FELTON BRUSH, INC.
TERMS AND CONDITIONS OF PURCHASE

1.       ENTIRE AGREEMENT.  This Terms and Conditions of Purchase and any Purchase Order issued by Felton Brush, Inc. (“Felton”) or agreement signed by Felton into which they are incorporated by reference, if any (collectively, the “Agreement”) constitute the entire and only agreement between the parties relating to the purchase of goods by Felton from Seller.  Any representation, affirmation of fact, and course of prior dealings, promises or conditions in connection therewith or usage of trade not expressly incorporated in this Agreement shall not be binding on Felton.

2.       SELLER’S TERMS AND CONDITIONS.  Reference to Seller’s bids or proposals on any Purchase Order issued by Felton shall not affect the terms and conditions hereof, unless specifically provided to the contrary herein, and no other agreement or quotation in any way modifying any of said terms and conditions will be binding upon Felton unless made in writing and signed by Felton’s authorized representative. Failure of Felton to object to terms and conditions contained in any acknowledgement, confirmation or other document provided by Seller shall not be construed as a waiver of the terms and conditions of this Agreement nor an acceptance of any terms and conditions contained in any such acknowledgement, confirmation or other document.  Felton hereby gives notification of objection to and rejection of all terms and conditions heretofore or hereafter proposed by Seller that are different from or additional to those specified in this Agreement and that are not separately agreed to in writing by Felton.  Notwithstanding any terms or conditions of Seller, the purchase of goods by Felton is expressly limited to and made conditional upon the terms and conditions contained herein.  If these terms and conditions are not acceptable, Seller must immediately notify Felton. Any of the following acts of Seller shall constitute assent to and acceptance of all terms and conditions contained herein: signing and returning a copy of Felton’s Purchase Order, commencement of performance, shipment of any of the goods ordered or returning Seller’s own form of acknowledgement.

3.       CHANGES.  Felton reserves the right at any time to make written changes in any one or more of the following: (a) specifications, drawings and data incorporated in its Purchase Order where the items to be furnished are to be specially manufactured for Felton; (b) methods in shipment or packing; (c) place of delivery; (d) time of delivery; (e) manner of delivery and (f) quantities. If any such change causes an increase or decrease in the cost of, or in the time required for performance of such order, an equitable adjustment shall be made in the price to be paid by Felton, or delivery schedule, or both. Any claim by Seller for adjustment hereunder must be approved by Felton in writing before Seller proceeds with such change.  Changes made by Seller without Felton’s authorized written consent shall be made at the sole risk of Seller with no right of financial or other recourse against Felton.

4.       DELIVERY.  Unless otherwise indicated on the face of Felton's Purchase Order, delivery of the goods ordered by Felton shall be F.O.B. Felton’s place of business. Title and risk of loss with respect to such goods shall not, however, pass to Felton unless and until Felton has accepted the goods and inspected them to Felton's satisfaction.

Time is of the essence, and if delivery of goods is not made in the quantities and at the times specified, Felton reserves the right, without liability, and in addition to its other rights and remedies, to take either or both of the following actions: (a) direct expedited routings of goods (in which case any excess costs incurred by reason of the expedited routing shall be paid by the Seller) and (b) terminate its Purchase Order by notice effective when received by Seller as to stated goods not yet shipped (in which case Felton may purchase substitute goods elsewhere and charge Seller for the excess cost of such substitute goods and for any other losses Felton may incur).

Seller shall not be liable for excess costs of deliveries or defaults due to causes beyond its control and without its fault or negligence; provided, however, that when Seller has reason to believe that deliveries may not be made as scheduled (specifically including any actual or potential labor disputes), Seller shall give written notice immediately to Felton setting forth the cause of the anticipated delay. If Seller's delay or default is caused by the delay or default of a subcontractor, such delay or default shall be excusable only if (a) it arose out of causes beyond the control of both Seller and subcontractor and without the fault or negligence of either of them and (b) the goods to be furnished under the subcontract were not obtainable from other sources in sufficient time to permit Seller the required delivery or performance schedule.

5.       PRICE.  Prices for goods ordered include all charges for Seller’s packing and crating and for transportation to F.O.B. point.  If no price is stated on the Purchase Order issued by Felton, Seller will invoice Felton at Seller’s lowest prevailing market price.

6.       WARRANTIES.  Seller warrants that it has all right, title and interest in and to all goods to be sold to Felton, free and clear of all liens, encumbrances and interests of any other party, and that such goods shall be sold to Felton free and clear of all liens, encumbrances and interests of any other party. Seller hereby further warrants that the whole of the goods furnished to Felton shall be of merchantable quality, that they shall conform with Felton's instructions, specifications, drawings, and data and that they do not infringe any rights of any third parties relating to patents, trademarks, design or appearance. When Seller has reason to know the particular purpose for which such goods are purchased, Seller also warrants that they will be fit for such purposes. Seller agrees that these warranties shall survive acceptance of the goods. Upon any breach of warranty, in addition to any rights granted to Felton hereunder as a result of any goods sold by Seller not conforming to these terms, Felton may require Seller to, at Felton's election but at Seller's expense, repair or replace any such defective goods. Said warranties shall be in addition to any warranties of additional scope given by Seller to Felton. All such warranties shall run to Felton, its successors and assigns, its customers and the end users of and of the goods sold to Felton. Seller agrees that, in connection with installation and commencement of operation of the goods sold to Felton, Felton (or its designee) may repair or replace any defective part of such goods without thereby voiding any of the Seller's warranties. These warranties are in addition to the warranties implied by law.  NONE OF THESE WARRANTIES AND NO OTHER IMPLIED OR EXPRESS WARRANTIES SHALL BE DEEMED DISCLAIMED OR EXCLUDED UNLESS EVIDENCED BY A WRITING SIGNED BY FELTON.
 

7.       INSPECTION AND ACCEPTANCE.  Payment for any goods under Felton's Purchase Order shall not constitute acceptance thereof. All goods ordered by Felton hereunder shall be subject to inspection within a reasonable time after delivery, and if the goods are found not to conform to the above warranties Felton may return the goods to Seller at Seller’s expense and risk or require that they be replaced or corrected to conform to the above warranties.  If Felton so rejects the goods or if Seller, when requested by Felton, fails to proceed promptly with the replacement or correction thereof, Felton either may cancel its Purchase Order or may replace or correct the goods and in either event may charge Seller the cost or damages incurred by Felton thereby.

Felton reserves the right to reject and refuse acceptance of goods which are not in accordance with Felton’s instructions, specifications, drawings and data or Seller's warranties (express or implied). Felton may reject an entire shipment if a sample inspection discloses that the goods inspected are not in accordance with said instructions, specifications, drawings, data or warranties, unless Seller agrees to reimburse Felton for the cost of a complete inspection of such shipment.

None of the provisions hereof dealing with the acceptance or inspection shall result in a waiver of Felton's right either to cancel or to return all or any portion of the goods because of failure to conform to Felton's agreement with Seller, or by reason of defects, latent or patent, or other breach of warranty.

8.       PATENTS. Seller warrants that the goods furnished by Seller hereunder do not infringe any U.S. or foreign patent, copyright, trade secrets and other intellectual property rights (collectively “intellectual property rights”) of any third party, and Seller agrees to defend at its own expense any claim or suit against Felton and to pay all awards or damages arising out of such suits or claims respecting infringement of any such intellectual property rights provided Felton notifies Seller of any claim or suit for such infringement and grants Seller sole control of the defense of such claim. Felton shall have the right to be represented in such action by its own counsel at its own expense. The foregoing does not apply to the extent such infringement is based on a claim that a detailed design provided by Felton infringes the intellectual property rights of a third party. In addition to, and not in lieu of Seller’s obligations hereunder, if any good furnished by Seller is held to infringe any intellectual property rights of any third party and the use thereof enjoined, Seller shall, at its own expense, either procure for Felton the right to continue using the good, modify the good so that it becomes non-infringing without adversely affecting such good’s functionality or performance, or refund to Felton the purchase price paid for the good and accept its return.
 

9.       CONFIDENTIAL INFORMATION.  Seller shall keep confidential all tooling, information, instructions, specifications, drawings, data and other documents furnished by Felton in connection with its Purchase Order and marked confidential or proprietary and all copies or partial copies thereof, and shall not divulge or use such tooling, information, instructions, specifications, drawings, data or other documents for the benefit of any person or entity other than Felton. Except as required for the efficient performance of Felton’s Purchase Order, Seller shall not make copies or permit copies to be made without the prior written consent of Felton. Seller shall thereafter make no further use, either directly or indirectly, of any such data or any information derived therefrom without obtaining Felton's prior written consent. Seller shall promptly, upon Felton’s request, return all such confidential or proprietary items.
 

10.   ASSIGNMENT AND SUBCONTRACTS.  Seller shall not assign any of the sums due or to become due hereunder or subcontract Felton’s Purchase Order, or any right or obligation thereunder, without the prior written consent of Felton.  Purchase of standard commercial supplies or raw materials normally purchased by Seller or required by Felton’s Purchase Order shall not be construed as assignments or subcontracts.  The rights and obligations contained herein shall inure to and be binding upon the parties, their legal representatives, successors and permitted assigns. 
 

11.   COMPLIANCE WITH APPLICABLE LAWS.  Seller agrees that, in the performance of this Agreement, it will comply with all applicable Federal, state and local laws and all rules, regulations and orders thereunder.  Without limiting the generality of the foregoing, Seller agrees that, unless otherwise agreed in writing by the parties, it will include on all invoices, and that all invoices in order to be approved for payment must include the following certification: "Seller represents that, with respect to the production of the goods covered by this invoice, it has fully complied with all applicable requirements of the Fair Labor Standards Act of 1938, as amended, and of regulations and orders of the United States Department of Labor issued thereunder.”

12.   LIABILITY FOR INJURY.  Seller shall indemnify, defend and hold harmless Felton against all loss and liability for personal injury and property damage caused directly or indirectly by goods furnished by Seller pursuant to a Purchase Order, whether occurring on the premises of Seller or Felton or elsewhere. Seller shall carry and maintain insurance coverage satisfactory to Felton to cover the above and upon request shall furnish appropriate evidence of such insurance.

13.   LIMITATION OF BUYER'S LIABILITY.   In the event of a breach by Buyer of any provision of this Agreement by reason of failure to make payment when due or to accept delivery of the goods or otherwise, Buyer shall be liable only for the direct and documented costs actually incurred by Seller. IN NO EVENT SHALL BUYER'S LIABILITY EXCEED THE PURCHASE PRICE OF THE GOODS TO BE PURCHASED HEREUNDER, AND IN NO EVENT SHALL FELTON BE LIABLE FOR ANY SPECIAL, INDIRECT, SECONDARY, PUNITIVE, EXEMPLARY, INCIDENTAL OR CONSEQUENTIAL DAMAGES OF ANY KIND OR NATURE WHATSOEVER WHETHER ALLEGED TO ARISE FROM BREACH OF CONTRACT, IN TORT OR OTHERWISE, EVEN IF FELTON HAS BEEN ADVISED OF THE POSSIBILITY OF SUCH DAMAGES.

14.   TERMINATION.  If Seller ceases to conduct its operations in the normal course of business (including inability to meet its obligations as they mature), or if any proceeding under the bankruptcy or insolvency laws is brought by or against Seller or a receiver for Seller is appointed or applied for, or an assignment for the benefit of creditors is made by Seller, Felton may terminate its Purchase Order without liability except for deliveries previously made or for goods then completed and subsequently delivered in accordance with the terms of said order.

15.   WAIVER.  No waiver of any term or condition of this Agreement shall be construed as a waiver of any other term or condition, nor shall any waiver of any default under this Agreement be construed as a waiver of any other default.  No waiver of any provision hereof or any right or remedy hereunder shall be effective unless in writing and signed by the party against whom such waiver is sought to be enforced.  No delay in exercising, no course of dealing with respect to, or no partial exercise of any right or remedy hereunder shall constitute a waiver of any other right or remedy, or future exercise thereof.

16.   SEVERABILITY.  The provisions of this Agreement shall be deemed severable, and the invalidity or unenforceability of any one or more of the provisions of this Agreement shall not affect the validity and enforceability of the other provisions of this Agreement.

17.   DISPUTE RESOLUTION.  The parties agree that any and all disputes, claims or controversies arising out of or relating to this Agreement shall be submitted to JAMS, or its successor, for mediation, and if the matter is not resolved through mediation, then it shall be submitted to JAMS, or its successor, for final and binding arbitration.

Either party may commence mediation by providing to JAMS and the other party a written request for mediation, setting forth the subject of the dispute and the relief requested. The parties will cooperate with JAMS and with one another in selecting a mediator from JAMS' panel of neutrals, and in scheduling the mediation proceedings. The parties covenant that they will participate in the mediation in good faith, and that they will share equally in its costs. All offers, promises, conduct and statements, whether oral or written, made in the course of the mediation by any of the parties, their agents, employees, experts and attorneys, and by the mediator or any JAMS employees, are confidential, privileged and inadmissible for any purpose, including impeachment, in any arbitration or other proceeding involving the parties, provided that evidence that is otherwise admissible or discoverable shall not be rendered inadmissible or non-discoverable as a result of its use in the mediation.

Either party may initiate arbitration with respect to the matters submitted to mediation by filing a written demand for arbitration at any time following the initial mediation session or 45 days after the date of filing the written request for mediation, whichever occurs first. The mediation may continue after the commencement of arbitration if the parties so desire. Unless otherwise agreed by the parties, the mediator shall be disqualified from serving as arbitrator in the case. Any arbitration shall be final and binding. The arbitrator shall award reasonable attorneys' fees and costs of arbitration to the prevailing party as part of the award. Judgment on the arbitrator’s award may be entered in any court of competent jurisdiction.

The mediation and arbitration requirements set forth herein shall not preclude parties from seeking from a court of competent jurisdiction a temporary restraining order, preliminary injunction or other equitable relief to preserve the status quo or prevent irreparable harm, although the merits of the underlying claim or dispute shall be resolved in accordance with this provision.

Any mediation and/or arbitration required hereunder shall be held in such places as the parties shall agree upon and in the absence of such an agreement, in the State of New Hampshire. 

18.   JURISDICTION.  Seller hereby consents to the jurisdiction of any local, state or federal court located in the state of New Hampshire, for the purposes of enforcing an arbitration award or otherwise under its contract with Felton, and hereby waives personal service of process and agrees that all such service of process may be made by registered or certified mail directed to the address set forth on the face of Seller's invoice. Such local, state or federal court located in the state of New Hampshire shall have exclusive jurisdiction under such contract.

19.   GOVERNING LAW.  The validity, interpretation and performance of this Agreement shall be governed by the laws of the State of New Hampshire without reference to its principles of conflicts of law rules, including Article 2 of the Uniform Commercial Code as enacted in New Hampshire, and shall not be governed by the provisions of the United Nations Convention on Contracts for the International Sale of Goods.  Any legal or equitable actions arising out of or relating to the transactions contemplated hereby shall be brought only in federal or state court in the State of New Hampshire, and both parties hereby irrevocably submit to the jurisdiction and venue of said court.

20.   NOTICES.  Any and all notices required under the contract between Seller and Felton shall be in writing, shall include the Purchase Order number and shall be deemed given on (i) the date on which the same is hand delivered, (ii) one business day after either deposit with a nationally recognized overnight courier service or transmission by telecopy (with a printer confirmation of transmission) or (iii) three business days after deposit in the United States mail, first class postage prepaid, addressed, in any case, to such party at the address (or telecopy number) set forth in Felton's Purchase Order, or at such other address (or telecopy number) as may be given in such manner. 

21.   FORCE MAJEURE.  Neither party shall be held responsible for any delay or failure hereunder caused, directly or indirectly, by fire, flood, accident, riot, explosion, war, strike, shortage of labor, fuel, power, materials or supplies, embargo, governmental requirement, civil or military authority, gang violence, terrorism, acts of God, act or omission of carriers or subcontractors, or other similar causes beyond the parties’ control.

22.   INDEPENDENT CONTRACTORS.  It is understood and agreed that Felton and Buyer are, and at all times shall remain, independent contractors and no partnership or joint venture is intended or implied by the undertakings set forth herein.  At no time shall either party represent to any third party that it is the agent of the other.  Felton and Buyer further covenant that no authorization shall be given to any employee of either of them to act on behalf of the other.  In no event shall either party at any time have authority to make any contracts, commitments or undertake any obligations on behalf of the other.

23.   SURVIVAL.  Any obligations which either expressly or by their nature are to continue after the termination or expiration of this Agreement shall survive and remain in full force and effect.

24.   CAPTIONS.  The captions or headings are for convenience only and are not intended to limit or define the scope or effect of any provision of this Agreement.

© 2005 Felton Brush, Inc.  All rights reserved.