MAHLE NORTH AMERICA RAW MATERIAL SELLERSPRODUCTION PURCHASING
GENERAL TERMS AND CONDITIONSEFFECTIVE DATE: SEPTEMBER 2021

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MAHLE NORTH AMERICA RAW MATERIAL SELLERSPRODUCTION PURCHASING GENERAL TERMS AND CONDITIONS
1The Parties and Materials Covered by the Contract

2

The Contract

3

Quantity; Blanket Orders; Material Releases

4

Shipping and Delivery

5

Price and Payment

6

Competitiveness

7

Inspection; Non-Conforming Materials

8Standards and Policies

9

Changes10

Warranties

11

Indemnification

12

Inspection and Audit

13

Customer Requirements

14

Duration and Termination of the Contract

15

Intellectual Property

16

Proprietary Information

17

Insurance; Waiver of Liens

18

Excusable Delay

19

MAHLE 's Liability

20

Limitation on Assignment and Subcontracting

21

Compliance with Laws

22

Remedies

23

Notices

24

Diversity Initiative

25

Miscellaneous

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MAHLE NORTH AMERICA RAW MATERIAL SELLERSPRODUCTION PURCHASING GENERAL TERMS AND CONDITIONS

1 The Parties and Materials Covered by the Contract
1.1 Parties. MAHLE, as used in these MAHLE North America Raw Material Purchasing
General Terms and Conditions (“Terms”), means the buyer identified on the face of
MAHLE’s Master Business Award Letter or Purchase Order, which may be any of the
MAHLE North American entities. Seller is identified on the face of the Master BusinessAward Letter or Purchase Order.
1.2 Materials. These Terms apply to the purchase of the raw materials (any materials to be
used in the manufacture of MAHLE’s products, including, but not limited to, chemicals,
reinforcement and other fillers, polymers, fabrics, textiles, or metals, hereinafterreferred to as "Materials") identified in the Master Business Award Letter or Purchase
Order issued by MAHLE to Seller.
2 The Contract
2.1

Terms of the Contract. The following documents collectively constitute the “Contract”: (i)Master Business Award Letter; (ii) these Terms; (iii) Purchase Order; (iv) Material Releases
to Seller pursuant to MAHLE’s Purchase Order; (v) Exhibits and other documents attachedto the Contract; and (vi) Supplier Code of Conduct (“MAHLE’s Policy”), as revised by
MAHLE from time to time. MAHLE’s Policy is available in the download center found byclicking the Supplier portal link at www.mahle.com. Seller is responsible for keeping
current regarding the terms of MAHLE’s Policy. The parties will interpret each term of theContract so that all of the provisions are given as full effect as possible. In the event of any
ambiguities, express conflicts or discrepancies in the other documents which are part of theContract, Seller shall immediately submit the matter to MAHLE for its determination and theparties shall attempt to resolve the matter in mutual agreement. In the event of a conflict
between the documents constituting the Contract, the order of precedence shall be as
follows: first, the Master Business Award Letter; second, the Purchase Order; third, any
documents referenced in the Purchase Order signed by both parties; fourth, Exhibits andother documents attached to the Contract; fifth, applicable Customer Requirements; andsixth, these Terms. Customer means any entity to which MAHLE, directly or indirectly, sells
Materials, or sells any goods or services into which MAHLE incorporates the Materials,
including any original equipment manufacturer and any upper tier supplier to an original
equipment manufacturer (“Customer”).

2.2 Seller Acceptance. The Contract is an offer by MAHLE to purchase the Materials fromthe Seller pursuant to the terms of the Contract. The Contract is formed when the Seller
accepts the offer from MAHLE. This occurs upon the earlier of: (a) the Seller beginningwork or performance with respect to any part of the Contract; (b) the Seller notifying
MAHLE of its acceptance of the offer; or (c) any other conduct that recognizes the existenceof a binding agreement with respect to the subject matter of the Contract. Written
acceptance is not necessary for acceptance and contract formation. The Contract does
not constitute an acceptance of any offer or proposal made by Seller. Selleracknowledges that: (i) a request for quotation or similar document issued by MAHLE is
not an offer by MAHLE; and (ii) any response by Seller to a request for quotation orsimilar document issued by MAHLE is not an offer by Seller.
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2.3 Seller’s Terms Rejected. MAHLE expressly rejects any additional or different terms that
Seller proposes and such additional or different terms are not part of the Contract. The
Contract is limited to and conditional upon Seller's acceptance of these Terms
exclusively. If Seller proposes any additional or different terms, such proposal shall not
operate as a rejection of the Contract if Seller commences work or otherwise accepts
MAHLE’s offer, in which case the Contract shall be deemed accepted by Seller without
any additional or different terms.
2.4

Entire Agreement. The Contract is the entire agreement between the parties regarding theMaterials and supersedes any prior agreements, prior orders, quotations, proposals,
negotiations or understandings of the parties regarding the Materials, whether written ororal. No modification shall be effective unless in writing and signed by MAHLE’s authorizedpurchasing representative.

3 Quantity; Blanket Orders; Material Releases
3.1

Material Releases. Unless specified differently in the Contract, Seller shall deliver Materials
in strict conformance with the dates, times, quantities and delivery locations identified by
MAHLE as firm orders in releases, manifests, broadcasts or similar releases ("Material
Releases"). Time, quantities and location are of the essence pursuant to the Contract andSeller agrees to 100% on-time delivery of the quantities and at the times specified by
MAHLE. Section 3.4 shall govern any information that is not identified in a Material
Release.

3.2

Capacity. By accepting the Contract, Seller warrants that it can manufacture or produce up
to 120% of any production capacity requirements specified in the request for quotation orotherwise, as agreed by MAHLE in writing, without the imposition of overtime charges orother surcharges. If MAHLE’s requirements exceed 120% of such capacity requirements,
then Seller shall promptly propose a plan for satisfying such increased requirements, which
Seller shall implement upon MAHLE’s written approval as a “change” in accordance with
§9.

3.3

Resources. Seller is responsible for obtaining and maintaining all inventories, and otherresources needed to manufacture the Materials necessary to meet MAHLE’s delivery
requirements. MAHLE shall have no obligation to purchase raw materials, inventory or
Materials manufactured beyond those identified as firm orders in Material Releases.

3.4

Blanket Orders. If the Contract does not specify a fixed quantity or states zero, "blanket,"or "per release," then MAHLE is placing a Blanket Order (“Blanket Order”). If the Contract
is a Blanket Order, then MAHLE shall purchase the percentage of MAHLE’s requirements
for the Materials specified in the Contract. If a Blanket Order does not state a specificpercentage, then the percentage requirement is 100% and Seller will provide MAHLE with
100% of MAHLE’s requirements for Materials. In instances where MAHLE commits in theContract to purchase its Materials exclusively from Seller or where the Blanket Order is for
100% of MAHLE’s requirement for Materials, then MAHLE will purchase its Materials
exclusively from Seller. In any instance, MAHLE may purchase and use parts from othersuppliers for purposes of: (i) trial production testing or similar purposes; and/or (ii)protecting against actual or potential shortages or disruptions in supply from Seller, as
expressly permitted in the Contract.

3.5

Forecasts. Seller acknowledges that any estimates or forecasts of production volumes or

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length of program, whether issued before or during the term of the Contract and whether
from MAHLE or its Customer: (i) are for informational purposes only, (ii) are subject tochange from time to time, (iii) do not bind MAHLE or its Customer, and (iv) do not modify
the duration of the Contract as set forth in §14.1. Seller’s reliance upon any estimates orforecasts of production volumes or length of program is at its own risk and Seller bears all
costs associated with any changes or discrepancies between such estimates or forecasts
and the actual production volumes or length of program. Seller cannot use any changes ordiscrepancies between the estimates or forecasts and the actual production volumes orlength of the program as a basis to terminate its contractual obligations to provide Materials
to MAHLE or as a basis to request a higher price for the Materials.
3.6 EDI. MAHLE may require Seller to participate in electronic data interchange (“EDI”) or asimilar inventory management program, at Seller's expense, for notification of Material
Releases, shipping confirmation and other information. MAHLE may require Seller toutilize any other MAHLE designated electronic communication system for payment,
logistics, quality or other purpose. Seller agrees that any MAHLE designatedcommunication system satisfies any legal requirement for a writing or signature.
4 Shipping and Delivery
4.1

Delivery Terms. Delivery terms are specified on the face of the Contract. If MAHLE does
not specify any terms in the Contract, then Seller must deliver the Materials CPT, Seller’s
dock.

4.2

MAHLE Requirements.
4.2.1

Seller shall properly pack, mark, and ship Materials, with proper related
documentation, according to MAHLE’s requirements provided in the Contract
including use of specified carrier or method of transportation, point of destination,and shipping on Saturdays and holidays.

4.2.2

Seller shall comply with the requirements of the involved carriers, the country of
manufacture and the country of destination. Seller shall assure delivery free ofdamage and deterioration. All labeling, marking and packaging shall be at Seller’s
expense, unless expressly agreed otherwise in the Contract.

4.2.3

Seller shall promptly provide MAHLE with a certificate of analysis exhibiting thefollowing set of properties within the requisite specification for the shipped
products:

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a.

General Information: (i) Seller’s name; (ii) factory; (iii) commercial name ofMaterials; (iv) MAHLE destination factory; (v) MAHLE Purchase Ordernumber; (vi) technical specification code issued by MAHLE, with issue dateand number; (vii) Materials production date;(viii) production batch
number/code, with bale identification numbers; and (ix) total net weight ofbatch(es) supplied.

b.

Average analytical data for production batch: analytical data aboutcharacteristics classified as “C” and “M” in technical documents, with detailsof target values, tolerances (or acceptance intervals) and analytical methods
used, which must comply with the aforementioned documents.

The certificate of analysis shall be delivered in original together with the delivery of
the Materials. The Seller shall be required to send an advance copy of suchcertificates by facsimile machine or e-mail to the factory at least three (3) days
before the Materials are due to arrive.
Delivery of the certificate of analysis shall not bind MAHLE, who shall have theright to refuse the delivery of any Materials to which these certificates apply, until
MAHLE has finished acceptance tests or the Seller has solved any doubts orreserves which MAHLE may have. It is hereby agreed that any tests and checks
carried out by MAHLE shall be without prejudice to the full and exclusive guarantee
and liability of the Seller to provide the Materials, and for this to be in compliancewith the Contract.
4.2.4

All shipment of goods to MAHLE must include two (2) packing slips. For Materials
shipped via truck, Seller shall enclose one (1) packing slip (or packing slips sets inthe case of multiple item shipments) in an envelope and attach one (1) packing slip
to the bill of lading and deliver it to MAHLE’s receiving department upon delivery of
the Materials.

4.2.5

MAHLE has no obligation to pay any invoices if Seller fails to meet therequirements stated above and if Seller fails to provide the following information on
invoices and packing slips: (i) MAHLE-assigned supplier code; (ii) purchase ordernumber; (iii) part number and quantity of each part number; (iv) the release number
on Blanket Orders; (v) the “Ship-to” address; (vi) MAHLE-assigned plant location
code; (vii) invoice-to address; and (viii) whether containers used are “returnable” or“non-returnable”, in addition to all other invoice requirements of this Contract.

4.2.6

Seller certifies that it will ship or make available the Materials, as pertinent to theshipping terms, from the location stated in the Contract. MAHLE must approve inadvance and in writing any proposed change in the location by Seller. MAHLE
shall review any proposed change for its effect on transit time, freight costs,
packaging methods, and other significant impacts on MAHLE. Seller shall be
responsible for all increased transportation and other costs unless otherwise
agreed by MAHLE in writing.

4.2.7

Seller must ship the Materials in accordance with the delivery schedules in the
Material Releases. Premium shipping expenses and/or other related expenses
incurred to meet the delivery schedules set forth in Material Releases are Seller’s
responsibility.

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4.2.8Seller must receive MAHLE’s advance written approval to make each earlydelivery. If Seller makes Materials available earlier than the agreed delivery date,
MAHLE reserves the right to charge Seller for all additional costs incurred forpicking up the Materials. If MAHLE does not return the Materials that Seller makes
available early, then MAHLE shall store the Materials until the agreed delivery dateat Seller’s expense. In the case of an early delivery, MAHLE will use the agreed
delivery date as the basis for calculating the date of payment. If MAHLE elects in
its sole and absolute discretion to accept one or more early deliveries, suchacceptance shall not constitute a waiver of MAHLE’s right to reject any othershipment which does not conform with the Contract.

4.2.9

Seller shall deliver the agreed delivery quantities in one shipment to MAHLE.
MAHLE shall accept partial deliveries only if MAHLE has agreed to each partial
shipment delivery in advance and in writing. In case of agreed partial deliveries,
Seller shall indicate the quantities it did not deliver on the packing slip. MAHLE
may postpone payment for the Materials until Seller makes the remaining quantity
available for pick-up.

4.2.10 Seller shall not make any surplus deliveries without MAHLE’s advance written
approval. If Seller makes any surplus deliveries without MAHLE’s advance written
approval, then MAHLE may, at Seller’s expense, either return the surplus Materials
to Seller or warehouse the surplus Materials.
4.2.11 To the extent Seller uses MAHLE-owned returnable containers (“Containers”):
a.

Seller shall use MAHLE’s required system for monitoring the location of theContainers;b.

Seller agrees to properly maintain and service the Containers at its own costand expense and ensure that the Containers are in proper working
condition;c.

Seller shall properly store, secure, clean and protect the Containers.
Additionally, Seller shall restrict the use of the Containers to competentpersonnel and assure that the Containers are operated using all safety
equipment and/or devices required for operation of the Containers and/or
required by law. Seller shall prohibit anyone other than duly authorized
personnel of MAHLE from performing any repairs, maintenance oradjustments to the Containers (unless otherwise previously authorized, in
writing, by MAHLE) and notify MAHLE immediately of any accident affecting
the Containers, setting forth all relevant facts, and thereafter promptly
furnishing MAHLE, in writing, all information required by MAHLE in
connection therewith. Seller shall be liable for any and all loss or damage to
the Containers due to its failure to observe any of the foregoing;d.

Seller agrees to pay all costs and expenses necessary to repair any
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e.

upon the expiration or termination of the Contract, Seller will return all
Containers to MAHLE.

4.3

Delay in Delivery. If Seller, for any reason, does not comply with MAHLE’s delivery
schedule or any other requirement of a Material Release or Purchase Order, MAHLE may,in its sole discretion: (a) approve a revised delivery schedule; (b) require expedited or
premium shipment of any of the Materials; or (c) cover, and adjust any quantity requirement
pursuant to the Contract accordingly. Seller shall be liable for all costs and for all otherdirect, consequential, and incidental damages MAHLE incurs as a result of Seller’s noncompliance including: (i) additional transportation costs; (ii) the cost of any production
disruption; and (iii) the cost of obtaining Materials from an alternate source. MAHLE’s rights
pursuant to this Section are at Seller’s sole expense, at MAHLE’s sole discretion and in
addition to and without prejudice to any other right or remedy available to MAHLE.

4.4

Title and Risk of Loss.
4.4.1

Unless otherwise specified, MAHLE shall take title to all Materials upon the earlierof: (i) delivery and acceptance of the Materials at MAHLE’s plant; or (ii) payment by
MAHLE for all or part of the purchase price of identified Materials.

4.4.2

Seller shall comply with MAHLE’s requirements with respect to any Materials towhich MAHLE has title but which are in the custody or control of Seller or Seller’s
suppliers, contractors or agents.

4.5 Country of Origin. Upon MAHLE’s request, Seller shall promptly furnish to MAHLE allcertificates of origin or domestic value-added and all other information relating to the costs
and places of origin of the Materials to comply fully with all customs, tariffs and otherapplicable Laws (as defined in §21). Seller warrants that any such information that it
supplies to MAHLE is true and that all prices pursuant to the Contract are not less than fairvalue pursuant to the Anti-Dumping Laws of the countries where the Seller exports theMaterials.
4.6 Hazardous Materials. Seller agrees to comply with all Laws (as defined in §21) relating
to any hazardous or restricted material that is an ingredient or part of the Materials.
Seller will give MAHLE sufficient warning in writing, including appropriate labels,
containers, packing, handling, disposal and recycling instructions, material safety data
sheets and certificates of analysis for any materials.
5 Price and Payment
5.1 Price. The purchase price for the Materials is stated in the Master Business Award Letter orPurchase Order. Unless otherwise stated in the Contract, the purchase price: (i) is aformula price for the duration of the Contract; (ii) is inclusive of all federal, state, provincial,value added and local taxes and any duties applicable to provision of the Materials; and (iii)
is inclusive of all storage, handling, packaging and all other expenses and charges of
Seller. Unless otherwise agreed by the Parties in writing, Seller recognizes that it
assumes all risks with respect to cost changes and variances in volumes and program
length. The Price, once determined, is not subject to increase for any reason, including, but
not limited to, any increase based upon changes in raw material pricing or labor, unlessagreed to in a Master Business Award Letter or a Purchase Order signed by a MAHLE
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Authorized Representative. MAHLE and Seller may enter into a price agreement in whichcase the price agreement will take precedence over this section.
5.2

Sales Tax. If the Materials may be exempt from sales taxes, the Contract must include all
information necessary for the parties to claim the exemption.

5.3

Payment Notice. Unless otherwise stated in the Contract, payment notices, whether
electronic or paper copy, shall be issued on or after delivery of the Materials to MAHLE andpayment shall be deemed to occur when MAHLE issues payment to Seller. MAHLE shallpay Seller in United States dollars unless otherwise agreed by MAHLE in writing. Seller
shall, at its expense, comply with MAHLE’s instructions and policies with respect to theform, content and method for submission of invoices.

5.4

Payment Terms. MAHLE shall pay invoices for Materials that are not subject to disputeand properly presented in accordance with the requirements of the Contract, including§§4.1 and §5.3. Unless otherwise agreed, Seller shall accept payment by check or othercash equivalent, including electronic funds transfer. If no terms are stated in the Contract,
MAHLE shall pay net ninety (90) days, after the later of (i) the Materials being received andaccepted at MAHLE’s facility; or (ii) MAHLE’s receipt of Seller’s invoice. If the payment
date is not a business day, payment shall be due the next business day. In theevent MAHLE disputes a payment, the applicable payment period shall begin when
the invoice is properly presented or the dispute is resolved. In the event of dispute, theparties will work together to resolve the disputed claim. MAHLE may recover any amountdue by Seller to MAHLE by setoff in accordance with §5.6. Seller shall pay any amounts
owed to MAHLE net thirty (30) days from the date of invoice or demand.

5.5

Best Price. The Seller warrants that the prices for the Materials sold to MAHLE are
no less favorable than those that the Seller currently extends to any other of its
Customers for the same or similar Materials in similar quantities. If the Seller
reduces its prices to third parties during the term of the Master Business Award
Letter or Purchase Order for the same or similar Materials in similar quantities, theSeller will correspondingly reduce the prices charged to MAHLE.

5.6

Set Off. In addition to any right of setoff or recoupment provided to MAHLE by law, MAHLE
shall be entitled at any time to set off or recoup against sums payable by MAHLE to Seller
or any of its affiliates any amounts for which MAHLE determines in good faith the Seller or
any of its affiliates is liable for pursuant to any Contract or other agreements. MAHLE may
do so providing prior notice to the Seller.

5.7

Payment Not Acceptance. MAHLE’s payment for the Materials shall not constituteacceptance of Materials, nor will it limit or affect any of MAHLE’s rights or remedies.

5.8

Credits. All credits or benefits resulting from the Contract, including trade credits, export
credits or the refund of duties, taxes, or fees, belong solely to MAHLE. Seller will promptly
provide all information and certificates, including Certificates of Origin, necessary topermit MAHLE, or its Customers, to receive the full amount of such benefits or credits.
Seller agrees to fulfill all customs or related obligations, origin marking or labelingrequirements, and local content origin requirements.

5.9 Direct Dealing. Seller shall not sell (or otherwise supply) the Materials, goods substantiallysimilar to the Materials or any goods substantially similar to the goods sold by MAHLE to
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any MAHLE Customer and/or competitor unless Seller has obtained MAHLE's express
written approval. This provision does not apply to Materials that are part of Seller’s
standard stock.
6 CompetitivenessSeller agrees to be competitive in price, quality, capacity, delivery and timeliness (collectively
defined as “Competitiveness”). Seller agrees that MAHLE may audit Seller, as described in §12, toverify Seller’s Competitiveness. In the event MAHLE makes a good faith determination that Seller
is not compliant with the Competitiveness requirement, Seller shall provide a remediation plan
acceptable to MAHLE in its reasonable discretion within fifteen (15) business days. If Seller fails toprovide or comply with an acceptable remediation plan, MAHLE may at its option terminate all orpart of the Contract for Cause as defined in §14.2.2.
7 Inspection; Non-Conforming Materials
7.1

MAHLE may inspect and evaluate all Materials, and all services at times and places
designated by MAHLE, upon reasonable notice to the Seller.

7.2

Rejection. Notwithstanding payment or any prior inspection, MAHLE may revoke
acceptance, reject or require correction and/or return to Seller, at Seller’s expense and riskof loss, any Materials that are defective and/or non-conforming. If MAHLE rejects
defective and/or non-conforming Materials, the Contract quantity will be reduced unless
MAHLE otherwise notifies Seller. Seller will not replace reduced quantities without a newPurchase Order or Material Release from MAHLE directing it to do so.

7.3

Corrective Action. Promptly upon learning of defective and/or non-conforming Materials,
Seller will develop, document, and implement corrective actions designed to ensure thatall Materials are produced in accordance with all applicable quality control policies andstandards of MAHLE and its Customers and subject to MAHLE’s approval. Seller shallprovide the corrective action plan to MAHLE and promptly notify MAHLE of test results,
plan progress and any other material events pertinent to the corrective action plan. If
MAHLE determines that Seller is unable to satisfy its responsibilities with respect to acorrective action plan, then MAHLE (or its designee) may perform all or part of these
responsibilities at Seller’s expense and without tests or contract with a third party toperform the tests. The costs of these tests shall be borne by the Seller and shall notrelieve Seller of any obligation pursuant to the Contract. Seller will also immediately notify
MAHLE in writing when it becomes aware of any ingredient, component, design or defectin the Materials that is or may become harmful to persons or property. Payment for
defective and/or non-conforming Materials is not an acceptance, does not limit or impair
MAHLE’s right to assert any legal or equitable remedy, and does not relieve Seller’s
responsibility for latent defects.

7.4

Return and Replacement. If MAHLE rejects the Materials, subject to corrective action orotherwise defective and/or non-conforming, Seller shall, without prejudice to any other rightor remedy of MAHLE, at MAHLE’s sole and absolute discretion:
7.4.1 Accept the return, at Seller’s sole expense, of the Materials and refund MAHLE thefull invoice price, plus all transportation charges and other charges associated withdefective and/or non-conforming Materials;

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7.4.2 Replace the defective and/or non-conforming Materials with conforming Materials,
with all associated costs and expenses, other than the original invoice and shipping
prices, being borne by Seller;
7.4.3 At Seller’s sole expense, correct at any time prior to shipment from MAHLE’s plant
Materials that fail to meet the requirements of the Contract; and/or
7.4.4 Reimburse MAHLE for all reasonable expenses that result from any rejection or
correction of defective Materials.
7.5

Customer Warranty and Liability Claims. Seller understands that MAHLE may be subject
to: (i) warranty, liability and other claims from its Customer; (ii) participation in Customer
quality and warranty programs, including cost-sharing programs and related obligations(collectively “Customer Warranty Programs”). This Section addresses procedures andobligations that apply when the Customer Warranty Programs are related in whole or inpart to the Materials. This Section supplements, not supersedes, Seller’s obligations
pursuant to other Terms and does not limit MAHLE’s rights pursuant to those other Terms.
7.5.1

If the Materials contain defects that result in warranty and/or liability claims, theSeller shall carry out tests to establish the cause of these defects and shalldocument them in a suitable form. MAHLE shall agree to the test extent anddepth taking into account its Customer's demands. The Seller shall immediately
notify MAHLE about the test results. MAHLE and Seller shall agree to acorrective plan and implementation dates.
a.

The Seller shall carry out regular reviews/audits regarding theeffectiveness of the corrective action and shall inform MAHLE
accordingly.

b.

If the Seller is unable to carry out its own tests, MAHLE, at Seller’s
expense, shall perform these tests or arrange for contract with a third
party to perform the tests.

7.5.2

If MAHLE incurs liability pursuant to a Customer Warranty Program related inwhole or in part to the Materials, the Customer’s determination of liability shall beconclusive with respect to Seller’s liability to MAHLE. If the liability relates in partto the Materials and in part to other causes, the MAHLE liability to the Customer
shall be equitably allocated. For purposes of §7.5, “liability” shall include, in
addition to a payment to Customer, the replacement of parts, participation inother remediation activities, and all other costs related to such liability.

7.5.3

MAHLE and the Seller, or the appropriate representative, shall settle, invoice andremunerate the warranty and/or liability claims. MAHLE may debit Seller’s
account with the invoiced amount. In the event that a debit is not possible, thepayment terms for warranty claims are as follows: (a) net thirty (30) days onclaims with no parts to return; and (b) net forty-five (45) days from part ship dateon claims requiring inspection.

7.5.4

The warranty term for Materials installed in automobiles, trucks, and commercial
vehicles shall be the greater of: (i) five (5) years for cars, three (3) years fortrucks, and three (3) years for commercial vehicles; (ii) the warranty period

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provided by applicable law, (iii) as stated in the Master Business Award Letter
between MAHLE and Seller; or (iv) the warranty period offered by MAHLE or its
Customer to end-users for the products MAHLE incorporates into the Materials. It
is the Seller’s responsibility to understand the Customer(s)’ policies andprocedures for which MAHLE uses the Materials and the warranty term of those
Customers. The warranty term shall commence at the date of initial start-up of
the vehicle by the end user.
7.6

Warranty for Zero Mileage Defects. This Section describes certain procedures andobligations that will typically apply to zero mileage defects, as defined below. This Section
supplements, not supersedes, Seller’s obligations pursuant to other provisions of theseTerms and does not limit MAHLE’s right to modify the procedures or apply different
procedures in a particular circumstance
7.6.1

7.6.2

7.7

Zero mileage defects are defects that become known:a.

with respect to incoming Materials;b.

during further processing of semi-finished products;c.

on the assembly line or during function tests after assembly at MAHLE;d.

on the assembly line or during function tests after assembly at MAHLE’s
Customer; ande.

up until the delivery of the vehicle in question by MAHLE’s Customer tothe end user.

MAHLE shall prepare a list of costs incurred to manage these defects. MAHLE
shall return the defective Materials to the Seller and shall debit the costs incurred
to manage these defects. These costs shall also include the flat-rate charges
invoiced by MAHLE’s Customer for removal and installation, as well as any otherincidental costs (for example transportation, customs, duties, handling charges,
packing costs, etc.). If MAHLE and its Customer approve the Seller’s remedy forthe defect through replacement, the Seller will adhere to MAHLE and/or MAHLE’s
Customer's time requirements for completion set by MAHLE or MAHLE’s
Customer. The Seller shall pay any additional costs incurred by MAHLE or
MAHLE’s Customer due to the delay in replacement, including ‘line down’ charges.

MAHLE Losses. The Seller is liable for all direct, incidental and consequential damages,
losses, costs, and expenses incurred by MAHLE at any time resulting from Seller’s failure
to deliver conforming and non-defective Materials or to comply with the shipping anddelivery or other requirements of MAHLE, even if the Seller has cured the failure. This
includes but is not limited to compensating MAHLE for:7.7.1

any amounts charged by Customer(s) to MAHLE including flat-rate charges;

7.7.2

all costs of containment, sorting, repair, replacement, cure, cover, or any othercosts incurred by MAHLE, determined in such manner and in such amount asreasonably determined by MAHLE; andP-GN-0003 Ver 3.0
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7.7.3all costs of any recall campaign, corrective service action, or other voluntary or
involuntary action in which MAHLE or its Customer participates in connection withinclusion of Materials sold by Seller.

8 Standards and Policies
8.1

Seller will conform to all quality control and other standards and inspection systems asestablished or directed by MAHLE and its Customer for goods and services similar to theMaterials. These include without limitation quality control policies, ISO 9001:2000 or
ISO/TS 16949:2002 quality certification, OHSAS 18001 health and safety certification,and ISO 14001 environmental certification including registration. All Materials shall comply
with the government regulations in respect of safety relating to restricted, toxic, radioactive
and hazardous materials, as well as of environmental, electrical and electromagnetic
considerations applicable in the country of manufacture and sale. All Materials and scrap
material provided by Seller shall be free from radioactivity. Seller will also participate in
MAHLE's supplier quality and development programs as directed by MAHLE. For
Materials used in motor vehicle manufacturing, Seller agrees to meet the full requirements
of industry Production Part Approval Processes (“PPAP”) as specified by MAHLE and its
Customer(s) and agrees to present this information to MAHLE upon request, at the level
requested. If there is conflict between any provision of the above programs or standards
and an express provision of these Terms, these Terms will control.

8.2

MAHLE requires that Seller use products from socially responsible sources, originatingfrom non-conflict regions or from certified non-conflict sources. Seller represents andwarrants that the Materials supplied or to be supplied to MAHLE under the Contract do not
and will not contain throughout the duration of the Contract, any sources not certified as“non-conflict sources.” Seller undertakes to know and to require MAHLE suppliers todisclose to the Seller, the sources of products used in its Materials and to eliminate
procurement, as soon as commercially practicable, of any products not procured fromcertified “non-conflict sources.” Seller and Seller’s suppliers are expected to assist MAHLE
in complying with the disclosure requirements of applicable laws.

8.3

To the extent MAHLE or its Customer establish or direct any modifications, supplements or
replacements for any of the standards, policies or systems stated above, Seller's
obligations pursuant to this Contract shall automatically be amended and Seller will comply
with such changes.

9 Changes
9.1

MAHLE Changes. MAHLE reserves the right at any time, by written notice, to change theContract, or the Materials, including the specifications, composition, sub-suppliers,
samples, description of Materials, engineering level, materials, packaging, testing
requirements, shipping date, or time or place of delivery. Subject to §9.2, Seller will makeany such change within the time specified by MAHLE or, if not specified, promptly.

9.2

Price and Costs. Seller may request a price adjustment, limited to the actual andreasonable costs incurred or to be incurred as a result of the change. Seller shall use its
best efforts to minimize such costs. Seller shall submit any request for price modification inwriting within ten (10) days of the change notification (or earlier, if reasonably requested by
MAHLE) and shall support the request with all pertinent documentation and analyses.
MAHLE shall have the right to verify any request. Seller shall promptly provide all

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documents and information necessary or requested to verify the request. If MAHLE andSeller are unable to agree on a price adjustment, then MAHLE shall determine the priceadjustment, if any, in its reasonable discretion. Unless directed otherwise by MAHLE inwriting, if Seller requests a price modification, it shall not implement the change until therequest is resolved in accordance with this Section. If Seller does not provide timely notice
to MAHLE that a requested change may result in a difference in price or time for
performance, MAHLE’s requested change shall not affect the price or time for performance.
9.3

Seller Changes. Seller will not make any change to the specifications except at MAHLE’s
written instruction or with MAHLE’s written approval. Seller shall use its best efforts to
identify possible changes to the Materials that may reduce costs, improve quality, orotherwise be beneficial to MAHLE and shall inform MAHLE of the possible changes which
may affect the specification, with sufficient detail for MAHLE to assess the advisability of thechange.

10 Warranties
10.1 Seller warrants to MAHLE its Customer(s) and their respective successors and assigns that
the Materials will (i) be free from defect, meet industry standards, and conform to thespecifications as agreed to by the parties; (ii) be fit and sufficient for the purpose for which
MAHLE intends to use the Materials as expressly identified by MAHLE; (iii) be properly stored
and packaged prior to and upon delivery to MAHLE to prevent deterioration and corrosion;and (iv) have its title vested in the MAHLE free and clear of any and all liens andencumbrances of any nature and free from any actual or claimed issues regardless ofownership. All Materials must additionally conform to any inspection result or certificate of
testing/analysis, including, but not limited to, Mill Sheets, as provided by Seller.
10.2 Service Warranties. To the extent Seller provides services related to the Materials, Seller
warrants that it will perform all services in a professional and workmanlike manner, consistent
with all standards and specifications agreed to with MAHLE and otherwise consistent withindustry standards.
10.3 Defective Materials or Materials that do not meet the agreed upon specifications, or the
specifications of any supplied inspection results, must be replaced with new Materials at
Seller’s expense in an immediate manner.
11 Indemnification
11.1 Seller agrees to indemnify, defend and hold harmless MAHLE, its affiliates, Customers,
dealers and users of the Materials, or the products in which the Materials are incorporated,
and all of their respective agents, successors and assigns, and each of their shareholders,
directors, officers, employers and agents, on demand, (collectively “Indemnified Parties”)
from and against any and all costs, fees, penalties, damages, consequential and otherwise,
including settlement costs and expenses, attorneys' fees and all other liabilities andobligations whatsoever ("Losses"), arising out of any third party claim or action which, in
whole or in part, arises from or relates to any actual or alleged:
11.1.1

Defect or non-conformity in the Materials;

11.1.2

Noncompliance by Seller with any of its representations, warranties or obligations
pursuant to the Contract;

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11.1.3

Negligence or fault of the Seller in connection with the Materials;

11.1.4

Any repair or recall campaign, corrective service action, or other voluntary or
involuntary action in which MAHLE or any Customer participates with respect tothe Materials or products into which the Materials are incorporated, including
labor and administrative costs;

11.1.5

Any spill, discharge or emission of hazardous wastes or substances which
relates, in whole or in part, to the Materials;

11.1.6

Infringement, including claims of direct or contributory infringement or
inducement to infringe, of any Intellectual Property Right (as defined in §15.1)
relating to Materials provided by Seller, even if they are made to MAHLE’s
specifications;11.1.7

Damage to the property of or personal injury to MAHLE, its Customer, theirrespective agents, or any other person or entity to the extent arising from or inconnection with Seller's work on the premises or Seller's use of MAHLE's orCustomer's property; and11.1.8

Challenge to MAHLE's sole right, title and interest in the tooling, or right topossession of the tooling, brought by any third party, including toolmakers,
subcontractors, and lending institutions.

11.2 In the event Seller must indemnify the Indemnified Parties pursuant to this Section, then
MAHLE may participate, at its option, in the defense of any claim with its own counsel, atSeller's expense.
11.3 To the maximum extent permitted by applicable law, Seller's obligation pursuant to thisSection will apply even as to Losses caused in whole or in part by an Indemnified Party’s
negligence, but Seller's indemnification shall not apply to the extent that Losses resulted
solely and directly from the negligence or willful misconduct of such Indemnified Party.
Seller's obligation to defend and indemnify pursuant to this Section will also apply
regardless of whether the claim arises in tort, negligence, contract, warranty, strict liability
or otherwise. The indemnification obligation pursuant to this Section shall not be limited inany way by any limitation on the amount or type of damages, compensation or benefits
payable by or for the benefit of Seller under Workers' Compensation Acts, Occupational
Disease Acts, Disability Benefits Acts or other employee benefits acts.
12 Inspection and Audit
12.1 Inspection of Facility. MAHLE may enter Seller's facility at any time to inspect the facility,
Materials, and any of MAHLE’s property related to the Contract. Seller shall provide,
without additional charge, access to all facilities and other assistance. MAHLE’s inspection
does not constitute acceptance of any work-in-process or finished goods and does notrelieve Seller of any of its responsibilities or warranties.
12.2 Audit. Upon reasonable notice to Seller, either MAHLE, its Customers, or a third party
designee, may audit Seller’s production facility, Materials and any other MAHLE property,
including all pertinent documents, data, data storage and protection, and other information,
related to the Contract at facility for the purpose of verifying Seller’s costs and its
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compliance with its obligations pursuant to the Contract. Seller shall provide, without
additional charge, all reasonable facilities and assistance during normal business hours.
12.3 Financial Review. Upon reasonable notice to Seller, and in MAHLE’s sole discretion,
MAHLE or a third party designated by MAHLE may review the financial condition of Seller
and its affiliates. Seller will fully cooperate in such review and will promptly provide copies
of or access to requested documents, including without limitation financial records andstatements, forecasts, business plans, banking contracts and loan documents. Seller will
arrange meetings at MAHLE’s request, during normal business hours, with a MAHLE
representative and Seller’s financial representatives who have knowledge about the audit
information. MAHLE and any designated third party will keep confidential any nonpublic
information about Seller obtained in a financial review and use such information only for
purposes of the review, except as needed to enforce the Contract.
13 Customer Requirements
13.1

As directed by MAHLE in writing, Seller agrees to comply with the applicable terms of
any agreements between MAHLE and its Customer(s) (“Customer Terms”). If there is any
conflict between the provisions of the Customer Terms and any provisions of the Contract,
MAHLE shall have the right to have the provisions of the Customer Terms prevail to theextent necessary or desirable to resolve such conflict. Seller represents that it is familiar
with all applicable Customer Terms.

13.2

In the event that MAHLE's Customer files or a third party files against MAHLE’s Customer apetition in bankruptcy or insolvency and, in the course of such proceeding, MAHLE permits
a reduction in the price(s) paid to MAHLE for products incorporating the Materials,
MAHLE may proportionally adjust the price paid to Seller for the Materials from andafter the date of such reduction by the same percentage as the price paid to MAHLE by
its Customer, and the Contract will otherwise remain in effect without modification.

14 Duration and Termination of the Contract
14.1

Duration. The Contract is for a definite term. The Contract shall be effective upon theearliest date stated in the Contract, and unless terminated earlier as provided in theContract:
14.1.1The Contract shall expire on the date specified in the Contract. However, theContract is extended as prescribed in §14.1.2 if the expiration date is prior to theend of the life of the program for the applicable vehicle production program.

14.1.2

Seller agrees to supply the Materials for the life of the program. The program life
includes any extensions to the program implemented by MAHLE’s Customer. If
the Customer extends the life of the program for which the Seller provides
MAHLE Materials, then MAHLE and Seller agree that the Contract will extend forthat time period.

14.1.3

The Contract will automatically renew for successive one-year periods after theend of the program life, including any extensions to the program for theapplicable vehicle production program, unless Seller provides written notice ofits decision not to renew the Contract at least one-hundred eighty (180) days
prior to the end of the program life, including any extensions to the program for

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the applicable vehicle production program.
14.1.414.2

For purpose of this Contract “termination” includes cancellation or any other act
or circumstance that ends the Contract, except for expiration.

Termination by MAHLE. In addition to any other rights of MAHLE to terminate the Contract,
MAHLE may terminate the Contract in whole or in part by written notice (a “Termination
Notice”), as follows:
14.2.1For convenience, effective three (3) days following delivery of the Termination
Notice or upon such other date specified by MAHLE in writing.

14.2.2For Cause, as defined in this Section, and any provision of the Contract providing
for termination for Cause, effective upon delivery of the Termination Notice orupon such other date specified by MAHLE in writing. MAHLE shall have Causeto terminate the Contract without liability to Seller, if Seller (i) breaches any
representation, warranty or other terms of the Contract; (ii) repudiates, breaches
or threatens to breach any of the terms of the Contract; (iii) fails to deliver, or
threatens not to deliver, Materials in connection with the Contract; or (iv) fails to
make progress or to meet reasonable quality requirements so as to endanger
timely and proper performance of the Contract.

14.2.3

If for any reason a termination for Cause is found to be wrongful, then MAHLE
and Seller agree that the termination shall be a termination for convenience.

14.2.4

Change of Control. MAHLE may terminate this Contract, in whole or in part, inthe event of a Change of Control of Seller. For the purposes of this Contract, a"Change of Control" includes: (i) any sale, lease or exchange of a substantial
portion of Seller's assets used in connection with Seller's performance of its
obligations pursuant to the Contract; (ii) any sale or exchange of a sufficientnumber of shares of Seller, or of any affiliate that controls Seller, to effect achange in management of Seller; or (iii) the execution of a voting or otheragreement of control in respect of Seller, or of any affiliate that controls Seller.
Seller shall notify MAHLE in writing within ten (10) days of any Change of Control
of Seller, and MAHLE may terminate the Contract for Cause in accordance with
§14.2.2 by giving written notice to Seller at any time up to sixty (60) days after
MAHLE's receipt of Seller's notice of Change of Control. In the event that MAHLE
elects not to terminate this Contract due to a Change in Control of Seller, theobligations and liabilities set forth in this Contract previously borne by Seller shallbecome the obligations and liabilities of any successor in interest.

14.2.5Insolvency of Seller. Seller shall provide MAHLE with prompt notice of any
potential bankruptcy proceedings of Seller and/or Seller’s affiliate companies or if
its financial condition creates a material risk regarding Seller’s ability to perform
its obligations pursuant to the Contract. The Contract may be terminatedimmediately by MAHLE without liability to Seller if any of the following orcomparable events occur, and Seller will reimburse MAHLE for all costs incurredby MAHLE in connection with any of the following, including without limitation,
attorneys’ and other professional fees: (a) Seller becomes insolvent; (b) Seller
files a voluntary petition in bankruptcy or insolvency; (c) proceedings inbankruptcy or insolvency are instituted against Seller; (d) a receiver or trustee is

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appointed for Seller; (e) Seller needs accommodations from MAHLE, financial orotherwise, to meet its obligations pursuant to the Contract; (f) Seller executes anassignment for the benefit of creditors; or (g) at any time in MAHLE’s sole
judgment Seller's financial or other condition or progress on the Contract
endangers timely performance. MAHLE, or a third party designated by MAHLE,
may at any time review the financial health of the Seller and its affiliates and to
determine if Seller is paying its lower tier suppliers. Seller will fully cooperate withsuch review and will promptly provide copies of or access to the requested
documents including, without limitation, financial records, forecasts, businessplans, banking contacts and loan documents. MAHLE will use the financial
information provided pursuant to this Section only to determine Seller’s ability toperform pursuant to the Contract.
14.2.6

Termination by MAHLE shall not relieve Seller of any liability pursuant to theContract.

14.2.7In the event that MAHLE elects not to terminate the Contract in connection withan event that would constitute Cause for termination, MAHLE may make such
equitable adjustments in the price, payment terms, sole supply relationship anddelivery requirements under the Contract as MAHLE deems appropriate toaddress changes in Seller’s circumstances, including Seller’s continuing ability toperform its obligations regarding warranty, defective and/or non-conforming
Materials or other requirements under the Contract, provided that MAHLE must
provide Seller with notice and details regarding the adjustments.

14.3

Termination by Seller. Seller may only terminate the Contract for MAHLE’s material breachof the Contract and then only if: (i) Seller first provides MAHLE written notice specifying thematerial breach and Seller’s intent to terminate the Contract if the material breach is not
cured; and (ii) MAHLE, within thirty (30) days of such notice, does not either: (x) cure thebreach; or (y) notify Seller that MAHLE is disputing the reasons for the material breach.
Seller shall terminate pursuant to this Section by delivering a Termination Notice to
MAHLE. Seller may not terminate the Contract for any reason except as permitted
pursuant to this Section. Seller may not suspend performance of the Contract for any
reason.

14.4

Seller’s Obligations Following Termination.
Following delivery of a Termination Notice, Seller shall, unless otherwise directed by
MAHLE and subject to its obligation to provide Transition Support (as defined in §14.8):
14.4.1terminate promptly all work pursuant to the Contract and transfer title and deliverto MAHLE all finished work completed prior to receipt of the Termination Notice;

14.4.2transfer title and deliver to MAHLE all conforming work in process, parts andMaterials that Seller produced or acquired in accordance with the Contract andthat Seller cannot use in producing goods for itself or for others, provided that
MAHLE shall have the right, but not the obligation, to purchase work in process,parts and materials in excess of the amounts authorized pursuant to §3.3; andP-GN-0003 Ver 3.0
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14.5

14.4.3take actions reasonably necessary to protect property in Seller's possession inwhich MAHLE has an interest until Seller receives disposal instructions from
MAHLE.

14.4.4be liable for all costs related to the delivery or replacement, unless statedotherwise in these Terms, of the Materials, including any testing or validation
costs necessitated by the Termination of the Contract.

MAHLE’s Obligations Following Termination. Subject to §14.7.2, MAHLE shall pay toSeller in connection with termination only the following amounts, without duplication, incomplete and final satisfaction of any liabilities relating to this Contract:
14.5.1the purchase price for all conforming Materials received by MAHLE prior to
Termination Notice or delivered following Termination Notice pursuant to §14.4,§14.8 or at the written direction of MAHLE;

14.5.2any amounts owed for Transition Support pursuant to §14.8.3.

14.5.3in the event MAHLE terminated the Contract for reasons other than Cause,
Seller's reasonable actual cost of: (i) merchantable and useable work-in-process
and the parts and materials transferred to MAHLE pursuant to §14.4, but not toexceed the purchase price of the Materials had Seller completed the Materials,
and not to exceed the amounts necessary to satisfy Seller’s obligations
pursuant to any Material Release, as defined in §3.1, subject to any lead times
agreed upon in writing by MAHLE and Seller; (ii) carrying out Seller’s obligation
pursuant to §14.4.3; and (iii) any other costs or allowances that MAHLE, in its
sole discretion, may elect to pay.

14.6

MAHLE’s Obligations Following Expiration. If the Contract expires, MAHLE shall pay toSeller, in complete and final satisfaction of any liabilities relating to the Contract, only thepurchase price for all conforming Materials received by MAHLE prior to expiration and, if
applicable, any amounts owed for Transition Support pursuant to §14.8.3.

14.7

Limitations on MAHLE’s Obligations Following Termination or Expiration.
14.7.1

MAHLE’s obligations pursuant to §14.5 are conditioned upon Seller furnishing to
MAHLE, within thirty (30) days after the date of termination (or such shorter
period as may be required by MAHLE’s Customer), a termination claim, which
will consist exclusively of the items of MAHLE's obligation to Seller that are
expressly permitted by this Section. MAHLE may audit Seller's records before
or after payment to verify amounts requested in Seller's termination claim. If theparties fail to agree upon the amount due Seller for its termination claim, MAHLE
shall determine the amount in its sole discretion.

14.7.2

MAHLE has no obligation to pay for Materials: (i) in excess of those for which
MAHLE was obligated to pay pursuant to §3.3; (ii) that are damaged or
destroyed or that are not merchantable or useable; (iii) that are in Seller’s
standard stock or that are readily marketable; or (iv) that can be returned toSeller’s suppliers or subcontractors for credit.

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14.8

14.7.3In the event of a termination of the Contract by MAHLE as a result of MAHLE
ceasing to be a supplier to the Customer for the product in respect of which
MAHLE issued the Contract, MAHLE shall only be obligated to compensate
Seller for any costs pursuant to §14.5.3 to the extent that the Customer
reimburses MAHLE for such costs.

14.7.4

MAHLE will have no obligation for and will not be required to pay Seller, directlyor on account of claims by Seller's subcontractors, for loss of anticipated profit,
failure to realize anticipated production volumes, revenues or savings,
unabsorbed overhead, interest on claims, product development and engineeringcosts, tooling, facilities and equipment rearrangement costs or rental,
unamortized capital or depreciation costs, or general administrative burden
charges resulting from or related to the termination or expiration of the Contract,
except as otherwise expressly agreed in a separate Contract issued by MAHLE.

Transition of Materials Following Termination or Expiration. Following expiration or
termination of the Contract by either party for any reason (including termination by Seller)
and notwithstanding any claimed or actual breach of any obligation by MAHLE, Seller will
cooperate in the transition of supply to a successor supplier, including the following, which
will collectively be referred to as "Transition Support":
14.8.1

Seller will continue procurement and delivery of all Materials at the prices andother terms stated in the Contract, without premium or other condition, during
the entire period reasonably needed by MAHLE to complete the transition to
the alternate supplier(s), such that Seller's action or inaction causes nointerruption in MAHLE's ability to obtain Materials as needed;

14.8.2at no cost to MAHLE, Seller will promptly provide all requested information,
documentation and access to Seller's manufacturing process, including onsite inspections, bill-of-material data, tooling and process detail and samplesof Materials and components; and14.8.3subject to Seller's actual capacity constraints, Seller will provide special
overtime production, storage and/or management of extra inventory ofMaterials, extraordinary packaging and transportation and other special
services approved by MAHLE in writing.

14.8.4

If the Transition Support occurs for reasons other than MAHLE's
termination for Cause, MAHLE will, at the end of Transition Support, pay thereasonable, actual cost of the Transition Support pursuant to this Section,
provided that Seller has advised MAHLE prior to incurring such amounts of its
estimate of such costs. If the parties disagree on the cost of Transition
Support, MAHLE will pay the agreed portion to Seller without prejudice toSeller’s right to seek to recover any disputed amounts.

15 Intellectual Property
15.1

Seller warrants that the Materials and the sale and/or use thereof (before or afterincorporation into products during manufacture) do not and will not infringe any
Intellectual Property Rights. “Intellectual Property Right” means any right arising

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pursuant to United States or foreign law relating to patent, trademark, copyright, moral,industrial design right or misuse or misappropriation of trade secrets.
15.2

If Seller, or any person employed by or working pursuant to the direction of Seller, inthe performance of the Contract conceives or first reduces to practice: (i) any invention
or any experimental, development or research activities, including engineering related
thereto, whether or not patentable; (ii) any reduction to practice of any subject matter,
application or discovery which could be patented or copyrighted; or (iii) any improvementin the design of the Materials or any alternative or improved method of accomplishing theobjectives of this Contract (collectively, “Inventions”), MAHLE shall own such Inventions
and the Inventions are MAHLE’s confidential and proprietary property, whether or not
such Inventions or any portions thereof can be copyrighted or patented or not. Seller
shall immediately disclose all Inventions to MAHLE and shall cooperate, and cause its
employees to cooperate, in executing any documents and taking any other actions
necessary to patent, copyright, assign to MAHLE or otherwise perfect or protect such
Inventions for the benefit of MAHLE.

15.3

Seller shall not manufacture or provide, or offer to manufacture or provide, any goods orservices that are based in whole or in part upon Inventions, confidential or Proprietary
Information (as defined in §16.1) of MAHLE or Intellectual Property Rights of MAHLE,
whether for its own purposes, except to satisfy its obligations pursuant to the Contract, for
the Customer or any other third parties, without MAHLE’s prior written consent.

15.4

Seller hereby grants to MAHLE, its subsidiaries and affiliates, and their respective
successors and assigns, and MAHLE hereby accepts, a non-exclusive, irrevocable,royalty-free, fully paid up worldwide license, including the right to sublicense to others inconnection with providing the Materials to MAHLE or the Customer, pursuant to: (i) any
Intellectual Property Rights owned or controlled by Seller or its affiliates, and relating to
the Materials, to make, have made, repair, reconstruct, rebuild, relocate, use, sell andimport the Materials, and (ii) any works of authorship fixed in any tangible medium of
expression, including drawings, prints, manuals and specifications, furnished by Seller inthe course of Seller’s activity pursuant to the Contract, to reproduce, distribute anddisplay such works and to prepare derivative works based thereon, subject to the otherprovisions of the Contract (all items in clauses (i) and (ii) above, collectively, “Seller’sIntellectual Property”, and such License in respect thereof, the “License”). Selleracknowledges and understands that the License shall be effective from the first date ofdelivery of the Materials pursuant to the Contract and extend for so long as MAHLE has
contractual obligations to the Customer. The License is intended to be subject to 11
U.S.C. §365(n), as an executory agreement pursuant to which MAHLE has license rights
to Seller’s Intellectual Property, and is supplementary to any other rights of MAHLE
pursuant to the Contract and any other agreement with Seller.

15.5

Seller will ensure that the terms of its contracts with its subcontractors and employees
are consistent with the terms of this Section.

16 Proprietary Information
16.1“Proprietary Information” means all information: (i) provided to Seller by MAHLE or its
representatives or subcontractors in connection with the Contract (including but notlimited to the terms of the Contract), the business, programs, specifications, data,
formulas, compositions, designs, sketches, photographs, samples, prototypes, test

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vehicles, manufacturing, packaging or shipping methods and processes and computer
software and programs (including object code and source code); (ii) related in any way tothe installation, operation or maintenance of MAHLE’s property, including specifications,drawings, processes and operating instructions. Proprietary Information also includes any
materials or information that contain, or are based on, any of MAHLE’s information,
whether prepared by MAHLE, Seller or any other person; or (ii) any and all services to berendered and/or work to be performed pursuant to the Contract. Seller shall not, withoutauthorization in writing from MAHLE, use (except as necessary to the performance of theContract), communicate or disclose the confidential and Proprietary Information of
MAHLE or use such information for any purpose other than to perform its obligations
pursuant to the Contract. Seller agrees to safeguard the confidential and Proprietary
Information of MAHLE by using reasonable efforts, consistent with those used in theprotection of its own Proprietary Information of a similar nature, to prevent its disclosure tothird parties. Seller agrees to cause its employees, contractors, officers, directors, agentsand representatives to be bound by and comply with the foregoing restrictions regarding
the use or disclosure of such confidential and Proprietary Information. Seller further
agrees not to assert any claims with respect to any technical information that Seller shallhave disclosed or may hereafter disclose to MAHLE in connection with the Materials.
16.2

The restrictions and obligations of §16.1 will not apply to information that: (a) is alreadypublicly known at the time of its disclosure by MAHLE; (b) after disclosure by MAHLE
becomes publicly known through no fault of Seller; or (c) Seller can establish by
written documentation was properly in its possession prior to disclosure by MAHLE or
was independently developed by Seller without use of or reference to MAHLE’s
information.
Notwithstanding anything to the contrary in these Terms, any
confidentiality or non-disclosure agreement between the parties that predates theContract will remain in effect except as expressly modified by the Contract, and to theextent of a conflict between the express terms of such an agreement and §16.2, the termsof that agreement will control.

16.3

All documents containing Proprietary Information relating to the Materials produced or
acquired by Seller pursuant to the Contract will belong to MAHLE. All drawings, knowhow, and confidential information supplied to Seller by MAHLE and all rights therein willremain the property of MAHLE and will be kept confidential by Seller in accordance with
§16.1 above.

16.4

Seller shall, within five (5) business days of MAHLE’s request or the expiration or
termination of the Contract, return all confidential and Proprietary Information (including
all copies, notes and/or extracts thereof).

17 Insurance; Waiver of Liens
17.1

Seller agrees to furnish to MAHLE promptly upon request a certificate from its insurance
brokers or agent showing that it, or its subcontractors, carries adequate workers'
compensation, and comprehensive general liability insurance coverage, including
contractual liability insurance applicable to the Contract, product liability, automobile,
public liability, and property damage insurance in amounts and coverage sufficient tocover all claims hereunder. The certificate must show the amount of coverage, policy
number, and date of expiration and must require the broker or agent to give MAHLE thirty(30) days prior written notice of any lapse or cancellation of any policy. MAHLE shall also
be shown as an additional insured and/or loss payee(s) on all such insurance policies,

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including the comprehensive general liability policy, and contain endorsements statingthat the policies are primary and not excess over or contributory with any other valid,applicable, and collectible insurance in force for MAHLE. MAHLE may require Seller tofurnish evidence of any insurance policy, but failure to comply with these requirements
will not relieve Seller of its liability and obligation pursuant to §17.1.
17.2

If Seller is self-insured for workers compensation coverage, it will, if requested by
MAHLE, provide the applicable state certificate establishing such status to MAHLE.
Seller hereby waives all mechanics' liens and claims and agrees that none shall be filed
or maintained against MAHLE’s premises on account of any Materials and shall cause allits subcontractors, materialmen and suppliers (and subcontractors of such parties) toprovide similar waivers and agreements in a form satisfactory to MAHLE.

18 Excusable Delay
18.1

Any delay or failure of either party to perform its obligations will be excused if and to theextent that the party is unable to perform due to an event or occurrence beyond its
reasonable control and without its fault or negligence, such as: acts of God;
restrictions, prohibitions, priorities or allocations imposed or actions taken by agovernmental authority, court injunction or order, or other government causes;
embargoes; fires; floods; earthquakes; explosions; tornados, twisters, windstorms,
extreme natural events, unusual or severe weather or other natural disasters; riots or civil
disorder; wars; acts of terrorism; sabotage; or epidemics (collectively “Excusable Delay”).
However, in no event will the Seller’s performance be excused by: (i) the change in costor availability of materials, components or services based on market conditions, Seller’s
failure or inability to perform (unless the failure or inability is caused by an event or
occurrence that would itself be an Excusable Delay); (ii) contract disputes; (iii) Seller’s
financial distress; (iv) Seller’s bankruptcy or insolvency of one or more of Seller’s
suppliers (v) any labor strike or other labor disruption applicable to Seller or to any of its
subcontractors or suppliers; or (vi) Seller’s failure to comply with applicable law or to takeactions reasonably necessary to schedule performance in anticipation of any customs,
export-import and/or Government requirement for which there is public notice.

18.2

Seller shall immediately give written notice to MAHLE of any event or occurrence thatthreatens to delay or actually delays Seller’s performance pursuant to the Contract. Suchnotice shall include all relevant information with respect to such threat, including thepossible duration and impact of a delay.

18.3

Seller, at its expense, shall use its best efforts to mitigate any adverse effects or costs to
MAHLE due to any actual or potential delay, including: (i) the implementation of a
production contingency plan; (ii) upon MAHLE’s express written authorization, increasing
Seller’s inventory of Materials to a level sufficient to sustain deliveries during such delay;and (iii) modifying the Materials, suppliers, production processes or other resources toallow the continuation or resumption of production.

18.4

During any Excusable Delay or failure to perform by Seller, MAHLE may at its option andat Seller’s expense: (i) purchase Materials from other sources and reduce its schedules toSeller by such quantities, without liability to Seller; (ii) require Seller to deliver to MAHLE at
MAHLE’s expense all finished goods, work in process and parts and materials producedor acquired for the Materials pursuant to the Contract; (iii) have Seller provide Materials
from other sources in quantities and at a time requested by MAHLE and at the price set

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forth in the Contract; and/or (iv) if requested by MAHLE in writing, Seller will, within five(5) days of MAHLE’s request, provide adequate assurances that the delay in Seller’s
performance resulting from any Excusable Delay will not exceed 30 days. If Seller fails toprovide MAHLE with adequate assurance within five (5) days of MAHLE’s request or the
Excusable Delay results in a failure or delay to perform that has lasted for more than thirty(30) days, MAHLE may terminate the Contract, in whole or in part, for Cause, in
accordance with §14.2.2.
18.5

Seller shall timely notify MAHLE of any actual or potential labor dispute or other labor
disruption as soon as Seller becomes aware of the same. Seller shall provide MAHLE
with six (6) months’ notice prior to the expiration of any current labor contract, applicable
to Seller or to any of its subcontractors or suppliers. Seller at its expense will take allnecessary actions to ensure a forty (40) working day supply of Materials in a neutral
warehouse site to be located in the United States at least fifty (50) miles from Seller’s
manufacturing locations during any anticipated labor disruption or prior to the expirationof any labor contract. Seller shall have this supply of Materials warehoused at least ten(10) working days prior to the expiration of any such contract or anticipated dispute.

19 MAHLE 's Liability
19.1

MAHLE’s sole liability pursuant to the Contract (including its termination or expiration) is
to pay for the Materials in accordance with §5.4 and to pay the specific termination related
amounts described in §§14.5 and 14.8.

19.2

In no event shall MAHLE be liable to Seller for any damages of any kind, including but notlimited to, for anticipated profits, whether direct or indirect, interest, penalties or incidental,
compensatory, consequential, punitive, multiple, or exemplary damages or liabilities inconnection with the Contract, whether for breach of contract, tort liability, late payment,
property damage, personal injury, illness, or death or otherwise.

20 Limitation on Assignment and Subcontracting
20.1

MAHLE issues the Contract to the Seller in reliance upon its personal performance of theduties imposed. Without prior written consent of MAHLE, Seller may not: (i) assign theContract or delegate the performance of its duties hereunder; (ii) assign any accounts
receivable from MAHLE to third parties; or (iii) enter or offer to enter into atransaction that includes a sale of a substantial portion of its assets used for the
production of the Materials for MAHLE or a merger, sale or exchange of stock orother equity interests that would result in a change of control of Seller. In the eventof any approved assignment (including without limitation subcontract), sale ordelegation authorized by MAHLE, Seller shall retain all responsibility for Materials,
including all related warranties and claims, unless otherwise expressly agreed inwriting by Buyer.

20.2

Seller will ensure that the terms of its contracts with its suppliers and contractors provide
MAHLE and its Customer with all of the rights specified in the Contract.

20.3

Any subcontracting, assignment or delegation does not relieve Seller of any responsibility
pursuant to the Contract.

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20.4

MAHLE shall have the right to assign any benefit or duty under the Contract to any third
party upon notice to Seller with or without Seller’s consent.

21 Compliance with Laws
21.1

Seller agrees to comply with all applicable laws, rules, regulations, ordinances or otherrequirements of any national, state, provincial, local, multi-national or international body(collectively “Laws”) relating to the manufacture, sale, delivery and use of the Materials orotherwise relating to the Contract. Upon request, Seller will submit to MAHLE evidence ofsuch compliance.

21.2

Antitrust Compliance. Seller will comply with local antitrust laws and regulations. Theselaws deal with agreements among competitors, agreements with resellers, pricediscrimination and other acts or situations that may unfairly reduce competition. If a
Seller is under investigation for actions related to the antitrust laws, it must notify MAHLE
immediately.

21.3

Conflict of Interest. There is the potential for a conflict of interest if a Seller’s employee orthe employee’s family member has a relationship with a MAHLE employee who can makedecisions that will affect the Seller’s business. For that reason, Seller must disclose thesetypes of relationships to MAHLE before entering into negotiations with MAHLE.
Additionally, Seller’s employees shall not have any business discussions with family
members employed by MAHLE that could influence business transactions involving the
Seller.

21.4

MAHLE is entitled to terminate the Contract at any time, without any penalty, should
MAHLE receive information indicating that Seller has given any agent or employee of
MAHLE any compensation, gratuity, gift or remuneration of any value in connection withthe solicitation or transaction of business with MAHLE.

21.5 Data Security. As part of its risk management responsibilities for information protection,
Seller will implement and maintain an information security management system (“ISMS”).
Additionally, understanding the nature and the need for protection of MAHLE’s data, Seller
guarantees it will otherwise implement and maintain reasonable security measures inaccordance with all applicable data protection regulations and as determined by MAHLE.
Upon MAHLE’s request, Seller must provide proof that it has implemented an ISMS and otherreasonable security measures throughout the Seller’s operations. After providing reasonable
notice to Seller, MAHLE has the right to inspect and audit Seller’s activities to ensurecompliance with these requirements. Such audits may be performed by MAHLE
independently or by a qualified third party of MAHLE’s choosing.
22 Remedies
22.1

The rights and remedies reserved to MAHLE in the Contract will be cumulative with and in
addition to all other legal or equitable remedies.

22.2

In any action brought by MAHLE to enforce Seller's obligations in connection with the
production or delivery of Materials or transition support, or for possession of property, theparties agree that MAHLE does not have an adequate remedy at law and MAHLE isentitled to an immediate order for specific performance of Seller's obligations (including
related temporary and preliminary injunctive relief).

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22.3

MAHLE shall recover actual and reasonable attorney's fees (including the cost of inhouse counsel) in any action arising out of the Contract, unless Seller is the prevailingparty.

23 Notices
23.1

All notices pursuant to the Contract shall be in writing and, unless otherwise expressly
stated in the Contract:
23.1.1 transmitted in any of the following ways: (i) mailing by certified mail, return receipt
requested, with first-class postage prepaid, effective five (5) days after posting; (ii)mailing by recognized overnight service utilizing receipts, delivery charges
prepaid, effective one (1) business day following deposit; (iii) fax where anelectronic proof of transmission generates at the time of sending, effective on thedate of transmission; (iv) email, subject to proof of transmission, effective on thedate of transmission; or (v) MAHLE’s electronic system for communication with its
suppliers, effective on the date of transmission. A copy of any notice to MAHLE
must be sent attention MAHLE Legal Department.

24 Diversity Initiative
24.1

MAHLE encourages its Sellers to use diverse suppliers.

24.2

A diverse supplier is a business establishment that meets one or more of the following
conditions: (i) a small business, as defined in Title 15, §632 of the United States Codeand related regulations; (ii) a small business owned and controlled by sociallydisadvantaged individuals (at least fifty one (51) percent of the business is owned andcontrolled by one or more socially and economically disadvantaged individuals and the
management and daily business operations are controlled by one or more suchindividuals); and (iii) a business that is at least fifty one (51) percent owned by a woman
or women who also control and operate the business. Upon MAHLE’s request, Seller will
inform MAHLE annually the percentage, based on dollar value of the content provided bydiverse suppliers of the part purchased hereunder, as well as the basis for claiming thatsuch content was provided by diverse suppliers.

25 Miscellaneous
25.1

Waiver. Either party’s failure to insist on the performance by the other party of any termor failure to exercise any right or remedy reserved in the Contract, or either party’s waiverof any breach or default hereunder by the other party shall not, thereafter, waive anyother terms, conditions, rights, remedies, breaches or defaults, whether of the same or asimilar type or not.

25.2

Severability. If any provision of the Contract, or portion of any provision, is declared
unenforceable, the balance of the Contract or such provision shall be interpreted andenforced to the greatest extent possible as if the unenforceable provision or portion had
never been a part hereof. In particular, if any interest rate provided for herein is higher
than that permitted by applicable law it shall automatically be amended to the highest
legal rate.

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25.3

Survival. Except as otherwise provided in the Contract, Seller’s obligations to MAHLE
survive termination of the Contract.

25.4

Interpretation. No provision may be construed against MAHLE as the drafting party.
Section headings are for convenience or reference only, and do not affect the meaning of
the Contract.

25.5

No Publicity. Seller will not advertise, publish or disclose to any third party (other than toSeller's professional advisors on a confidential and need-to-know basis) in any manner
the fact that Seller contracted to furnish MAHLE the Materials pursuant to the Contract or
any terms of the Contract (including prices), or use any of MAHLE’s trademarks or trade
names in any press release, advertising or promotional materials, without first obtaining
MAHLE’s written consent.

25.6

Relationship of Parties. Seller and MAHLE are independent contracting parties andnothing in the Contract will make either party the employee, agent or legal representativeof the other for any purpose. The Contract does not grant either party any authority toassume or to create any obligation on behalf of or in the name of the other. Seller will
be solely responsible for all employment and income taxes, insurance premiums,
charges and other expenses it incurs in connection with its performance of the Contract,
except as approved by MAHLE in writing. All employees and agents of Seller or its
respective contractors are employees or agents solely of Seller or such contractors, andnot of MAHLE, and are not entitled to employee benefits or other rights accorded to
MAHLE’s employees. MAHLE is not responsible for any obligation with respect toemployees or agents of Seller or its contractors.

25.7

Third-Party Beneficiaries. MAHLE’s subsidiaries and affiliates are express third party
beneficiaries of the Contract, and any such subsidiary or affiliate may exercise the rights
and remedies of MAHLE hereunder as if such party were a party to the Contract.

25.8

Conflict of Interest. Seller represents and warrants that its performance of the Contract
will not in any way conflict with any continuing interests or obligations of Seller or its
employees or contractors. Seller further warrants that while the Contract is in effect,
Seller and those of its employees and contractors participating in the performance of
the Contract will refrain from any activities that could present a conflict of interest withrespect to Seller's relationship with MAHLE or its performance of the Contract.

25.9

Jurisdiction and Applicable Law; Arbitration.
25.9.1 MAHLE and Seller shall first attempt to resolve any disputes arising under theContract through good faith negotiations.
25.9.2 The Contract shall be interpreted and enforced in accordance with the local,
domestic laws of the State of Michigan without regard to its conflicts of law
provisions, as if MAHLE and the Seller entirely performed all transactions
between them in the State of Michigan and in the United States of America,
exclusive of their choice of law rules. The parties expressly consent to the soleand exclusive jurisdiction and venue, to the maximum extent permitted inaccordance with the law, of the State courts located in Oakland County, Michigan
or the federal courts in the Eastern District of Michigan, Southern Division, for all
lawsuits brought by either party arising out of or related to the Contract.

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25.9.3 The parties expressly agree that the United Nations Convention on Contracts for
the International Sale of Goods shall not apply to the Contract or any agreement
or dispute between the parties.
25.9.4 Arbitration. At any time before or within thirty (30) days following the service ofprocess in a legal action, MAHLE may, with written notice to Seller, elect tosubmit any dispute regarding the Contract, other than requests for injunctive or
declaratory relief, to binding arbitration. The arbitration proceedings shall be
conducted before a panel of three arbitrators (one appointed by each party andthe neutral appointed by the other two arbitrators) in accordance with theCommercial Rules of the American Arbitration Association including applicationof the Optional Rules for Emergency Measures of Protection and shall begoverned by the United States Arbitration Act. The arbitration shall be conductedin the city and state, district or province of MAHLE’s principal place of business,and the language of the arbitration shall be in English. The arbitrators shall issue
a written opinion setting forth findings of fact, conclusions of law and the basis forthe arbitrator’s decision, which may include an award of legal fees and costs.
25.9.5 Seller shall continue to perform their obligations under the Contract without setoff
for any matters being contested.
IN WITNESS WHEREOF, we acknowledge receipt of and accept the Contract without exception.
Seller’s Name: __________________________

MAHLE’s Name: _________________________

By: ____________________________________

By: ___________________________________
Title: __________________________________

Title: ________________________________
Date: __________________________________

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