Spenco Medical Corporation general terms and conditions

1. Acceptance-Agreement. Acceptance of this Purchase Order (“Order”) is required on the attached acceptance copy, which must be signed and returned immediately. However, any conduct by Seller recognizing the existence of an agreement shall also be deemed an acceptance without exception of the terms and conditions of this Order. Any addition to or other modification to these terms and conditions or to quantities, prices or deliveries contained in any acknowledgment, invoice, other form or communication from Seller is hereby objected to and rejected, notwithstanding Buyer’s acceptance of delivery or payment for goods or services.

2. Changes. Spenco Medical Corporation (“Buyer”) shall have the right at any time to make changes in drawings, designs, specifications, materials, packaging, time and place of delivery and method of transportation. If any such change causes an increase or decrease in the cost, or the time required for the performance, an equitable adjustment shall be made and this Order shall be accordingly modified in writing. Seller agrees to accept any and all such changes, subject to this paragraph.

3. Termination for Convenience of Buyer. Buyer reserves the right to terminate this Order and any part hereof for its sole convenience. In the event of such termination, Seller shall immediately stop all work and shall immediately cause its suppliers or subcontractors to cease such work. Seller shall be paid a reasonable termination charge reflecting the percentage of the work performed prior to the notice of termination, plus documented actual direct costs resulting from termination. Seller shall not be paid for any work done after receipt of the notice of termination, except that necessary to effect termination, nor for any costs incurred by Seller’s suppliers or subcontractors which Seller reasonably could have avoided.

4. Termination for Cause. Buyer may also terminate this Order or any part hereof for cause in the event of any default by the Seller, including Seller’s failure to comply with any terms and conditions of this Order. In the event of termination for cause, Buyer shall not incur any liability for such termination, and without prejudice to any other remedy Buyer may have, Seller shall be liable to Buyer for any and all damages sustained by reason of the default.

5. Delivery. Time is of the essence with respect to Seller’s obligation hereunder. If delivery of items or rendering of services is not completed by the time promised, Buyer reserves the right, in addition to its other rights to return goods or cancel all or part of this Order and charge Seller with all costs, expenses and damages associated with such return or cancellation. Unless otherwise stated in this Order, goods shall be delivered f.o.b. destination designated by Buyer, with Seller solely responsible for all freight costs. Seller agrees that any allowance, refund or discount received from carriers for shipment of goods will be credited to Buyer.

6. Inspection/Testing. Payment for the goods and services delivered hereunder shall not constitute acceptance thereof. Buyer shall have the right to inspect such goods and services and to reject any which are in Buyer’s judgment defective or nonconforming. Goods rejected or those which are supplied in excess of quantities called for herein may be returned to Seller at Seller’s expense and in addition Buyer may charge Seller all expenses of unpacking, examining, repacking and reshipping such goods. In the event Buyer receives goods or services, having defects or non-conformity not apparent on examination, Buyer reserves the right to require replacement, as well as payment of damages, notwithstanding Buyer’s failure to reject such goods upon delivery.

7. Seller’s Representations & Warranties. Seller represents and warrants to Buyer, in addition to all warranties implied by law, that all goods and/or services purchased hereunder, together with any related packaging, labeling and other printed matter and all related advertisements furnished or authorized by Seller shall (a) be free from defects in design, workmanship or materials including, without limitation, such defects as could create a hazard to life or property; (b) be suitable for use under, be manufactured and packed for shipment in accordance with, and where required, be registered under, all applicable federal, state and local laws and all orders and regulations promulgated there under including, but not limited to, the Fair Labor Standards Act of 1938, as amended; (c) not infringe or encroach upon any third parties’ personal, contractual or proprietary rights, including patents, trademarks, trade names, copyrights, rights or privacy or trade secrets; (d) conform to all specifications and other descriptions set forth or incorporated herein or in the Buyer’s specifications applicable to this purchase; and (e) will possess all performance qualities and characteristics claimed in statements issued or authorized by Seller. Seller also represents and warrants that it has satisfied all applicable requirements for filing of continuing guarantees with the appropriate Federal agency under any applicable Federal statutes; including the Textile Fiber Products Identification Act and Fair Packaging and Labeling Act.

8. Defective or Non-Conforming Merchandise. Any goods or services which are not in complete conformity with Seller’s representations and warranties set forth in this Agreement, or with any implied warranties of Seller, may at Buyer’s option and until the expiration of one year following resale by Buyer, be returned to Seller for refund of the purchase price or for the repair or replacement by Seller, or may be repaired by Buyer at Seller’s expense. Seller shall bear the cost of packing, shipping and transporting all defective goods for both inbound and outbound shipments.

9. Hazardous Items. Where there is reliable information which reasonably supports the conclusion that a determined or undetermined number of items of goods contain defects or hazards which could foreseeably cause death or serious bodily injury to any person, or property damage in substantial amount, Seller at its own expense shall use its best efforts to locate, identify and recall such items, whether in the possession of Buyer or Buyer’s customers. Seller, upon recalling such items, shall repair or replace them or otherwise discharge at Seller’s expense the obligations imposable upon a manufacturer or reseller of hazardous products under the Consumer Product Safety Act or other applicable law.

10. Vendor Chargeback Policy. Seller shall comply with Buyer’s packaging specifications and with the following terms
1. The Purchase Order Number must be shown on all parcels, packing slip, and Bill of Lading.
2. All parcels must be clearly numbered and a legible packing slip must be firmly attached to or placed within parcel “No. 1”of the shipment.
3. All parcels must be clearly marked with the lot, batch or roll number, if applicable.
4. All parcels must be clearly identified as to contents, including basic descriptions and quantities.
5. Multiple parcels containing like products or units must be uniformly filled. Boxes must be uniformed in size and content. Roll goods must be equal in
widths and similar in lengths. (The last parcel in each individual shipment is excluded from this requirement.)
Buyer may chargeback to Seller costs attributable to noncompliance. Labor costs will be charged at the rate of $20.00 per man-hour.

11. Insurance. Seller shall furnish Buyer with satisfactory evidence of insurance with minimum limits as follows:
(a) Worker’s Compensation Insurance of not less than statutory limits in Seller’s state of business (or other limits as may be required by applicable law if Seller is located in a foreign country) and with Employer’s liability limits of at least $500,000 each accident; $500,000 each employee; and $500,000 policy limit;
(b) Commercial general liability insurance of not less than $1,000,000 per occurrence including contractual liability coverage;
(c) Automobile bodily injury liability insurance of not less than $1,000,000 combined single limit, or with such other limits as Buyer may specify in this Order or from time to time in writing;
(d) An umbrella policy providing at least $1,000,000 in coverage.
All such Insurance shall (a) be extended to include “vendors coverage”; (b) name Buyer as an additional insured with respect to such “vendors coverage”; and (c) be written with such insurance companies and contain such provisions as shall be satisfactory to Buyer. Seller shall furnish Buyer with certificates of insurance confirming the existence of such insurance and stipulating that the insurer will give Buyer at least thirty days written notice prior to any cancellation of or material change in such insurance.

12. Indemnification. Seller shall defend, indemnify and hold harmless Buyer against all damages, claims, costs and expenses (including attorney’s fees) arising out of or resulting from the use or condition of the goods or services purchased hereunder, or from any act or omission of Seller, its agents, employees or subcontractors. If this Order involves the performance of services by Seller on Buyer’s premises, Seller shall pay and discharge all liabilities of Seller to all employees of Buyer, its agents and subcontractors including but not limited to liability for personal injury or death arising out of or resulting from the performance of such services. Without prejudice to any other remedy which Buyer may have, Seller shall be responsible for, and bear expense of, any necessary correction (including any repair, replacement or recall) due to faulty workmanship or materials, or due to faulty design, unless such design was supplied by Buyer.

13. Patents; Other Intellectual Property Rights. Seller shall indemnify, hold harmless and, if requested by Buyer, defend Buyer against any and all claims, including but not limited to claims of Buyer’s customer(s), that goods or services sold hereunder infringe any U.S. or foreign letters patent, copyright, trademark, trade secret rights or any other intellectual property rights and against any and all claims of unfair competition or trade secret violations provided Buyer gives Seller prompt notice in writing of any action or proceeding and, at Seller’s expense, gives Seller necessary information, assistance, and authority to do so; and Seller shall defend, indemnify and hold Buyer and Buyer’s customers harmless against any and all expenses, losses, royalties, profits, damages and costs (including attorney’s fees) resulting from any such action or proceeding, including any settlement. Buyer may be represented by and actively participate through its own counsel in any such suit or proceeding if it so desires. Seller hereby assigns to Buyer all copyrightable material arising directly out of work done expressly to fulfill this Order.

14. Proprietary Information-Confidentially-Advertising. Seller shall consider all information furnished by Buyer or any other person acting on behalf of Buyer to be confidential and shall not disclose any such information to any other person, or use such information itself for any purpose other than performing this Order unless Seller first obtains written permission from Buyer. All such information in tangible form, including drawings, samples, models, specifications, or other documents prepared by Seller for Buyer shall be returned promptly upon request. Seller shall not advertise or publish the fact that Buyer has contracted to purchase goods or services from Seller, nor shall any information relating to this Order be disclosed without Buyer’s written permission.

15. Miscellaneous.
a. Entire Agreement. This Order, and any documents referred to on the face hereof, constitute the entire agreement between the parties. The terms of any document referred to on the face of this Order shall control in the event of any conflict with the printed provisions of this Order.
b. Assignments and Subcontracting. No part of this Order may be assigned or subcontracted without the prior written approval of Buyer.
c. Waiver. Buyer’s failure to insist on performance of any of the terms or conditions herein or to exercise any right or privilege or Buyer’s waiver of any breach hereunder shall not affect a waiver of other right or privilege, whether of the same or similar type.
d. Venue and Jurisdiction. This Purchase Order, and the legal relationship between Buyer and Seller, shall be governed by the laws of the State of Texas. Venue on any dispute arising under this agreement or otherwise arising between Buyer and Seller shall be exclusively at McLennan County, Texas the place where the agreement is partially performed.
e. Compliance with Law. Seller warrants that all items shipped hereunder, and the method of shipment, will be or have been produced in compliance with the requirements of applicable local, state and Federal law, rule, regulation, standard or code, and in accordance with applicable international law or the applicable law of foreign countries as to items which will be sold outside the United States.
f. State of Limitations. All rights of Seller to commence any court action of other proceeding with respect to this Order shall terminate one year after the cause of action has accrued.
g. Captions. Captions preceding particular sections are for convenience only and are not to be construed as part of this Order or as a limitation of the scope of a particular section to which they refer.