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Terms & Conditions

Capsonic Automotive and Aerospace Purchase Order Standard Terms and Conditions

This Purchase Order is for the purchase of goods, services, or both as described on the face of this document (collectively, “Goods”) and is issued by Capsonic Automotive Inc.(hereafter, “Capsonic”). This Purchase Order is deemed accepted when entity supplying Goods (hereafter “Supplier”) returns the acknowledgment copy of this Purchase Order or begins performing, whichever is earlier. Capsonic rejects any additional or inconsistent terms and conditions offered by Supplier at any time. Any reference to Supplier’s quotation, bid, or proposal does not imply acceptance of any term, condition, or instruction contained in that document. No course of prior dealing or usage of the trade may modify, supplement, or explain any terms used in this Purchase Order. These terms and conditions together with the specifications, drawings, or other documents referred to on the face of the Purchase Order, or attached, or any documents incorporated by reference, supersede any prior or contemporaneous communications, representations, promises, or negotiations, whether oral or written, respecting the subject matter of this Purchase Order. All contract documents referenced in this Purchase Order are interpreted together as one agreement. In the event there is an irreconcilable conflict of such contract documents, the following order of precedence applies: a) any supply agreement or other agreement of the Parties referenced by the Purchase Order; then b) the face of the Purchase Order and any supplemental terms included or incorporated by reference; then c) these general Purchase Order provisions; and finally d) other contract documents agreed to in writing by the parties. No change to or modification of this Purchase Order will be binding upon Capsonic unless in writing, specifically identifying that it amends this Purchase Order, and signed, or approved electronically, by an authorized procurement representative of Capsonic. If Supplier becomes aware of any ambiguities, issues, or discrepancies between this Purchase Order and any specification, design, or other technical requirement applicable to this Purchase Order, Supplier will immediately submit the matter to Capsonic for resolution.

Capsonic will provide Supplier with Required Shipment and/or Delivery Schedules for Goods provided under this Purchase Order. For Spot Buy Purchase Order(s) (non-recurring shipments), the required delivery date will be specified on the face of the Purchase Order. For Blanket Purchase Orders (continuing recurrent shipments required), Capsonic will provide Release Schedules that specify the required quantity of Goods to be provided by Calendar Date.

Purchase Order will specify the length of time within Capsonic Releases which will comprise a firm commitment for the full value of the Goods released to Supplier for fabrication. If applicable, Purchase Order will also specify the length of time within Capsonic Releases which will comprise a commitment for the raw material value of Goods appearing on the release. In order to qualify for Material Value commitment Supplier must provide a cost breakout for Good(s) that is accepted by, and on file at Capsonic at time of Release issuance. Capsonic will bear no responsibility of any kind for raw material purchases by, or finished Goods produced by Supplier which exceed that represented on Capsonic Releases.

Capsonic may provide future volume Forecast(s). Such Forecasts comprise the best estimates or projections available at the time of distribution of such forecast. Supplier acknowledges that any such Forecasts provided by Capsonic are provided for informational purposes only and, like any other forward looking projections, are based on a number of economic and business factors, variables and assumptions, some of all of which may change over time. Capsonic makes no representation, warranty, guaranty, or commitment of any kind or nature, express or implied, regarding any such Forecasts provided to Supplier, including with respect to the accuracy or completeness of such forecasts. Supplier agrees to produce and provide goods without restriction or change of price at volumes up to the specified capacity and lead times upon request from Capsonic.

Delivery Terms for Goods supplied under this Purchase Order will be TTOP DDP El, Paso, TX Warehouse, unless otherwise specified on the face of the Purchase Order.

Supplier will deliver Goods or Services in the quantities and on the date(s) specified on the Purchase Order if Spot Buy, or schedule releases if under Blanket Purchase Order, and will do so using the method of transportation instructed by Capsonic on the Purchase Order. If delivery dates are not stated, Supplier will offer its best delivery date(s), which will be subject to acceptance by Capsonic. Unless otherwise directed, all Goods shipped in one day from and to a single location must be consolidated on one bill of lading or air waybill, as appropriate.

If the Supplier is not able to have Goods ready for shipment in time to meet Capsonic release schedules, then Supplier will, at its expense, deliver Goods by the most expeditious shipping method. Supplier will engage such expedited shipments without delay. Supplier will pay, and be responsible for, the entire cost of such premium shipment(s), unless Capsonic actions directly caused Supplier to fail to meet Capsonic release schedules, in which case Capsonic will be responsible for costs for premium shipment. In no way should determination of cause delay the prompt shipment of goods at the earliest possible time.

Capsonic reserves the right to reject, at no expense to Capsonic, all or any part of any delivery that varies from the quantity authorized by Capsonic for shipment. Supplier will not make any substitutions without Capsonic’s prior written approval. All items will be packaged according to Capsonic's instructions or, if none, according to good commercial practice in a manner sufficient to ensure receipt in an undamaged condition. Capsonic will not be liable for any discharge, spill or other environmental incident (including clean-up costs) involving any Goods shipped under the Purchase Order until received by Capsonic. All containers will be properly marked for identification as instructed on Capsonic’s Purchase Order and contain a packing slip that details, at a minimum, the Capsonic Purchase Order number(s), product part number, detailed product description, total number of boxes in shipment, quantity of product shipped, and final delivery address. Items shipped in advance of Capsonic's delivery schedule may be returned at Supplier's expense, and Supplier will bear the risk of loss for all goods delilvered in advance of the delivery date specified on Capsonic releases. For domestic shipments, if requested by Capsonic, and for all international shipments, Supplier will give written notice of shipment to Capsonic when the Goods are delivered to a carrier for transportation. The Purchase Order number(s) must appear on all correspondence, shipping labels, and shipping documents, including all packing sheets, bills of lading and air waybills.

All Goods, unless specifically exempted by the destination country’s governing authorities, must be marked with the country of origin (manufacture) of the Goods in a conspicuous place as legibly, indelibly, and permanently as the nature of the article or container permits.

Supplier will provide Capsonic with (a) the Harmonized Tariff Schedule number, country of origin information or certificates, manufacturer’s affidavits, applicable free trade agreement (“FTA”) certificates, and any other documents or nformation Capsonic may require to comply with international trade regulations or to lawfully minimize duties, taxes, and fees, and (b) FTA certificates for all Goods that qualify under one or more FTAs. Supplier will provide Capsonic all documents, records, and other supporting information necessary to substantiate the Goods’ qualification under an FTA.

Supplier will exert reasonable efforts to qualify the Goods under FTAs. Within one business day after Supplier delivers the Goods to the carrier, Supplier will send Capsonic a complete set of shipping documents including the commercial invoice, packing list, and air waybill, or three original parts of the combined through-bill of lading, clean without notation, necessary to release the Goods to Capsonic’s custody.

Goods delivered under this Purchase Order shall be free of liens and if Capsonic requests, satisfactory evidence of freedom from liens shall be delivered to requesting personnel.

Title to the goods purchased under this Purchase Order will transfer to Capsonic upon terms as specified on the face of this Purchased Order. Risk of loss will be with Supplier until transfer of title for goods occurs.

Whenever anything delays or threatens to delay the timely performance of this Purchase Order, Supplier must immediately notify Capsonic in writing of all relevant information with respect to such delay.

If Supplier is unable to produce, sell, or deliver goods or services covered by the Purchase Order, or Buyer is unable to accept delivery, buy, or use any goods or services covered by this Purchase Order, as a result of an event or occurrence beyond the reasonable control of the affected party and without such party’s fault or negligence, then any delay of failure to perform under this Purchase Order will be excused for only so long as such event or ccurrence continues, provided, however, that the affected party gives written notice of each such delay (including the anticipated duration of the delay) to the other party as soon as possible after the occurrence (but in no event later than three (3) business days thereafter). Such events and occurrences ,may include, by way of example an d not limitation, natural disasters, fires, floods, windstorms, severe weather, explosions, riots, wars, sabotage, labor problems (including lockouts, strikes and slowdowns), and power failures.

Any delay or failure to perform caused by the default of a sub tier supplier of Supplier will be excused only if (a) it is beyond the control of both Supplier and its sub-tier supplier(s) and without the fault or negligence of any of them, and (b) the Goods to be furnished cannot be obtained from other sources in sufficient time to permit Supplier to meet the delivery schedule. Supplier’s ability to sell Goods at a more advantageous price or Supplier’s economic hardship in buying materials or processing necessary for manufacture of the Goods will not constitute an excusable delay event.

If Supplier’s delivery is delayed, Capsonic may, at Capsonic’s sole option, cancel deliveries scheduled during the excusable delay period or elect to extend the period of performance to cover the period of delay caused by the excusable delay. If an excusable delay occurs that affects delivery of Goods to Capsonic, Supplier will allocate its available supply of Goods in a manner that assures Capsonic of at least the same proportion of Supplier’s total output of Goods as was allocated to Capsonic before the excusable delay event. If delivery of any Goods is delayed for more than 30 days, Capsonic may, without liability, cancel all or any part of this Purchase Order.

If Capsonic, in its sole discretion, determines there is a significant risk that Supplier will fail to meet its performance or delivery requirements under this Purchase Order, Capsonic may require Supplier to perform under a Capsonic Performance Assurance Plan. The Performance Assurance Plan may include specific reporting and performance requirements reasonably tailored to ensure Supplier’s adequate performance under identified provisions of this Purchase Order. Any failure by Supplier to satisfy the terms of the Performance Assurance Plan is a material breach of this Purchase Order

For Goods transported domestically from Supplier’s location in the U.S. to Capsonic’s location in the U.S., the F.O.B point is Capsonic’s location, Freight Collect, unless otherwise specified on the face of the Purchase Order or in a separate agreement. When the F. O. B. point is Capsonic’s location, title passes to Capsonic upon delivery of the Goods at Capsonic’s location. When the F. O. B. point is Supplier’s location, title passes to Capsonic upon delivery of the Goods to the carrier designated or approved by Capsonic. Supplier bears all risk of loss or damage to the Goods until title transfers to Capsonic. Unless Capsonic Automotive and otherwise specified on the face of the Purchase Order or in a separate agreement, all shipments shall be made via Capsonic preferred carriers and shipped Freight Collect.

For Goods transported internationally (from or to locations outside of the US) Supplier will deliver the Goods “FCA - Supplier’s location” (Incoterms 2000) to a Capsonic preferred carriers and shipped Freight Collect, unless otherwise specified on the face of the Purchase Order or in a separate agreement. Title to Goods passes to Capsonic upon receipt at Capsonic’s location.

The foregoing does not relieve Supplier of any responsibility for hidden damages discovered after acceptance of the Goods. Notwithstanding the foregoing, title and risk of loss to Goods subject to a consignment stock agreement pass upon release of the Goods from the consignment stock. Capsonic may direct Supplier to ship the Goods to Capsonic or to any third party designated by Capsonic.

Supplier assumes all responsibility and liability for any shipments covered by this Purchase Order requiring any government import clearance. If government authorities declare or otherwise impose countervailing duties, antidumping duties, or retaliatory duties on the Goods imported under this Purchase Order, Capsonic reserves the right to terminate this Purchase Order under the Termination provisions of this Purchase Order. Supplier will be debited for any duties, fees, or freight incurred by Capsonic due to Supplier’s failure to comply with the terms and conditions of this Purchase Order.

Supplier will comply with all export and import laws and regulations of all countries involved in transactions associated with this Purchase Order. Supplier will first obtain the written consent of Capsonic before submitting any request for authority to export or reexport any drawing, data, hardware, equipment or other item provided to Supplier by Capsonic.

All drawback of duties, and rights thereto, related to duties paid by Supplier or Capsonic when the Goods are imported or any materials or components used in manufacturing of the Goods will accrue to the exclusive benefit of Capsonic. Duty drawback rights include rights developed by substitution and duty drawback rights obtained from sub tier suppliers related to the Goods. Supplier will provide Capsonic with all documents, records, and other supporting information necessary to obtain any duty drawback, and will reasonably cooperate with Capsonic to obtain payment.

If Supplier is a non-U.S. entity, Supplier will assist Capsonic in obtaining credit from Supplier’s government for the value of relevant Goods purchased to meet any present or future contractual offer or industrial benefit requirements imposed upon Capsonic or its subsidiaries or affiliates. Assistance includes, but is not limited to, providing upon Capsonic’s request evidence of the existence, value, content, and other pertinent information relating to the purchases. Capsonic reserves the right to claim these credits for itself or third parties. If Supplier is a U.S. entity that awards any portion of the work to lower tier non-U.S. suppliers, Supplier will assign to Capsonic any credits obtained from the non- U.S. sub tier supplier’s government relating to this transaction and assist Capsonic in obtaining any credits.

Supplier agrees that all rights of novelty associated with information or documents provided by Capsonic to Supplier will remain with Capsonic.

Supplier agrees that any tooling produced by Supplier will be made using industry-acceptable methods of tool-making and that tooling will operate to the satisfaction of Capsonic for the lifetime capacity of the tool specified by Capsonic, provided proper maintenance is applied. Supplier of tooling is NOT indemnified against operational support/repairs of tool(s) produced under contract even if Supplier is not the production supplier of components made from said tool(s), unless specified by Capsonic.

Capsonic reserves the right to access and use in any way any and all tooling drawings, models, or related data developed in the creation of tooling contracted to Supplier to fabricate. Supplier represents that it will provide such information promptly upon Capsonic request at any time.

Tooling Purchase Orders will have payments terms of 50% payable immediately at tool completion/50% payable Net 60 upon tool approval by Capsonic.

Supplier is to create tooling to support lifetime capacity identified by Capsonic +15%

Title to any material, tooling, equipment or technical data that Capsonic pays for or provides to Supplier or is responsible for providing to Supplier, including replacements (“Capsonic Property”), will remain or vest with Capsonic. Supplier will conspicuously label Capsonic Property as such, unless instructed in writing to do otherwise, maintain it in good condition, keep written records of the Capsonic Property in its possession and the location of the property, not allow any liens to be placed upon it, and not change its location without prior written approval from Capsonic.

Supplier is responsible for inspecting and determining that the Capsonic Property is in useable and acceptable condition.

Supplier will use Capsonic Property exclusively to fulfill Capsonic Purchase Orders unless otherwise authorized in writing by Capsonic’s procurement representative. Capsonic Property is intended for use at the Supplier’s site only or as otherwise authorized in writing by Capsonic’s procurement representative and, to the extent applicable, is subject to U.S. and other government export or re-export requirements. While in possession of Capsonic Property, Supplier is responsible for any loss, theft, damage, or destruction of Capsonic Property and any loss, damage or destruction of any third-party property resulting from Supplier’s negligent use of Capsonic Property. Supplier will not include the cost of any insurance for Capsonic Property in the prices charged under this Purchase Order. Supplier will return Capsonic Property or dispose of it at Capsonic’s sole option as it directs in writing. Capsonic makes no representations and disclaims all warranties (express or implied) with respect to Capsonic Property.

Supplier will furnish the Goods at the prices stated on the face of the Purchase Order. If prices are not stated on the face of the Purchase Order, Supplier will offer its lowest prices subject to written acceptance by Capsonic. Unless otherwise provided on the face of the Purchase Order, the prices include all packaging and freight to the specified delivery point; applicable taxes and other government charges including, but not limited to, all sales, use, or excise taxes; and all customs duties, fees, or charges. To the extent that value added tax (or any equivalent tax) is properly chargeable on the supply to Capsonic of any Products, Capsonic will pay the tax as an addition to payments otherwise due Supplier under this Purchase Order, if Supplier provides to Capsonic a value-added tax (or equivalent tax) invoice.

Supplier warrants that the prices charged for the Goods delivered under this Purchase Order are the lowest prices charged by Supplier to any of its external customers for similar volumes of similar Goods. If Supplier charges any external customer a lower price for a similar volume of similar Goods, Supplier must notify Capsonic and apply that price to all Goods ordered under this Purchase Order. If at any time before full performance of this Purchase Order Capsonic notifies Supplier in writing that Capsonic has received a written offer from another supplier for Goods similar to those to be provided under this Purchase Order at a price lower than the price set forth in this Purchase Order, Supplier must immediately meet the lower price for any undelivered Goods. If Supplier fails to meet the lower price Capsonic, at its option, may terminate the balance of the Purchase Order without liability

Suppliers producing custom tooling to be paid for and owned by Capsonic are to provide all required tooling timing and status documentation, as requested by Capsonic Supplier Quality, Engineering, and/or Tooling Engineering personnel.

Capsonic and Supplier will use the timing information provided, and the required completion date shown on Purchase Order to establish supplier’s compliance with proper completion and/or delivery date for the tooling contracted to the Supplier for fabrication. A tool will be determined to be satisfactorily complete when component product can be produced off of said tool with proper material and dimensional conditions such that Capsonic Supplier Quality or Tooling Engineering provides written authorization of same. Such written authorization may take the form of First Article Approval, PPAP, or Run-Off Approvals, but must have signed approval from the appropriate Capsonic representative.

Should the supplier successfully achieve approval for the contracted tool by, or before, the required date, then the Supplier will be paid a 5% bonus, based on the original contracted value of the tool order.

Should the supplier not successfully achieve approval for the contracted tool by, or before, the required date,due to reasons solely the responsibility of the Supplier, or its contracted lower tire suppliers, then the Supplier will be charged a late fee, equal to 5% of the original contracted value of the tool order. Such offset will be applied at time of final payment installment for such tool.

Delays in provision of such approval by Capsonic personnel due to Supplier’s lack of timely provision of necessary evidences does NOT constitute a justification for approval date revision.

After each shipment made or service provided, Supplier will submit an invoice listing a description of the Goods provided and, as applicable, part numbers, quantity, unit of measure, hours and the unit and total prices. If authorized by the Capsonic Purchase Order, any incidental charges such as royalties, selling commissions, nonrecurring engineering or other incidental charges must be separately itemized and identified on the invoice. The invoice must also include the following information, as applicable, in English, or in the destination country’s official language if required:

(a) name and address of Supplier and the Capsonic entity purchasing the Goods;

(b) name of shipper (if different from Supplier);

(c) Capsonic’s Purchase Order number(s);

(d) country of export; (e) detailed description of the Goods;

(f) Harmonized Tariff Schedule number;

(g) country of origin (manufacture) of the Goods, or if multiple countries of origin, the country of origin of each part shipped;

(h) weights of the Goods shipped;

(i) currency in which the sale was made;

(j) payment terms;

(k) shipment terms used; and

(l) all rebates or discounts.

The invoice will be accompanied (if applicable) by a signed bill of lading or express receipt evidencing shipment, or delivery, as applicable. Payment of an invoice does not constitute acceptance of the Goods and is subject to appropriate adjustment should Supplier fail to meet the requirements of the Purchase Order. Payment terms are net 60 days from receipt of invoice and conforming Goods unless otherwise stated on the face of the Purchase Order or other written agreement executed by both parties. Payment terms timing does not begin until a proper invoice is received from Supplier. Payments will be scheduled for the first payment cycle following the net terms for the Purchase Order.

Capsonic may deduct any amount owing from Supplier to Capsonic as a set off against any amount owing to Supplier under this Purchase Order.

All Goods may be inspected and tested by Capsonic, its customers, higher-tier contractors, and end users at all reasonable times and places. If an inspection or a testing is made on Supplier’s premises, Supplier will provide, without additional charge, all reasonable facilities and assistance required for the inspection and tests. In its standard inspection and testing of the Goods, Supplier will use an inspection system accepted by Capsonic in writing. All inspection records, including sub tier supplier records relating to the Goods, will be maintained by Supplier and made available to Capsonic during the performance of this Purchase Order, and for such longer periods as may be specified by Capsonic.

Final inspection and acceptance by Capsonic will be at destination unless otherwise specified in this Purchase Order. Capsonic may inspect 100% or a sample of Goods, at Capsonic’s option, and may reject all or any portion of the Goods or lot of Goods if Capsonic determines them to be defective or nonconforming. If Capsonic performs any inspection (other than the standard inspection) after discovering defective or nonconforming Goods, any additional inspection costs will be paid by Supplier. No inspection, tests, approval, design approval, or acceptance of the Goods relieves Supplier from responsibility for warranty or any latent defects, fraud, or negligence. If the Goods are defective or otherwise do not conform to the requirements of this Purchase Order, Capsonic may, by written notice to Supplier: (a) rescind this Purchase Order as to the Goods; (b) accept the Goods at an equitable reduction in price; or (c) reject the Goods and require the delivery of replacements. Delivery of replacements will be accompanied by a written notice specifying that such Goods are replacements. If Supplier fails to deliver required replacements promptly, Capsonic may correct any retained defective or nonconforming Goods at Supplier’s expense; replace them with Goods from another supplier and charge the Supplier the cost thereof, including cover, and any incidental costs; or terminate this Purchase Order for cause.

Supplier warrants to Capsonic, its successors, assigns, customers, and end users that, upon delivery, and during the entire Warranty Period specified below, all Goods furnished (including all replacement or corrected Goods or components that Supplier furnishes under this warranty) will (a) be free from defects in material, workmanship, and design, even if the design has been approved by Capsonic, (b) conform to applicable drawings, designs, quality control plans, specifications and samples and other descriptions furnished or specified by Capsonic, (c) be merchantable, (d) be fit for the intended purposes (to the extent the Goods are not of a detailed design furnished by Capsonic) and operate as intended, (e) comply with all applicable national and local laws, (f) be free and clear of any and all liens, restrictions, reservations, security interests, or encumbrances, and (g) not infringe any patent, published patent application, or other intellectual property rights of any third party existing as of the date of delivery, and not utilize misappropriated third party trade secret information. Services will be performed in accordance with the highest standards in the industry.

The Warranty Period will be for a period of 24 months from the date of delivery to the end user or such longer period of time as may have been accepted by Capsonic from Capsonic’s customer or the date on which any longer or broader government requirement covering the Goods ends. These warranties will survive any delivery, inspection, acceptance, or payment by Capsonic for the entire Warranty Period. Claims for breach of warranty do not accrue until discovery of noncompliance, even if the Goods were previously inspected. The warranties provided are cumulative and in addition to any warranty provided by law or equity. Any applicable statute of limitations runs from the date of discovery. Goods that meet the preceding standards are collectively called “conforming Goods.” If conforming Goods are not furnished within the time specified by Capsonic then Capsonic may, at its election and in addition to any other rights or remedies it may have at law or in equity, have the nonconforming Goods repaired, replaced, or corrected at Supplier’s expense. Supplier is responsible for the costs of repairing, replacing or correcting nonconforming Goods, and for all related costs, expenses and damages including, but not limited to, the costs of removal, disassembly, failure analysis, fault isolation, reinstallation, re-inspection, and retrofit of the nonconforming Goods or of Capsonic’s affected end-product; all freight charges; all customer charges; and all corrective action costs (i.e., costs of additional inspection or quality-control systems). Unless set off by Capsonic, Supplier will reimburse Capsonic for all such costs upon receipt of Capsonic’s invoice

Capsonic may, by written or electronic notification, direct changes in the drawings, designs, specifications, method of shipment or packing, quantity, or time or place of delivery of the Goods; reschedule the services; or require additional or diminished services. Only authorized Capsonic procurement representatives may issue changes to the Purchase Order. If any change causes an increase or decrease in the cost of, or the time required for, performing this Purchase Order, an equitable adjustment will be made in the Purchase Order price, delivery dates or both, and this Purchase Order will be modified in writing or electronically accordingly. Any claim for adjustment under this provision may, at Capsonic’s option, be deemed to be waived unless asserted in writing (including the amount of the claim) and delivered to Capsonic within 30 days from the date of the receipt by Supplier of the Capsonic-directed change to the Purchase Order. If the cost of property made obsolete or excess as a result of a change is paid by Capsonic, Capsonic may prescribe the manner of disposition of the property. Notwithstanding any disagreement between the parties regarding the impact of a change, Supplier will proceed diligently with its performance under this Purchase Order pending resolution of the disagreement.

Supplier will make no changes to the design, materials, manufacturing location, or processes specified in the Purchase Order or documents referenced in it, or if none, those in place when the Purchase Order is issued, without the advance written approval of Capsonic’s procurement representative. Changes to a process include, but are not limited to, changes to the production process, changes in manufacturing equipment, or changes between a manual and automated process. This requirement applies whether or not the change affects costs and regardless of the type of change, including product improvements

At any time by written notice and at no cost, Capsonic may require Supplier to stop all or any part of the work under this Purchase Order for up to 120 days (“Stop Work Order”), and for any further period as Supplier and Capsonic may agree. Immediately upon receipt of a Stop-Work Order, Supplier will comply with its terms. At any time during the stop-work period, Capsonic may, in whole or in part, either cancel the Stop Work Order or terminate the work under the Termination section of this Purchase Order. To the extent the Stop Work Order is canceled or expires, Supplier must resume work.

The non-breaching party may terminate this Purchase Order if the other party commits a material breach and fails to remedy the breach within 30 calendar days following receipt of written notice specifying the grounds for the breach. A material breach includes, but is not limited to, late delivery or delivery of nonconforming Goods. The solvent party may terminate this Purchase Order upon written notice if the other party becomes insolvent or if any petition is filed or proceedings commenced by or against that party relating to bankruptcy, receivership, reorganization, or assignment for the benefit of creditors Notwithstanding any firm time period or quantity on the face of the Purchase Order, Capsonic may terminate this Purchase Order in whole or in part at any time with or without cause for undelivered Goods or unperformed services upon 10 days’ prior written notice

If Capsonic terminates this Purchase Order under earlier Paragraphs in this section, Capsonic’s sole liability to Supplier, and Supplier’s sole and exclusive remedy, is payment for Goods received and accepted by Capsonic before the termination. The payment can be set off against any damages to Capsonic. Upon termination, Capsonic may require Supplier to transfer title and deliver to Capsonic any completed Goods and Capsonic will pay the Purchase Order price for those Goods subject to set off against any damages to Capsonic. Capsonic may also require Supplier to transfer title and deliver to Capsonic any or all property produced or procured by Supplier to perform this Purchase Order. Capsonic will credit Supplier with the reasonable value of the property, but not more than Supplier’s actual cost or the Purchase Order value, whichever is less.

To the extent that any portion of this Purchase Order is not terminated under Paragraph 20.1 or 20.2 above, Supplier will continue performing that portion.

In any of the following or any similar events Capsonic may immediately terminate this Purchase Order without any liability to Supplier or obligation to purchase raw materials, work-in-process or finished goods: (a) insolvency or financial difficulties of Supplier, (b) filing of a voluntary petition in bankruptcy by Supplier, (c) filling of any involuntary petition in bankruptcy against Supplier, (d) appointment of a receiver or trustee for Supplier, (e) execution of an assignment for the benefit of creditors by Supplier, or (f) any accommodation by Capsonic, financial or otherwise, not contemplated by this Purchase Order, that are necessary for Supplier to meet its obligations under this Purchase Order. Supplier will reimburse Capsonic for all costs Capsonic incurs in connection with any of the foregoing whether or not this Purchase Order is terminates, including, but not limited to all attorney or other professional fees.

Supplier agrees to accept orders and provide goods for the length of contract as stipulated on the Purchase Order. For custom tooled products, such contract is for the production life of end use product with additional three (3) years of service supply, unless otherwise agreed to in writing by Capsonic. If production of any non-custom Goods called for under this Purchase Order is to be discontinued or suspended at any time within one year after final delivery of any Goods under this Purchase Order, Supplier must give Capsonic at least 180 days prior written notice of the discontinuance or suspension. During the notice period Supplier must accept orders from Capsonic for the Goods at the price and on the terms of this Purchase Order.

Supplier will, at its expense, defend and indemnify Capsonic and its subsidiaries, affiliates, and agents, and their respective officers, directors, shareholders, and employees, and Capsonic’s customers (collectively “Indemnitees”) from and against any and all loss, cost, expense, damage, claim, demand, or liability, including reasonable attorney and professional fees and costs, and the cost of settlement, compromise, judgment, or verdict incurred by or demanded of an Indemnitee arising out of, resulting from or occurring in connection with Supplier's negligence, willful misconduct, or breach of the terms of this Purchase Order. In no event will Supplier enter into any settlement without Capsonic’s prior written consent, which will not be unreasonably withheld.

For Goods provided under this Purchase Order, Supplier will, at its expense, defend and indemnify Indemnitee from and against any and all loss, cost, expense, damage, claim, demand, or liability, including reasonable attorney and professional fees and costs, and the cost of settlement, compromise, judgment, or verdict incurred by or demanded from Indemnitee arising out of, resulting from, or occurring in connection with any alleged: (a) patent, copyright, or trademark infringement; (b) unlawful disclosure, use, or misappropriation of a trade secret; or (c) violation of any other third-party intellectual property right, and from expenses incurred by Indemnitee in defense of such suit, claim, or proceeding if Supplier does not undertake the defense thereof. Supplier will have the right to conduct the defense of any such claim or action and, consistent with Indemnitee's rights hereunder, all negotiations for its settlement. But in no event will Supplier enter into any settlement without Capsonic’s prior written consent, which will not be unreasonably withheld. Indemnitee may participate in a defense or negotiations to protect its interests. If any injunction or restraining order is issued, Supplier will, at its expense, either obtain for Indemnitee the right to continue using and selling the Goods or replace or modify the Goods to make them noninfringing. Supplier shall also indemnify Capsonic’s customers and agents for such infringement if and to the extent that Capsonic has agreed to so indemnify them, but to no greater extent than Supplier has indemnified Capsonic herein and under the same conditions as set forth herein.

Supplier will maintain and carry insurance which includes, but is not limited to, commercial general liability (including product liability and for services to be performed, completed operations liability) in a sum no less than $5 million, if automobiles will be used in performance of this Purchase Order, automobile liability in a sum no less than $5 million, Workers’ Compensation insurance as required by any applicable law or regulation and in accordance with the laws of the state, territory or province having jurisdiction over Supplier’s employees, and employer’s liability in an amount of no less than $1 million. If Goods will be designed for use on or in connection with aircraft (including, but not limited to, missiles, spacecraft, launch vehicles, lighter-than-air vehicles, remotely piloted vehicles and ground support or control equipment used therewith), Supplier will maintain aviation products liability insurance, inclusive of grounding, contractual, and war liability coverage, in a sum no less than $5 million. Supplier will also maintain “all risk” property insurance (covering all property at full replacement value) which is subject to the risk of loss provision per Article 6 of these terms and conditions. Such insurances will be maintained with insurers that have an AM Bests rating of no less than A- or equivalent. Supplier will furnish certificates of insurance from its carrier(s) on the foregoing coverages, which will provide that such coverage will not be changed without thirty (30) days advance written notification to Buyer from the carrier(s). Except where prohibited by law, Supplier will require its insurers to waive all rights of recovery or subrogation against Capsonic’s insurers, Capsonic, its subsidiaries and affiliated companies, and its and their respective officers, directors, shareholders, employees, and agents. The amount of insurance carried in compliance with the above requirements is not to be construed as either a limitation on or satisfaction of the indemnification obligation in this Purchase Order

All information, including without limitation specifications, samples, drawings, data, documents, computer software, materials, know-how, designs, inventions, processes, and other technical, business, or financial information, that: (a) is supplied to Supplier by or on behalf of Capsonic, whether transmitted in writing, orally, or otherwise and whether supplied to Supplier prior to or after the issuance of this Purchase Order and is marked as “proprietary”; (b) Supplier designs, develops, or creates in connection with this Purchase Order at Capsonic’s expense; (c) Supplier designs, develops, or creates to meet Capsonic-furnished technical requirements; or (d) is a derivative of (a), (b), or (c) that Supplier designs, develops or creates in connection with this Purchase Order is deemed to be “Information”.

Information will remain the property of Capsonic, may not be used by Supplier for any purpose other than for performing this Purchase Order, may not be disclosed to any third party, and will be returned to Capsonic upon the earlier of Capsonic’s written request or completion of the Purchase Order. If, with Capsonic’s prior written approval, Supplier furnishes Information to a sub-tier supplier, Supplier will bind the sub-tier supplier to requirements substantially identical to this Paragraph 25 and Supplier will remain responsible to Capsonic for any breach of this Paragraph 25 by its sub-tier suppliers.

Supplier will maintain suitably detailed records as may be necessary to adequately reflect Supplier’s compliance with the terms of this Purchase Order. Supplier will permit Capsonic’s auditors to have access at all reasonable times to Supplier’s books and other pertinent records. Supplier will require each of its sub tier suppliers to do likewise with respect to their books and records. Supplier and each sub tier supplier will also furnish other information as may be needed by Capsonic’s representatives in auditing compliance. Capsonic may perform audits up to two years following completion of this Purchase Order. If, as a result of an audit, any invoice submitted by Supplier is found to be in error, an appropriate adjustment will be made to the invoice or the next succeeding invoice following the discovery of the error and will be paid promptly by Supplier or Capsonic, as the case may be. Supplier will promptly correct any other Supplier deficiencies discovered as a result of the audit.

Supplier will not assign this Purchase Order or any rights or obligations or subcontract all or any material aspect of the work called for without the prior written approval of Capsonic. Any assignment without Capsonic’s written approval will be voidable at the option of Capsonic. Capsonic may assign this Purchase Order or any of its rights or obligations to any of its subsidiaries or affiliates, or to any purchaser or successor to all or a portion of the assets of the business or product line to which this Purchase Order relates without Supplier’s consent and upon written notice to Supplier.

Nothing in this Purchase Order will be construed to place Supplier and Capsonic in an agency, employment, franchise, joint venture, or partnership relationship. Neither party has the authority to obligate or bind the other in any manner, and nothing contained in this Purchase Order will give rise or is intended to give rise to rights of any kind to any third parties. Neither party will make any representation to the contrary. The parties agree that Supplier will perform its obligations under this Purchase Order as an independent contractor. Supplier retains the right to exercise full control of, supervision over and responsibility for Supplier’s performance hereunder, including the employment, direction, compensation and discharge of Supplier’s personnel, as well as compliance with workers’ compensation, unemployment, disability insurance, social security, withholding and all other laws, rules, codes, regulations and ordinances governing such matters.

Supplier’s invoices for Goods shall include the following certification: Seller certifies that the goods for which this invoice is rendered were produced in compliance with all applicable requirements of sections 6, 7, and 12 of the Fair Labors Standards Act, as amended, and of the regulations and orders of the United States Department of Labor issued under section 13 of the Act.

Ther are incorporated in this Order the provisions of executive Order 112.6 (as amended) of the President of the United States on Equal Employment Opportunity and the Rules and Regulations issued pursuant thereto with which the Supplier represents that it will comply, unless exempted.

Supplier will comply with all applicable national, state and local laws, regulations and ordinances. Supplier will maintain an integrity and compliance program acceptable to Capsonic and effective in preventing and correcting ethical violations and in maintaining compliance with laws

Supplier will comply with all applicable national, EU, state/provincial and local environmental, health and safety laws, regulations or directives. Additionally, unless Supplier informs Capsonic in writing and obtains Capsonic’s prior written consent, no Goods will contain any of the substances identified in Article 4.1 of the European Parliament Directive 2002/95/EC (RoHS Directive) as that Directive is updated from time to time, or similar laws or regulations identified by Capsonic, restricting the use of hazardous materials in other jurisdictions. Goods will comply with the restrictions set forth in the Montreal Protocol on ozone-depleting substances.

Supplier may be required to disclose and/or document the ingredients, checmicals, compounds, and raw state materials used on the manufacture of the product(s) covered by Purchase Order, as well as provide evidence of proper warning instructions and use of Material Safety Data Sheets. Commencement of any work under Purchase Order from Capsonic shall constitute Supplier acceptance of these requirements.

All Capsonic remedies set forth in this Purchase Order are in addition to, and will in no way limit, any other rights and remedies that may be available to Capsonic at law or in equity.

All Notices relating to this Purchase Order must be in writing. Notices to the parties will be sent to their respective addresses appearing on the face of this Purchase Order. Notices must be delivered personally; or delivered by recognized overnight courier; or mailed certified first class mail, postage prepaid; or sent by facsimile transmission to the facsimile number provided by Capsonic or Supplier respectively; or sent by electronic transmission (email) with proof of delivery. Any Notice will be deemed given on the date delivered if delivered personally; three business days after being placed in the mail as specified; or upon confirmation receipt that it was transmitted satisfactorily if transmitted by facsimile or electronic transmission.

Any news release, public announcement, advertisement, publicity or any other disclosure concerning this Purchase Order to any third party except as may be necessary to comply with other obligations stated in this Purchase Order requires prior written approval of Capsonic.

Headings and captions are for convenience of reference only and do not alter the meaning or interpretation of any provision of this Purchase Order.

If either (i) this Purchase Order is issued by Capsonic from a location within the Unites States of America or its territories (as shown by the issuing address of Capsonic on Purchase Order), (ii) this Purchase Order is issued, in whole or part, for goods to be shipped to a Capsonic location within the United States of America or its territories (as shown by the ship to or receiving address of Capsonic on Purchase Order), or (iii) Suppliers applicable shipping location is within the United States of America or its territories (as shown by the ship from address of Supplier), then (a) this Purchase Order is to be construed with the laws of the United States of America and the State of Illinois, excluding the provisions of the United Nations Convention on Contracts for the International Sales of Good and any choice of law provisions that require application of any other law, and (b) Capsonic hereby agrees that the forum and venue for any legal or equitable action or proceeding arising out of, or in connection with, this Purchase Order will lie in the appropriate federal or state courts in the State of Illinois, and specifically waives any and all objections to such jurisdiction and venue.

In all cases not covered by the criteria above, (a) this contract is to be construed according to the laws of the country (and state and province, if applicable) where Capsonic’s receiving location is located (as shown by the ship to or receiving address of Capsonic on Purchase Order), excluding the provisions of the United Nations Convention on Contracts for the International Sales of Good and any choice of law provisions that require application of any other law; (b) any legal of equitable action or proceedings by Capsonic against Supplier arising out of, or in connection with, this Purchase Order may be brought by Capsonic in any court(s) having jurisdiction over Supplier or, at Buyer’s option, in any court(s) having jurisdiction over Capsonic’s receiving location, in which event Supplier consents to such jurisdiction and venue, including service of process in accordance with applicable procedures; and (c) any legal or equitable actions or proceedings by Supplier against Capsonic arising out of, or in connection with this Purchase Order may be brought by Supplier only in the court(s) having jurisdiction over Capsonic’s receiving location.

The failure of either party to enforce at any time any of the provisions of this Purchase Order will not be construed to be a continuing waiver of any provisions hereunder, nor will any such failure prejudice the right of such party to take any action in the future to enforce any provisions hereunder.

If any provision of this Purchase Order is held to be illegal, invalid, or unenforceable by a court of competent jurisdiction, that provision will be severed from this Purchase Order; the remaining provisions will remain in full force and effect; and a similar legal, valid and enforceable provision will be substituted in lieu of the severed provision.

As required by Capsonic, or Governmental Agency(ies) in Country of Origin, Supplier will implement the Business Partner Criteria of any Supply Chain Security Program that the country of import for the Goods may adopt such as the U.S. Customs-Trade Partnership Against Terrorism (C-TPAT) or the Canadian Partners in Protection (PIP) Program.

Supplier’s Quality System must be in compliance with an internationally recognized quality system standard (including, but not limited to: ISO9000, TS16949, AS9100,…etc), or Supplier must have on file with Capsonic a plan to achieve such certification within 12 months of Purchase Order issuance, unless otherwise agreed to in writing by Capsonic. Additional Certification requirements may be part of Purchase Order compliance, but will be identified as such on the face of the Purchase Order.

All provisions of this Purchase Order which by their nature should apply beyond their terms will remain in force after any termination or expiration of this Purchase Order including, but not limited to, those addressing the following subjects: Import/Customs Compliance, Price, Price: Most Favored Customer and Meet or Release, Invoicing and Payment, Set Off, Warranty, Cessation of Production, General Indemnification, Intellectual Property Indemnification, Insurance, Protection of Information, Audit, Applicable Law and Forum, Publicity, and Survival.

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