Agreement for Sale of Goods

Agreement for Sale of Goods on an Ongoing Basis

Sales Agreement made on the , between

a corporation organized and existing under the laws of the state of , with its principal office located at , referred to herein as (Buyer), and

, a corporation organized and existing under the laws of the state of , with its principal office located at , referred to herein as Seller.

Whereas, the parties contemplate that Buyer will purchase from Seller and Seller will sell to Buyer the product defined in Section 1 below (hereinafter call Product) on an ongoing basis; and

Whereas, to avoid having to resolve questions of conflicting terms and conditions on purchase orders and purchase order acknowledgments each time Buyer places an order with Seller, the parties are willing to enter into an Agreement that sets forth the terms and conditions that will govern all such transactions between them;

Now, therefore, for and in consideration of the mutual covenants contained in this Agreement, and other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, the parties agree as follows:

1. Definition of Product

The term Product means those items for which Buyer issues to Seller a Purchase Order during the term of this Agreement.

2. Issuance of Purchase Orders

Buyer may issue Purchase Orders to Seller from time to time. Each Purchase Order shall contain a description of the products ordered, the quantities and prices, the shipment schedule, the terms and place of delivery, and the following notation: This order is issued pursuant and subject to Agreement No. between Seller and Buyer. Every Purchase Order issued by Buyer to Seller following the date of this Agreement and bearing such a notation shall be governed by and be deemed to include the provisions of this Agreement.

3. Term

The term of this Agreement for purposes of Purchase Order placement shall commence on the date of this Agreement stated above and continue for a subsequent period of months. This Agreement shall be renewed automatically for similar -month periods unless either party, at least days prior to the end of any such -month period, gives the other party written notice of its intent not to so renew.

4. Cancellation for Cause

Either party may cancel this Agreement if the other party is in default of any of the material provisions of this Agreement or is in default under any order, and such default is not cured within days of receipt by the other party of written notice from the party giving notice specifying the nature of the default and corrective action that may be taken, if any.

5. Termination

A. Buyer may terminate work under a Purchase Order in whole or in part at any time by written notice to Seller that states the extent and effective date of the termination.

B. If, within a reasonable length of time, the parties cannot agree on the amount of fair compensation to Seller for the termination, Buyer, in addition to making prompt payment of amounts due for material delivered or services performed prior to the effective date of termination, will pay to Seller the following amounts without duplication: (1) the contract price for all material and services that have been completed in accordance with the Purchase Order and not paid for; (2) the actual costs incurred by Seller that are properly allocable or apportionable under recognized commercial accounting practices to the terminated portion of the Purchase Order; and (3) the reasonable costs of Seller in making settlement under this Agreement and in protecting the property in which Buyer has or may acquire an interest.

C. With Buyer's consent and Agreement or approval, Seller may retain or sell any completed items, or any items, materials, or work in progress, the cost of which is allocable or apportionable to the Purchase Order under the immediately preceding paragraph, and will credit or pay the amounts so agreed or received, transfer title, and make delivery as Buyer directs.

6. Packing, Shipping, Pricing and Payment

A. All items shall be suitably packed, marked, and shipped as designated by Buyer or, in the absence of such a designation, in accordance with the requirements of common carriers in a manner to secure lowest transportation cost, and no additional charge shall be made to Buyer.

B. Prices for products shall be based on delivery F.O.B. Buyer's facility in , .

C. There will be no additional charges to Buyer for packing.

D. Seller will insure shipments by commercial shippers at full value plus %. Seller will not insure air freight shipments for more than the minimum coverage offered by the carrier.

E. Shipments for which Buyer is responsible for transportation charges must be properly described on the bill of lading to obtain the lowest applicable charge. The lowest valuation available must be declared when the carrier offers released valuation rates.

F. All local, state, and federal excise, sales, and use taxes, when applicable, shall be stated separately on Seller's invoices.

G. Seller's invoices shall contain the following information:

1. Buyer's Purchase Order number;

2. Part number;

3. Description of goods shipped;

4. Quantity of goods shipped; and

5. Unit price applicable to the goods.

7. Delivery

A. Seller shall expend its best efforts to conform to the mutually agreed delivery dates for products ordered pursuant to this Agreement. The mutually agreed delivery date for purposes of Purchase Orders placed pursuant to this Agreement shall be a date that allows, at the minimum, the lead time expressed in weeks after receipt of Purchase Order. In the event of failure of delivery on the delivery date, Buyer will give Seller written notice of delinquency allowing Seller a reasonable time to cure. In no event shall Seller be considered in default of its obligation under this Agreement to deliver until days after the notice.

B. Seller shall notify Buyer immediately of any circumstances that may cause a delay in delivery stating the estimated period and reasons for delay and, if requested by Buyer, shall use additional effort, including premium effort, and shall ship via air or other expedited routing to avoid or minimize delay to the maximum extent possible, all at no change in the price, and without prejudice to any of Buyer's rights or remedies.

C. In spite of any other provisions of this Agreement, if shipment cannot be or is not made within days after the date scheduled on any Purchase Order, Buyer may, upon knowledge of the fact and whether or not the delay would be excusable as provided below, terminate the Purchase Order by written notice to Seller and, in spite of any other provisions of this Agreement, the termination shall be without cost to Buyer and shall discharge all obligations and liabilities of the parties under the Purchase Order except as to products delivered previously.

8. Inspection

Seller shall inspect and test all products prior to shipment to Buyer. Notwithstanding any prior payment or inspection by Buyer, all products shall be subject to final inspection and acceptance by Buyer at Buyer's facility in , , or in accordance with quality control standards to be agreed upon by Buyer and Seller.

Final inspection and acceptance or rejection will be made by Buyer within days after receipt of products, and failure of Buyer to reject any product within days after receipt shall constitute acceptance.

Should Buyer reject any product for failure to conform to the requirements of a Purchase Order, Buyer shall notify Seller of the rejection, giving detailed reasons for the rejection. Seller shall then have the option to repair or replace the nonconforming product within days at Buyer's or Seller's facility. Rejected items to be returned to Seller shall be shipped at Seller's expense. Should Seller fail to act to correct any nonconforming product within days after notice by Buyer, then Buyer may, at Seller's risk and expense, return any nonconforming Product to Seller.

9. Inspection at Source

If a Purchase Order indicates that any Product is to be subject to inspection by Buyer or its representative at Seller's premises, Seller, without cost to Buyer, shall provide all reasonable facilities and assistance for the safety and convenience of the inspectors. At the time of inspections, Seller shall make available to the inspectors copies of all drawings, specifications, and packaging data applicable to the items. The inspection shall be deemed as preliminary only and all items shall be subject to final inspection and acceptance at Buyer's facility.

10. Excusable Delay

Neither party shall be liable to the other for damages for any delay arising out of causes beyond its reasonable control and without its fault or negligence.

11. Warranty

Seller warrants to Buyer that all products delivered under a Purchase Order shall be free from defects in materials and workmanship, that all products will conform to the requirements of the Purchase Order including, but not limited to, the applicable descriptions, specifications, and drawings that shall have been agreed to by the parties and, to the extent the items are not manufactured pursuant to detailed designs furnished by Buyer, that all items will be free from defects in design and suitable for the intended purposes. The warranty period shall extend to final acceptance by Buyer or Buyer's customer in accordance with the final acceptance test procedures as mutually agreed between Buyer and Seller, whichever occurs last.

12. Changes

A. As to any product, Buyer reserves the right at any time to make changes in:

1. Its drawings and specifications;

2. Methods of packaging and shipping;

3. Schedules;

4. Quantities; and

5. The place of delivery.

Any difference in price or time for performance resulting from the changes shall be equitably adjusted and the Purchase Order shall be modified accordingly in writing, but any claim by Seller for any adjustment must be made in writing within days of the receipt of the change orders.

B. Seller shall not initiate or make any change or modification in the performance, specification, design, materials, or components in or of the product without, in each case, having received Buyer's prior written consent to any proposed change or modification. The acceptance of any Product that has been so changed or modified without Buyer's prior written consent shall be subject to revocation and Buyer may reject the Product at any time in spite of any time limitations contained elsewhere in this Agreement.

13. No Waiver

The failure of either party to this Agreement to insist upon the performance of any of the terms and conditions of this Agreement, or the waiver of any breach of any of the terms and conditions of this Agreement, shall not be construed as subsequently waiving any such terms and conditions, but the same shall continue and remain in full force and effect as if no such forbearance or waiver had occurred.

14. Governing Law

This Agreement shall be governed by, construed, and enforced in accordance with the laws of the State of .

15. Notices

Any notice provided for or concerning this Agreement shall be in writing and shall be deemed sufficiently given when sent by certified or registered mail if sent to the respective address of each party as set forth at the beginning of this Agreement.

16. Attorney’s Fees

In the event that any lawsuit is filed in relation to this Agreement, the unsuccessful party in the action shall pay to the successful party, in addition to all the sums that either party may be called on to pay, a reasonable sum for the successful party's attorney fees.

17. Mandatory Arbitration

Any dispute under this Agreement shall be required to be resolved by binding arbitration of the parties hereto. If the parties cannot agree on an arbitrator, each party shall select one arbitrator and both arbitrators shall then select a third. The third arbitrator so selected shall arbitrate said dispute. The arbitration shall be governed by the rules of the American Arbitration Association then in force and effect.

18. Entire Agreement

This Agreement shall constitute the entire agreement between the parties and any prior understanding or representation of any kind preceding the date of this Agreement shall not be binding upon either party except to the extent incorporated in this Agreement.

19. Modification of Agreement

Any modification of this Agreement or additional obligation assumed by either party in connection with this Agreement shall be binding only if placed in writing and signed by each party or an authorized representative of each party.

20. Assignment of Rights

The rights of each party under this Agreement are personal to that party and may not be assigned or transferred to any other person, firm, corporation, or other entity without the prior, express, and written consent of the other party.

WITNESS our signatures as of the day and date first above stated.