Common use of LBS Clause in Contracts

LBS. Mixing product into the same master carton is not acceptable; each product must be packaged in its own master carton. - Palletized product must be shipped on 40"x48" pallets and must not exceed an overhang of 1" on all sides, and pallet must be shrink-wrapped. DIRECTED'S inability to collect loss and damaged claims from the carriers due to poor packaging will result in such losses being claimed against the vendor and the charges deducted from the invoice. VENDOR MARKING REQUIREMENTS MASTER CARTON MARKINGS Master carton markings can be affixed by label or printed directly on the master carton. Handwritten markings are not acceptable. Minimum overall size of markings is to be no less than 3" x 5" in size. Information should be no smaller than 36-point size (1/2") and be printed in a BOLD font style. Carton marking should be on two sides of the carton (adjacent sides preferred). If labels are used, assure that they are a non-removable style of label to prevent lifting and peeling off during transit. Information required on the Master Carton: - DIRECTED'S part number and revision letter (revision letter to appear in parenthesis) example 455T(B). - Quantity of item in carton, including unit of measure (pcs., pks., pairs) - Date Code - Country of Origin - Purchase Order Number - Carton Count, i.e., 1/5, 2/5, 3/5, etc. INITIAL 3 NUTEK SCHEDULE 4 VENDOR REQUIREMENTS X_______ CONFIDENTIAL DATE CODE MARKINGS - DIRECTED'S date code system consists of two digits (unless otherwise specified for DIRECTED'S customer specifics, i.e., GM). The first digit represents the year and the second represents the month. - The date code must represent the month and year you have manufactured the product (unless otherwise pre-approved by DIRECTED'S Packaging/QA Representative). - At a minimum the date code must appear on the master carton and the product. Audi products require date code on packaging/gift boxes. Example of a typical DIRECTED date code (2G). 2002 is represented by the 2 and July is represented by the G: YEAR IDENTIFICATION MONTH IDENTIFICATION ------------------- -------------------- 2001 = 1 January = A July = G 2002 = 2 February = B August = H 2003 = 3 March = C September = I (Except for GMSPO product) 2004 = 4 April = D October = J 2005 = 5 May = E November = K June = F December = L MASTER CARTON LABEL SAMPLE DEI P/N: XXXXX (X) QTY: 24 PCS D/C: 1A C/NO: 5 OF 7 PO#: XXXXX COUNTRY OF ORIGIN MASTER CARTON LABEL SAMPLE STYLE B 7A 4/81 (FILE: B-MCSAMPLE) INITIAL 4 NUTEK SCHEDULE 4 VENDOR REQUIREMENTS X_______ CONFIDENTIAL BAR CODING: UPC-A TYPE (unless otherwise specified on bill of material) - UPC bar code must appear on all gift ▇▇▇▇s and/or packaging materials and must be scanable. Human-readable number and check digit must be printed under the bar code. - UPC bar code is normally distributed with DIRECTED'S artwork/film. If there is no artwork/film, then a white label made with non-removable adhesive will be required on the packaging (unless otherwise pre-approved by packaging/QA representative). - The UPC bar code is issued by packing/QA and will also appear on the printed bill of materials (BOM). UPC BAR CODE LABEL REQUIREMENTS - ▇abel size preferred is 1" x 3" (unless otherwise pre-approved by packaging/QA representative). - Must include "COUNTRY OF ORIGIN" - DIRECTED'S full part number including revision letter in parenthesis. - DIRECTED'S description of part number and date code (if date is on the product, then it is not required on the label). - Human-Readable number and check digit to be printed under the bar code symbol. UPC BAR CODE LABEL SAMPLE (Label style A&B, for your reference) Directed Made in Electronics Inc. Country of Origin DEI PART # DESCRIPTION AND DATE CODE (BAR CODE) INITIAL 5 NUTEK SCHEDULE 4 VENDOR REQUIREMENTS X_______ CONFIDENTIAL [***] - CERTAIN INFORMATION ON THIS PAGE HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT TO THE OMITTED PORTIONS. GENERAL SHIPPING REQUIREMENTS - DIRECTED is a certified QS-9000 company and it is a requirement of ours that vendors meet a 100% on time delivery performance - Vendor is required to notify DIRECTED no less than three days in advance of shipments with a faxed or email shipping advise. - Vendor is required to use DIRECTED specified freight carrier (unless otherwise instructed by DIRECTED) - For shipments coming into DIRECTED from overseas, it is required that original documents are sent to DIRECTED no less than one week after departure - All cartons must arrive with proper markings as described in the marking requirements section along with carton count, i.e., 1/5, 2/5, 3/5, etc. - Each shipment must be accompanied with a detailed packing slip. PREFERRED CARRIERS

LBS. Mixing product into the same master carton is not acceptable; each product must be packaged in its own master carton. - Palletized product must be shipped on 40"x48" pallets and must not exceed an overhang of 1" on all sides, and pallet must be shrink-wrapped. DIRECTED'S inability to collect loss and damaged claims from the carriers due to poor packaging will result in such losses being claimed against the vendor and the charges deducted from the invoice. [***] VENDOR MARKING REQUIREMENTS MASTER CARTON MARKINGS Master carton markings can be affixed by label or printed directly on the master carton. Handwritten markings are not acceptable. Minimum overall size of markings is to be no less than 3" x 5" in size. Information should be no smaller than 36-point size (1/2") and be printed in a BOLD font style. Carton marking should be on two sides of the carton (adjacent sides preferred). If labels are used, assure that they are a non-removable style of label to prevent lifting and peeling off during transit. Information required on the Master Carton: - DIRECTED'S part number and revision letter (revision letter to appear in parenthesis) example 455T(B). - Quantity of item in carton, including unit of measure (pcs., pks., pairs) - Date Code - Country of Origin - Purchase Order Number - Carton Count, i.e., 1/5, 2/5, 3/5, etc. INITIAL 3 NUTEK SCHEDULE 4 VENDOR REQUIREMENTS X_______ CONFIDENTIAL DATE CODE MARKINGS - DIRECTED'S date code system consists of two digits (unless otherwise specified for DIRECTED'S customer specifics, i.e., GM). The first digit represents the year and the second represents the month. - The date code must represent the month and year you have manufactured the product (unless otherwise pre-approved by DIRECTED'S Packaging/QA Representative). - At a minimum the date code must appear on the master carton and the product. Audi products require date code on packaging/gift boxes. Example of a typical DIRECTED date code (2G). 2002 is represented by the 2 and July is represented by the G: YEAR IDENTIFICATION MONTH IDENTIFICATION ------------------- -------------------- 2001 = 1 January = A July = G 2002 = 2 February = B August = H 2003 = 3 March = C September = I (Except for GMSPO product) 2004 = 4 April = D October = J 2005 = 5 May = E November = K June = F December = L MASTER CARTON LABEL SAMPLE DEI P/N: XXXXX (X) QTY: 24 PCS D/C: 1A C/NO: 5 OF 7 PO#: XXXXX COUNTRY OF ORIGIN MASTER CARTON LABEL SAMPLE STYLE B 7A 4/81 (FILE: B-MCSAMPLE) INITIAL 4 NUTEK SCHEDULE 4 VENDOR REQUIREMENTS X_______ CONFIDENTIAL BAR CODING: UPC-A TYPE (unless otherwise specified on bill of material) - UPC bar code must appear on all gift ▇▇▇▇s and/or packaging materials and must be scanable. Human-readable number and check digit must be printed under the bar code. - UPC bar code is normally distributed with DIRECTED'S artwork/film. If there is no artwork/film, then a white label made with non-removable adhesive will be required on the packaging (unless otherwise pre-approved by packaging/QA representative). - The UPC bar code is issued by packing/QA and will also appear on the printed bill of materials (BOM). UPC BAR CODE LABEL REQUIREMENTS - ▇abel size preferred is 1" x 3" (unless otherwise pre-approved by packaging/QA representative). - Must include "COUNTRY OF ORIGIN" - DIRECTED'S full part number including revision letter in parenthesis. - DIRECTED'S description of part number and date code (if date is on the product, then it is not required on the label). - Human-Readable number and check digit to be printed under the bar code symbol. UPC BAR CODE LABEL SAMPLE (Label style A&B, for your reference) Directed Made in Electronics Inc. Country of Origin DEI PART # DESCRIPTION AND DATE CODE (BAR CODE) INITIAL 5 NUTEK SCHEDULE 4 VENDOR REQUIREMENTS X_______ CONFIDENTIAL [***] - CERTAIN INFORMATION ON THIS PAGE HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT TO THE OMITTED PORTIONS. GENERAL SHIPPING REQUIREMENTS - DIRECTED is a certified QS-9000 company and it is a requirement of ours that vendors meet a 100% on time delivery performance [***] - Vendor is required to notify DIRECTED no less than three days in advance of shipments with a faxed or email shipping advise. [***] - Vendor is required to use DIRECTED specified freight carrier (unless otherwise instructed by DIRECTED) [***] - For shipments coming into DIRECTED from overseas, it is required that original documents are sent to DIRECTED no less than one week after departure [***] - All cartons must arrive with proper markings as described in the marking requirements section along with carton count, i.e., 1/5, 2/5, 3/5, etc. - Each shipment must be accompanied with a detailed packing slip. PREFERRED CARRIERS