ISUZU NORTH AMERICA CORPORATION - ISUZU Purchasing

1 ISUZU NORTH AMERICA CORPORATION Purchasing PROCEDURES MANUAL Revised February 2016 ISUZU NORTH AMERICA CORPORATION Purchasing Department 46401 Commerce Center Drive Plymouth, Michigan 48170 (734) 455-7595 ISUZU NORTH AMERICA CORPORATION c/o Spartan Motors 1055 Mikesell St., Plant 5 Charlotte, MI 48813 (517) 541-3809 INAC Corporate Office 1400 S. Douglass Road Anaheim, CA 92806 (714) 935-9300 MISSION The Purchasing Department of ISUZU NORTH AMERICA CORPORATION (INAC) contracts for all commodities and services by maintaining procedures which foster fair and open competition; and by acquiring the greatest possible value and quality in the services and products purchased, with timely delivery, and the most economical cost.

2 Goals Purchasing goals are to: Act as the liaison between the supplier and all departments facilitating the production of commercial trucks for ISUZU NORTH AMERICA CORPORATION . Evaluate and select suppliers based on cost, quality and engineering expertise. Investigate and resolve supplier financial and accounts payable questions. Issued 6/01/2005 Revised 8/18/2015 i TABLE OF CONTENTS Section Page Request for Quotation Basic Policy 1 1 Part Quotation Process 1 1 Request for Quotation Forms 1 2 Terms and Conditions Basic Policy 2 1 Terms and Conditions (Sample) 2 i Forecasts and Delivery Orders Planning Forecasts 3 1 Delivery Orders 3 1 Emergency Delivery Orders 3 1 Forecast and Delivery Order Forms 3 2 Purchase Order System 4 1 Basic Conditions 4 1 Process 4 1 Manual 4 1 Basic Conditions 4 1 Service and Prototype Contact Information 4 2 Purchase Order Forms 4 3 Payment Production parts 5 1 Basic Conditions 5 1 Process 5 1 Discrepancies/Questions 5 1 Adjustments 5 2 Tooling.

3 Special Parts 5 2 Basic Conditions 5 2 Process 5 2 Issued 6/01/2005 Revised 8/18/2015 ii Section Page Claim Procedures Basic Policy 6 1 Types of Claims 6 1 Quality Claim - Defective Parts 6 1 Packaging and Container Claims 6 2 Shipping Non-Conformance 6 2 Shortage of Parts or Misdelivered Parts 6 3 Over Shipment of Parts 6 3 Multiple Bills of Lading 6 3 Split Shipments 6 4 Late Shipments 6 4 Unauthorized Freight Carrier 6 4 Freight Damage 6 4 Standard Claim Package 6 4 Repeat Claim 6 5 Tooling Basic Policy 7 1 Ordering and Production 7 1 Payment 7 2 Manner of Usage 7 3 Relocation 7 3 Disposal of Tooling 7 3 Tooling Forms 7 4 Engineering and Model Changes Engineering Change Basic Policy 8 1 Documents and Definitions 8 1 Document Combinations and Flow 8 2 Basic Flow of Engineering Changes 8 2 Basic Flow of Supplier Request Sheets 8 3 Engineering & Model Change Forms 8 3 Notification of Changes Required Documents 9 1 Forms 9 2 Issued 6/01/2005 Revised 8/18/2015 iii Section Page Customs Operations

4 Free Trade Agreements 10 1 NAFTA General Provisions 10 1 NAFTA Tariff Classification 10 1 Other Free Trade Agreements 10 1 Customs-Trade Partnership Against Terrorism 10 2 Customs Forms 10 3 Appendix A CTPAT Expectations 10 i Appendix B CTPAT Self-Assessment Form 10 ii Itochu Automobile AMERICA , Inc. (Logistics) Transportation 11 1 Parts Transportation Contact 11 2 Quality Requirements Quality Policy 12 1 Concepts for Quality Assurance 12 1 PPAP 12 1 Process Change Requests & Deviations 12 2 Production Controls 12 3 Product Concern & Corrective Action 12 3 Packaging 12 4 Document Retention 12 4 Quality Forms 12 5 1-1 Issued 6/01/2005 Revised 2/01/2016 REQUEST FOR QUOTATION Basic Policy A Request for Quotation (RFQ) will be issued in the following circumstances.

5 A new part release (current and future programs) A design change for an existing part Market test or cost investigative inquiry The RFQ sheet itemizes the details to be considered when quoting. In submitting a quotation, it is essential that supplier quote to the prints and specifications provided in the RFQ Sheet. However, ISUZU encourages supplier to provide alternative specifications to reduce cost or improve product quality. A Part RFQ is subject to the General Terms and Conditions which are enclosed with each RFQ package. Supplier s submission of a quotation or proposal in response to the RFQ constitutes supplier s acceptance of ISUZU s General Terms and Conditions. Part Quotation Process INAC Purchasing will provide the following documents to the supplier in a part quote package: Request for Quotation Cover Sheet General Terms and Conditions Standard Supplement to Request for Quotation Pre-Survey Questionnaire (new supplier) Part Quotation Form Tooling Quotation Form Production Process Charts (as required) Drawings and Specifications ECS/ECN (for initial production part release or design changes) Supplier should complete the RFQ package in accordance with the General Terms and Conditions.

6 Supplier is welcome to recommend alternative specifications. In this case, the Supplier should attach their drawing and a full explanation to the quotation. Supplier is still required to quote to the original drawings and specifications. If the quotation cannot be returned within the requested time, supplier should contact the commodity buyer who initiated the RFQ. Supplier is required to quote each phase of vehicle development (including pilot costs) using the quotation format. It is ISUZU s policy that pilot parts should be supplied at production piece pricing. After receipt of quotations, the commodity buyer will evaluate and select a supplier. 1-2 Issued 6/01/2005 Revised 2/01/2016 REQUEST FOR QUOTATION FORMS** 1.

7 Part Quotation Sheet 2. Tooling Quotation Sheet 3. Production Process Charts 4. Standard Supplement to Request for Quotation 5. Supplier Questionnaire **Forms are periodically updated with process change; please always confirm with INAC Purchasing that you are using the most current form or access the ISUZU website at Issued: 6/01/05 Updated: 2/01 's Name:Code: Date: This quotation is valid until: // P/ No.: P/ Name: Est. :Complete for cost varianceto previous P/ No. (if applicable)Scrap Old P/ NameMaterial Wt. (Kg)Rate (%)Unit PriceAmountVariance*Reason1234 Total(1)Scrap Old P/ NameMaterial (%)Unit PriceAmountVariance*Reason12345678910 Total(2) Type of OperatingRate perOld P/ Production *Reason12345678910 Total(3)(4) - Fill the attached sheet(s) for Expenses ( %)(5)Freight cost included in (5)- Preproduction build orders must be at production ( %)(6)Total (4)+(5)+(6)(7)- Cost Reduction % at SOP + 1yr.

8 :Tooling Cost/Piece(8)- Cost Reduction % at SOP + 2yr.:Packaging Cost/Piece(9)Grand Total (7)+(8)+(9)- Production Readiness Timing:- Manufacturing Plant Location: - FOB Ship Location: Remarks:* Reason Code: (A)=VA; (B)=Design Change; (C)=Specification; (D)=Volume; (E)=Supply Parts Change; (F)=Negotiation; (G)= Other (state reason in Remark section)AmountAmountINAC PART QUOTATION SHEETS upplier Signature:RFQ or ECS No.:Old P/ No.:Title:(1)+(2)+(3) = : 6/01/05 Updated: 2/01/16 Supplier's Name:Code: Date: This quotation is valid until:P/ No.: P/ Name: Est. :Complete for Tool Modificationto previous P/ No. (if applicable)Tool Tool*ToolP/ NameSize (LxWxH)Weight (Kg) **Reason12345678910111213 :Location (where tool will be used)Name of ToolManufacturer LocationTool PreparationTool NameCityStateManufacturerCityStateLead Time12345678910111213- Production Volume Lead Time:Supplier Signature:Title:Remarks:* Tool Type: (P)= Press; (C)= Casting; (F)= Forging; (J)=Jig; (R)=Resin; (BM)= Blow Mold; (M)= Model; (D)= Die; (CM)= Compression Mold; (IM)= Injection Mold** Reason Code: (A)=VA; (B)=Design Change; (C)=Specification; (D)=Volume; (E)=Supply Parts Change; (F)=Negotiation.

9 (G)= Other (state reason in Remark section)(Provide more detail for Cost Variance Reason in Remark section)- Gantt Chart for production readiness must be submitted after ISUZU tool kick offINAC TOOLING QUOTATION SHEETRFQ or ECS No.:Old P/ No.:Total Tooling Cost:PRODUCTION PROCESS CHART - PLASTIC and RUBBER PARTSU pdated 6/1 1 of 2 SKETCH OF PART (With Dimensions) PRODUCTION PROCESS CHART (B) 1/2 Sheet For Plastic & Rubber Part ---Date of IssueName of SupplierMaterial of PartThickness of PartmmSignatureWeight of Partkg Production Volumeunits/ monthBusinessEngineeringPieces(s) per carName of Subcontractor:Prototype or of tool (With Dimensions; R , L x F , B x H)InjectionType of MachineMoldingCycle Time:/secCompressionPieces per Shot/shotMoldingNumber of ToolVacuum MoldingMaterial of ToolBlow MoldingWeight of ToolkgExtrusionTool LifeshotsMoldingLead Time(Weeks)OthersTool Number.

10 Estimated Tool Cost ($) 0123 Estimate AssemblyEval ModelPart NumberPart NameComponent Part NumberComponent Part NameIsuzu ApprovalPRODUCTION PROCESS CHART - PLASTIC and RUBBER PARTSU pdated 8/24 2 of 2 Production Process Chart (B)2/2 For Plastic & Rubber PartsSketches of1 2 Production Process ItemModification Records OriginatedIsuzu ApprovalModelPart NumberPart Name (Due to)DateNameDateName0 Component Part NumbeComponent Part Name1 23 PRODUCTION PROCESS CHART - STAMPED and FORGED PARTSU pdated 8/24 1 of 2 SKETCH OF PART (With Dimensions)PRODUCTION PROCESS CHART (A) 1/2 Sheet For Stamped & Forged Parts ---Date of IssueName of SupplierMaterial of PartThickness of PartmmSignatureWeight of Partkg Production Volumeunits/ monthBusinessEngineeringPiece(s) per carName of Subcontractor:Prototype or Volume Proto ProcessType of MachineNumber of ToolsPieces perSize of Tool (mm)Weight of ToolEstimated Tooling Cost ($)Est.