1. Offer, Acceptance and Exclusive Terms

Each Purchase Order, including these Terms and Conditions, is an offer by TOLY to the party to whom the Purchase Order is addressed and that party’s affiliates and subsidiaries (together “Supplier”) to enter into a contract for the production, purchase and sale of the goods and/or services specified in the Purchase Order and in any attachments, schedules, exhibits, requests for quotations, designs and drawings provided to Supplier by TOLY (collectively, “Goods”). Each Purchase Order, including these Terms and Conditions, will be deemed accepted by Supplier by Supplier’s shipment of Goods, performance of services, commencement of work on Goods, written acknowledgement, or any other conduct of Supplier that recognizes the existence of a contract pertaining to the subject matter of the Purchase Order.

Supplier’s acceptance is expressly limited to these Terms and Conditions. Any purported acceptance of any Purchase Order on terms and conditions which attempt to modify, supersede, supplement or otherwise alter these Terms and Conditions will not be binding upon TOLY

The Incoterms are valid in supplement as far as they do not contradict any of the clauses of these TOLY Purchasing Terms and Conditions or of any other agreement between TOLY and the Supplier.

2. Quantity and Duration

Unless a Purchase Order specifies otherwise, the term of the Purchase Order begins on the effective date shown on the Purchase Order (the “Effective Date”) and continues for twelve (12) consecutive months following the Effective Date.

TOLY, at its option, may extend the term of the Purchase Order for a specified period (as determined by TOLY) beyond the scheduled expiration date or any Renewal Term (as applicable). This period is referred to as an “Extended Term.” Prices in effect and all other terms and conditions, as agreed between the parties, will remain in effect during the Extended Term unless otherwise specified in writing by TOLY

3. Price

Prices charged for Goods will be stated in the Purchase Order and are not subject to increase for any reason including, but not limited to, increases in raw material or component costs, labour costs, or overhead costs. Prices may be subject to mandatory decreases if so provided in the Purchase Order. Supplier is solely responsible for any and all transport and unloading charges and costs, customs charges and costs, taxes, tariffs, duties, insurance charges and costs, and any fiscal contribution related to the Goods, unless otherwise expressly stated in the Purchase Order.

Supplier represents and warrants that the price charged to TOLY for the Goods is at least as low as the price charged by Supplier to other buyers under conditions similar to those specified in the Purchase Order and that all prices comply with all applicable governmental laws and regulations in effect at the time of quotation, sale and delivery. Supplier will ensure that the prices charged to TOLY for the Goods remains competitive with the price for similar goods available to TOLY from other suppliers.

4. Invoices

All invoices and/or advance shipping notices for Goods shipped pursuant to each Purchase Order must reference the Purchase Order number, Purchase Order amendment or Batch number, TOLY’s reference number, Supplier’s part number (if different), quantity of pieces in the shipment, number of cartons or containers, Supplier’s name, and bill of lading number.

Supplier will provide all invoices and/or advance shipping notices for Goods shipped pursuant to each Purchase Order to TOLY at the invoicing address identified in the Purchase Order.

No invoice may reference any term separate from or different than these Terms and Conditions or the terms in the Purchase Order. TOLY reserves the right to return all invoices or related documents submitted incorrectly. Any payment by TOLY of a nonconforming invoice shall not be deemed to amount to an acceptance of any non-conforming element or terms on such invoice.

5. Payment Terms

Unless otherwise stated in the Purchase Order, Supplier’s invoices will be payable sixty (60) days following the date of TOLY’s receipt of the (i) Goods or (ii) Supplier’s invoice. All invoicing will be made through electronic data interchange and all payments will be made by electronic funds transfers. If a payment date falls on a non-business day, payment will be made on the following business day. No payment will be due from or made by TOLY prior to TOLY’s receipt of (i) the Goods corresponding to such payment and (ii) Supplier’s invoice in accordance with Section 4.

Any amount paid by TOLY for Goods will not be deemed to be a waiver of any breach of the Purchase Order by Supplier or any amount otherwise due to TOLY. Any waiver by TOLY of any breach by Supplier on one occasion will not preclude TOLY from seeking any recovery from Supplier, nor will it preclude TOLY from terminating the Purchase Order for, or constitute a waiver of, any other breach at another time.

If a customer of TOLY directs, recommends or requests that Supplier be TOLY’s source for the Goods: (i) payment from TOLY, for the Goods, will be due to Supplier only after, to the extent of, and in proportion to TOLY’s actual receipt of payment from such customer for TOLY’s component parts or assembled goods into which the Goods are incorporated; (ii) any extension of such customer’s payment terms to TOLY for TOLY’s component parts or assembled goods into which the Goods are incorporated will automatically extend, by the same amount of time, the payment terms between TOLY and Supplier.

7. Delivery; Premium Shipping Costs; Risk of Loss

Deliveries will be made in quantities and at the times specified on the Purchase Order. Time and quantity of delivery are of the essence of each Purchase Order. Supplier will adhere to shipping directions specified on the Purchase Order. TOLY will not be required to make payment for Goods delivered to TOLY that are in excess of quantities and delivery schedules specified in TOLY’s Purchase Order.

Premium shipping expenses and/or other related expenses necessary to meet delivery schedules set forth in the Purchase Order will be Supplier’s sole responsibility unless: (i) the delay or expense was solely the result of actions by TOLY which materially breach TOLY’s obligations in the Purchase Order (if such material breach was not caused by Supplier); and (ii) Supplier provides TOLY with written notice of any claim against TOLY within ten (10) days after the occurrence of the alleged actions of TOLY giving rise to such claim.

Notwithstanding any agreement concerning payment of freight expenses, delivery will not have occurred and the risk of loss will not have shifted to TOLY until the Goods have been received at the specified delivery location and have been accepted by TOLY at that location.

8. Intellectual Property

Intellectual Property Rights. The term “Intellectual Property Rights” means inventions, patents (including utility patents and design patents), trade secrets, trademarks, service marks, trade dress, industrial designs, mask works, copyrights, knowhow, software, data base rights and other proprietary rights. The term “Background Intellectual Property Rights” means the Intellectual Property Rights of either TOLY or Supplier existing prior to an applicable Purchase Order, as well as any improvements thereto, excluding the Foreground Intellectual Property Rights. The term “Foreground Intellectual Property Rights” means any and all Intellectual Property Rights developed for incorporation into the Goods that are either developed by TOLY alone, by TOLY and Supplier jointly, or by Supplier alone as requested by TOLY in connection with any Purchase Order. Foreground Intellectual Property Rights do not include any Background Intellectual Property Rights.

Background Intellectual Property Rights. Each party will retain exclusive ownership of its Background Intellectual Property Rights. TOLY does not transfer to Supplier any of its Background Intellectual Property Rights, and Supplier may not use the same other than to produce and supply Goods to TOLY except as stated in this Section 8.B, Supplier does not transfer to TOLY any Background Intellectual Property Rights of Supplier, other than Supplier grants to TOLY and its customers the right to resell Goods or incorporate Goods purchased from Supplier, component parts or assemblies and to sell the same to TOLY’s customers.

Foreground Intellectual Property Rights. All Foreground Intellectual Property Rights are owned by TOLY and not by Supplier. Supplier hereby confirms the same and assigns to TOLY all of Supplier’s right, title and interest in and to all Foreground Intellectual Property Rights that are developed or created in the course of performing any Purchase Order (separately or as part of any Goods). To the extent that any Foreground Intellectual Property Rights are copyrightable works or works of authorship (including, but not limited to, computer programs, technical specifications, documentation and manuals), the parties agree that they are “works made for hire” as that term is used in connection with the EUROPEAN Copyright Act. Supplier may only use the Foreground Intellectual Property Rights to produce and supply Goods to TOLY.

Supplier warrants that all Goods covered by each Purchase Order do not and will not infringe upon, violate or misappropriate the Intellectual Property Rights of any third party. Supplier: (i) will defend, hold harmless and indemnify TOLY and its customers against all claims, demands, losses, suits, damages, liability and expenses (including actual fees for attorneys, experts and consultants, settlement costs and judgments) arising out of any lawsuit, claim, demand or action for actual or alleged direct or contributory or vicarious infringement of, or inducement to infringe, any European or foreign Intellectual Property Right by reason of the manufacture, use, sale, offering for sale, importation or distribution of the Goods (including such claims where Supplier has provided only part of the Goods); and (ii) waives any claim against TOLY and its customers, including any hold-harmless or similar claim, whether known or unknown, contingent or latent, in any way related to a claim asserted against Supplier or TOLY for infringement of any Intellectual Property Rights, including claims arising out of compliance with specifications furnished by TOLY.

Supplier will not assert or transfer to any third party a right to assert against TOLY or its customers any Intellectual Property Rights that Supplier has or may have that are applicable to the Goods used or furnished under the Purchase Order.

9. Warranty

Supplier warrants that all Goods covered by each Purchase Order will conform to all specifications, standards, drawings, samples and/or descriptions, quality requirements, performance requirements, and fit, form and function requirements furnished to Supplier by TOLY, and that parts in question are fit for purpose and/or intended use. Supplier warrants that all Goods will be, safe, of good material and workmanship and free from defects. In addition, Supplier acknowledges that Supplier knows of TOLY’s intended use of the Goods and expressly warrants that all Goods will be fit and sufficient for the particular purpose intended by TOLY

Supplier warrants that Supplier will convey good title to the Goods to TOLY, free and clear of all liens, claims, interests and other encumbrances.

All warranties are intended to provide TOLY with protection from any and all warranty claims brought against TOLY by its customer. This includes, but is not limited to, meeting any customer-required warranties relating to the Goods or products into which the Goods are incorporated. All such customer-required warranties are incorporated by reference.

The warranties provided for in this Section 9 are in addition to all other warranties, express, implied or statutory, and will survive TOLY’s inspection, test, delivery, acceptance, use and payment of and for the Goods, and inure to the benefit of TOLY, its successors and assigns, and TOLY’s customers and the users of TOLY’s or its customers’ products. The warranties provided for in this Section 9 may not be limited or disclaimed by Supplier. TOLY’s approval of Supplier’s designs, materials, processes, drawings, specifications or the like will not be construed to relieve Supplier of any warranties, nor will a waiver by TOLY of any required specification as to any particular Goods constitute a waiver of any such requirements for the remaining Goods to be delivered unless so stated by TOLY in writing.

Supplier will immediately notify TOLY in writing if Supplier learns of any facts, circumstances or conditions, the existence of which causes or threatens to cause imminent breach of any warranties or interruption in Supplier’s production of Goods.

To mitigate its damages, TOLY may defend any claim that any Goods supplied by Supplier are defective, in breach of warranty, or otherwise do not meet applicable legal or contractual requirements because such customer may attempt to hold TOLY responsible for problems caused in whole or in part by Supplier. Such defence is in the interest of both Supplier and TOLY. Supplier waives the right to argue that the fact that TOLY took any such position in any way limits TOLY’s right to assert a claim against Supplier by TOLY for breach of warranty, contribution, indemnification or other claim that may arise from or be related to the subject matter of any of the foregoing.

10. Indemnification

Supplier covenants and agrees to indemnify and hold harmless TOLY and its respective directors, officers, employees and agents from any claims, liabilities, damages (including actual, special, consequential, punitive and exemplary damages), costs and expenses (including actual fees for attorneys, experts and consultants, settlement costs and judgments) incurred in connection with any claims (including lawsuits, administrative claims, regulatory actions and other proceedings to recover for personal injury or death, property damage or economic losses of any kind) that are related in any way to or arise in any way from the Goods, Supplier’s representations, Supplier’s performance of or failure to perform obligations under any Purchase Order, including claims based on Supplier’s breach or alleged breach of warranty (whether or not the Goods have been incorporated into TOLY’s products and/or resold by TOLY) and claims for any violation of any applicable law, ordinance or regulation or government authorization or order.

TOLY will notify Supplier after TOLY becomes aware of the basis for a claim against Supplier under this Section 10. Supplier will immediately begin to work cooperatively with TOLY to determine the root cause of a defect in or failure of the Goods (and related systems and components).

11. Changes

TOLY reserves the right at any time to direct changes, or cause Supplier to make changes, to the Goods under any Purchase Order or Purchase Order amendment including, but not limited to, changes in the design (including drawings and specifications), processing, methods of packing and shipping and the date or place of delivery of the Goods covered by the Purchase Order or to otherwise change the scope of the work covered by the Purchase Order including work with respect to such matters as inspection, testing or quality control, and Supplier agrees to promptly make such changes. Price and/or timing for delivery of Goods resulting from changes pursuant to this Section will be equitably adjusted by TOLY following TOLY’s receipt from Supplier of sufficient documentation regarding Supplier’s costs and/or production timing resulting from such changes.

Any change (i) in subcontractors of Supplier or suppliers of Supplier, or (ii) in the processes or procedures used by Supplier in its production of Goods, or (iii) the fit, form, function or appearance of Goods, must be approved by TOLY in advance and in writing. If Supplier purchases materials, parts or components used in Supplier’s production of Goods from any suppliers or subcontractors, any change (i) in the processes or procedures used by Supplier’s suppliers or subcontractors in the production of such materials, parts or components, or (ii) the fit, form, function or appearance of such materials, parts or components, must be approved by TOLY in advance and in writing. Any requests for such changes by Supplier or Supplier’s suppliers or subcontractors may be approved or denied by TOLY in its sole discretion.

14. Remedies for Breach by Supplier

Without limiting any of TOLY’s rights and remedies at law or in equity (all of which are preserved), should any Goods fail to conform to any applicable warranties, Supplier will reimburse TOLY for any and all actual, special, incidental and consequential damages caused by nonconforming Goods including, without limitation, costs, expenses and losses incurred by TOLY: (i) in inspecting, sorting, testing, repairing or replacing such nonconforming Goods; (ii) resulting from production interruptions; (iii) in conducting Remedial Actions; and (iv) in connection with claims for personal injury (including death) or property damage caused by nonconforming Goods.

Supplier acknowledges and agrees that money damages will not be an exclusive remedy for any actual, anticipatory or threatened breach of any Purchase Order by Supplier with respect to Supplier’s delivery of Goods to TOLY . In addition to all other rights and remedies which TOLY may have, TOLY will be entitled to specific performance and temporary, preliminary and permanent injunctive and other equitable relief as a remedy for any such breach, without proof of actual damages and without bond or other security being required.

15. Termination

TOLY’s Right to Terminate for Cause. TOLY may terminate immediately all or any part of each Purchase Order, without any liability of TOLY to Supplier, if Supplier: (i) repudiates, breaches or threatens to repudiate or breach any of the terms of the Purchase Order including, without limitation, Supplier’s warranties provided in these Terms and Conditions; (ii) fails to perform or deliver Goods as and when specified by TOLY; (iii) fails to provide TOLY with adequate and reasonable assurance of Supplier’s ability to perform timely any of Supplier’s obligations under any Purchase Order including, without limitation, timely delivery of Goods; or (iv) repudiates, breaches or threatens to repudiate or breach any of the terms of any other purchase order issued by TOLY to Supplier.

TOLY’s Right to Terminate for Convenience.

• In addition to any other rights of TOLY to terminate each Purchase Order for cause, TOLY may, at its option, terminate all or any part of the Purchase Order at any time and for any reason by giving written notice to Supplier.
• Upon receipt of notice of termination pursuant to this Section 15.B, Supplier, unless otherwise directed in writing by TOLY, will: (i) immediately terminate all work under the Purchase Order; (ii) upon TOLY’s written request, transfer title and deliver to TOLY the usable and merchantable finished Goods and raw materials/components that Supplier produced or acquired in accordance with Release amounts under the Purchase Order and which Supplier cannot reasonably use in producing goods for itself or for others; (iii) take actions reasonably necessary to protect property in Supplier’s possession which TOLY has an interest; and (iv) upon TOLY’s request, cooperate with TOLY in effecting the resourcing of the Goods covered by the Purchase Order to an alternative supplier designated by TOLY

Because TOLY’s commitments to its customers are made in reliance on Supplier’s commitments under each Purchase Order, Supplier has no right to terminate any Purchase Order.

19. Liability, specifically Product Liability

The supplier’s liability is in accordance with statutory regulations, unless otherwise agreed to in these Purchasing Terms and Conditions.

If claims are lodged against TOLY owing to product liability laws, the supplier shall exempt and hold TOLY harmless on first request from all these claims if and insofar as the damage is caused by a defect in the goods which are delivered by the Supplier and which are the subject of the contract. The Supplier shall, in such cases, also exempt TOLY accordingly from all costs, in particular from expenses for required recall measures (including recall measures in accordance with product safety regulations and the costs for legal prosecution). In cases of liability based on fault, the Supplier shall not have such an obligation if it can prove that it is not at fault. In all other matters, the legal provisions shall apply.

At the commencement of the contract and any time after that, upon request, the Supplier shall present to TOLY proof of product liability and recall insurance with a coverage of at least €2,000,000.00 per liability case; the Supplier shall also, after complete fulfilment of the obligations from the contract, maintain the insurance coverage for a period of five years after the processed goods are placed on the market by TOLY. The Supplier already at this point shall cede all claims arising from the product liability insurance and all ancillary rights to TOLY. TOLY already at this point accepts such cession. If cession should not be permitted in accordance with the insurance agreement then the Supplier shall herewith irrevocably instruct the insurance company to effect any payments only to TOLY. Any further claims by TOLY remain unaffected hereby.

Unless otherwise agreed, the Supplier shall mark his goods for delivery in a durable manner so that they can be permanently identified as his products.

20. Customs Requirements and Export Controls

Supplier will promptly furnish to TOLY all documents required for customs drawback purposes, properly completed in accordance with all applicable laws and regulations. Supplier will also, at Supplier’s sole expense, provide all information (including written documentation and electronic transaction records) relating to the Goods which is necessary for TOLY to fulfil any customs-related or other governmental agency-related obligations, origin marking and labelling requirements, and certification and local content reporting requirements, to enable TOLY to claim preferential duty treatment at the time of entry for Goods eligible under trade preference regimes, and to make all arrangements necessary for the Goods to be covered by any applicable duty deferral or free trade zone program(s) of the country of import.

Export licenses or authorizations necessary for the export of Goods will be the responsibility of Supplier unless otherwise expressly stated in the Purchase Order, in which case Supplier will, at Supplier’s expense, provide all information and documentation necessary or desirable to enable TOLY to obtain necessary or appropriate licenses or authorizations. Credits or benefits resulting or arising from any Purchase Order including trade credits, export credits, customs drawbacks, and the refund of duties, taxes or fees, will belong to TOLY. Supplier will indemnify and hold TOLY and TOLY’s customers and their respective successors, assigns, representatives, employees and agents harmless from and against any costs, expenses or liabilities arising from Supplier’s provision of incorrect information or non-compliance with customs regulations.

21. Certificates of Origin

Upon request, Supplier will promptly furnish TOLY with all certificates of origin and domestic value-added and other information relating to the costs and places of origin of the Goods and the materials contained therein or used in the performance thereof, as may be required by TOLY to comply fully with all customs, tariffs and other applicable governmental regulations. Supplier will comply with all such regulations. Supplier will indemnify and hold TOLY, TOLY’s customers and their respective successors, assigns, representatives, employees and agents harmless from and against all liabilities, demands, claims, losses, costs, damages and expenses of any kind or nature (including attorneys’ fees and costs, fines and penalties) arising or resulting from (i) Supplier’s delay in furnishing such certificates or other information to TOLY, (ii) any errors or omissions contained in such certificates, and (iii) any noncompliance by Supplier with such regulations.

24. Setoff and Contractual Recoupment

In addition to any right of setoff or recoupment provided or allowed by law, TOLY and any of its affiliates, subsidiaries and divisions (“TOLY Group”) may set off against or recoup from any amounts owing to Supplier or any of its affiliates, subsidiaries and divisions (“Supplier Group”) any amounts owing to any member of the TOLY Group by any member of the Supplier Group including, without limitation, for damages resulting from breaches by Supplier of its obligations at law and under this or any other Purchase Order.

If an obligation of any member of the Supplier Group is disputed, contingent or unliquidated, payment by any member of the TOLY Group of all or any portion of the amount due may be deferred, without incurring any interest thereon, until such dispute contingency is resolved or the obligation is liquidated. Without limiting the generality of the foregoing and by way of example only, in the event of an insolvency of Supplier, if all of the Purchase Orders between TOLY and Supplier have not been assumed, then TOLY may withhold payment to Supplier for Goods previously delivered (via an administrative hold or otherwise) until the risk of potential rejection and other damages is eliminated.

26. Force Majeure and Labour Disruptions

Any delay or failure of TOLY or Supplier to perform its obligations under the Purchase Order will be excused if, and to the extent that, the party is unable to perform specifically 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 a governmental authority; embargoes; fires; explosions; natural disasters; riots; or wars. During any such delay or failure to perform by Supplier, TOLY may, at its option:

• purchase the Goods from other sources and reduce its Releases to Supplier by such quantities without liability of TOLY to Supplier;
• require Supplier to deliver to TOLY, at TOLY’s expense, all finished Goods, work in process and/or parts and materials produced or acquired for work under the Purchase Order; or
• require Supplier to provide Goods from other sources in quantities and at a time requested by TOLY and at the price set forth in the Purchase Order.

Supplier’s financial inability to perform, changes in cost or availability of materials, components or services based on market conditions, and/or supplier actions or contract disputes will not excuse performance by Supplier under theories of force majeure, commercial impracticability or otherwise, and Supplier expressly assumes these risks.