MCNAUGHTON - MCKAY ELECTRIC COMPANY
GENERAL TERMS AND CONDITIONS OF PURCHASE

PARTIES. "Purchaser" shall mean McNaughton-McKay Electric Company. "Seller" shall mean the party with which Purchaser places its purchase order(s). The goods covered by Purchaser's purchase order and all parts, portions, items, attachments, repairs, replacements and substitutions thereof are collectively referred to as the "Products". The services covered by Purchaser's purchase order are referred to as the "Services".

AGREEMENT AND ACCEPTANCE. These General Terms and Conditions of Purchase ("Terms and Conditions") along with Purchaser's purchase orders, any releases, requisitions, work orders, shipping instructions, supplemental terms and conditions and any other document, whether expressed in written form or by electronic data interchange provided by Purchaser (collectively, the "Agreement") will exclusively govern the purchase of Products and Services by Purchaser and represents the entire agreement between Purchaser and Seller with respect thereto. Acceptance of Purchaser's purchase order shall constitute Seller's agreement to comply with and be bound by the Agreement, including but not limited to these Terms and Conditions. Purchaser objects to and rejects any other terms and conditions that may be proposed by Seller or that appear on or are referenced in Seller's quotation, bid, acknowledgement, or other documents of Seller that are in addition to or otherwise not consistent with the Agreement. Trade usage and course of dealing or performance shall not be employed to vary, explain or supplement the Agreement. Any reference on the face of Purchaser's purchase order to any bid, proposal or offer of sale is deemed to be limited to the description of the Products or Services and shall not effect or modify the Agreement.

PRICE AND PAYMENT. Purchaser shall pay all invoices in accordance with the payment terms set forth on Purchaser's purchase order. Unless the face of Purchaser's purchase order states to the contrary, all prices are (a) firm and not subject to increase or additional charges; (b) in U.S. dollars; and (c) inclusive of all freight, duty and taxes other than sales or use taxes Seller is required by law to collect from Purchaser. Such sales or use taxes shall not be included in Seller's invoice if Purchaser indicates that the Products or Services are exempt from such taxes. Applicable taxes shall be separately stated on Seller's invoice.

NO MINIMUM PURCHASE. Unless otherwise expressly stated on the face of Purchaser's purchase order, nothing in the Agreement obligates Purchaser to purchase or acquire any minimum level of Products or Services from Seller. No territorial protection or rights are given or intended to be given to Seller under the Agreement.

PACKING, MARKING AND SHIPMENT. Seller shall suitably pack, mark and ship Products in accordance with the instructions of Purchaser and the requirements of the carrier transporting the Products and shall assure delivery free of damage and deterioration. Purchaser shall not be charged for packing, marking or shipping unless separately itemized on the face of Purchaser's purchase order. Purchaser's purchase order number must appear on the container, the packing list, invoice and correspondence relating to the purchase order.

INSPECTION, ACCEPTANCE OF PRODUCTS. Purchaser and its authorized representatives shall have the right, but not the obligation, to inspect the Products and Services at times and places designated by Purchaser before, during or after delivery or performance. All Products and Services shall be subject to final inspection by Purchaser or its authorized representatives and acceptance at the final destination specified. Purchaser's making of or failure to make an inspection, examination or test of, or payment for, or Purchaser's acceptance of the Products and Services shall in no way relieve Seller from its obligation to conform to all of the requirements of the Agreement and shall in no way impair Purchaser's right to reject or revoke acceptance of nonconforming Products and Services, or to avail itself of any other remedies to which Purchaser may be entitled, notwithstanding Purchaser's knowledge of the nonconformity, its substantiality or the ease of its discovery. Purchaser reserves the right to review Seller's quality assurance and quality control procedures.

NONCONFORMING PRODUCTS AND SERVICES. All Products or Services not fully conforming to the terms of the Agreement, including any specifications, drawings and/or data submitted to Seller, or shipped contrary to instructions, or in excess of the quantities or substituted for Products provided in Purchaser's purchase order, or not shipped in containers conforming to Purchaser's specifications (or in the absence of such specifications, in recognized standard containers), or violating any statute, ordinance, or administrative order, rule, or regulation, may be rejected by Purchaser and returned or held at Seller's expense and risk. Purchaser may charge to Seller, all expenses of inspecting, unpacking, examining, repacking, storing, and reshipping any Products rejected for the reasons noted herein. The remedies hereinabove afforded Purchaser shall not be exclusive, and Purchaser may hold Seller liable for any and all damages arising from any breach or default set forth herein.

WARRANTY. Seller warrants with respect to the Products and Services that: (a) Seller has clear title, free of all liens and encumbrances; (b) there are no claims of third parties of any nature whatsoever arising out of or related to the Products or Services; (c) the Products are new and in strict conformance with the specifications, drawings, samples, designs or other descriptions furnished to or by Seller, and shall be merchantable, of good quality and workmanship, free from defects in material and workmanship, and fit for Purchaser's particular purpose; (d) Products of Seller's design will be free from defects in design; (e) Seller and its personnel will perform the Services exercising the standards of diligence, skill and care normally exercised by similarly qualified and competent persons in the performance of comparable work in accordance with best industry practices; and (f) the Services will conform in all respects to the specifications and requirements of the Agreement and fulfill the particular purpose intended. Upon notice by Purchaser of any defect or failure, Seller shall re-perform or otherwise correct any non-compliant Services and repair or replace any non-compliant Products. If Seller fails to make the necessary repair, replacement, re-performance or correction within a reasonable time, Purchaser may perform or cause to be performed such repair, replacement, re-performance or correction at Seller's risk and cost and any costs and expenses incurred by Purchaser shall be recoverable from Seller as a debt due and payable. These warranties extend to Purchaser, its successors, assigns, customers and users of its Products. Seller's warranties shall survive inspection, acceptance, and payment and shall be in addition to any other warranties of Seller, whether express, statutory or implied. Remedies for breach of these warranties are cumulative and shall include any available at law or in equity.

PURCHASER'S PROPERTY. All tools, dies, molds, templates, equipment, specifications, data, drawings, designs, software or materials furnished by Purchaser to Seller or paid for by Purchaser (collectively, "Items"), including replacements and materials attached thereto, shall remain and be marked as the personal property of Purchaser. The Items shall be separately stored and insured by Seller, and Seller assumes all risk of loss and liability arising out of or related to the Items, until the Items are returned to Purchaser. The Items shall be used by Seller only for filling Purchaser's purchase orders and are subject to immediate removal, at Purchaser's written request, with each Item to be delivered, at Seller's expense, in its original condition, reasonable wear and tear excepted.

COMPLIANCE WITH LAWS. In providing Products and Services, Seller shall comply with any and all applicable federal, state, local, and international laws, regulations, ordinances, executive orders, rules, orders, standards, conventions, directives, and treatises, including, but not limited to those relating to: (a) design, manufacture, transportation, sales, advertising, branding, distribution, exportation, importation, labeling, packaging, decoration, certification and approval of the Products or Services or (b) employment discrimination, hours and conditions of employment, occupational health and safety, wages, environmental matters, product safety, corrupt or deceptive practices, boycotts, antitrust, consumer products, or government subcontracting. From time to time, upon Purchaser's request, Seller shall certify Seller's compliance with the foregoing.

CHANGES. Purchaser may, at any time, make changes to any purchase order, including, but not limited to, changes in the quantity, delivery time or place, shipping or packing method, or any drawings, specifications or designs. If such a change causes a material increase or decrease in the cost of, or the time required for, performance of the purchase order, Seller shall notify Purchaser in writing immediately. Any claim by Seller for an adjustment in time for performance or price must be asserted in writing within ten (10) days from date of notification of a change. No change shall be binding on Purchaser unless agreed in writing by an authorized representative of Purchaser.

SUSPENSION. Purchaser reserves the right at any time and for any cause to suspend further performance of all or part of any purchase order, upon written notice thereof to Seller. If work is suspended in accordance herewith: (a) except to the extent suspension arises from any act, omission or default of Seller, Seller shall be reimbursed for Seller's actual direct net costs and expenses incurred as a result of suspension which shall be subject to audit by Purchaser; (b) Seller shall have no further claim against Purchaser for damage or loss resulting from such suspension including loss of profit or business opportunity, indirect, incidental or consequential damages; (c) Seller shall resume performance upon written notice by Purchaser; and (d) Seller shall properly care for, protect and insure all work in progress and materials, supplies and equipment Seller has on hand for performance of the purchase order.

TERMINATION AT PURCHASER'S OPTION. Purchaser may terminate a purchase order at any time without cause in whole or in part by written notice, whereupon Seller will stop work on the date and to the extent specified in such notice and terminate all orders and subcontracts that relate to the terminated purchase order.

TERMINATION FOR DEFAULT. If Seller (a) fails to deliver Products or perform Services at the time specified in the Agreement or fails to make progress so as to endanger performance of the work or impair delivery dates; (b) fails to perform any other provision hereof and does not cure such failure within a period of ten (10) days after receipt of written notice from Purchaser specifying such failure; (c) becomes financially unstable, insolvent, makes an assignment in favor of creditors, or enters bankruptcy or dissolution procedures; or (d) is merged into another company, Purchaser may cancel the whole or any part of any purchase order without any liability, except for payment due for Products and Services delivered and accepted to date. Upon such termination, Purchaser will have the right, upon notice to Seller, to take title to and possession of all or any part of such materials, work-in-process or finished Products, any special tooling and all drawings, technology and information furnished by Purchaser.

CONFIDENTIAL INFORMATION. Purchaser may disclose confidential or proprietary information ("Confidential Information") to Seller under the Agreement. Confidential Information includes, but is not limited to, any business, financial, product or customer information, along with any information identified by Purchaser as confidential. Seller agrees not to disclose Confidential Information to any third party and will use such information only as is necessary to perform its obligations under the Agreement. Upon the expiration or termination of the Agreement for any reason, Seller will promptly deliver to Purchaser all such Confidential Information. Seller agrees to limit its internal distribution of Confidential Information to its employees who have a need to know, and to take steps to ensure that the dissemination is so limited, including the execution by Seller's employees of nondisclosure agreements with provisions no less restrictive to those set forth herein. In no event will Seller use less than the degree of care and means that it uses to protect its own information of like kind, but in any event not less than reasonable care, to prevent the unauthorized use or disclosure of the Confidential Information. Seller further agrees not to use the Confidential Information except in the course of performing under the Agreement and will not use the Confidential Information for the benefit of anyone other than Purchaser.

INDEMNITY. Seller shall defend, indemnify and hold Purchaser, its affiliates and their respective directors, officers, employees, customers, agents, contractors, successors and assigns harmless from and against any and all claims, liabilities, losses, damages, actions and expenses (including attorneys' fees) in connection with, arising out of, or relating to: (a) any breach by Seller of its warranties, covenants or obligations hereunder; (b) any injury (including death), property damage, or economic loss arising out of or related to (i) the Products or Services or (ii) the acts or omission of Seller or its employees or subcontractors, including work at Purchaser's premises or using Purchaser's property, unless resulting from the sole negligence of Purchaser; (c) any infringement or contributory infringement of a patent, trademark, copyright, or other proprietary interest by reason of the manufacture, delivery, license, use or sale of the Products or Services ("Infringement"), regardless whether (a) through (c) arise in tort (including negligence), contract, warranty, strict liability, or otherwise. Seller shall not settle any such suit or claim without Purchaser's prior written approval. The obligation under this paragraph shall be continuing and shall not be diminished by any approval or acceptance of or payment for the Products and Services.

INTELLECTUAL PROPERTY INFRINGEMENT. For any alleged or actual Infringement, Seller shall, at Seller's expense, obtain for Purchaser a perpetual, royalty-free license with respect to such item, or shall replace or modify the item in a manner satisfactory to Purchaser, so as to avoid the Infringement without any degradation in performance. Seller's obligation shall apply even if Purchaser furnishes a portion of the design or specifications.

WORKS. In the event that Seller is required to produce for Purchaser inventions, original works of authorship or Products using Purchaser's trademarks, trade names, logos or other proprietary information or trade secrets, Seller agrees that all such inventions, works, and Products (collectively, the "Works") which are, in whole or in part, conceived or made by Seller pursuant to this order shall be deemed "works made for hire" and shall belong exclusively to Purchaser. Seller hereby irrevocably assigns and transfers to Purchaser all rights, title and interests, of every kind and character, which Seller has in the Works and agrees to take all actions that Purchaser may reasonably request in order to vest in Purchaser such title to the Works. This obligation shall survive any expiration or termination of any purchase order or these Terms and Conditions.

LIMITATION OF LIABILITY. PURCHASER SHALL NOT BE LIABLE FOR ANY SPECIAL, INCIDENTAL OR CONSEQUENTIAL DAMAGES ARISING OUT OF OR RELATED TO THIS AGREEMENT, INCLUDING ANY TERMINATION, REJECTION, OR REVOCATION OF ACCEPTANCE OF ALL OR ANY PART OF THE PURCHASE ORDER. IN NO EVENT SHALL PURCHASER'S LIABILITY HEREUNDER EXCEED THE PURCHASE PRICE OF THE PURCHASER ORDER GIVING RISE TO THE CLAIM OR ACTION.

INSURANCE. Without limiting any of Seller's obligations under the Agreement, Seller shall purchase and maintain in full force and effect, at Seller's sole expense, the types and limits of insurance coverage requested by Purchaser and Purchaser shall be named as an additional insured. Upon Purchaser's request, certificates of insurance shall be filed with Purchaser.

SAFETY PROTECTIVE MEASURES AND PRECAUTIONS; ON-SITE SERVICES. Seller agrees to take such safety protective measures and precautions as are required by law, ordinances, industrial code, applicable municipal, state and federal safety regulations, and to cooperate fully with Purchaser, and any insurance carrier to comply with their recommendations so that the Services will be performed and the Products will be produced and delivered with the greatest degree of safety. When Services are to be performed at any location owned, leased, operated, or occupied by Purchaser, Seller shall, and shall ensure that its personnel comply with, each of the rules and policies of Purchaser with respect to the performance of the Services, access to any site and the conduct of any work at the site.

INDEPENDENT CONTRACTOR. Seller is an independent contractor and will not act as, or be regarded as, a partner, co-venturer, representative, agent or employee of Purchaser, and Seller and its personnel will not be entitled to any benefits which accrue to any employee of Purchaser by virtue of their status as an employee.

FORCE MAJEURE. Neither party shall be liable to the other party for failure to perform obligations under this Agreement due to acts of civil or military authority, national emergencies, insurrection, war, terrorism, threat of terrorism, public utility failures, acts of God, or other similar matters not within the control of such party and which would not have been avoided by acting in accordance with good industry practices ("force majeure events"). A party who is affected by a force majeure event shall give prompt notice to the other party, specifying the nature of the force majeure event and the expected delay in performance.

SEVERABILITY. In the event any provision of the Agreement shall be deemed to be invalid, illegal or unenforceable, the validity, legality and enforceability of the remaining provisions shall not in any way be affected or impaired hereby. The parties agree to replace any invalid provision with a valid provision, which most closely approximates the intent and economic effect of the invalid provision.

ASSIGNMENT. The Agreement or any rights or interest therein may not be assigned, delegated or encumbered in whole or in part, or sold or transferred as part of a sale of Seller or its business, stock or assets without Purchaser's prior written consent, including without limitation, the subcontracting of work to be performed under the Agreement.

REMEDIES; WAIVER. A waiver of any default hereunder or of any term or condition of the Agreement shall not be deemed to be a continuing waiver or a waiver of any other default or any other term or condition, but shall apply solely to the instance to which such wavier is directed. The rights and remedies reserved to Purchaser are cumulative and in addition to any other or further rights and remedies available at law or in equity.

GOVERNING LAW. This contract shall be governed in accordance with the laws of the State of Michigan, USA, without regard to its conflicts of laws principles. The parties agree that the 1980 UN Convention on Contracts for the International Sale of Products will not apply. Seller and Purchaser hereby agree that any legal proceeding with respect to the Agreement shall be brought only in a court of the State of Michigan or in a court of the United States sitting in Michigan, and both Seller and Purchaser submit to and accept generally and unconditionally the personal jurisdiction of those courts.

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