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Terms and Conditions

TERMS AND CONDITIONS OF PURCHASE

1. DEFINITIONS.

“Goods” as used herein shall mean the goods, products, materials, supplies, parts, assemblies, drawings, documents, or services covered by this purchase order. “Production” and “delivery” as used herein shall include any services to be rendered under this purchase order.

2. THE CONTRACT

a. Additional Documents. All specifications, drawings, technical data and documents expressly referred to in this purchase order are incorporated herein by reference. If such reference is to a portion only of such specifications, drawings, data or documents, then only the portions referenced shall be incorporated herein.

b. Complete Agreement. This purchase order, including all items incorporated herein by reference, contains the final and entire contract between Purchaser and Seller. And no agreement or other understanding purporting to add to or modify the terms and conditions hereof shall be binding upon Purchaser unless agreed to by Purchaser in writing on or subsequent to the date of this purchase order.

c. Non-Assignment. Seller shall not delegate to any other person the production of goods under this purchase order. Purchaser shall be entitled to assert against any assignee of Seller all rights, claims and defenses of any type (including, but not limited to, rights of setoff, recoupment and counterclaim), which Purchaser could assert against Seller, whether acquired prior or subsequent to such assignment.

d. Terms Law. This contract shall be interpreted and applied according to the laws of the State of Michigan.

3. PRICE

a. Discounts. All cash discount periods shall be computed from the date of receipt by Purchaser of a correct invoice or goods, whichever is later. Cash discounts will be based on full amount of invoice less freight charges and taxes separately stated on invoice.

b. Extra Charges, Invoices and Payment. No extra charges of any kind will be allowed unless specifically agreed to in writing by Purchaser. Price is to cover net weight, unless otherwise agreed. No invoices shall be issued nor payment made prior to delivery. All state and federal excise, sales and use taxes shall be stated separately on the invoices. All payments are subject to adjustment for storage or rejection.

c. Transportation Charges. Any transportation charges with respect to which Seller is entitled to receive reimbursement shall be added to Seller’s invoice as a separate item, with the receipted freight bill attached thereto. No parcel post insurance charges will be allowed unless authorized by Purchaser in writing. Any excess charges resulting from the use of unauthorized transportation will be disallowed or charged to Seller. No goods valued in excess of $500 are to be shipped via Parcel Post. Seller shall not declared any value on goods shipped via United Parcel Service, Air Express, Air Freight or Parcel Post. Seller shall release rail or truck shipment at the lowest valuation permitted in governing tariff or classification.

d. Reduction in Rates, Duties or Taxes. Any reduction in applicable freight rates, customs duties, import taxes, excise taxes, and/or sales taxes from those in force on the date of this purchase order, whether separately stated on the face of the order or not, shall be paid to Purchaser or credited against the price of the goods.

e. Duty Drawbacks Rights. This purchase order includes any and all related customs duty drawback rights, which are transferable from Seller to Purchaser. Seller shall inform Purchaser of the existence of any such rights and upon request supply such documents as may be required for Purchaser to obtain any such drawback.

4. DELIVERY

a. Transportation. All goods shall be properly packed, marked, loaded and shipped as required by this order and the transporting carrier, and shipped in a manner which will permit the lowest transportation rates to apply. Seller shall reimburse Purchases for all expenses incurred due to improper packing, marking, loading or routing. Seller shall route shipments in accordance with Purchaser’s instructions and shall offer all shipments to Purchaser’s Transportation Operations unless otherwise instructed.

b. Risk of Loss. Delivery shall not be complete until goods have been actually delivered to and accepted by Purchaser, notwithstanding any agreement to pay freight, express, parcel post, or other transportation charges. The risk of loss or damage in transit shall be upon the Seller, except where shipment is by Purchaser’s vehicle in which case the risk of loss or damage shall pass to Purchaser upon completion of loading.

c. Shipping Releases. Seller shall not produce any of the goods covered by this purchase order, or procure any of the materials required in their production, or ship any of such goods to Purchaser, except to the extent authorized in written instructions furnished to Seller by Purchaser or as necessary to meet specific delivery dates provided in this purchase order. Purchaser shall have no responsibility for goods for which delivery dates or such written instructions have not been provided. Shipments in excess of those authorized may be returned to Seller and Seller shall pay Purchaser for all packing, handling, sorting, loading and transportation expenses in connection with such shipments. Purchaser may from time to time change shipping schedules specified in this purchase order or contained in other written instructions or direct temporary suspension of such scheduled shipments.

d. Delays. Seller shall in the event of a delay or threat of delay, due to any cause, in the production or delivery of goods hereunder, immediately notify Purchaser and shall include with such notice all relevant information with respect to such delay or threatened delay. Seller shall be liable for any damages resulting from failure to make delivery within the time called for by this order or by any written instructions of Purchaser except where (1) such delay in delivery shall be due to causes beyond the reasonable control of Seller, and (2) Seller notifies Purchaser as aforesaid. If Seller for any reason cannot comply with Purchaser’s delivery schedule, Purchaser, in addition to any other rights or remedies available to it by law or under these terms and conditions, may terminate this purchase order or cancel any shipments thereunder without further liability to Seller.

5. INSPECTION AND ACCEPTANCE

a. All goods shall be subject to inspection and test by the Purchaser and its customers to the extent practical at all times and places and in any event prior to acceptance by Purchaser.

b. Acceptance or rejection of the goods shall be made as promptly as practicable after delivery, except as otherwise provided in this order; however, failure to inspect and accept or reject goods shall not relieve the Seller from responsibility for compliance with order requirements nor impose liability on Purchaser

c. Payment shall not constitute final acceptance. Defective goods will be returned at Seller’s risk and expense at full invoice price, plus transportation charges, if any, and no replacement of defective goods shall be made unless specified in writing by the Purchaser. Purchaser may reject and return any portion of any shipment of goods under this purchase order which may be defective or fail to comply with applicable specifications, drawings, samples or descriptions without invalidating the remainder of the order.

7. TERMINATION AT OPTION OF PURCHASER

a. Production of goods under this purchase order may be terminated in whole or in part, by Purchaser at any time by mailing or delivering written notice of termination to Seller.

b. After receipt of a notice of termination and unless otherwise directed by Purchaser, Seller shall:
1. immediately terminate all production of goods under this purchase order;
2. terminate all orders and subcontracts relating to the production of goods as terminated by the notice;
3. settle all claims arising out of such termination of orders and subcontracts;
4. transfer title and deliver to Purchaser all completed goods which conform to the requirements of this order and do not exceed the amount authorized for production by Purchaser, and (ii) all reasonable quantities (but not in excess of amounts authorized by Purchaser) of goods in process, and materials produced or acquired by Purchaser specifically for the productions of the goods, provided such goods in process and materials are of a type and quality for producing goods which conform to the requirements of this purchase order and cannot be reasonably used by Seller in producing goods for itself or for its other customer;
5. take all action necessary to protect property in which Purchaser has or may acquire an interest;
6. submit to Purchaser not later than three months from the effective date of termination (one month in the case of partial termination), its termination claim provided, however, that in the event of failure of Seller to submit its termination claim within such period, Purchaser may determine, notwithstanding the provisions of subparagraph (c) hereof, on the basis of information available to it, the amount, if any, due Seller with respect to the termination, and such determination shall be final.

c. Upon termination by Purchaser under this paragraph, Purchaser shall pay to Seller the following amounts without duplication;
1. the purchase order price for all goods which have been completed in accordance with this purchase order;
2. the actual costs incurred by Seller in accordance with this purchase order to the extent such costs are reasonable in amount and are properly allocable to the terminated portion of this purchase order, including the actual cost of goods in process and materials delivered to Purchaser in accordance with subparagraph (b) hereof, and including the actual cost of discharging liabilities which are so allocable or apportionable; and
3. the reasonable costs incurred by Seller in protecting property in which Purchaser has or may acquire an interest. Payments made under this subparagraph (c), exclusive of payments made under subdivision (3) hereof, shall not exceed the aggregate price specified in this purchase order, less payments otherwise made or to be made.

d. This paragraph (7) shall not apply if this purchase order is cancelled by Purchaser for the default of Seller.

6. CHANGES

Changes may be made in drawings, specifications, descriptions, shipping instructions, quantities and/or delivery schedules only by the prior written notice of consent or Purchaser. Should any such change increase or decrease the cost of or the time required for production of goods under this purchase order, Seller shall immediately notify Purchaser, and Purchaser shall make an equitable adjustment in the purchase price or delivery schedule, or both.

8. WARRANTIES

In addition to any implied warranties, the Seller warrants that all goods covered by this purchase order will be merchantable and free from defects in material and workmanship and will conform to applicable specifications, drawings, samples and descriptions. In case any such goods shall be defective or otherwise not in conformity with this order, Seller shall at Purchaser’s option and in addition to all other remedies of the Purchaser either credit the Purchaser for, or at Seller’s own expense replace, repair or correct any such goods. Such warranties, together with service warranties and guarantees, shall run to Purchaser, its successors, assigns, customers and to the users of its products, and shall survive any inspection, delivery, acceptance or payment by Purchaser of or for the goods. Seller shall hold Purchaser harmless for any costs, expenses and damages, whether direct, indirect, incidental or consequential, arising from a breach of these warranties.

9. PURCHASER’S PROPERTY

Unless otherwise agreed to in writing, all tools, equipment, documents or other material of every description furnished to
Seller by Purchaser or for which Seller has been reimbursed by Purchaser, including any replacements thereof and any materials affixed or attached thereto, shall be the personal property of Purchaser. Such property shall at all times be properly maintained by Seller, shall be deemed to be personally, shall be appropriately marked to establish Purchaser’s ownership, shall not be commingled with the property of Seller or of any third party, shall not be moved from Seller’s premises without Purchaser’s prior written approval, and shall be held at Seller’s risk and expense. Seller shall, upon Purchaser’s written request, sign and file a Financing Statement as “Consignee”, in accordance with Section 9 408 of the Uniform Commercial Code, to secure title of such property in Purchaser. Such property shall be subject to removal at Purchaser’s written request in which event Seller shall redeliver such property in the same condition as originally received by Seller, reasonable wear and tear excepted, all at Seller’s expense. Purchaser shall have the right to enter upon Seller’s premises at all reasonable times to inspect such property and Seller’s records with respect thereto. Seller agrees not to use any designs, tools, patterns, drawings, materials or other information or equipment furnished by Purchaser in the manufacture or design of any goods for any other customer and further agrees not to use or disclose to any third party any confidential or proprietary information of Purchaser, acquired by Seller in the course of producing goods under this purchase order.

10. PATENTS

Seller agrees to indemnify and hold harmless Purchaser and its customers against all liability, loss, and expense (including attorney’s fees) by reason of any claim, action or litigation arising out of any alleged or actual, direct or contributory infringement of patent arising from the purchase, use or sale of the goods. In case the purchase, use or sale of said goods; or any part thereof, is held to constitute infringement or is enjoined, Seller shall, at its own expense, procure for Purchaser and its customers the right to continue the purchase, use and sale of such goods; or, with the approval of Purchaser, modify such goods so they become non-infringing, or remove such goods and refund the purchase price and the transportation and installation costs thereof.

11. HARMFUL INGREDIENTS OR DEFECTIVE DESIGN

Whenever Seller becomes aware that any ingredient or component of the goods covered by this purchase order are or may become harmful to persons or property, or that the design or construction of the goods is defective in any manner which is or may become harmful to persons or property. Seller shall immediately give notice thereof, including all relevant information with respect thereto, to Purchaser.

12. LICENSING OF INVENTIONS

If this order involves experimental, development or research activities, including engineering related thereto, all information developed in the course thereof shall be owned by Purchaser and be deemed confidential and proprietary property of Purchaser, whether patented or not, and Seller shall cooperate (and cause his employees to cooperate) in executing any documents and taking any other actions necessary or convenient to patent or otherwise perfect or protect for the benefit of Purchaser any inventions conceived, developed or reduced to practice in performance of this purchase order. If the order does not involve such experimental, developmental or research activities, but the goods covered by it are to be produced in accordance with drawings or specifications furnished by Purchaser, Seller hereby grants to Purchase irrevocable, non-exclusive and royalty-free license to make, have made, use and sell any improvement in the goods which is conceived, developed or reduced to practice by Seller in the production of the goods under this purchase order.

13. ADVERTISING

Seller shall not disclose that Purchaser has contracted with Seller without Purchaser’s prior written consent.

14. SET OFF

Purchaser shall be entitled at all times to set off any amount owing at any time from Seller or any affiliated company of Seller, to Purchaser or any of it affiliated companies, against any amount payable at any time by Purchaser in connection with this purchase order. By “affiliated company” is meant any corporation, firm or association, which controls, is controlled by or is under common control with Seller or Purchaser, as the case may be.

15. ENGINEERING

Technical and Business data supplied will be deemed confidential and proprietary and remain the sole property of Creative Foam.

16. COMPLIANCE WITH LAWS

Seller shall comply with all laws, regulations, ordinances or other governmental regulations now or hereafter applicable to the goods or the production thereof.

17. FAIR LABOR STANDARDS ACT

Seller will comply with the Fair Labor Standards Act of 1938, as amended, All invoices shall contain the following assurance: Seller represents that it has complied with the Fair Labor Standards Act of 1938, as amended, in producing the supplies or performing the services covered by this invoice.

18. EQUAL OPPORTUNITY CLAUSE

The contract provisions of Paragraphs (1) through (7) of Section 202 of Executive Order 11246 issued in 1965, as amended by Executive Order 11375 of 1967, and all rules and regulations pursuant thereto are part of and included in this Purchase Order.

19. EMPLOYMENT OF THE HANDICAPPED CLAUSE

The provisions of the affirmative action clause entitled “Employment of the Handicapped”, contained in the Regulations concerning Affirmative Action Obligations of Contractors and Subcontractors, 41 CFR 60-741.3, issued pursuant to the Vocational Rehabilitation Act of 1973, as amended by the Rehabilitation Act Amendments of 1974, is a part of and included in this purchase order.

20. LISTING OF EMPLOYMENT OPENINGS FOR VETERANS CLAUSE

The contract clause contained in the Regulations providing for Veteran’s Employment Emphasis Under Federal Contracts, 41 CFR 60-250.4, is a part of and included in this purchase order.

21. VETERANS

eller shall comply with the provisions of the Vietnam Era Veterans Readjustment Assistance Act of 1974. Public Law 93-508, as it amends 38 USC 2012, the Vietnam Era Readjustment Assistance Act of 1972.

22. AGE DISCRIMINATION IN EMPLOYMENT ACT.
Seller shall comply with the provisions of the Age Discrimination in Employment Act of 1967, as amended in 1978, and all rules and regulations issued pursuant thereto.

STATE SALES TAX NUMBERS FOR THE PURCHASER’S INDIVIDUAL PLANT LOCATION WILL BE PROVIDED UPON REQUEST OF THE SELLER. CREATIVE FOAM CORPORATION, IDENTIFICATION NUMBER 38-1905349

22. AGE DISCRIMINATION IN EMPLOYMENT ACT

Seller shall comply with the provisions of the Age Discrimination in Employment Act of 1967, as amended in 1978, and all rules and regulations issued pursuant thereto.

STATE SALES TAX NUMBERS FOR THE PURCHASER’S INDIVIDUAL PLANT LOCATION WILL BE PROVIDED UPON REQUEST OF THE SELLER. CREATIVE FOAM CORPORATION, IDENTIFICATION NUMBER 38-1905349

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