PURCHASE ORDER TERMS AND CONDITIONS

All E&R Industrial Sales, Inc. (“E&R”) purchases of products from suppliers or manufacturers (“Supplier”) for distribution to E&R’s customers are governed by the following terms and conditions (“PO Terms”). All such purchases are subject to any terms and conditions appearing on the face and the reverse side of purchase orders as well as to applicable digital purchase terms and conditions and other acknowledgements appearing on E&R’s website at www.erindustrial.com. In the event of a conflict among such terms and conditions, except for an applicable supply agreement which shall take precedence, these PO Terms shall prevail. No terms or conditions in any acceptance, confirmation, acknowledgment or invoice from Supplier, contrary to or modifying these PO Terms, shall apply unless approved and accepted in a separate writing by E&R. These PO Terms are subject to change without notice. Suppliers shall not fill at a price higher than specifically agreed upon by E&R in writing. Shipment or providing any of the items or services referred to in any purchase order shall constitute complete and unqualified acceptance of these PO Terms including any terms and conditions on the face and reverse side of a purchase order, and shall constitute an agreement that such purchase order and contract arising therefrom shall be governed in accordance with the provisions of the Uniform Commercial Code and the laws of the State of Michigan, and not the United Nations Convention on the Sale of Goods. In accordance therewith, the parties submit to the venue and laws of the state and federal courts of Pennsylvania, excluding its conflict of law rules.

1. Warranties and Representations:

(a) Supplier warrants and represents that all goods, products, materials and services (“Products”) sold to E&R will be new, merchantable, of good quality and workmanship, free from defects, authentic and do not contain any counterfeit parts, and fit and sufficient for the intended purpose for which required; (b) Supplier warrants and represents that all Products are the best of the grade specified; will conform to the description, quality and performance furnished or specified by E&R, or if not furnished or specified, to standard commercial specifications; (c) that no Products are banned, misbranded or mislabeled, and all Products are produced or provided in conformity with all applicable federal, state and local statutes, rules and regulations; (d) Supplier warrants and represents that on the date of completion of services or delivery of Products, and for one (1) year thereafter, that all Products provided and delivered hereunder shall be of good quality and workmanship, free from defects, and shall conform to or be performed in accordance with accepted industry standards. The warranties and representations herein shall survive completion of services or delivery of Products, and shall not be deemed waived either by E&R’s failure to discover defects, acceptance of goods or payment therefore. Such warranties and representations shall cover all losses, including costs and expenses (including reasonable attorney’s fees) to which E&R will be exposed by any defects of Supplier’s materials or performance.

2. General Indemnity.

Supplier shall protect, defend, indemnify, assume any liability, save and hold harmless E&R, its agents, subsidiaries and affiliates, customers, officers, directors, employees, insurers, and its successors and assigns, from and against any allegations, claims, demands, lawsuits, liabilities, penalties, recalls or product corrective actions, losses, damages, charges, settlements, judgments, costs and expenses (including attorneys’ or experts’ fees incurred), which may be imposed upon, incurred by, asserted against, or awarded against E&R ("Liabilities") relating to Products or services provided to Supplier or by its agents and representatives, including but not limited to all Liabilities arising out of, or allegedly based on: (a) Supplier’s acts or omissions, or negligence, defects, or failures to warn, label or disclose associated with any Product or services provided by Supplier; (b) breaches of warranty (express or implied); (c) Liabilities arising out of allegations or violations of local, state, federal or international regulations concerning Supplier’s Products “Product Regulatory Action”; (d) legal proceedings connected with any Liabilities or Product Regulatory Action, or arising out of any actual or alleged violation with respect to any federal, state or local treaty, law, statute, ordinance, administrative order, rule, regulation or regulatory proposition, enactment or resolution, including Laws and Environmental Laws referred to in 3 below and in 13 (a-d); (e) Liabilities based upon any claim of patent, trademark, copyright, trade dress infringement or any other violation of a third party’s proprietary or contract rights and/or as referenced in 8 hereafter; (f) Supplier sponsored marketing or product demonstration efforts; and (vii) breaches by Supplier of certifications, warranties, representations and obligations under these PO Terms.

If a Supplier is providing "Aircraft Products" to E&R, Supplier shall be responsible for notifying its insurer of the existence of this contractual obligation to indemnify E&R, and ensure that all necessary steps are taken to insure this indemnification obligation under Supplier’s applicable insurance policy(s). Should the Supplier’s insurer reject this indemnification obligation, Supplier shall immediately provide notification of such rejection to E&R.

3. Regulatory Compliance; Hazardous Substances and Hazardous Product Labeling:

Supplier represents and warrants on a continuing basis that Products procured shall comply with all treaties, laws, regulations and standards, “Laws”, including Environmental Laws as defined below concerning the sale and resale, design, manufacture, marketing, labeling, shipping and packaging of its Products.

Supplier further represents that in the sale and resale, manufacturing, marketing, packaging, labeling, and shipping of its Products, that it complies with, and will continue to comply with Laws. Supplier further represents and warrants that Products supplied contain no asbestos or mercury components, materials or elements.

Supplier shall furnish all information evidencing compliance with, federal, state or local treaties and Laws pertaining to the environment, and the toxic or hazardous nature of Products or their constituents; including but not limited to the Toxic Substance Control Act, the Occupational Safety and Health Act ("OSHA"), ROHS standards, the Hazard Communication Standard, the Federal Hazardous Substances Act, California Proposition 65, and any other environmental or toxic or hazardous product obligation (all referred to as Environmental Laws). If E&R purchases Products from Supplier that are deemed to violate Environmental Laws, E&R shall be permitted promptly to return such Products to Supplier without return charges or costs with the purchase price or product cost being promptly refunded to E&R.

If Supplier is supplying E&R hazardous materials as defined by Environmental Laws, including the provisions promulgated by the Federal Department of Transportation, Supplier shall warn, label and ship such hazardous materials in accordance with Environmental Laws. With shipments Supplier agrees to provide E&R with up-to-date OSHA Safety Data Sheets, ROHS information, and all other information necessary to comply with applicable Environmental Laws.

4. Insurance:

Supplier covenants and agrees, as a condition of purchase, at its expense to provide commercial general liability insurance coverage with a minimum policy limit of $2,000,000 per occurrence for bodily injury, property damage, including products/completed operations with a $5,000,000 minimum aggregate limit. The policy shall be occurrence based and placed with a carrier having an A.M Best Rating of A-VII or better. Supplier agrees to name E&R Industrial Sales, Inc., its subsidiaries and affiliates as additional insureds on all policies and applicable endorsements. Supplier agrees to provide a certificate of insurance evidencing said coverages referenced herein and annually thereafter or as the policy renews, Supplier also agrees to provide thirty (30) days prior written notice of any material change, non-renewal, or policy cancellation. Supplier further agrees to have all applicable policies endorsed to respond primary and non-contributory to any other valid and collectible insurance available to E&R.

5. Payment Terms; Freight, Title and Risk of Loss; Delivery Terms:

Unless otherwise agreed in writing, all payment periods shall be net 30 days, commencing upon receipt and acknowledgment of delivery by E&R at the specified E&R location of the Products ordered by E&R. Unless otherwise agreed all shipments shall be FCA Origin. Title and risk of loss shall pass upon tender of Products to carrier. In addition to complying with E&R’s shipping instructions contained in a purchase order, Supplier shall advise E&R immediately of the shipment and delivery of Products ordered, and submit packing list with the shipment. TIME IS OF THE ESSENCE. If delivery is not made on or before the specified date, E&R shall have the option to cancel such purchase order, or any unfilled part thereof, and purchase elsewhere. No separate charges will be allowed Supplier for cartage or packing unless specified in such purchase order. E&R assumes no liability for loss of, or damage to Products until same have been accepted by E&R in good order at the delivery point specified by E&R. Any expense incurred or loss sustained by deviation from shipping instructions shall be charged to the account of Supplier.

6. Force Majeure:

E&R shall not be required to accept or pay for any Products, covered by any purchase order if prevented from accepting and utilizing the same by reason of any labor dispute, accident, fire, casualty, act of Government, or any other cause beyond its control.

7. Insolvency and Security Interest:

E&R may cancel any portion of a purchase order which remains unfilled after the beginning of any bankruptcy or insolvency proceeding by or against Supplier or after an assignment for the benefit of the Supplier’s creditors, or of a receiver. Supplier grants to E&R a security interest in all goods, in its possession or otherwise, which have been manufactured or identified for any E&R purchase order, and Supplier agrees to execute, or authorize E&R to execute on its behalf, any documents which are necessary for E&R to perfect its security interest.

8. Infringement:

Supplier warrants that all Products sold to E&R, whether or not E&R has furnished specifications, shall be delivered free of the rightful claim of any person by way of infringement, or the like. In addition to the terms contained in Section 2 which are incorporated by reference herein, Supplier shall defend, indemnify, save and hold E&R, its employees, customers, agents and directors harmless from any and all liability, loss, damage and expense arising from any infringement or alleged infringement of any patent, trademark, copyright, packaging, labeling, advertising, marketing, trade secret or other intellectual property right, by reason of the purchase, lease, use or resale by E&R of Products.

9. Product Information and Data:

Supplier grants to E&R, a non-exclusive, irrevocable, worldwide, royalty-free right to use manuals, information, data and cross-references regarding the Products in connection with E&R’s business. Such right shall commence on the date of each individual purchase order, and shall continue until the latest of (a) expiration or termination of each such purchase order; (b) the exhaustion of inventory of Products held by E&R; or (c) the date on which Supplier’s Products or any data related thereto last appeared on any E&R Websites or in the then-current edition of the E&R Catalog. Such right further includes, but is not limited to, the right to copy, publish, sell, transfer, distribute, sublicense and prepare derivative works (including translations) of such manuals, information, data, and cross-references by any method and in any and all forms and media now or hereafter known (including in any E&R Catalogs and E&R Websites). Such right may be exercised by E&R and its divisions, subsidiaries and affiliates.

10. Trademarks and Copyrights:

Supplier grants to E&R a non-exclusive, irrevocable, worldwide, royalty-free right to use Supplier logos, trademarks, service marks, trade names, and domain names in connection with any E&R Catalogs and E&R websites including, but not limited to, Product promotions, and other sales and marketing materials. Such right shall commence on the date of each individual purchase order and shall continue until the latest of (a) expiration or termination of each such purchase order; (b) the exhaustion of inventory of Supplier Products held by E&R; and (c) the date on which Products or any data related thereto last appeared on any E&R websites or in the then-current edition of the E&R Catalog or websites.

11. Product Substitution:

E&R reserves the right to substitute for its customers, without notice to Supplier or customers, comparable brands and Products for Products listed in its catalogs, websites and promotional literature. In the event of Supplier's or E&R’s discontinuance or termination of the sale or purchase of Products, E&R may continue to display, promote, and offer Supplier's Products in its catalogs, web sites, and marketing materials; continuing to use Supplier’s trade names/marks in such efforts. E&R may substitute other Suppliers' Products using similar SKU numbers or other information regarding Supplier's Products until such time as E&R's inventory of Supplier's Products is depleted, and the process of discontinuing the business relationship in orderly manner has been completed to E&R's satisfaction.

12. Assignment; Set Off:

E&R’s purchase orders shall not be assigned in whole or in part without its written permission. E&R may without notice set off amounts payable respecting Products against any present or future indebtedness of Supplier to it arising from any purchase order or any other transaction (whether or not related hereto). Any monies due for Products furnished hereunder, at E&R’s option, may be applied by it to the payment of any sums which the Supplier or any of its affiliated or subsidiary companies may owe to E&R or to any subsidiary of E&R.

13. Electronic Data Interchange:

If E&R and Supplier have mutually agreed to use an Electronic Data Interchange system or an Internet enabled process, “EDI”, to facilitate transactions, Supplier agrees: that it will not contest (a) any agreement resulting from such transaction under the provisions of any law relating to whether agreements must be in writing or signed by the party to be bound thereby; or (b) the admissibility of copies of EDI records under the business records exception to the hearsay rule, the best evidence rule or any other similar rule, on the basis that such records were not originated or maintained in documentary form. E&R and Supplier shall negotiate and agree on technical standards and methods for use in making EDI purchases, and will use appropriate security procedures to protect EDI records from improper access. The business records maintained by E&R regarding EDI purchases made by E&R shall be controlling.

14. Regulatory Compliance: Country of Origin, NAFTA, Trade Agreement and Tariff Compliance, Export Compliance and Consumer Product Safety Commission:

 

(a) Supplier may be subject to a number of federal regulations incorporated into E&R's contracts. Supplier shall comply with the following federal regulations, to the extent applicable: (i) 52.203-13, (Contractor Code of Business Ethics and Conduct); (ii) 52.203-15 (Whistleblower Protections under the ARRA); (iii) 52.212-5 (d) (1) (Comptroller General Examination of Record); (iv) 52.219-8 (Utilization of Small Business Concerns); (v) 52.222-17 (Nondisplacement of Qualified Workers); (vi) 52.222-26 (Equal Opportunity); (vii) 52.222-35 (Equal Opportunity for Special Disabled Veterans, Veterans of the Vietnam Era, and Other Eligible Veterans); (viii) 52.222-36 (Affirmative Action for Workers with Disabilities); (ix) 52.222-37 (Employment Reports on Veterans); (x) 52.222-39 (Notification of Employee Rights Concerning Payment of Union Dues or Fees); (xi) 52.222-40 (Notification of Employee Rights Under the National Labor Relations Act); (xii) 52.222-41 (Service Contract Act of 1965); (xiii) 52.222-50, (Combating Trafficking in Persons); (xiv) 52.222-51 (Exemption from Application of the Service Contract Act to Contracts for Maintenance, Calibration, or Repair of Certain Equipment-Requirements); (xv) 52.222-53 (Exemption from Application of the Service Contract Act to Contracts for Certain Services-Requirements); (xvi) 52.222-54, (Employment Eligibility Verification); (xvii) 52.226-6 (Promoting Excess Food Donation to Nonprofit Organizations); (xviii) 52.244-6 (Subcontracts for Commercial Items); (xix) 52.247-64 (Preference for Privately Owned U.S.-Flag Commercial Vessels); (xx) 41 CFR 60-1.4(a); (xxi) 41 CFR 60-300.5(a); and (xxii) 41 CFR 60-741.5(a).

(b) Supplier certifies, represents and warrants as of the date of shipment of any Products and on a continuing basis thereafter, that country of origin labeling, identification, and Product packaging and certifications thereto are accurate, and comply with applicable U.S. laws, treaties, and regulations; including but not limited to: The Buy America Act, Trade Agreements Acts and the North American Free Trade Agreement “NAFTA”. Supplier shall mark all Products and/or packaging with correct country of origin markings, and provide accurate Export Commodity Control Numbers (“ECCNs”), and US Census Bureau Schedule B Harmonized Tariff codes in conformity with all U.S. laws, treaties and regulations, including but not limited to the Buy America Act, NAFTA, and Trade Agreements Acts.

(c) If Products qualify for preferential treatment under the North American Free Trade Agreement ("NAFTA"), Supplier shall provide as requested by E&R, and on a continuing basis, properly completed, accurate and signed NAFTA Certificates of Origin. If Products do not qualify for preferential treatment under NAFTA, Supplier shall further provide and certify to E&R the accurate country of origin status or where the last substantial transformation of Products occurred.

(d) Supplier shall notify E&R on a continuing basis of all changes in country of origin criteria, Buy America Act, or Trade Agreement Acts information, NAFTA origin information, harmonized tariff codes, and ECCNs status. Acceptance of a purchase order constitutes acceptance of the regulations referred to in these paragraphs 13(a-d). Supplier shall cooperate as requested by E&R in its efforts to obtain, certify and verify such information as is requested in13 (a-d).

(e) Supplier shall comply with the following export-controlled Products requirements as applicable. Export-controlled Products means Products subject to the Export Administration Regulations (15 CFR Parts 730-774) or the International Traffic in Arms Regulations (22 CFR Parts 120-130). The parties anticipate that, in the performance of any and all purchase orders, the Supplier may require access to export-controlled items. In doing so:

         (i) Supplier shall comply with all applicable laws and regulations regarding export-controlled Products, including the requirement for contractors or Suppliers to register with the Department of State in accordance with the International Traffic in Arms Regulations (“ITAR”). As applicable, Supplier shall consult with the Department of State regarding issues relating to the ITAR and with the Department of Commerce regarding any questions relating to the Export Administration Regulations (“EAR”). Compliance with US export laws and regulations exists independent of, and is not established or limited by, the information provided by paragraph 13(e) (i) and (ii), and no terms herein are intended to change, supersede, or waive any of the requirements of applicable federal laws, executive orders, and regulations relating to US export control, and

        (ii) Supplier shall include this paragraph 13(e) (i) and (ii) in all Supplier subcontracts that are expected to involve access to, or generation of export-controlled items.

(f) Supplier shall comply with applicable Consumer Product Safety Commission regulations including providing certificates of conformity as required by the Consumer Product Safety Improvement Act of 2008.

15. Anti-Bribery/Anti-Corruption:

(a) E&R’s business practices prohibit bribery and corrupt behavior in any form. Supplier shall use only legitimate and ethical business practices in the conduct of its business. Supplier shall comply fully with (a) all applicable laws applying to commercial or public sector corruption, including the U.S. Foreign Corrupt Practices Act, the U.K. Bribery Act, laws implementing the OECD Convention on Combating Bribery of Foreign Public Officials in International Business Transactions, local anti-corruption laws and laws prohibiting the payment or acceptance of commercial or public sector bribes, money laundering or terrorism and (b) all applicable laws relating to supply chain transparency, human trafficking and human slavery, including but not limited to the laws of the respective countries of manufacture or export and the UK Modern Slavery Act.

(b) Supplier shall not offer or provide anything of value (gifts, loans, travel, entertainment, or any other similar benefit) either directly or indirectly to any government official for the purpose of influencing any act or decision. This means that Supplier cannot pay a gratuity, bribe or inducement to any government official, even if it appears customary or consistent with prevailing business practices. Prohibited payments include, for example, any payment to government officials to improperly obtain paperwork necessary for products to clear customs or vessels carrying Company’s products to enter ports; to permit clearance of items or vessels without necessary paperwork, to permit clearance of prohibited goods; to avoid inspection of vessels or products by customs, port or harbor officials or to otherwise expedite the handling of products being imported or to reduce or minimize the amount of duty to be paid; any payment to a government immigration, labor or social security official to influence a decision in connection with Company or Supplier; any payment to a government purchasing agent to influence his decision to purchase products from Company or Supplier; any payment to government officials to reduce taxes or expedite the resolution of tax matters; any payment of travel expenses of a government official, contributions to an election campaign of a candidate for government office, or otherwise giving a gift (other than of nominal value) to any to an official in any agency that may regulate Company’s or Supplier’s business or who is a current or potential Supplier or Company or Supplier in an effort to influence a decision in connection with Company or Supplier.

(c) Supplier shall permit (i) audits by E&R of all records (including those of any of its subsidiaries, joint ventures or affiliates) related to the work performed for, or services or products provided to, E&R, and (ii) permit E&R to report any violation of any of the United States Foreign Corrupt Practices Act, UK Bribery Act or any other applicable laws and regulations.

16. Termination and Survival of Obligations:

E&R shall have the right to terminate a purchase order in whole or in part at any time, with or without cause, by giving prior written or oral notice to Supplier effective upon receipt. All of the obligations, terms and conditions contained herein, including but not limited to, indemnities and the procurement of insurance, shall survive termination of any such purchase order.

17. Confidentiality:

Each party agrees that all non-public information, data, ideas, strategies, pricing, E&R end user or customer information, product information, product cost information, and any other documentation, or other information in any format, acquired from, developed by, or conveyed to either party in connection with performance under a purchase order or supplier agreement, "Information" is confidential, proprietary and valuable, and will be held in strict confidence. Access to such Information shall be limited solely to agents, employees or representatives who have a strict need to know such Information. Information shall not otherwise be disclosed or used by the receiving party or its agents, employees, or representatives without the prior written permission of the providing party of the Information. Information shall not include any Information which (a) is independently developed by the receiving party; (b) is approved for release by the providing party; or (c) is, or becomes publicly known through no wrongful act of the receiving party. Provided however that no Information shall be disclosed pursuant to subpoena or similar request without prior notice to, and the approval by the providing party of the Information. The obligations hereunder shall survive the termination or discontinuance of an applicable purchase order for two (2) years after notice of same, and in the event of such notice, the receiving party, upon request, shall return all Information to the providing party. The parties further agree that the existence and contents of the PO Terms or any purchase order are highly confidential and shall not be disclosed by either party, without limitation, in any press release or publicity story, without the prior written consent of the other party.

18. E&R Private Label Trademarks and Private Label Materials:

Supplier acknowledges that E&R has granted Supplier a non-exclusive, non-transferable, royalty free license to use, during the term of a specific purchase order or supplier agreement, any E&R owned private label trademarks, product information, specifications, ideas, know-how, tools, molds, jigs, tooling supplies, manuals, OIPM's, literature, and any other materials used by Supplier, paid for or provided by, or authorized by E&R to be used by Supplier in the manufacture of private label products for E&R, "Private Label Materials". Private Label Materials shall be used solely for the manufacture of private label products for E&R and shall be returned to E&R promptly upon request. Supplier shall make the E&R Private Label Materials available for inspection upon reasonable notice by E&R. Stock number and Stock Keeping Unit numbers used by E&R are E&R proprietary information, and may be reassigned and reused in E&R's sole discretion.

19. Right to Audit:

At any time upon written notice, E&R or its designated representatives shall have the right, at Supplier’s location and at E&R’s expense, for up to three (3) years after final payment under a purchase order or a related agreement, to examine, copy, inspect and audit all books, records, information or documents (in paper or digital format) “Information”, relating to Supplier’s performance, procedures, practices, pricing and product costs (including those of its subcontractors or agents) “Performance” with respect to Products purchased by E&R under a purchase order or related agreement regardless of the form or type of Information stored (paper, disk, tape, databases, software). Information provided shall sufficiently and accurately reflect Supplier’s or its agents or representatives’ Performance. Should audit results reveal any pricing or cost errors, the value of such error(s) shall be calculated and promptly paid to or credited to E&R, or appropriate debits will be issued by E&R.

20. Waiver:

The failure of either party to assert a right hereunder or to insist upon compliance with any term or condition shall not constitute a waiver of that right or excuse any subsequent non-performance of any such term or condition by the other party.

21. No Third Party Benefit:

The provisions stated above are for the sole and exclusive benefit of the parties hereto, and confer no rights, third party benefits or claims upon any person or entities not a direct contract party hereto.