyed work or material. Buyer will make no payments for finished work, work in process or raw material fabricated or procured by Seller in excess of any authorization required under paragraph 5 herein. Notwithstanding the above, payments made under this paragraph shall not exceed the aggregate price specified in this order less payments otherwise made or to be made, and adjustments shall be made reducing the payment hereunder for costs of work in process and raw material to reflect on a pro rata basis any indicated loss on the entire order had it been completed. Payment made under this paragraph will constitute Buyer’s only liability in event this order is terminated hereunder. Except as otherwise provided in this order, the provisions of this paragraph will not apply to any cancellation by Buyer for default by Seller or for any other cause allowed by law or under this order.

19. CANCELLATION FOR DEFAULT If Seller fails (i) to deliver the materials or goods or perform the services at the time specified herein or any extension thereof authorized by Buyer in writing, or (ii) to perform any of the other provisions of this order and does not cure such failure within such period as Buyer may authorize after receipt of notice from Buyer specifying such failure, Buyer may by written notice or default to Seller cancel the whole or any part of the materials, goods, or services ordered, without liability, except for completed services and completed materials and goods delivered and accepted and except under that portion of the order not cancelled. If after notice of default under this paragraph, it is determined that Seller was not in default, work affected by the cancellation shall be deemed terminated pursuant to paragraph 18 above and the rights and obligations of the parties shall be governed by such paragraph.

20. INSURANCE – Seller agrees to furnish acceptable certificates evidencing adequate workmen’s compensation, public liability and property damage insurance coverage. Seller shall defend, indemnify and protect Buyer against all claims, liabilities, losses and damages due to or injury to or death of any person or damage to or loss of any property arising out of improper performance of negligent work under this order or arising out of any act or omission of any employee or agent of Seller and its subcontractors while on Buyer’s property or in the course of their employment.

21. INSPECTION AND REJECTIONS – Buyer shall have the right to inspect and test all materials and goods to the extent practicable at all times and places, including the places and during period of manufacture. Seller shall also provide and maintain an adequate inspection system covering the materials and goods hereunder. Seller shall make its inspection records of all work and material available to Buyer during performance of this order, and for such longer period as may be specified in this order.

In case any materials or goods delivered hereunder are defective in material or workmanship or otherwise not in conformity with the requirements of this order, Buyer shall have the right, notwithstanding payment or any prior inspection or test, either to reject it or to require its correction. Property which is rejected or required to be corrected shall be removed (if permitted or required by Buyer) or correct in place, by and at the expense of the Seller promptly after notice, and shall not thereafter be delivered hereunder unless the former rejection or requirement of correction is disclosed. If the Seller fails promptly to remove such property which is required to be removed, or promptly to replace or correct such property, Buyer either (i) may by contract or otherwise replace or correct such property and shall charge to Seller the increased costs occasioned Buyer thereby, or (ii) may affect a cancellation for default under paragraph 19. Unless the Seller is able to correct or replace such property within the delivery schedule, Buyer by written notice may accept the delivery of such property subject to a reduction in price reflecting the reduced value attributable to nonconformance. Seller assumes the risk of damage to or loss of and all handling and transportation costs for defective property delivered hereunder.

22. CHANGES – Buyer may at any time, by a written order, and without notice to sureties, if any, make changes within the general scope of this order, in any one or more of the following: (i) drawings, designs or specifications pertaining to this order; (ii) method of shipment or packing; (iii) place of delivery; (iv) the amount of property to be made available by Buyer for use by Seller in performance of this order. If any such change causes an increase or decrease in the cost of, or the time required for, performance of any part of the work under this order, whether changed or not changed by any such order, an equitable adjustment shall be made in the order price, or the delivery schedule, or both. Such claim by Seller for adjustment under this paragraph must be asserted within 30 days from the date of receipt by Seller of the notification of change. Buyer will have the right to check all claims hereunder at any reasonable time or times by inspecting and auditing the records, facilities, work or materials of Seller relating to this order.

23. RIGHTS AND REMEDIES – The rights and remedies herein reserved to Buyer shall be cumulative and additional to any other or further rights and remedies available at law or in equity. No waiver of a breach of any provision of this order shall constitute a waiver of any other breach or waiver of such provision.

24. LABOR DISPUTES – Whenever Seller has knowledge that any actual or potential labor dispute is delaying or threatens to delay the timely performance of this order, Seller shall immediately give notice thereof, including all relevant information with respect thereto, to Buyer.

25. SPECIAL TOOLING – The term “special tooling” as used in this paragraph shall be deemed to include all jigs, dies, fixtures, molds, patterns, special taps, special gauges, special test equipment, other special equipment and manufacturing aids, and drawings and any replacements of the foregoing, required or manufactured for use in the performance of this order, which are of such a specialized nature, that without substantial modification or alteration, their use is limited to the production of the materials, goods or parts thereof or performance of the services of the type required by this order. The term does not include (i) items of tooling or equipment heretofore acquired by Seller, or replacement thereof, whether or not altered or adopted for use in the performance of this order, (ii) consumable small tools, (iii) general or special machine tools or similar capital items, or (iv) tooling title to which is in Buyer or Buyer’s customer.

Seller agrees that special tooling shall be retained and not used or reworked except for performance of work hereunder or as authorized in writing by Buyer. While in Seller’s possession or control, Seller warrants that it will keep the special tooling in good condition, fully covered by insurance, free of liens and encumbrances at all times, and will replace it when lost, destroyed, or necessary for performance of work hereunder. Upon cessation or termination of the work under this order for which the special tooling is required. Seller shall furnish Buyer a list of the products, parts, or services for the manufacture or performance of which such special tooling was used or designed and a list indicating where each item of the special tooling is located, and shall transfer and/or dispose of title to and possession of the special tooling as Buyer may direct in writing. In addition, Buyer shall have the right to take possession of, including the right of entry for such purposes, any special tooling, title to which Buyer acquires hereunder, without any additional liability whatsoever to Seller.

26. ACCEPTANCE – This order is not binding until accepted in writing or by a delivery, or the commencement of performance of services, or commencement of work on (including the ordering of materials, goods or tooling for) materials or goods to be specially manufactured for Buyer’s pursuant to this order.

27. USE OF BUYER’S NAME – (a) Seller shall not without first obtaining the written consent of Buyer, in any manner publish the fact that Seller has furnished or contracted to furnish Buyer the articles herein mentioned or use the name of ILPEA Industries Inc. or any of its subsidiaries or customers in Seller’s advertising or other publication, (b) if the material specified within this order is peculiar to Buyer’s design, either as an assembly or component part of any assembly, or if the material bears Buyer’s Trade-Mark and/or identifying Mark it shall not bear the Trade-Mark or other designation of the maker or Seller and similar material shall not be sold or otherwise disposed of to anyone other than Buyer.

28. TRADEMARKS – Whenever Seller is requested by Buyer so to do, by notation on blueprints or written instructions, Seller will place on the goods covered by this order in the manner specified by Buyer such Trade-Mark and/or identifying Mark as Buyer may specify without expense to the Buyer.

29. Seller represents and warrants that the goods or services furnished hereunder were produced in compliance with all applicable requirements of Sections 5, 7, and 12 of the Fair Labor Standard Act of 1938, as amended, and of regulations and orders of the Department of Labor issued under Section 14 thereof.

30. The Equal Opportunity Clause of Section 1.4 of the Rules and Regulations of the Office of Federal Contract Compliance Programs related to Executive Order 11246, the Affirmative Action Clause of Section 741.4 of the Rules and Regulations of the Office of Federal Contract Compliance Programs related to Affirmative Action Programs for Handicapped Persons, and the Affirmative Action Clause of Section 250.1 of the Rules and Regulations of the Office of Federal Contract Compliance Programs related to Affirmative Action Regulations for Veterans of the Vietnam Era are hereby incorporated by reference.

31. Seller represents and warrants that the goods or services furnished hereunder (including all labels, packages and containers for said goods) comply with all applicable standards, rules and regulations in effect under the Williams-Steiger Occupational Safety and Health Act of 1970 with respect to design, construction, manufacture or use for their intended purpose of said goods or services.