FUTABA CORPORATION OF AMERICA, INC. – PURCHASE ORDER – TERMS AND CONDITIONS

  1. AGREEMENT TO PURCHASE Buyer agrees to purchase from Seller and Seller agrees to sell to Buyer the products outlined herein (“Products”) at the prices set and on the terms and conditions provided in this Purchase Order (“Order”).  The provisions of this Order are not altered, amended nor changed by the terms and conditions of any quotation or proposal submitted by the Seller, unless such terms and conditions are specifically incorporated by reference on the face of this Order.  Seller shall notify Buyer within three (3) business days of receipt of this Order as to its acceptance or rejection of said Order.  Failure of the Seller to so notify Buyer within the time prescribed shall be deemed an acceptance of such Order by Seller.
  2. QUANTITY OF PRODUCTS Buyer shall be liable only for quantities ordered, received and accepted in accordance with the agreed upon delivery schedules as provided in this Order.
  3. PRICES FOR PRODUCTS The prices set forth in this Order shall remain firm during the term of this Agreement, except that prices shall be changed downward to conform to general price decreases in the industry or as a result of an engineering change.  In the event of any price reduction between the execution of this Agreement, and delivery of the Products, Buyer shall be entitled to such reduction beginning with the next delivery to Buyer after the price reduction takes effect.  Unless agreed otherwise, pricing shall include all applicable federal, state and local taxes, any tariffs or import duties agreed to be paid by Buyer, commissions or other charges.
  4. TERMS OF PAYMENT Buyer will pay Seller on agreed  upon Terms  from the date of invoice.  No interest shall be paid on any amounts due hereunder.
  5. SHIPMENT All Products shall be packed in accordance with sound commercial practices to obtain the lowest transportation rates unless otherwise specified in this Order.  Seller shall provide a complete packing list attached to the outside of each container for shipments hereunder containing the necessary lifting, loading and shipping information including Buyer’s Order number, item number, weight and dates of shipment, and any Bill of Lading number.  Seller shall be importer of record and shall be responsible for any import/export duties, tariffs, fees or any costs associated with the import/export process, unless otherwise agreed.  Products shall be shipped by Seller F.O.B. to destination and Seller shall assume all responsibility and costs up to the point of delivery including insurance and transportation costs. Risk of damage or loss shall remain with Seller during shipment and until delivery and acceptance by Buyer. Title shall pass to Buyer upon delivery of goods to and acceptance by Buyer.
  6. DELIVERY If delivery of Products or rendering of service is not completed by the promised time, Buyer reserves the right, without liability and in addition to all other rights and remedies Buyer has hereunder, to (i) terminate this Order by notice effective, upon receipt by Seller, as to all Products not yet shipped, or (ii) to purchase substitute products elsewhere and, at the option of Buyer, to charge Seller for any loss incurred, or (iii) request Seller, at its own expense, to expedite shipment to Buyer.  Seller shall bear the costs for any damages incurred by Buyer as a result of Seller’s failure to deliver within the scheduled time including, but not limited to, expedited or other shipping expenses incurred by Buyer when shipping delayed products to its customers, process charges, loss of profits, and any other additional costs incurred by Buyer as a result of Seller’s delayed delivery.
  7. CANCELLATION Buyer may cancel Order or effect termination for any Products at any time outside thirty (30) calendar days of the Products scheduled shipment date(s) without incurring any liability.
  8. ACCEPTANCE Notwithstanding any payment by Buyer, acceptance shall occur only after (i) actual receipt of Products by Buyer and (ii) determination by Buyer that said Products conform to the Order.  Any failure to inspect or test the Products by Buyer shall not relieve Seller of any of its responsibilities hereunder. Buyer reserves the right to charge Seller for the expense of inspecting or testing any products which are found to be non-conforming.  Acceptance by Buyer after testing or inspection does not relieve Seller from liability for latent defects.  If the Products are rejected by Buyer, Seller shall immediately arrange the return of products to Seller at Seller’s expense.
  9. RESCHEDULE Buyer may  reschedule shipment of standard or non-standard Products at any time without incurring liability.
  10. CHANGES Buyer reserves the right at any time to make changes in drawings, specifications, materials, packaging, time and place of delivery, and method of transportation.  If changes cause an increase or decrease in cost or time required for performance, an equitable adjustment shall be made by the parties in writing.  Seller agrees to accept said changes, discontinue any work in process, and continue with its performance under the changed specifications.  Buyer hereby agrees to pay the reasonable costs of any work in process begun prior to notification of Seller of change by Buyer.  Seller shall not have the right to change drawings, designs, specifications, packaging, materials, time and place of delivery, and method of delivery, without the prior written consent of Buyer.
  11. INVENTORY AMNESTY Seller hereby agrees to accept all Products in Buyer’s possession for full credit which Products the Buyer deems, in its sole discretion, to be excess to its requirements.  This shall apply only to standard Products which shall be returnable up to one (1) year after receipt by Buyer. Buyer hereby agrees to pay costs of shipping for return of said products; title and risk of loss shall pass to Seller upon receipt thereof.

12.DISCONTINUANCES  If a product covered by this Order is permanently discontinued at any time within one year after final delivery under this Order, Seller shall give Buyer at least one-hundred eighty (180) days written notice of such discontinuance during which time Seller shall accept orders from Buyer for reasonable quantities of such product.

  1. WARRANTIES In addition to any other express or implied warranties, Seller warrants that Products furnished pursuant to this Agreement will be (i) new, (ii) free from defects in workmanship and material, (iii) free from defects in design (except to the extent such Products are manufactured in compliance with detailed designs exclusively provided by Buyer and, in such case, Seller warrants that the products conform to the specifications), (iv) fit for a particular purpose, and (v) in compliance and/or conformity with any Seller quality requirements, including those established through course of dealing in prior deliveries or through production of models/samples to Buyer.  In addition to any other rights Buyer may have hereunder, Buyer may return, within fifteen (15) months of acceptance thereof, at the expense of Seller, any Products found not to be as specified, for full credit of the price originally paid.  If Buyer requests replacement or rework of Products, Seller shall replace or rework said Products within a reasonable time.  Seller shall pay costs of shipping.
  2. PROPRIETARY RIGHTS If Buyer provides Seller with any design, process, specifications, or other detailed information, which information shall be considered a patent, copyright, trademark, proprietary right or other confidential information (“proprietary information”) of Buyer, for use by Seller in the manufacture of the Products purchased hereunder, Seller agrees to maintain said proprietary information in strict confidence and to otherwise use said information only as absolutely necessary for the manufacture of said Products and for no other purpose.  Use by Seller of said design, process, or specifications provided by Buyer under this agreement does not convey to Seller any rights in the proprietary information.
  3. MATERIALS Any materials or equipment provided by Buyer to Seller for purposes of filling this Order shall remain the property of Buyer, and Seller shall identify, maintain and preserve said materials or equipment in accordance with Buyer’s instructions.
  4. INDEMNIFICATION Seller shall hold harmless, defend and indemnify Buyer, its affiliates, directors, officers, employees and agents, against any defect, failure and/or recall of its Products.  Seller shall bear the costs of labor and materials, shipping to and from customer site, on-site service calls, technical support labor costs in handling customer problems, and inventory costs of field service spares for all said defects, failures and recalls.  Seller shall further indemnify, defend and hold Buyer, its affiliates, directors, officers, employees and agents, harmless for all claims that the Products, and/or equipment and/or processes used to manufacture and/or assemble them, infringe or are alleged to infringe a third party’s patent, copyright, trade secret or any other form of intellectual property.
  5. STATUTORY COMPLIANCE Seller shall comply with all applicable Federal, State and local laws, ordinances, regulations, rules and directives and its Products shall comply with all said laws and regulations.
  6. TERMINATION Buyer or Seller may terminate this Order in the event of a breach by the other party without liability to the other party for such termination.  In the event Seller terminates Order due to Buyer’s default, Buyer’s maximum liability to Seller is payment for Products shipped to and accepted by Buyer prior to notice of termination.  Termination shall be effective as to all Products not yet shipped pursuant to this Order.
  7. LIABILITY IN NO EVENT SHALL EITHER PARTY BE LIABLE TO THE OTHER FOR ANY SPECIAL, INCIDENTAL, CONSEQUENTIAL OR PUNITIVE DAMAGES, WHETHER BASED UPON CONTRACT, TORT, OR ANY OTHER LEGAL THEORY.
  8. ASSIGNMENT/DELEGATION Seller may assign its rights to receive payment hereunder provided Buyer is given reasonable notice as to the name and address of the assignee.  Seller may not delegate its performance in the manufacture and/or delivery of Products under this Order without the prior written consent of Buyer.
  9. WAIVER No waiver of any breach of the terms and conditions of this Order shall be deemed as a waiver of any other or subsequent breach.  All rights afforded Buyer pursuant to this Order shall be in addition to any other rights Buyer has by law.
  10. GOVERNING LAW The laws of the State of Alabama shall govern construction of the agreement between the parties.  The exclusive forum for any legal action shall be in federal or state court located in Madison County, Alabama.  Seller hereby submits to the jurisdiction and venue of such court.
  11. CONSTRUCTION In the event any provision of this agreement shall be held to be invalid, illegal or unenforceable in any respect, by a court of competent jurisdiction, the remaining portion of the agreement shall continue in full force and effect.  In the event of dispute, the provisions of the agreement shall not be construed against the party drafting the agreement.
  12. NOTICE All written notices required pursuant to this agreement, unless otherwise provided, shall be deemed delivered when sent by United States mail, first-class postage prepaid, to the addresses show on the face of this Order.
  13. TIME Time is of the essence in the performance of this Order.
  14. INTEGRATION This Order and any attachments hereto, specifically incorporated by reference herein, and signed by both parties shall be the complete agreement between the parties and supersede any prior oral or written agreements and understandings between the parties.  Any modifications must be made by a separate, subsequently dated, written document signed by both parties.
  15. AUDIT Subject to reasonable confidentiality obligations, Futaba will have the right to audit and inspect the records and facilities of Vendor and Vendor’s agents, representatives and subcontractors used in performance of the Order or relating to the goods or services to the extent reasonably necessary to determine Vendor’s compliance with the Order. Vendor will provide Futaba or its third party designee conducting the audit or inspection with reasonable assistance, including without limitation access to buildings, appropriate personnel and work space. Futaba’s audit/inspection, or failure to conduct any audit or inspection, will not release Vendor from any of Vendor’s obligations