PUR-POL-001

22NOV2019

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THIS GENERAL PURCHASE TERMS AND CONDITIONS (“GPTC”) is made and entered into by and between Sigma International, Inc. (“Sigma”), a Michigan corporation with its principal offices at 36800 Plymouth Rd, Livonia, MI 48150, United States of America and Supplier (collectively "the Parties").  The Parties covenant and agree as follows:

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1.Offer and Acceptance 

Each purchase order issued by Sigma, either a Contract/Blanket Purchase Order (“CPO”) or Materials Release Purchase Order (“MRPO”), collectively “Order(s)”, is an offer from Sigma to Supplier for the purchase of goods and/or services (collectively, the “Goods”) governed by this GPTC.  The Order supersedes all prior quotations, proposals and other communications regarding Goods covered by the Order, except that a signed prior agreement (such as an Award Letter, Supply Agreement, Statement of Work or Non-Disclosure Agreement) will continue to apply and govern to the extent the terms therein are more beneficial to Sigma. Any modification of the GPTC must be expressly stated in the Order. The Order alone does not constitute an acceptance by Supplier. Any reference in the Order to any offer made by Supplier is solely to incorporate the description or specifications of Goods in the prior proposal, but only to the extent that the description or specifications do not conflict with the description and specifications in the Order.

Supplier accepts these GPTC and forms a contract by doing any of the following:

• commencing any work under the Order;

• accepting and executing the Order in writing; or

• any other conduct that recognizes the existence of a contract with respect to the subject matter of the Order. Any additional or different terms proposed by Supplier, whether in Supplier’s quotation, acknowledgement, invoice or otherwise, are unacceptable to Sigma, are expressly rejected by Sigma, and will not become part of the Order.

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2.Time Period of Order.

The agreement formed by the Order is binding on the parties for the term specified in the Order.  If an expiration date is not stated in the Order, the contract continues indefinitely or until there is no longer customer demand for the Goods, including time appropriated for service parts. 

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3.Quantities.

Quantities listed in each CPO are Sigma’s best estimate of the quantities of Goods it might purchase from Supplier for the contract term specified in the Order. If no quantity is stated:

• Supplier is obligated to supply Sigma’s stated requirements for the Goods in quantities as specified by Sigma in the MRPO;

• Sigma is required to purchase no less than one unit of each of the Goods and no more than those quantities identified as firm orders in MRPO’s transmitted by Sigma to Supplier or, for services, to the extent expressly stated;

• Sigma may purchase additional quantities of the listed Goods. 

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4.Ordering, Fulfillment, and Delivery of Goods.

• All orders to Supplier shall be accompanied by an Order.  All Orders issued by Sigma shall generally include or refer to the following information: (i) part numbers; (ii) description or specifications; (iii) quantity; (iv) due dates; (v) shipping instructions and place of delivery; (vi) payment terms; and (vii) any other special information required by the circumstances of the Order.

• Time is of significant essence in the Automotive Industry. Therefore, deadlines and delivery schedules are absolutely binding. Any production stoppage or late delivery with customers of Sigma could result in unforeseeable damages being claimed by customers.  Supplier will make the necessary arrangements to ensure complete and timely fulfillment with quality Goods.

• Supplier will: (i) properly pack, mark, and ship Goods according to the requirements of Sigma, the involved carriers and the country of destination; (ii) route the shipments according to Sigma’s instructions; (iii) label or tag each package according to Sigma’s requirements and instructions; (iv) provide documents with each shipment showing the MRPO number, Sigma’s part number, Supplier’s part number (where applicable), number of pieces in the shipment, number of containers in the shipment, Supplier’s name, address, contact information and the bill of lading number; and (v) promptly forward the original bill of lading or other shipment receipt for each shipment according to Sigma’s instructions and carrier requirements. Supplier will provide all special handling instructions that are needed to advise carriers, Sigma, and their employees how to take appropriate measures while handling, transporting, processing, using or disposing of the Goods, containers, and packing. 

• Upon written notice to Supplier, Sigma may require Supplier to modify the specifications, designs, drawings, samples or other descriptions to which the Goods are required to perform, the methods of shipment and packaging of the Goods, or the place of delivery.

• Supplier is expected to own or purchase, at its own expense, the necessary materials and equipment to fulfill Orders to Sigma as required.

• All Goods shall be received subject to Sigma's and/or its Customer's inspection, and rejection for defects and nonconforming Goods shall be handled as set forth in the Sigma Supplier Quality Manual (“SQM”).    

• Deliveries shall be made both in quantities and at times specified in the applicable Order furnished by Sigma.

• If a delivery date is missed, Supplier shall then ship the Goods by the fastest possible shipping method notwithstanding the method specified in the Order at the Supplier's cost, which shall not be chargeable to Sigma or its Customers.  

• Sigma may change the rate of scheduled shipments or direct temporary suspension of scheduled shipments, neither of which shall entitle Supplier to a modification of the price of Goods or services covered by an Order.

• Incoterms 2010 shall apply.  To the extent the Order does not include any details about delivery and dispatch, delivery shall be made DDP (Delivered Duty Paid).

 

5.Ingredients and Materials. 

At the request of Sigma, Supplier will promptly provide Sigma with the following information in the form requested by Sigma: (i) a list of all ingredients and materials in Goods; (ii) the manufacturing location of Goods; (iii) the amount of all ingredients, and (iv) pursuant to Section 10, information concerning any changes in or additions to the ingredients. Before and at the time Goods are shipped, Supplier will give sufficient warning in writing (including appropriate labels on all Goods, containers, and packing, including without limitation disposal and recycling instructions, material safety data sheets and certificates of analysis) of any hazardous or restricted material that is an ingredient or part of the Goods. Supplier agrees to comply with all applicable national, state, provincial, and local laws and regulations pertaining to product content and warning labels, including without limitation the U.S. Toxic Substances Control Act and European Union Directive 2002/96/EC and 2002/95/EC regarding restrictions of certain hazardous substances, Dodd-Frank Act regarding conflict minerals and European Union Regulation 1907/2007/EC regarding Registration, Evaluation, Authorization and Restriction of Chemicals. Supplier will reimburse for any expenses incurred as a result of improper packing, marking, routing, or shipping.

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6.Invoices and Premium Freight. 

All invoices and/or advanced shipping notices ("ASN") for material shipped pursuant to any Order must reference the Order number, Sigma's part number, Supplier’s part number where applicable, quantity of pieces in shipment, number of cartons or containers, Supplier's name and number and bill of lading number. Sigma reserves the right to return all invoices or related documents submitted incorrectly.  Sigma will pay proper invoices complying with all of the terms. The total price also includes all duties and taxes except for any governmentally imposed value added tax, sales tax, or other state, local or provincial tax, which must be shown separately on Supplier’s invoice for each shipment. Sigma is not responsible for any business activity taxes, payroll taxes or taxes on Supplier’s income or assets. Supplier will pay all premium freight costs over normal freight costs if Supplier needs to use an expedited shipping method to meet agreed delivery dates due to its own acts or omissions. Supplier will pay any costs incurred by Sigma, including costs charged by Sigma’s customer(s) to Sigma, as a result of Supplier’s failure to comply with shipping or delivery requirements.

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7.Payment Terms. 

Unless otherwise agreed by both parties, Sigma and Supplier shall pay each other as follows:

• Sigma shall pay Supplier its Tooling costs when (i) Sigma's Customer approves the sample in accordance with the Customer's Production Part Approval Process ("PPAP") and (ii) Sigma accepts the Tooling in accordance with the requirements of Section 19 herein. 

• Sigma will initiate payment to Supplier for the Goods within 90 (ninety) days of Sigma’s receipt of the Goods, subject to cost recovery for non-conformance. 

• Supplier pay Sigma within 90 (ninety) days of the date of Sigma's invoices for any raw materials supplied by Sigma to Supplier.

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8.Risk of Loss and Transfer of Ownership. 

Unless otherwise agreed in writing by both Parties, the risk of loss and ownership of Goods passes from Supplier to Sigma upon delivery to Sigma’s transportation carrier; or if shipment is by Supplier or common carrier, then upon delivery to Sigma’s designated facility;  or to the Customer’s specified facility (for example, a “drop-ship” to customer within the supply chain). 

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9.Changes and Modifications. 

• Sigma reserves the right at any time to direct changes, or cause Supplier to make changes, to the design (including drawings and specifications), processing, methods of packing and shipping and the date or place of delivery of the Goods covered by any Order as may be directed by the Customer, and Supplier agrees to promptly make such changes after written notice by Sigma.

 

The Parties will negotiate the additional cost or expenses incurred by Supplier, if any, as a result of such changes.   

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• Supplier shall not make any change to any Order without the written approval of an authorized individual at Sigma.  Any such changes shall be deemed not to affect the delivery time, product performance or cost unless agreed to by Sigma.  Nothing in this Section shall excuse Supplier from proceeding with the Order as changed by Supplier without Sigma's written approval.

• Without Sigma's prior written approval by authorized personnel and subsequently completing the PPAP process, Supplier shall not change (i) any third party supplier of services, raw materials or Goods used by supplier in connection with its performance under any Order, (ii) the facility from which Supplier or such supplier operates, or (iii) the nature, type or quality of any services, raw materials or Goods used by Supplier or its suppliers in connection with any Order.

• The written form may be replaced by an approved encoded internet-based system or a remote data transmission system. 

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10.Sigma Property. 

• All supplies, materials, molds, machinery, equipment, patterns, tools, dies, jigs, fixtures, blueprints, designs, specifications, drawings, photographic negatives and positives, art work, copy layout, consigned material for production or repair and other items furnished by Sigma, either directly or indirectly, to Supplier to perform an Order, or for which Supplier has been reimbursed by Sigma (collectively, "Property"), shall be and remain the property of Sigma or its Customer. Supplier shall bear the risk of loss of and damage to the Property, subject to reasonable wear and tear, and Supplier at its own expense shall keep such Property insured for the benefit of Sigma.   

• The Property shall at all times be properly housed and maintained by Supplier; shall not be used by Supplier for any purpose other than the performance of the related Sigma Order;  shall be conspicuously marked by Supplier to identify it as the property of Sigma or its Customer (“Owner”), and indicate Owner's name;  shall not be moved from Supplier's premises without Sigma's prior written approval. Supplier, at its expense, shall use commercially reasonable efforts to maintain, repair and refurbish the Property in first class condition. All replacement parts, additions, improvements and accessories for such Property shall automatically become Owner’s property upon their incorporation into or attachment to the Property.  

• Supplier agrees that Sigma has the right, at any time, with or without reason and without payment of any kind to retake possession of or request return of any or all Property. Upon the request of Sigma, the Property shall be immediately released to Sigma or delivered to Sigma by Supplier, either:

  • at Supplier's plant, properly packaged and marked in accordance with the requirements of the carrier selected by Sigma to transport such Property; or

  • to any location designated by Sigma, in which event Sigma shall pay to Supplier the reasonable cost of delivering such Property to such location.

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When permitted by law, Supplier waives any lien or other rights that Supplier might otherwise have on any of the Property for work performed on such Property or otherwise.

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11.Inspection. 

Sigma shall have the right to enter Supplier's facility at reasonable times and by prior appointment, to inspect the facility, Goods, materials and any Property of Sigma covered by this GPTC.

 

Sigma's inspection of the Goods, whether during manufacture, prior to delivery or within a reasonable time after delivery, shall not constitute acceptance of any work-in-process or finished Goods.

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12.Subcontracted Goods. 

The supplier shall not subcontract any of its duties under this Agreement without Sigma's prior written approval. Agreement by Sigma shall not absolve Supplier of the responsibility to provide acceptable Goods nor shall it preclude subsequent rejection by Sigma. Notwithstanding the foregoing, Supplier remains fully liable for any work subcontracted.

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13.Non-conforming Goods. 

• Sigma, at its option, may reject and return at Supplier's risk and expense, or retain and correct, Goods received pursuant to any MRPO that fail to conform to the requirements of such MRPO even if the nonconformity does not become apparent to Sigma until the manufacturing or processing stage by Sigma’s Customers.

• Supplier will replace nonconforming Goods with conforming Goods or reimburse Sigma for its costs of reworking the nonconforming Goods as directed by Sigma and as set forth in 16c. 

• Supplier shall reimburse Sigma for:

  • any amounts paid by Sigma or its Customers relating to any returned nonconforming Goods;

  • any amounts paid by Sigma for costs and expenses imposed on Sigma by Sigma’s Customers relating to any nonconforming Goods; and

  • any other costs incurred by Sigma in connection with the nonconforming Goods, including, but not limited to inspection, sorting, testing, evaluations, storage or rework.  Sigma will provide a debit memo for which may be offset against Sigma’s payables to Supplier.  If offset is not available, Supplier shall pay Sigma within thirty (30) days after a debit memo. Payment by Sigma for nonconforming Goods shall not constitute an acceptance hereof, limit or impair Sigma's right to assert any legal or equitable remedy or relieve Supplier 's responsibility for latent defects.

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14.Warranty. 

• Supplier expressly warrants that all goods delivered to Sigma will (i) conform to all specifications, drawings, descriptions and samples previously provided (ii) be free from faulty design and defects in materials and workmanship, and (iii) be merchantable, safe and appropriate for the purpose for which Goods of that kind are normally used. 

• Supplier acknowledges that it knows Sigma's and Sigma's customers' intended use of Goods to be sold under an Order, and that Sigma is relying on Supplier's skill or judgment to select or furnish suitable Goods, and Supplier warrants that the Goods will be fit for the particular intended purpose. Supplier further expressly warrants that upon Sigma's receipt of any Goods from Supplier, the Goods will be free and clear of all liens, charges, assessments and encumbrances and that good and merchantable title to the Goods will vest in Sigma. All services performed by Supplier will be performed in a competent, workmanlike manner and in accordance with industry standards.  The warranties provided in this Section are in addition to all other warranties, express, implied or statutory, will survive Sigma's inspection, test, delivery, acceptance, use and payment, and inure to the benefit of Sigma, its successors and assigns, and Sigma's customers and the users of Sigma's or its customers' products.  The warranties provided in this Section may not be limited or disclaimed by Supplier. Sigma's approval of Supplier's designs, materials, processes, drawings, specifications or the like shall not be construed to relieve Supplier of any warranties, nor shall a waiver by Sigma of any required specification as to any particular Goods constitute a waiver of any such requirements for the remaining Goods to be delivered unless so stated by Sigma in writing. 

• If any person or entity initiates or threatens litigation alleging that intellectual property rights used by a Party infringes or violates such person’s or entity’s interest in such property (an “IP Claim”), the Party against whom the IP Claim is filed (the “IP Claim Defendant”) shall defend against such claim at its expense. If the IP Claim Defendant concludes, in its sole judgment reasonably exercised, that the costs of settling the IP Claim or litigating the IP Claim to a non-appealable judgment are unacceptable, the IP Claim Defendant may immediately terminate this Agreement by giving written notice to the other Party.

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15.Insurance. 

Supplier shall undertake to procure product liability insurance and recall costs insurance sufficient and adequate for the total business of the Supplier and to verify such coverage by submitting a copy of the insurance policies respectively which state the amount of coverage.  Supplier shall obtain and maintain at its sole expense insurance coverage as reasonably requested by Sigma with such insurance carriers and in such amounts as are agreed by both Parties. Supplier shall furnish to Sigma certificates of insurance setting forth the amount of coverage, policy number and date(s) of expiration for insurance maintained by Supplier and such certificates must provide that Sigma shall receive thirty (30) days prior written notification from the insurer of any termination or reduction in the amount or scope of coverages.

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16.Parts Identification. 

All Goods supplied pursuant to this GPTC which shall be construed as a completed part shall bear the part number and name or code name as directed by Sigma in its applicable Order.    

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17.Financial and Operational Condition of Supplier.

• Supplier agrees to notify Sigma should any significant decline in overall financial health occur to Supplier, including but not limited to having challenges in paying its invoices or any likelihood of insolvency.  Supplier must notify Sigma no more than 10 days after entering into any negotiations for the sale or exchange of its stock or assets that could result in a change of control of Supplier.  

• Supplier will provide Sigma and its representatives upon request with evidence satisfactory to Sigma that Supplier is financially capable of and is complying with the terms of this GPTC including but not limited to Dun and Bradstreet reports, letters of reference from Supplier’s banking sources and Supplier’s most current and immediately past 2 (two) years' annual audited financial statements.  Supplier agrees that if Supplier experiences any delivery or operational problems, Sigma may, but is not required to, designate a representative to be present in Supplier’s applicable facility to observe Supplier's operations.

• Supplier agrees that if Sigma provides to Supplier any accommodations (financial or other) that are necessary for Supplier to fulfill its obligations under this Agreement, Supplier will reimburse Sigma for all costs, including attorneys' and other professionals' fees, incurred by Sigma in connection with such accommodation.   

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18.Supplemental Terms and Conditions for Tooling and Equipment. 

General.

• All Tooling and Equipment are to be made to Sigma's specifications, as may change from time to time.

Specifications. 

• Supplier shall promptly inform Sigma of any inconsistencies or ambiguities in Sigma's specifications of which Supplier is or becomes aware. After reviewing Sigma's specifications, Supplier must notify Sigma of any questions that Supplier has concerning whether the Tooling or Equipment that Supplier is producing will meet Sigma's needs. Supplier shall provide Sigma with a schedule for completion of the Tooling or Equipment so that Sigma may monitor the ability and likelihood that Supplier will meet its delivery requirements.

Inspection and Rejection.

• Sigma shall have the right to inspect and test all Tooling and Equipment at all times and places including, when practicable, during manufacture. If any such inspection or test is made on Supplier's premises, Supplier shall furnish all reasonable facilities and assistance for a safe and convenient inspection or test without additional charge to Sigma. Sigma's inspection of the Tooling or Equipment, no matter when occurring, shall not be acceptance of any work-in process or Tooling or Equipment.

• Notwithstanding prior inspection or use of the Tooling or Equipment, Sigma shall have the right to reject any of such Tooling or Equipment which does not conform to the requirements of an Order and/or which do not pass a Customer's PPAP.

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Acceptance.

For purposes of this Agreement, acceptance of Tooling and Equipment shall be defined as receipt by Supplier of written acknowledgement from Sigma's authorized representative of completed and signed PPAP which makes for final acceptance of the tool.  It is expected and required that tooling trials and samples will be used to test and validate tooling and processes.  If requested by Sigma, Supplier shall provide a pre-acceptance run-off to Sigma at Supplier's facility, at no cost to Sigma.   

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Warranty.

• Supplier fully warrants all Tooling and Equipment will conform to the applicable drawings, specifications and other descriptions furnished pursuant to the related Order, be free of defects in design (to the extent that Supplier furnished the design), materials and workmanship, and be suitable for the purpose intended. Furthermore, Supplier shall require its suppliers of component parts of Goods and/or equipment for Tooling or Equipment to provide a warranty equal to the warranties provided to Sigma by Supplier in this Agreement and shall assign to Sigma all such warranties. Supplier shall provide all necessary documentation to Sigma to evidence that it has assigned such warranties from its suppliers onto Sigma. In the event that Supplier fails to obtain or assign such warranties, Supplier agrees that it will reimburse Sigma for all loss, cost, liability or expense (including reasonable attorneys' fees) related to such failure.

• Supplier warrants that it will, whenever possible, use commercially available parts of the highest industry quality, and will supply a detailed bill of materials listing all parts. Supplier further agrees that it will comply with all specific Goods sourcing directions of Sigma.

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19.Confidentiality. 

Sigma and the Supplier have previously signed and entered into a mutual non-disclosure agreement. In the event such agreement has not been concluded, the parties hereby undertake to treat any commercial and technological details, which come to their knowledge due to the business relationship and which are not publicly known, as a trade secret with strict confidence. The confidentiality obligation shall survive the termination of any Order plus three (3) years. Sigma shall be entitled to claim damages from Supplier for any breach of such obligation.

Supplier and Sigma shall treat all confidential information disclosed to it by the other (including information relating to the Goods and the contents of this GPTC) as confidential and shall use such information only for the purposes of this GPTC and for no other purposes whatsoever. Supplier and Sigma shall be entitled to disclose the information referred to above to their professional and technical advisors. Supplier and Sigma shall ensure that none of its officers or employees shall reveal to any third party any confidential information.

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20.Sigma Cancellation, Termination, or Discontinuation. 

• Sigma may, at its option, cancel an Order without liability to Supplier based on a default by Supplier, including if:

  • Supplier delivers Goods that are defective or otherwise not conforming to the Order;

  • Supplier fails to deliver any Goods in accordance with the delivery schedule set forth in the Order issued by Sigma;

  • Supplier, within 10 days (or a shorter period of the circumstances so merit) after request by Sigma, fails to provide Sigma with adequate assurances of its ability to perform under an Order;

  • Supplier otherwise fails to comply with any of the terms of an Order;

  • Supplier is or becomes insolvent, files or has filed against it a petition under any bankruptcy or insolvency laws or if a receiver or trustee is appointed to take possession or control of Supplier's Sigma's business or a material portion of its assets. 

• In addition, Sigma may, at its option, cancel an Order without liability to Supplier by providing Supplier written notice of cancellation at least 30 days prior to the effective cancellation date if:

  • Supplier sells, or offers to sell, a substantial portion of its assets used for the production of Goods or provision of services for Sigma;

  • Supplier sells or exchanges, or offers to sell or exchange an amount of its stock that would result in a change in the control of Supplier; or

  • Supplier fails to remain competitive with respect to quality, technology, delivery and pricing of the Goods or services. 

  • Upon any cancellation by Sigma under this Section, Sigma shall be entitled to recover from Supplier all damages, whether direct, indirect, special or consequential, and for all losses of every type resulting from Supplier’s breach or default.

• Notwithstanding the above, Sigma may terminate its purchase obligations under an Order, in whole or in part, at any time by providing a written notice of termination to Supplier.  Sigma shall have the right to terminate an Order even if an excusable delay exists or if Supplier is not in breach of its obligations under the Order.

• Upon receipt of a notice of termination, unless otherwise directed by Sigma, Supplier shall

  • promptly stop all work under the Order;

  • transfer title to and deliver to Sigma or its designee all furnished Goods, work in process, and parts and materials that Supplier produced or acquired in accordance with the Order and which Supplier cannot use in producing Goods for itself or for others;

  • verify and settle all claims by subcontractors for actual costs that are rendered unrecoverable by the termination upon the subcontractor's delivery to Sigma or its designee of all finished Goods, work in process, and parts and materials which the subcontractors cannot use in producing Goods for themselves or others;

  • take actions reasonably necessary to protect property in Supplier's possession in which Sigma has an interest until Supplier has received disposal instructions from Sigma, and;

  • Cooperate with Sigma in resourcing production to a different supplier, upon Sigma’s request.

• Upon termination by Sigma under the terms of this Section, Sigma's sole and exclusive obligation to Supplier shall be to pay Supplier:  (1) the Order price for all conforming finished Goods shipped to Sigma and for any completed services; (2) Supplier's and its subcontractors' actual cost of the work in process and parts and materials transferred to Sigma in accordance with subsection (b) above; and (3) Supplier's actual cost of carrying out its obligations of subsection (b) above.  However, Sigma will have no obligation for and will not be required to make payments to Supplier, directly or on account of claims by Supplier's suppliers and subcontractors, for loss of anticipated profit, overhead, product development and engineering costs, tooling, facilities and equipment rearrangement costs or rental, unamortized capitalized costs, or general and administrative burden charges resulting from the termination of an Order.

• Supplier will furnish to Sigma, within one month after the effective date of termination, Supplier's proposed termination claim.  Sigma may audit Supplier's records, before or subsequent to payment, to verify amounts requested in Supplier's termination claim.

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21.Supplier Cancellation, Termination, or Discontinuance. 

Supplier shall immediately notify Sigma of intent to cancel or discontinue production.  The parties will act in good faith to adopt an orderly written transition plan addressing work-in-process, raw materials, tooling, customer approvals, ramp up schedules, long-lead time items, arrangements for an alternate Supplier, etc.  Supplier accepts complete liability for all damages and costs, incurred or suffered by Sigma due to breach of the contract. Supplier agrees Sigma shall have the right to withhold any payment for any Supplier failure to comply. 

 

• Regardless of any timely notice, Supplier shall not be relieved of producing parts unless and until Sigma agrees that the transition to another Supplier has been completed and Sigma has obtained all required customer approvals. Only upon Sigma’s written approval will Supplier be relieved of its obligations under this clause. Regardless of any timely notice, Sigma reserves the right, and Supplier agrees without objection, to extend the term of this GPTC by up to 12 months with pricing, terms, and conditions in effect.

• In addition, regardless of any special notice, transition, or exit from the business, Supplier shall retain its obligation to provide service parts unless Sigma agrees that the obligation has been properly accepted by the successor Supplier.

• Supplier, at its cost and expense, agrees to retrofit all Sigma-owned or Customer-owned tooling to the extent necessary to prepare the tool for operation at new Supplier location.  In the event

• the Sigma-owned or Customer-owned tooling is unable to be retrofitted, Supplier shall, at Sigma’s option, refund all tooling charges to Sigma, pay all costs associated with producing new tooling at new Supplier’s location, and assume all costs related to its breach or to its decision to cease its performance.

• Supplier shall reimburse Sigma for all transportation costs incurred by Sigma associated with transferring the tooling to the new Supplier.

• Supplier shall provide Sigma with all valid warranties, tooling, jigs, fixtures, drawings and any other related Sigma-owned or Customer-owned property, upon notice of its intent to exit the business or otherwise cease or discontinue production.

 

22.Default and Remedies

• Specific Performance. Supplier acknowledges and agrees that money damages would not be a sufficient remedy for any actual, anticipatory or threatened breach of any Order by Supplier with respect to its delivery of Goods to Sigma and that, in addition to all other rights and remedies which Sigma may have, Sigma shall be entitled to specific performance and interlocutory and permanent injunctive or other equitable relief as a remedy for any such breach, without proof of actual damages, without establishing a “balance of convenience,” and without bond or other security being required.

• General. Supplier shall be in default:

  • if Supplier fails to perform any obligation within the time specified in an Order or any extension thereof granted by Sigma in writing, or upon Sigma’s demand if no time has been specified;

  • if Supplier fails to make progress in the performance of any obligation so as to make Sigma reasonably apprehensive about Supplier’s ability or willingness to perform its obligations;

  • if Supplier repudiates or is in breach of any provisions of an Order, including Supplier’s warranties; or

  • if  Supplier’s  performance of its obligations, or if any of the Goods, are found at any time to be defective in design, material or workmanship, or otherwise not in conformity with the requirements of an Order, and if in any of these defaults, the effect of which default can be  cured, Supplier does not cure such failure within five calendar days or such longer period as Sigma may authorize in the notice of default.

 

Sigma may take remedial and other action based on one or more Sections of this Agreement as alternative and/or cumulative basis. Supplier shall continue performance of all Orders, to the extent not terminated, and shall be liable to Sigma for any excess costs for alternative products or services. If Supplier for any reason anticipates difficulty in complying with a required delivery or other date, or in meeting any of the other requirements of an Order, Supplier shall notify Sigma’s material management representative no later than 72 hours before required shipping date for on-time delivery.  Sigma is under no obligation to waive any default.

 

23.Contingency Plan for Acts of God and other Supply Chain Disruptions. 

Sigma requires its suppliers to have evidence upon request for a contingency plan for natural disasters, extended holiday, plant shut-downs, EDI, IT, transportation, equipment failures, fire or electrical outages, etc.

Any delay or failure of either party to perform its obligations shall be excused if Supplier is unable to produce, sell or deliver, or Sigma is unable to accept delivery, buy or use, the Goods covered by these GPTC, as the result of an event or occurrence beyond the reasonable control of the party and without its fault or negligence, including but not limited to, acts of God, actions by any governmental authority (whether valid or invalid), fires, floods, windstorms, explosions, riots, natural disasters, wars, sabotage, labor problems (including lockouts, strikes and slowdowns), inability to obtain power, material, labor equipment or transportation, or court injunction or order; provided that written notice of such delay (including the anticipated duration of the delay) shall be given by the affected party to the other party as soon as possible after the event or occurrence (but in no event more than three (3) days thereafter and always also when a shipment is missed). During the period of such delay or failure to perform by Supplier, Sigma, at its option, may purchase Goods from other sources and reduce its schedules/Orders to Supplier by such quantities, without liability to Supplier, or have Supplier provide the Goods from other sources in quantities and at times requested by Sigma, and the price set forth in the relevant Order.  In addition, Supplier at its expense shall take such actions as are necessary to ensure the supply of Goods to Sigma for a period of at least 30 days during any anticipated labor disruption or resulting from the expiration of Supplier’s labor contracts. If requested by Sigma, Supplier shall within seven (7) days, provide adequate assurances that the delay shall not exceed 30 days. If the delay lasts more than 30 days or Supplier does not provide adequate assurances that the delay will cease within 30 days, Sigma may immediately terminate any relevant Order without liability.

 

24.Resourcing.

• Supplier acknowledges that an interruption of business at Sigma’s plant or Customer’s plant would result in damages and/or difficulties for which money damages would not be a sufficient remedy. While the cost of a plant shutdown may easily generate substantial costs, the damages to Sigma’s relationship with Sigma’s Customer through potential loss of business, and other damages which are equally difficult to calculate, can be a much worse consequence. Because of these risks, in the event of a breach or threatened breach by Supplier of any of the representations, warranties or covenants of Supplier, Sigma may, upon notice to Supplier, whether or not  Sigma may otherwise be obligated to  purchase the Goods from Supplier, resource the production of Goods from Supplier to another supplier or dual source any of the Goods covered hereby (i.e.,  have another supplier produce or be prepared to produce Goods being produced by Supplier), to protect Sigma  and its Customers.

• Transition of Supply. In connection with Sigma’s termination or non-renewal of this Order, or Sigma’s other decision to source the Goods from any alternate supplier(s), Supplier shall cooperate with Sigma in the transition of supply of the Goods, including the following:

  • Supplier shall continue production and delivery of all Goods as ordered by  Sigma, at the prices and other terms stated in an Order, without premium or other condition, during the entire period reasonably needed by Sigma to complete the transition to the alternate supplier(s), such that Supplier’s action or inaction causes no interruption in Sigma’s ability to  obtain the Goods as needed;

  • at no cost to Sigma, Supplier shall promptly provide all requested information and documentation regarding and access to Supplier’s manufacturing process, including on-site inspections, bill-of- material, data, tooling and process detail and samples of the Goods and components; and immediate access to Sigma-owned or Customer-owned tooling for relocation purposes;

  • subject to Supplier’s reasonable capacity constraints, Supplier shall provide special overtime production, storage, delivery, and/or management of extra inventory of the Goods (parts bank), extraordinary packaging and transportation and other special services (collectively “Transition Support”) as expressly requested by Sigma in writing. If the transition of supply occurs for reasons other than Supplier’s default, Sigma shall, at the end of the transition period, pay the reasonable, actual cost of Transition Support requested by Sigma and incurred by Supplier, provided that Sigma must approve Supplier’s estimate of such costs in writing prior to Supplier incurring such costs.

 

25.Recall. 

If any of the Goods fail to conform to the warranty of Supplier hereunder or to comply with any motor vehicle safety standards or are found to contain a safety related defect, including but not limited to failure to meet industry state of art, and Sigma, Sigma’s customer, the National Highway Traffic Safety Administration or other appropriate government agency or non-governmental organization orders or requests that a Recall Campaign or remedial action in lieu of a Recall Campaign be undertaken, Supplier shall bear the cost and expense of any Recall Campaign or such remedial action and shall, without charge, provide replacement Goods as needed. Supplier shall reimburse Sigma for all costs, damages and expenses (including reasonable attorney fees) incurred by Sigma or its related entities arising out of a Recall Campaign or remedial action in which any Goods supplied by Supplier are alleged to be defective or to breach the warranty hereunder. Sigma shall have the right to perform a full investigation including but not limited to inspection and testing of the products involved, vehicle history, reports, analysis, and tests performed by or in the possession of Supplier. The term “Recall Campaign” or remedial action in lieu thereof, shall mean any such systematic effort to locate Goods, suspected, believed to be or known to be defective and installed in vehicles or vehicle components, and to replace, repair, modify or correct such Goods regardless  of  whether  such  Recall  Campaign  is  initiated  by Sigma,  Sigma’s  Customer,  any governmental or regulatory body or any other entity.

 

26.Directed Supplier Relationship.

A “Directed Supplier” is any Supplier from which Sigma has been requested or  recommended to procure Goods at the direction or suggestion of Sigma’s Customer and/or the ultimate customer (including through co-sourcing arrangements), or when, due to a Customer’s product description, specification or other limitation, Sigma is limited as a practical matter to such Supplier for the Goods required. If an Order derives from a supplier relationship directed or recommended by a Customer (“Directing Customer”) by establishing Supplier as a Directed Supplier, Supplier shall comply with all provisions of an Order (including these GPTC) even though Supplier may have negotiated economics and other terms with the Directing Customer.  At Sigma’s request, Supplier who is a Directed Supplier shall negotiate performance, quality, warranty and other contract issues relating to the Goods with the Directing Customer to assure that the Directing Customer’s requirements are adequately developed, described and met. Any negotiation between Directed Supplier and Directing Customer must include a Sigma representative. Supplier is solely responsible to provide in writing all information relating to the Goods, including for example, the Goods’ design and performance (as approved by the Directing Customer and Sigma), design for interface of the Goods with Sigma’s products, testing data and reports, tooling requirements and timing, and other matters which could affect Sigma’s use of the Goods and performance of Sigma’s obligations to provide, directly or indirectly, products to the Directing Customer. Sigma may require Supplier to comply with:

 

(i) the Directing Customer’s terms and conditions of purchase as amended by Directing Customer; and

(ii) these GPTC, and to the extent there is a conflict with an Order, Sigma may elect the provisions which apply.

Supplier shall participate in the PPAP process as well as cost reduction and warranty cost sharing programs of the Directing Customer with Sigma. A Supplier that is a Directed Supplier acknowledges the applicability of these GPTC notwithstanding the fact that Supplier may have negotiated the price or other provisions with the Customer, and that it is bound by these GPTC and an Order, including, without limitation, the payment terms.

 

27.Industrial and Intellectual Property Rights.

• Delivered Goods shall be free of any rights of third parties. The Goods to be delivered by Supplier are products supplied to the automobile industry and may be distributed and used on an international level.  For this reason, Supplier warrants that, by the use, the installation and the sale of the delivered Goods, an existing industrial property right or industrial property right application (hereinafter called together “Industrial Property Rights”) worldwide will not be infringed.

• Supplier shall be liable towards Sigma for any damage that results from the use, the installation or the sale of the delivered Goods due to an infringement of any right of third parties. Should a third party assert any such claims against Sigma or its customers, Supplier shall undertake to indemnify and hold harmless Sigma and its customers from such claims upon first request of Sigma. Supplier’s obligation to indemnify shall also cover any expenses necessarily incurred by Sigma due to or in connection with such assertion by a third party.

• The parties undertake to inform each other without delay of infringement risks and alleged infringements which come to their knowledge and to give each other the opportunity to counteract such claims by mutual consent.

• Upon request of Sigma, Supplier shall give notice of the use of published or non-published Industrial Property Rights, being owned by Supplier or licensed by Supplier, and of Industrial Property Right applications with respect to the item to be delivered.

• Should Sigma receive notice that ordered or delivered Goods infringe Intellectual Property Rights, Sigma shall be entitled to claim damages for non-fulfilment and to withdraw from the contract.

• In the event of a termination, caused by Supplier’s incapability to deliver or due to its unwillingness to deliver, of any supply agreement Sigma shall be granted a world-wide, irrevocable, perpetual, non-exclusive and royalty-free right and license to make or have made the Goods or Goods made under any Order by Supplier, should Sigma so require. The same shall apply to any tool used by Supplier.

• In the event the Supplier intends to apply for protection of any innovation as regards (such as but not limited to) materials, designs, processes, technologies, methods that are attributable to an Sigma system, product or component and any methodology for their manufacturing the Supplier shall without undue delay seek the approval of Sigma for such application.

 

28.Assignment. 

Save as otherwise herein provided, neither this Agreement nor any part, share or interest therein nor any rights or obligations hereunder may be ceded, assigned, or otherwise transferred by Supplier without the prior written consent of Sigma.

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29.Entire Agreement. 

This Agreement, together with all Orders, exhibits and documents specifically referenced in this GPTC or an Order, constitutes the entire agreement between Supplier and Sigma with respect to the matters contained herein and therein and supersedes all prior oral or written representations and agreements.

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23.Notices.

All notices, demands, and requests required or permitted to be given under the provisions of this GPTC shall be in writing and shall be deemed given (a) when personally delivered or (b) on the third business day following the day such notice or other communication is sent by a reputable and reliable courier to the following:

a.if to Sigma:

                                Sigma International, Inc.

                                Attention:  Christopher Naidoo

                                36800 Plymouth Rd. Livonia MI 48150, USA

 

b.if to Supplier, then the address provided by Supplier

or to such other address or facsimile number that the parties may designate in writing.

 

31.Parties in Interest.

This Agreement shall inure to the benefit of, and be binding on, the named parties and their respective successors and permitted assigns, but not any other person.

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32.Governing Law.

a.This GPTC and all Orders shall be governed by and construed in accordance with the laws of the State of Michigan, without regard to any choice of law principles which would require the application of the law of any other jurisdiction.

b.Each Party hereto hereby irrevocably submits to the jurisdiction of the United States District Court for the Eastern District of Michigan, Southern Division, and if such court does not have jurisdiction, of the courts of the State of Michigan in Wayne County, for the purposes of any proceeding arising out of this Agreement, or the subject matter hereof or thereof, brought by any other Party. 

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33.Arbitration.

a.Any dispute under this GPTC or any Order shall be resolved in binding arbitration pursuant to the Commercial Arbitration Rules, then in effect of the American Arbitration Association (the “Arbitration Rules”) (or under any other form of arbitration mutually acceptable to the parties involved) to the extent that the Arbitration Rules do not conflict with any provision of this Section. This agreement to arbitrate shall be specifically enforceable under the prevailing arbitration law.  

 

b.No provision of or the exercise of any rights under this Section shall limit the right of any party to seek and obtain provisional or ancillary remedies (such as injunctive relief, attachment, or the appointment of a receiver) from any court having jurisdiction before, during, or after the pendency of an arbitration proceeding under this Section. The institution and maintenance of any such action or proceeding shall not constitute a waiver of the right of any party (including the party taking the action or instituting the proceeding) to submit a dispute, controversy, or claim to arbitration under this Section.

c.Any award, order, or judgment made pursuant to arbitration shall be deemed final and binding and may be entered in any court having jurisdiction over the enforcement of the award, order, or judgment. Each party agrees to submit to the jurisdiction of any court for purposes of the enforcement of the award, order, or judgment.

d.The arbitration shall be held before one arbitrator who has been practicing law for at least 15 (fifteen) years, is knowledgeable in the general subject matter of the dispute, controversy, or claim, and has had experience as an arbitrator selected in accordance with the Arbitration Rules, except that any arbitration in which the disputed, controverted, or claimed amount (as reflected on the demand for arbitration, as the same may be amended) exceeds $100,000 shall be held before three arbitrators, one arbitrator being selected by Sigma, one being selected by Supplier, and the third being selected by the other two arbitrators. 

e.The arbitration shall be held in Southeastern Michigan.

f.In any arbitration proceeding under this Section, subject to the award of the arbitrator(s), each party shall pay all its own expenses, an equal share of the fees and expenses of the arbitrator, and, if applicable, the fees and expenses of its own appointed arbitrator. The arbitrator(s) shall have the power to award recovery of costs and fees (including reasonable attorney fees, administrative and AAA fees, if any, and arbitrators' fees) among the parties as the arbitrators determine to be equitable under the circumstances.

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34.Severability. 

If in any jurisdiction, any provision of this GPTC or any Order or its application to any party or circumstance is restricted, prohibited or unenforceable, the remainder of the Agreement shall still apply.