Supplier Terms

SJ ELECTRO SYSTEMS, LLC. or any of its subsidiaries or affiliates (collectively, “SJE”) ORDERS ARE SUBJECT TO THE FOLLOWING TERMS AND CONDITIONS.

1. Acceptance. This purchase order (“Purchase Order”) constitutes an offer on the part of SJE and/or one or more of its affiliates or subsidiaries (“SJE”) to purchase the products or services set forth herein (the “Products” and/or “Services”) upon the conditions and terms and at the prices stated herein. Seller’s delivery of the items identified in this Purchase Order shall constitute Seller’s acceptance of all of the conditions, terms and prices stated herein and no deviations from the conditions, terms and prices provided by Seller will be valid or binding upon SJE.

2. Price. Unless otherwise specified, the price stated includes all charges and expenses of Seller including, but not limited to, packing, boxing, cartage and any and all applicable taxes and duties of Federal, state, provincial or local governments. Seller agrees to accept in lieu of any tax that may be included in this Purchase Order a tax exemption certificate or other evidence acceptable to the Federal, state, provincial or local government and to reduce the price as stated herein by the amount of such exempt tax.

If additional payments will be or have been made to Seller by SJE for items such as assists (e.g., tooling, molds, dies, materials or components provided for incorporation in or for use in the manufacture of the finished merchandise), royalties, packing, selling commissions or other incidental charges, such additional value(s) should be separately itemized and identified on the commercial invoice. Seller invoices must not indicate a nominal value for goods but shall indicate the invoice price charged to SJE.

3. Delivery. (a) Time of delivery is of the essence of this contract, and if delivery is not made on or before the specified date of delivery, SJE reserves the right, without liability, to return same at the Seller’s expense.
(b) SJE reserves the right to designate carriers and routes when freight charges are the responsibility of SJE. Seller agrees to reimburse SJE for excess freight charges incurred as a result of failure to follow such designations by SJE.
(c) If seller does not meet promised delivery date, SJE may require delivery by the fastest way and charges resulting from this transportation must be fully prepaid and absorbed by seller.
(d) Commercial Invoice Requirements. Seller shall furnish SJE with a written commercial invoice containing, at a minimum, the following information: (i) reference to the Purchase Order; (ii) Seller’s name and address; (iii) SJE’s name and address; (iv) country of export; (v) detailed description of merchandise in English, including the product name/code; (vi) accurate quantities and weights of the merchandise shipped; (vii) actual purchase price, including all elements of the amount paid or payable by SJE; (viii) the currency in which the sale was made; (ix) all charges, costs and expenses associated with the merchandise, including freight, insurance, commission, containerization and packing, unless the cost of packing, containerization and inland freight are already included in the invoice price; (x) all rebates or discounts; (xi) the country of origin (manufacture) of the goods; (xii) the Harmonized Tariff Schedule number of the goods (if known), (xiii) the agreed upon terms of sale as noted in this Purchase Order, and (xiv) all goods or services furnished for the production of the merchandise (e.g., “assists”) not included in the invoice price for the first shipment of goods destined for the customs territory of the United States (or other applicable jurisdiction) incorporating the goods or services, unless SJE directs otherwise in writing.

4. Law Governing; Venue; Conflicts in Terms. The terms and conditions of this agreement, and the resolution of any disputes arising out of it, shall be governed by and interpreted in accordance with the laws of the State of Minnesota, USA. Any and all terms and conditions specified by SJE and noted on the face of this Purchase Order or any attachments thereto, shall take precedence over any pre-printed terms herein which may be inconsistent therewith. In no event will any terms on any Seller document regarding the order and delivery of the goods or services specified herein (whether pre-printed or not) take precedence over the terms of this Purchase Order or be given effect by SJE.

5. Indemnity. Seller agrees to indemnify and hold SJE harmless from and against any and all liabilities, damages, penalties, judgments, suits, expenses and other costs (including reasonable attorneys’ fees and expenses, recall expenses, replacement, or repair of SJE products caused by the negligence of the seller or caused by a defect in or failure of Seller’s product) of any kind or nature arising out of or related to
a) Seller’s performance or nonperformance of its duties under this Agreement,
b) any act, omission or default of Seller or its employees and/or contractors,
c) any breach by Seller of the warranties provided hereunder,
d) Seller’s failure to follow any product specifications provided by SJE and e) any liability resulting in any way from any product delivered by Seller to SJE hereunder. This indemnity shall survive the termination of this Purchase Order.

6. Packing and Shipping. All articles are to be suitably packed or otherwise prepared for shipment so as to meet requirements for obtaining lowest transportation rates and to meet carrier’s requirements. No charges will be allowed for packing, crating or cartage unless stated in the order. Each container must be marked to show order number, and itemized packing sheets must accompany each shipment or delivery.

7. Inspection. All Products shall be subject to inspection, testing and approval by SJE before or after acceptance, at SJE’s premises or any other location selected by SJE. Products rejected as damaged, defective or otherwise not conforming in any way to a Purchase Order (including these terms and conditions) may be held or returned by SJE to Seller at Seller’s risk and expense, including transportation and handling costs, and SJE in any event shall be entitled to a full refund. Seller shall promptly reimburse SJE for any and all costs incurred by SJE to inspect or test such nonconforming Products or otherwise incurred by SJE as a result of such nonconforming Products. SJE’s acceptance, inspection, testing, approval and/or use of or payment for any Products shall not constitute a waiver of any rights or remedies (including rights or remedies with respect to any non-conformities later discovered) and shall not relieve Seller from any liabilities or obligations under its warranties or otherwise.

8. Risk of Loss. Notwithstanding F.O.B. point specified on the face hereof, Seller assumes all risk of loss of or damage to any Products until the Products are finally accepted by SJE pursuant to the terms of the Purchase Order and these terms and conditions.

9. Warranty. In addition, and without prejudice to all other warranties expressed or implied by law, Seller warrants that all material or articles covered by this Purchase Order will conform to drawings, specifications and other description and will be of good quality and workmanship and free from defects. All warranties, both expressed and implied, also constitute conditions and shall survive inspection, acceptance and payment and shall inure to the benefit of SJE and its customers. Without limitation of any rights by reason of any breach of warranty or otherwise, materials or articles which are not as warranted may at any time be returned to Seller at Seller’s expense for credit, correction or replacement, as SJE may direct, and Seller shall provide conforming replacement goods as directed by SJE and within the time frame required by SJE, all at Seller’s sole cost and expense.

10. Intellectual Property Rights. Seller warrants to SJE and its customers that the sale and use of goods hereunder will not infringe any patent, copyright or other intellectual property right of any third party; that Seller will at its own expense defend any action, suit or claim or assist in defense thereof, in which an infringement of any patent, copyright or other intellectual property right is alleged with respect to the sale or use of said goods; and that Seller will indemnify and save harmless SJE and its customers from any and all losses, costs and damages for infringement or alleged infringement of any patent, copyright or other intellectual property right because of the sale or use of said goods. This provision shall not apply with respect to goods manufactured according to design originated by SJE.

11. Amendments. (a) All specifications, drawings, and data submitted to Seller with this Purchase Order are incorporated and made part of this contract. SJE may at any time, by written order, make changes in drawings, design specifications, method of shipment or packing or time or place of delivery, require additional work or direct the omission of work covered by this Purchase Order. This Purchase Order (including the terms and conditions incorporated herein by reference, as well as any drawings, specifications or other documents or requirements referenced in this Purchase Order) shall constitute the entire agreement between SJE and Seller and supersedes all previous communications, either oral or written, with respect to the subject matter of this Purchase Order. (b) Merchandise, products or specifications substituted without SJE’ authority may be returned at Seller’s expense. (c) SJE will not accept overruns or under runs unless such overruns and under runs are agreed to by SJE in writing.

12. Materials, Tools and Data. Title to any material, dies, molds, jigs or tools furnished by SJE to Seller for purposes of completing this Purchase Order shall remain the property of SJE. Seller shall protect SJE against all loss and damage of said property by full and complete insurance at Seller’s expense in an amount satisfactory to SJE. If the cost of special dies, molds, jigs or tools involved in the manufacture of articles covered by this Purchase Order is amortized and included in the price hereunder, the same shall become the property of SJE upon completion or termination of this Purchase Order. Drawings, designs and technical information and data furnished by SJE shall remain SJE’s property, shall be held in confidence by Seller, shall not be disclosed by Seller to others without SJE’s written permission and shall be returned to SJE upon completion or termination of this order.

13. Confidentiality. All technical information whatsoever supplied to the Seller by SJE with respect to this contract shall be considered and kept confidential by the Seller, and neither Seller nor any employee, agent, or other person under Seller’s direction shall disclose any such information, directly or indirectly, to any other person whatsoever. Additionally, Seller agrees to assign to SJE and not otherwise make use of any invention, improvement or discovery (whether or not patentable), conceived or reduced to practice in the performance of this contract by any employee or agent of Seller, or other person working under seller’s direction. Upon completion of this contract, Seller shall deliver to SJE any and all information relating to any such invention, improvement or discovery, and shall cause employees, agents or others under SJE’ direction to execute all documents necessary or desirable to enable SJE to obtain title and to file applications for patents therefore throughout the world.

14. Compliance. Seller covenants and agrees to observe and comply, in the performance of this Purchase Order, with all applicable federal, state, provincial and local laws including but not limited to all country of origin marking requirements established by U.S. Customs and Border Patrol or other applicable authority, laws and regulations governing the importation of goods into the customs territory of the United States or other applicable jurisdiction and any other laws specific to the good provided hereunder and Seller agrees to indemnify and save harmless SJE for and from any and all liabilities, expense, costs and damages which SJE may be put to or incur or suffer as a result of Seller’s failure or omission so to do.

15. Conflict Minerals. “Conflict Minerals” is defined herein as gold, tantalum, tin and tungsten, unless the U.S. Secretary of State determines that additional derivatives are financing conflict in the Democratic Republic of the Congo or any country sharing an internationally recognized border with the Democratic Republic of the Congo. “Recycled Metals” is defined herein as reclaimed end-user or post-consumer products, or scrap processed metals created during product manufacturing. Recycled Metals include excess, obsolete, defective and scrap metal materials that contain refined or processed metals that are appropriate to recycle in the production of tin, tantalum, tungsten and/or gold; Recycled Metals do not include minerals partially processed, unprocessed or a bi-product from another ore. If any of the Products provided pursuant to this Purchase Order contain or are constituted of any Conflict Minerals, such Conflict Minerals either (a) shall not have originated from any of the Covered Countries, or (b) shall be from Recycled Metals. By providing any Products that contain or are constituted of any Conflict Minerals pursuant to this Purchase Order, Seller is certifying either (a) that such Conflict Minerals have not originated from any of the Covered Countries, or (b) that such Conflict Minerals are from Recycled Metals. If any of the Products provided pursuant to this Purchase Order contain or are constituted of any Conflict Minerals, Seller, before providing such Products to SJE, shall notify SJE in writing that such Products contain such Conflict Minerals and shall provide SJE with (a) written proof that such Conflict Minerals have not originated from any of the Covered Countries or are from Recycled Metals; and (b) the full legal name(s) and location(s) of the facility or facilities which smelt(s) or refine(s) such Conflict Minerals. Seller shall provide such notification and materials to SJE at the following address: SJE, Inc., Attn: Purchasing Management, P.O. Box 1708, Detroit Lakes, MN 56502.

16. Non-Assignment. This Purchase Order shall not be assigned by Seller, and assignment of this Purchase Order, any interest therein or any payment due or to become due there under, without the prior written consent of SJE, shall be void, except that SJE may assign this Purchase Order, in whole or in part, to its parent, subsidiaries and/or affiliated companies.

17. Termination. SJE may terminate all or any part of this Purchase Order at any time or times without cause upon written notice to Seller without incurring any liability. If this order is cancelled for convenience, any claim of Seller shall be settled on the basis of reasonable costs it has incurred in the performance of this order.

SJE may terminate all or any part of this Purchase Order immediately without incurring any liability upon the occurrence of any of the following causes:
(a) A material breach of any term of this Purchase Order by Seller, including, but without limitation, untimely shipments or shipments of goods which do not conform to the contract, Purchase Order or specifications.
(b) Assignment or attempted assignment of this Purchase Order in whole or in part by Seller without SJE’ written consent.
(c) Any material adverse change in the financial condition of Seller which SJE in good faith believes to impair the likelihood that SJE will receive a timely and full performance of the contract.

18. Insurance. Seller shall at its expense purchase and maintain products liability insurance to satisfy any claims or liabilities which Seller might incur arising out of the other operation of law, as well as for the satisfaction of any manufacture, sale or delivery of any of the goods described in this Purchase Order. Such products liability insurance policy shall provide coverage for the satisfaction of any liability of the Seller to SJE resulting from operation of the indemnity provisions of this Purchase Order, or from liability of Seller to any third party or parties. Any insurance purchased by Seller to cover loss or damage to the goods in transit to SJE shall be solely at Seller’s expense. Seller agrees to provide SJE with a certificate of insurability and agrees to notify SJE of any change in status that occurs during the fulfillment of this contract.

If this contract covers the performance of labor for SJE, Seller agrees to furnish evidence satisfactory to SJE that all liens have been released by all persons who have performed services or furnished materials under this contract. Seller further agrees at its sole cost and expense to maintain for the mutual benefit of SJE and Seller insurance coverage in the following minimum amounts against all items of indemnity referred to in paragraph 10:

• Worker’s Compensation – statutory limits for State or States in which the work is to be performed and Employers Liability in the amount of $500,000/$500,000/$500,000.
• Commercial General Liability – $1,000,000 Per Occurrence, $2,000,000 Aggregate
• Umbrella Liability – $5,000,000

All policies of insurance shall provide that the proceeds shall be payable to SJE and Seller as their respective interests may appear. All policies of insurance shall further provide that they shall not be cancelable on less than ten (10) days’ notice to all insured. Seller shall furnish SJE with certificates, satisfactory to SJE, evidencing such insurance policies and naming SJE as an additional insured. If Seller is a self-insurer, the certificate of the department of labor and industry of the state of which said labor is to be performed, must be furnished by such department directly to SJE. Compliance by Seller with these insurance requirements does not in any way affect Seller’s indemnification of SJE under paragraph 5. Seller agrees to defend, indemnify, and hold SJE harmless against all damages, liability, claims, losses and expenses (including attorneys’ fees) arising out of, or resulting in any way from the goods or services purchased hereunder or from any act or omission of Seller, its agents, employees or subcontractors.

19. Liens. All goods to be delivered by Seller hereunder and all property to be rendered to SJE shall be free and clear of any and all liens and encumbrances whatsoever.


21. Certification and Testing. To the extent any product specifications require any certification and/or testing of the product provided hereunder, testing results and applicable certifications must be provided with each batch and/or shipment of product provided hereunder.

22. Notice of Labor Disputes. Seller will immediately give written notice to SJE when Seller has knowledge of an actual or potential labor dispute that may affect this purchase order.

23. Waiver. The failure of SJE to insist upon the performance of any of the terms shall not be construed as a waiver of the future performance of any such terms.

24. Entire Agreement and Successors and Assigns. This instrument contains all of the terms and a condition agreed upon and constitutes the entire agreement between the parties, and shall be binding upon their representatives, successors and assigns, if any.