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FPI Board of Directors Resolution

Termination of Pass-Through Practice

Effective Date October 24, 2002

Note From FPI

In the past, FPI employed the pass-through practice very infrequently, and only as a customer satisfaction measure. If a situation arises where FPI will be delinquent in producing an item, FPI shall now advise the customer of the delay and revised, projected delivery date whereas, in the past, it may have otherwise used "pass through" to achieve on-time delivery and accommodate the customer's needs. In such situations, customers will be given the option to either:

(1)  accept the revised delivery date (and be advised of any applicable liquidated damages or late delivery penalties for which FPI may be responsible and will pay), or

(2)  receive waiver approval for that portion of the order, so as to procure the needed items from other sources.