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Purchase Order - General Terms and Conditions
1) Acceptance of this purchase order (the “Purchase Order”) by any means of acknowledgment, or any shipment of goods ordered or performance of services called for hereunder, shall constitute acceptance by Seller of the terms and conditions contained in this Purchase Order. Any terms or conditions proposed by the Seller inconsistent with or in addition to the terms and conditions contained herein shall be void and of no effect unless specifically agreed to by Grayhill, Inc. (the “Buyer” or “Grayhill”) in writing. This Purchase Order (and the terms and conditions set forth herein), together with any such approved written modifications, constitute the entire agreement between the parties.
 
2) Buyer reserves the right to withdraw this order at any time prior to actual receipt of written acceptance hereof by Seller. Notwithstanding receipt of acceptance, Buyer may also cancel this order in whole or in part and be relieved of all liability for any delivered or undelivered portion (as applicable), in addition to any other right or remedy, in the event: 
a) that any merchandise from Seller fails to meet Buyer's specifications; or 
b) that Seller fails to deliver, at any time, goods strictly conforming to the terms of this order; or 
c) as to undelivered merchandise, that as a result of fire or other casualty or other circumstances beyond the control of Buyer, Buyer cannot operate (one or more of) its places of business; or 
d) as to undelivered merchandise, of Seller's bankruptcy, insolvency, receivership, bankruptcy reorganization, assignment for the benefit of creditors, or cessation of business; or
e) that Seller fails to deliver any merchandise on time. 
f) that Seller’s “Vendor Ranking” falls into an unacceptable catagory as defined by Grayhill policy. 
Payment by Buyer for goods delivered hereunder shall not constitute acceptance of defective goods.

3) Delivery shall not be deemed to be complete until conforming goods have been actually received and accepted by Buyer. Notwithstanding any agreement by Buyer to pay freight, express or other transportation charges, the risk of loss or damage in transit shall be upon the Seller.

4) Quantities of articles shipped must be equal to, or a maximum of 5% over, the Purchase Order quantity for each line item. Short shipments, or shipments exceeding 5% of the Purchase Order quantity may be rejected by Buyer at incoming, or the excess may be returned to Seller at the Buyer’s Purchasing Agent’s discretion. Freight charges for any returned overage of articles are at the Seller’s expense.

5) Articles must arrive at Buyer’s dock within a shipping window of 5 days early and zero days late. Articles that arrive earlier or later than this delivery window, will be counted as early or late shipments, and will be reflected as such on the vendor ranking scorecard. Buyer reserves the right to reject early/late shipments at the discretion of Buyer’s Purchasing Agent or any officer of Buyer.

6) Seller agrees to adhere to the policy in the Buyer’s Materials Standards Manual (MSM Section 10) to maintain a vendor ranking score (as determined by Buyer) greater than 80, preferably greater than 90. Preferred Vendors are defined as those maintaining a vendor ranking score (as determined by Buyer) greater than 95 over a 4 quarter running average (with such four quarters being those immediately prior to the quarter in which such definition is being applied by Buyer). Seller agrees that if the Seller’s vendor ranking score (as determined by Buyer) falls below 80, Seller will respond with written corrective actions within 30 days of receiving such score. In addition to Buyer’s other rights under this Purchase Order, it is agreed by Seller that failure of Seller to so respond with written corrective actions which are accepted by Grayhill, and/or to improve (to Buyer’s satisfaction) the Seller’s vendor ranking score (as determined by Buyer), may result in termination of the business relationship with Seller. 

7) Seller certifies, covenants, represents and warrants that all goods delivered under this Purchase Order will conform with the Buyer’s specifications and approved sample, if furnished, and shall be free from defects, including latent defects. Seller agrees that ESD packaging is required on all electronic parts and assemblies in accordance with ANSI/ESD S20.20.  Process requirements for critical characteristics are found in the current issues of Grayhill Standard Operating Procedure Number 2338 and all deliveries to Grayhill for resale parts must adhere to this Grayhill Procedure (and Seller confirms it has reviewed said Grayhill Procedure and agrees thereto). Seller certifies, covenants, represents and warrants said goods to be fit and safe for their intended use, and acceptance of this order shall constitute an agreement by Seller to indemnify and hold Buyer harmless for all claims, liability, loss, damage and expense (including, without limitation, any and all collection costs and attorney’s fees, expert witness fees, accounting fees and court costs) incurred or sustained by Buyer by reason of any breach of any of such certification, covenant, representation or warranty, and such indemnification obligation of Seller shall survive the acceptance of the goods and payment therefore by the Buyer. In the event that a defect or non-conformance is discovered with any supplied item or service, Seller is required to notify the Buyer of the defect or non-conformance within five (5) days of discovery.

8) Unless the goods ordered hereunder consist of a design furnished by Buyer, Seller agrees to defend, at Seller’s expense, Buyer and its customers and users of its products and indemnify and hold them harmless with respect to any and all claims that the products or materials furnished by the Seller (or the design or technology of any such product) under this order infringe upon any patents or other intellectual property rights; and unless a design furnished by Buyer was the sole cause of the relevant damage or claim, Seller will also defend at Seller’s expense Buyer and its customers and users of its products, and indemnify and hold them harmless with respect to any and all claims that the products or materials furnished by the Seller (or the design or technology of any such product), are defective or caused injury to person or property, and any and all suits, controversies, demands and liabilities arising out of (or related to) any such claims or damages with respect to such products or materials or the design thereof. 

9) Seller shall comply with the U.S. International Traffic in Arms Regulations (ITAR), the U.S. Export Administration Regulations (EAR), and the sanctions programs administered by the U.S. Department of the Treasury’s Office of Foreign Assets Control (OFAC) (collectively, “Export Control Laws and Regulations”), in its performance hereunder, including but not limited to laws or regulations relating to the import and export of services, merchandise, information, documentation, technology, technical data, or software whether or not such information was provided to the Seller by the Buyer.  The Seller shall not, in connection with its performance under this Purchase Order, engage in any transaction with any person or entity listed on the Denied Parties List, the Specially Designated Nationals List, or any other list of restricted parties maintained by the U.S. Departments of State, Commerce, or Treasury.

10) Seller shall provide Buyer with detailed information about all merchandise, technology, and technical data provided by the Seller, including classification and/or control status and any other information necessary to ensure compliance with Export Control Laws and Regulations.

11) Seller agrees to defend, indemnify, and hold Buyer harmless from and against any and all claims, losses, liabilities, damages, and expenses (including, without limitation, all litigation costs, including, without limitation, all attorney fees, accounting fees, expert witness fees, and court costs relating to any such defense, and all costs of collecting upon or otherwise enforcing this indemnity) incurred or sustained by Grayhill as a consequence of (or related to) Seller’s failure to comply with any Export Control Laws or Regulations, or any other U.S. export laws or regulations (or any part of sections 9, 10, or 11 of this Purchase Order’s Terms and Conditions), or any laws or regulations related to the environment, including (without limitation) ROHS (the Europe Union’s Restriction or Hazardous Substances, EU Directive 2002/95/EC), REACH (the European Union’s Registration, Evaluation, Authorization and Restriction of Chemicals, EC 1907/2006), and WEEE (the European Union’s Waste from Electrical and Electronic Equipment Directive, EU Directive 2002/96/EC).

12) Articles shipped may not be invoiced at higher prices than shown on the Purchase Order, and except as may be otherwise specifically and explicitly provided in this Purchase Order, the price includes all charges for boxing, packing, cartage and other such expenses and all applicable national, federal, state and local taxes and all import duties and all export duties in effect on the Purchase Order date. 

13) Unless otherwise specifically stated by Buyer in the Purchase Order, payment terms for any item of merchandise are Net 45 days from the date that Buyer receives such item or from date of the invoice for that item, whichever is later. The cash discount period will date from Buyer’s receipt of goods or date of invoice, whichever is later.  C.O.D. (cash on delivery) shipments will not be accepted. 

14) All molds, dies, tools, special fixtures, jigs, gauges, patterns, plates and models paid for by Buyer, unless expressly otherwise stated in this Purchase Order to the contrary, are Buyer's property and shall be delivered to Buyer by Seller as quickly as is reasonably possible following Buyer’s demand (and, in any event, within less than fifteen (15) days following such a demand). Seller agrees to maintain said items in first class operative condition at Seller's expense. Seller also agrees to mark all such items in the manner specified (in writing) by Buyer. No use of said items shall be permitted except as authorized by Buyer. Unless otherwise specifically and expressly agreed to by Buyer in a writing signed on Buyer’s behalf by an officer thereof, payment for the tooling items shall not be due until Buyer accepts the first run of fabricated parts from said items. Seller agrees to conform to Buyer's standard operating procedure SOP 2924 (PPAP) for submitting samples for new, or changes to existing molds, dies, tools, special fixtures, jigs, gauges, patterns, plates, or models. While in Seller's custody or control, such property shall be held at Seller's risk and Seller shall be responsible for all loss or damage thereto (and shall clearly identify in Seller’s records that all such items belong to Buyer).  Seller hereby authorizes Buyer to file a UCC financing statement to identify Buyer’s property being held by Seller.  Seller agrees to insure (with an insurance company that has a financial security rating of no less than A IX as determined from time to time by A.M. Best Company) all such items at Seller’s expense in an amount equivalent to their replacement cost; and at Buyer’s request, Seller provide Buyer with a certificate of insurance showing such insurance, in form and substance acceptable to Buyer. 

15) Seller certifies that all goods furnished hereunder will be produced and shipped in compliance with all applicable requirements of all state, local, and federal laws, ordinances, and regulations, including, without limitation, the Fair Labor Standards Act of 1938, as amended, and all regulations and orders issued thereunder. All invoices must carry the following certification:
 
“We hereby certify that these goods were produced, or services performed, in compliance with all applicable requirements of Sections 6, 7 and 12 of the Fair Labor Standards Act, as amended, and all regulations and orders of the United States Department of Labor issued under Section 14 thereof.”

16) The remedies herein reserved by Buyer shall be cumulative and in addition to any other legal remedies. No waiver of a breach of any provision of this Purchase Order shall constitute a waiver of a continuing or further breach of such provision or of any other provision hereof. 

17) This Purchase Order and the contract resulting from this Purchase Order shall not be assignable by the Seller without the prior written consent of Buyer (and any attempt by Seller to assign this Purchase Order, or any part thereof, without such consent shall be null and void unless Buyer consents in writing thereto). 

18) Work Product: The manufacture, production and/or shipment of the items that are the subject matter of this Purchase Order may require design work, product development applications, specification development and other work product of a nature which may be deemed proprietary, confidential or otherwise not generally known to the trade or public. Unless expressly and specifically stated in writing by Buyer in this Purchase Order to the contrary, all such work product, including (without limitation) documents evidencing such work product and know-how relating to such work product are the exclusive property of Buyer and shall be delivered to or otherwise made known to Buyer upon Buyer’s demand. In no event shall such work product (or any portion thereof) be deemed the property of the Seller, nor shall the Seller assert or attempt to assert any ownership or proprietary interest therein. 

19) Seller and Buyer agree that the laws of the State of Illinois (except the conflict of law provisions thereof) shall govern this Purchase Order (and any and all contracts arising from this Purchase Order) and apply to the interpretation and enforcement of this Purchase Order (and any and all such contracts) and the transaction described herein (or in any such contract), excluding, however, the United Nations Convention on Contracts for the International Sale of Goods. Seller accepts the exclusive venue and jurisdiction of the State courts of Illinois (or US federal courts) located in Chicago, Cook County, Illinois with respect to any disputes or other matters related to this Purchase Order and/or any merchandise ordered or delivered under this Purchase Order (or any dispute or matter related to any such contract). 

20) Seller represents and warrants to Buyer that Seller is an equal opportunity employer and is in compliance with Executive Order 11246 and all applicable portions of Title 41 Code of Federal Regulations (“CFR”), chapter 60. In this regard, Seller agrees to comply with all applicable provisions of 41 CFR §60-1.4(a), 41 CFR §60-250.4 and 41 CFR §60-741.4 (regarding equal employment opportunities for minorities, females, veterans and individuals with disabilities, respectively), and the requirements thereunder are incorporated herein by reference thereto. 

21) All shipments of parts, material, and services under this Purchase Order shall be in compliance with Buyer's drawings and/or specifications (including the current edition of ISO 9001). Seller shall require their subtier subcontractors to comply (and shall be responsible for such compliance) with the applicable requirements hereof under the subcontract purchase documents, including (without limitation) all key characteristics hereof.  Inspection records of each product shipped to Buyer under this Purchase Order must be retained for a minimum of seven years. These records must be stored in a protected area, legible, and be retrievable and identifiable easily upon request of Buyer or Buyer’s associates or their respective customers or regulatory authorities, as approved by Grayhill.

22) Right of Entry: Buyer’s authorized representatives, Buyer's customer and/or the U.S. Federal Aviation Administration (FAA) (or other governmental agencies identified by Buyer or being involved in the use or regulation of any relevant goods) can access applicable areas of all facilities, and applicable records. In addition, Buyer, Buyer's customer and/or the FAA (and/or any and all governmental agencies described above) may enter Seller’s plant at all reasonable times to conduct preliminary inspections and tests of the applicable products and/or work-in-process, audit applicable areas of the facility/system, review of applicable nonconforming product for disposition and root cause analysis and countermeasure implementation for product issues. The Seller shall include in its applicable subcontracts issued in connection with this Purchase Order an identical provision giving Buyer, Buyer's customer and/or the FAA (and/or any and all governmental agencies described above) the right to enter the plants of Seller’s subcontractors. Buyer, Buyer's customer and/or the FAA (and/or any such agencies) may assign representatives at Seller’s plant on a full-time basis. Seller shall furnish, free of charge, all office space, secretarial service and other facilities and assistance reasonably required by Buyer and/or the Buyer’s customer and/or the FAA representatives (and/or the representatives of any such governmental agencies) at the Seller’s plant. 

23) Any design changes (or manufacturing changes or packaging changes) by Seller are not permitted without prior written notification to and written approval from Grayhill. 

24) Buyer shall have the right to set-off (against any and all obligations that Buyer may have to pay Seller): (a) any and all claims that Buyer may have against Seller; (b) any and all obligations that Seller may have to pay Buyer; and (c) any and all other liabilities that Seller may have to Buyer. If any part or parts of this Purchase Order are found to be invalid, illegal or unenforceable in any respect, it is the intent of the parties that a court so finding shall strike the provisions of this Purchase Order so found to be invalid, illegal or unenforceable, and the remaining provisions of this Purchase Order shall nevertheless be valid and binding with the same force and effect as if the invalid, illegal or unenforceable part or parts were originally deleted.

25) Without limiting any other portion of this Purchase Order’s Terms and Conditions benefiting Buyer, it is hereby provided that Seller shall comply (and represents and warrants to Buyer that Seller will and does comply) with: (a) all applicable laws and regulations related to Seller’s performance of this Purchase Order, including (without limitation), all laws and regulations regarding the environment, shipping, transport, export, import, manufacturing and sale; and (b) the following insurance maintenance requirements:
I. Seller and any / all subcontractors engaged by Seller to provide goods, products or services to Buyer (and/or to any entities related to Buyer) shall purchase and maintain the following insurance at all times during the performance of this Purchase Order and for two full years following the completion or termination of this Purchase Order and Seller’s performance hereunder:
 
II. 
A. Commercial General Liability Insurance (including, without limitation, premises/operations liability, independent contractors liability, products liability, completed operations liability, broad form property damage liability, personal injury liability and blanket contractual liability) written on an occurrence form policy at minimum limits of $3,000,000 combined single limit for bodily injury and property damage on a per occurrence basis. 
 
B. Automobile Liability Insurance (including owned, hired and non-owned automobiles) written on an occurrence form policy at minimum limits of  $1,000,000 combined single limit for bodily injury and property damage arising from any occurrence.
 
C. Statutory Workers’ Compensation Insurance and Employers Liability Insurance, including occupational disease & employers liability; and the minimum employer’s liability limits for each such insurance shall be $1,000,000 for each accident.
 
D. Seller may use any combination of primary liability insurance policies and umbrella liability insurance policies to satisfy the coverage and policy limit requirements detailed above.
 
III. The aforementioned policies written for Seller shall contain a rider or supplemental page stating the following:
 
A. Buyer is interested in the maintenance of this insurance; and it is agreed that this insurance will not be canceled, materially changed, or not renewed without at least thirty (30) days advance written notice to Buyer by certified mail addressed as follows:  Grayhill, Inc. (attention:  purchasing department), 561 Hillgrove Avenue, LaGrange, IL 60525-5997.
 
B. Seller’s Commercial General Liability coverage shall include the following extensions:
 
(1) Seller’s insurance is Primary, Non Contributory & Non Excess relative to any insurance maintained by and available to Buyer.
 
(2) An additional insured endorsement specifying Buyer as an additional insured party along with any lender and/or other affiliated entity as identified by Buyer.
 
IV. Seller’s insurance companies shall have a financial security rating of no less than A IX as determined from time to time by A.M. Best Company.
 
V Seller’s and its subcontractors’ insurance policies (as requested by these Terms and Conditions) shall be in force and correct certificates of insurance filed on an Accord form or its equivalent with Buyer prior to the commencement of performance by Seller of this Purchase Order; and
 
VI. Each such certificate of insurance shall identify Buyer as the holder such certificate:
 
26)   Seller shall not (without the prior, specific written permission of the Buyer): (a) publicize this Purchase Order, or the terms thereof, or Seller’s relationship with the Buyer; (b) disclose any information from or regarding Buyer (or this Purchase Order) to any third party except as required by subpoena or other legally imposed requirement (and in the instance of any such subpoena or other such legally imposed requirement, Seller shall before making any such disclosure, first notify [as soon as possible] the Buyer in writing of such pending disclosure and  cooperate with Buyer and its legal counsel to limit such disclosure to the fullest extent allowed by law); or (c) use (other than to fill this Purchase Order [or otherwise for Buyer’s exclusive benefit]) any information received by Seller from Buyer.

27) In the event that any products which the Buyer purchases from the Seller are going to be included by the Buyer in any product which the Buyer is going to sell to any department , agency or instrumentality of the US Government, including (without limitation) the Defense Department, then the Federal Acquisition Regulations (FAR) and Defense Federal Acquisition Regulation Supplement (DFARS), as in effect on the date that the Purchase Order is sent by the Buyer to the Seller are (unless Buyer specifically elects to the contrary in a writing signed by Buyer and delivered to Seller) hereby incorporated in such Purchase Order by reference as if the text of the FAR and the DFARS were fully written in the Purchase Order; and in the event of such incorporation, unless otherwise specifically stated by Buyer in a writing signed by Buyer, the term "Contractor" means Seller except in the term "prime contractor,” "subcontractor" means Seller's subcontractor, "Contract" means the agreement between Buyer and Seller (including the Buyer’s Purchase Order, which term as used in these Terms and Conditions shall be deemed to include, without limitation, all exhibits and attachments to such Purchase Order as well as the Purchase Order itself and all of the Buyer’s terms and conditions related thereto); except in the terms “prime contract” and both "Contracting Officer" and "Government" mean Buyer except in the terms "Government Property,” and "Government-Furnished Property,” or as otherwise indicated in such Regulations or in such writing signed by Buyer.    
Note: All above-referenced operating procedures of Grayhill are available by written request to your appropriate Grayhill purchasing agent. 

28) Seller agrees to notify Grayhill, in writing with six months advance notice, when any part ordered by Grayhill from Seller historically becomes obsolete or goes end of life.
 
Revision 2/1/2012


Sales Orders

1) These terms and conditions supersede the terms and conditions of the Buyer's Purchase Order. Any provision of the Buyer's Purchase Order which conflicts with these terms and conditions shall be ineffective and these terms and conditions shall govern unless the Seller shall subsequently agree otherwise in writing.
 
2) This contract may not be changed or terminated orally, and no change, termination or waiver of any of its provisions shall be valid unless in writing and signed by Seller.
 
3) Unless otherwise stated herein, all prices are F.O.B. Seller's plant in LaGrange, Illinois. Method of delivery and routing shall be at the Seller's discretion. Notwithstanding any agreement to pay freight, delivery of good purchased hereunder to a common carrier or licensed trucker shall constitute delivery to Buyer, and all risk of loss or damage in transit shall be borne by Buyer. In the event the Buyer requires special packing, Buyer shall pay an additional charge for the same, as determined by Seller.
 
4) Prices are based upon continuous production in uninterrupted runs of the quantity specified. The price for smaller runs shall be subject to a reasonable increase in price. On units classified as non-standard (regardless of whether or not catalogued), that is units fabricated to individual customer requirements, drawings, specifications or design as contrasted to standard items offered by the company for general sale, Seller reserves the right to fabricate the entire quantity ordered in one production run, although shipments will be made in accordance with any agreed delivery schedule. In the event of cancellation of such non-standard items, the cost of raw material, components, sub-assemblies or finished assemblies on quantities equivalent to the full production run for the entire quantity ordered plus normal overrun shall be considered as part of applicable cancellation charges.
 
5) Seller shall not be liable for failure to deliver or delays in delivery occasioned by strikes, lock-outs, inability to obtain materials or shipping space, breakdowns, delays of carriers or suppliers, governmental acts and regulations, acts of God and other causes beyond Seller's control; nor shall same because for cancellation of the order described herein. It is understood that delivery will be made in accordance with Seller's regular manufacturing schedule. Every effort will be made to meet the Buyer's required delivery dates but Seller will not be liable for any damages resulting from delays in delivery.

6) Delivery of ten (10%) percent more or less than quantity specified herein shall constitute fulfillment of this agreement. Buyer hereby promises to accept and pay for any excess not exceeding ten (10%) percent. Buyer agrees to pay any price increase of ten (10%) percent or less than the amount specified herein which Seller may impose if such increase reflects an equivalent increase in Seller's costs of components or raw materials between the date hereof and the scheduled delivery date. Catalogue or other specified weights are estimated but are not guaranteed.

7) Unless otherwise stated, Seller's prices do not include sales, use, excise or similar taxes. Consequently, in addition to the price specified herein, the amount of an present or future sales, use, excise or similar tax applicable to the sales of the products hereunder shall be paid by Buyer, or in lieu thereof. Buyer shall provide seller with a tax exemption certificate acceptable to the taxing authorities.

8) Except as otherwise stated herein, Buyer may not cancel this contract except with the written consent of the Seller. In the event of unauthorized cancellation or other breach by Buyer, Seller's damages shall include but are not limited to the following:

a) Invoice price of all goods which have been identified to the contract, whether such goods have been delivered to Buyer or not.

b) Actual costs incurred by Seller for goods not completed, which are allocable to the balance of the contract, including the cost of discharging Seller's liabilities which are so applicable, and the costs of materials on hand which were acquired or produced in connection with this order, plus a reasonable allowance for profit in connection with this order, plus a reasonable allowance for profit in connection with partially finished work and materials.

c) A reasonable allowance for profit in connection with goods called for under the contract, but with respect to which production has not yet begun at the time of cancellation or other breach.

d) Reasonable costs of collection incurred by Seller, including accountants and attorneys' fees.

9) Seller reserves the right to make delivery in installments, unless otherwise expressly stated herein. All such installments shall be separately invoice and paid for when due, without regard to prior or subsequent deliveries. Delay in delivery of an installment shall not relieve Buyer of its obligations to accept
remaining deliveries.

10) Seller reserves the right at any time, to revoke any credit extended to Buyer because of Buyer's failure to pay for any goods when due or for any reason deemed good and sufficient to Seller, and in such event Seller shall have the right to demand that all subsequent shipments be paid for prior to delivery.

11) SELLER'S LIABILITY UNDER THIS CONTRACT SHALL BE LIMITED TO THE STATED SELLING PRICE PER UNIT OF ANY DEFECTIVE ARTICLES AND SHALL, IN NO EVENT INCLUDE BUYER'S MANUFACTURING COSTS, LOST PROFITS OR GOODWILL, OR ANY OTHER SPECIAL OR CONSEQUENTIAL
DAMAGES.

12) All prices, unless otherwise provided, are net thirty (30) days from date of invoice. No discount will be allowed on tool, die, jig, mold and fixture changes, if any.

13) Unless otherwise agreed specifically in writing, all tools, dies, jigs and fixtures made or furnished by Seller shall remain Seller's property, whether or not the cost thereof has, in any way been paid by Buyer. If any tools, dies, molds, jigs and fixtures employed by Seller in connection with this contract are Buyer's property, they shall be held at Buyer's risk. Seller shall have a lien on such items and on any other items of Buyer's property which are in Seller's possession to secure all indebtedness whatsoever due from Buyer to Seller, which lien may be enforced by sale or court action. Seller's assertion of such lien shall not constitute a default under this contract.

14) Buyer shall indemnify, defend and hold Seller harmless from and against all claims, suits, judgments, costs, losses, expenses (including attorneys' fees) and liabilities from infringement (actual or claimed) of patents or trademarks arising from compliance with Buyer's specifications or instructions.

15) If, pursuant to Buyer's request, Seller shall agree to postpone delivery beyond the date specified in its order, Seller shall have the right to demand payment when the items are completed. Such complete items shall be held at Buyer's risk, and Buyer shall pay reasonable storage charges during the period that the shipment is delayed.

16) The remedies herein reserved by Seller shall be cumulative and in addition to any other legal remedies. No waiver of a breach of any portion of this contract shall constitute a waiver of continuing or future breaches of such provision or of any other provision hereof.

17) This contract represents the entire agreement of the parties and shall not be assignable by Buyer voluntarily or by operation of law or otherwise without Seller's consent.

18) This contract is made in an shall be governed by and construed according to the laws of the State of Illinois.

19) Anything herein to the contrary notwithstanding, any action for alleged breach by Seller of the contract between the parties, including, but not limited to an action for breach of the warranties herein set forth, shall be barred unless commenced by Buyer within one (1) year of the accrual of such cause
of action.

20) Claims for shortages in shipment must be made in writing and within ten (10) days of receipt by Buyer or shall be deemed waived.

21) Stenographic or clerical errors are subject to correction.

22) The parties agree that the law of The State of Illinois shall apply to the interpretation and enforcement of its contract and the transaction described herein, excluding, however, the United Nations Convention on contracts for the international sale of goods.

DISCLAIMER OF WARRANTY
Seller warrants the goods sold will conform in all material respects with all pertinent specifications including performance specifications, drawings and approved sample, if furnished. In the event that this contract includes a commitment by Seller to furnish goods of a certain rated output capacity, such commitment shall refer to the capacity of the goods when operated with materials of the same kind, quality and grade as any samples furnished to Seller in the development of the items, and to operation of such products under the same voltage and environmental conditions as in Seller's plant. Operation of such items to the quoted capacity in Seller's plant shall be conclusive proof of their capacity. Seller also warrants said goods to be free of defective material and factory workmanship. THIS WARRANTY IS IN LIEU OF ALL OTHER WARRANTIES, EXPRESSED OR IMPLIED. SELLER MAKES NO WARRANTY THAT SAID ARTICLES ARE FIT FOR ANY PARTICULAR PURPOSE; NOR ANY WARRANTY AS TO THE MERCHANTABILITY OR QUALITY OF ARTICLES SOLD EXCEPT AS HEREIN STATED. THERE ARE NO WARRANTIES WHICH EXTEND BEYOND THE DESCRIPTION ON THE FACE HEREOF. All claims for alleged defects in goods under this warranty shall be deemed waived unless made in writing and delivered to Seller within thirty (30) days after receipt of goods by Buyer. This warranty shall not apply where goods sold are subject to misuse, neglect, accident, improper application or have been repaired or substantially altered by others. Should Seller determine that goods sold are non-conforming, Seller will, at its exclusive option, repair or replace such non-conforming goods or reimburse the Buyer for the cost thereof. Transportation charges covering returned goods will be borne by Seller only when such goods prove defective within the warranty period and are returned within the warranty period. No returns will be accepted unless authorized by the factory, and Buyer shall bear all risk of loss or damage to returned goods in transit.

Quotations

1) This Quotation is for informational purposes only and is subject to change or withdrawal without notice. Your order will constitute an offer in accordance with the terms and conditions herein stated and such offer, upon acknowledgement by Seller on its Sales Order Acknowledgement Form or acceptance at LaGrange, Illinois, will constitute an agreement between us. Your oder after such acceptance by us will not be subject to cancellation, change or reduction in amount, or suspension by you of deliveries, unless prior to such action you have obtained our written consent.

2) Any of the terms and provisions of Buyer's order which are inconsistent with these conditions of sale or the Terms and Conditions stated in the Seller's Acknowledgement of Buyer's offer shall not be binding on this Seller. No waiver, alteration or modification of any of the provisions on either side of this Quotation shall be binding unless in writing and signed by an executive officer of the Seller.

3) Prices are based upon continuous production in uninterrupted runs of the quantity specified. The price for smaller runs shall be subject to a reasonable increase in price at Seller's discretion. Orders for other than standard catalog items are accepted on the basis of the Buyer accepting and paying for ten (10%) percent more or less than the quantity specified herein. Quantity prices are based on the shipment of the entire quantity within any given ninety (90) day period.

4) Unless otherwise stated, Seller's prices do not include sales, use excise or similar taxes. Consequently, in addition to the price specified herein, the amount of any present or future sales, use, excise or similar tax applicable to the sales of the products hereunder shall be paid by Buyer, or in lieu thereof, Buyer shall provide Seller with a tax exemption certificate acceptable to the taxing authorities.

5) On goods fabricated, manufactured or produced to individual customer requirements, drawings, specifications or design, Seller reserves the right to fabricate, manufacture or products the entire quantity ordered in one production run, unless shipments will be made in accordance with Buyer's requested schedule. In the even of cancellaton or such non-standard goods, any raw material components, sub-assemblies or finished assemblies on quantities equivalent to the full production run for the entire quantity ordered plus normal overrun shall be as part of applicable cancellation charges.

6) Seller reserves the right to change prices on goods schedules for delivery to Buyer later than ninety (90) days following the date of acceptance of the order therefore, including any installment of goods to be delivered even though a prior installment was delivered within the said ninety (90) day period. Seller hereby agrees that any such increase in price under this paragraph shall be based upon the increase in the cost of material or labor incurred by the Seller.

7) All prices unless otherwise stated are net with balance due 30 days from date of invoice.

8) Unless otherwise stated herein, all prices are F.O.B. Seller's Plant. Method of delivery and routing shall be at Seller's discretion unless specifically designated by Buyer. Nothwithstanding any agreement to pay freight, delivery of goods purchased hereunder to a common carrier or licensed trucker shall constitute delivery to Buyer, and all risk of loss or damage in transit shall be borne by Buyer.

9) It is understood that every effort will be made to deliver product in accordance with Seller's regular production schedule. Seller shall not be liable for failure to deliver or delays in delivery occasioned by strikes, lock-outs, inability to obtain materials or shipping space, breakdowns, delays of carriers or suppliers, governmental acts and regulations, acts of Godand other causes beyond Seller's control, nor shall same be cause for cancellation of any order. Seller shall not be liable for any damages resulting from delays in delivery. Delivery shall be deemed timely if made within ten (10) working days of the scheduled delivery date.

10) Seller reserves the right, at any time, to revoke any credit extended to Buyer because of Buyer's failure to pay for goods when due or for any other reason deemed good and sufficient by Seller, and in such event, all subsequent payments shall be made in advance of shipment or on delivery at Seller's discretion.

11) Seller reserves the right to make delivery in installments unless otherwise expressly stated herein. All such installments shall be separately invoiced and paid for when due, without regard to subsequent deliveries. Delay in delivery of an installment shall not relieve Buyer of its obligations to accept remaining deliveries.

12) Seller warrants the goods sold will conform with all pertinent specifications including performance specifications, drawings, and approved sample, if furnished. Seller also warrants said goods to be free of defective material and workmanship, but unless agreed to by Seller in writing. Seller will not inspect one hundred (100%) percent of all goods delivered to Buyer. THIS WARRANTY IS IN LIEU OF ALL OTHER WARRANTIES, EXPRESSED OR IMPLIED. SELLER MAKES NO WARRANTY THAT SAID GOODS ARE FIT FOR ANY PARTICULAR PURPOSE, NOT ANY WARRANTY AS TO THE MERCHANTABILITY OR QUALITY OF GOODS SOLD EXCEPT AS HEREIN STATED. All claims for alleged defects in goods under this warranty shall be deemed waived unless made in writing and delivered to Seller within thirty (30) days after date of shipment, and on any such claims the Seller has the option of inspecting the goods claimed defective at Buyer's place of business or having them reshipped to Seller for inspection. This warranty shall not apply where goods have been subject to misuse, neglect, accident, improper application or have been repaired or substantially altered by others. Transportation charges covering returned goods shall be borne by Seller only when said goods are determined by Seller to be defective and covered by the warranty. No returns will be accepted unless authorized by Seller in writing.

13) SELLER'S LIABILITY SHALL BE LIMITED TO SELLER'S STATED SELLING PRICE PER UNIT OF ANY DEFECTIVE GOODS AND SHALL IN NO EVENT, INCLUDE BUYER'S MANUFACTURING COSTS, LOSS OF PROFITS OR GOODWILL, OR ANY OTHER SPECIAL OR CONSEQUENTIAL DAMAGES. SELLER MAY AT ITS DISCRETION REPAIR AND/OR REPLACE, OR AT ITS OPTION, ISSUE THE BUYER CREDIT FOR SUCH DEFECTIVE GOODS RETURNED BY THE BUYER.

14) Buyer shall indemnify, defend and hold Seller harmless from and against all claims, suits, judgements, costs, losses, expenses (including attorney's fees) and liabilities from infringement (actual or claimed) of patents, copyrights or trademarks arising from compliance with Buyer's design, specifications or instructions and the fulfillment of Buyer's order.

15) Unless otherwise agreed specifically in writing, all tools, dies, molds, jigs or fixtures made or furnished by Seller shall remain Seller's property, whether or not the cost thereof has, in any way, been paid by Buyer. If any of the above items used by Seller in connection with this contract are Buyer's property, they shall be held at Buyer's risk and Seller shall not be responsible or liable for damage thereto or loss or destruction thereof; and Buyer agrees that Seller shall have a lien thereon while in Seller's possession to secure all indebtness whatsoever due from Buyer to Seller, which lien may be enforced by sale or court action. Seller's assertion of such lien shall not constitute a default under this Agreement.

16) Except as otherwise stated, any contract between Buyer and Seller shall be non-cancellable except with the written consent of Seller. In the event of cancellation, Buyer shall pay Seller, at Seller's option, the following as liquidated damages:

(a) Invoice price of all goods which have been identified to the contract, whether such articles have been delivered to Buyer, or not.

(b) Actual costs incurred by Seller for goods not completed, which are allocable to the balance of the contract, including the cost of discharging Seller's liabilities which are so applicable, and the costs of materials on hand which were acquired or produced in connection with this order, plus a reasonable allowance for profit in connection with partially finished work and materials.

(c) A reasonable allowance for profit in connection with goods called for under the contract, but with respect to which production has not yet begun at the time of the cancellation.

(d) Reasonable costs incurred by Seller inducing accountants' and attorneys' fees, if any, for making termination settlement hereunder.

17) Seller shall not be responsible or liable for damage to or loss or destruction of drawings, artwork, samples or other items provided by Buyer or prepared by Seller at Buyer's expense, not called for within thirty (30) days after the completion of the order for which they are used.

18) The remedies herein reserved by Seller shall be cumulative and in addition to any other legal remedies. No waiver of a breach of any portion of this contract shall constitute a waiver of continuing breach of such provision or of any other provision hereof.

19) Claims for shortages in shipment must be made within ten (10) days of receipt by Buyer or shall be deemed waived.

20) Any Contract, including the terms and conditions of Seller's Acknowledgement of Buyer's order, constitutes the entire agreement of the parties, and shall not be assignable by Buyer voluntarily or by operation of law or otherwise without Seller's consent.

21) Any contract between the parties shall be governed by and shall be construed according to the laws of the State of Illinois.

22) Anything herein to the contrary notwithstanding, any action for alleged breach by Seller of a contract between the parties, including, but not limited to an action for breach of the warranties herein set forth, shall be barred unless commenced by Buyer within thirty (30) days from the date of the occurrence giving rise to such cause of action.

23) Stenographic or clerical errors are subject to corrections.