PURCHASE ORDER TERMS AND CONDITIONS 1. ACCEPTANCE, SCOPE. This Purchase Order is for the purchase of goods, services, or both as described on the face of this document (collectively, Goods ) and is issued by National Filter Media, Inc. ( NFM ) to Supplier. A purchase order is deemed accepted upon a) the date the Supplier returns the acknowledgment copy of a purchase order to NFM or b) five calendar days from date NFM issues the purchase order to Supplier regardless of mechanism used to convey requirements, whichever is earlier. NFM rejects any additional or inconsistent terms and conditions offered by Supplier at any time. Any reference to Supplier s quotation, bid, or proposal does not imply acceptance of any term, condition, or instruction contained in that document. No course of prior dealing or usage of the trade may modify, supplement, or explain any terms used in this Purchase Order. These terms and conditions together with the specifications, drawings, or other documents referred to on the face of the Purchase Order, or attached, or any documents incorporated by reference, supersede any prior or contemporaneous communications, representations, promises, or negotiations, whether oral or written, respecting the subject matter of this Purchase Order. All contract documents referenced in this Purchase Order are interpreted together as one agreement. In the event there is an irreconcilable conflict of such contract documents, the following order of precedence applies: a) any supply agreement or other agreement of the Parties referenced by the Purchase Order; then b) the face of the Purchase Order and any supplemental terms included or incorporated by reference; then c) these Purchase Order Terms and Conditions; and finally d) other contract documents agreed to in writing by the parties. No change to or modification of this Purchase Order will be binding upon NFM unless in writing, signed, or approved electronically, by an authorized NFM representative. 2. DELIVERY. Supplier will deliver Goods in the quantities and on the date(s) specified on the Purchase Order. All items will be packaged according to NFM s instructions or, if none, according to good commercial practice in a manner sufficient to ensure receipt in an undamaged condition. Supplier agrees to notify NFM immediately, in writing, in the event it appears that Supplier may not meet the delivery schedule and shall set forth the reasons for the delay (actual or potential), the steps being taken to remedy the delay, and the schedule that Supplier believes it will be able to meet. Such notice shall not relieve Supplier of any responsibilities in this Purchase Order. 3. SHIPMENT, TITLE, RISK OF LOSS. 3.1 Shipment and Title. Unless otherwise agreed in the Purchase Order, Supplier shall ship all Goods F.O.B. NFM s location. Time is of the essence. Supplier shall be responsible for all damages of any kind incurred or suffered by NFM, which were caused by a delay of Supplier in meeting delivery schedules. Supplier shall also be responsible for all premium logistics cost resulting from Supplier s inability to meet delivery schedules, including costs incurred in getting Goods to NFM. 3.2 Risk of Loss. Delivery shall not be deemed complete until the Goods have been actually received by NFM at its facility. The risk of loss and damage in transit shall remain with Supplier and shall not pass to NFM until received at NFM s facility and in a condition in compliance with the terms of this Purchase Order. Unauthorized advance shipments and shipments other than for the quantity ordered are returnable at Supplier s expense.
4. FORCE MAJEURE. Neither party shall be held responsible for delay or failure of performance to the extent such delay or failure is caused by flood, strike, civil, governmental or military authority, act of God, or other similar causes beyond its reasonable control and without the fault or negligence of the delayed or nonperforming party or its subcontractors; provided, however, that the non-performing party: (a) gives the other party prompt notice of the reason for delay or failure of performance; and (b) takes reasonable steps to mitigate the duration and effect of the delay or failure of performance. In the event of delay or failure of performance for a period of at least fifteen (15) days, the other party may cancel this Purchase Order without liability. Supplier s liability for loss of or damage to NFM s material in Supplier s possession or control shall not be relieved or modified by this clause. 5. PRICE. Supplier shall furnish the Goods at the prices stated on the face of the Purchase Order. If prices are not stated on the face of the Purchase Order, Supplier will offer its lowest prices subject to written acceptance by NFM. The prices include all packaging and shipping to the specified delivery point; applicable taxes including sales, use, or excise taxes; and all customs duties, fees, or charges. 6. PAYMENT. After each shipment made or service provided, supplier will submit an invoice listing a description of the Goods provided and, as applicable, part numbers, quantity, and total prices. Payment of an invoice does not constitute acceptance of the Goods and shall be subject to an appropriate adjustment for failure of Suppler to meet the requirements of this Purchase Order. Unless otherwise agreed to in writing by the Parties, invoices shall be paid sixty (60) days from receipt of the invoice. 7. INSPECTION. All Goods may be inspected and tested by NFM, its customers, higher-tier contractors, and end users at all reasonable times and places. Supplier shall permit employees or representatives of NFM to have access to Supplier s facilities at all reasonable hours. Final inspection and acceptance by NFM will be at destination unless otherwise specified in this Purchase Order. NFM may inspect 100% or a sample of Goods, at NFM s option, and may reject all or any portion of the Goods or lot of Goods if NFM determines them to be defective or nonconforming. If NFM performs any inspection (other than the standard inspection) after discovering defective or nonconforming Goods, any additional inspection costs will be paid by Supplier. No inspection, tests, approval, design approval, or acceptance of the Goods relieves Supplier from responsibility for warranty or any latent defects, fraud, or negligence. If the Goods are defective or otherwise do not conform to the requirements of this Purchase Order, NFM may, by written notice to Supplier: (a) rescind this Purchase Order as to the Goods; (b) accept the Goods at an equitable reduction in price; or (c) reject the Goods and require the delivery of replacements. 8. WARRANTY. 8.1 Supplier warrants to NFM, its successors, assigns, customers, and end users that, upon delivery, and during the entire Warranty Period specified below, all Goods furnished (including all replacement or corrected Goods or components that Supplier furnishes under this warranty) will (a) be free from defects in material, workmanship, and design, even if the design has been approved by NFM; (b) conform to applicable drawings, designs, quality control plans, specifications and samples and other descriptions furnished or specified by NFM; (c) be merchantable; (d) be fit for the intended purposes and operate as intended; (e) comply with all applicable national and local laws; (f) be free and clear of any and all liens, restrictions, reservations, security interests, or encumbrances; and (g) not infringe any patent, published
patent application, or other intellectual property rights of any third party existing as of the date of delivery, and not utilize misappropriated third party trade secret information. Services will be performed in accordance with the highest standards in the industry. 8.2 The Warranty Period will be for a period of twelve (12) months from the date of delivery to the end user. These warranties will survive any delivery, inspection, acceptance, or payment by NFM for the entire Warranty Period. Claims for breach of warranty do not accrue until discovery of noncompliance, even if the Goods were previously inspected. The warranties provided are cumulative and in addition to any warranty provided by law or equity. Any applicable statute of limitations runs from the date of discovery. Supplier is responsible for the costs of repairing, replacing or correcting nonconforming Goods, and for all related costs, expenses and damages including, but not limited to, the costs of removal, disassembly, failure analysis, fault isolation, reinstallation, re-inspection, and retrofit of the nonconforming Goods or of NFM s affected endproduct; all freight charges; all customer charges; and all corrective action costs (i.e., costs of additional inspection or quality-control systems). 9. TERMINATION. The nonbreaching party may terminate this Purchase Order if the other party commits a material breach and fails to remedy the breach within 30 calendar days following receipt of written notice specifying the grounds for the breach. A material breach includes, but is not limited to, late delivery or delivery of nonconforming Goods. The solvent party may terminate this Purchase Order upon written notice if the other party becomes insolvent or if any petition is filed or proceedings commenced by or against that party relating to bankruptcy, receivership, reorganization, or assignment for the benefit of creditors. If NFM terminates this Purchase Order under either of the aforementioned scenarios, NFM s sole liability to Supplier, and Supplier s sole and exclusive remedy, is payment for Goods received and accepted by NFM before the termination. 10. INDEMINIFCATION. 10.1 General Indemnification. Supplier will, at its expense, defend and indemnify NFM and its subsidiaries, affiliates, and agents, and their respective officers, directors, shareholders, and employees, and NFM s customers (collectively Indemnitees ) from and against any and all loss (including consequential damages or lost profits), cost, expense, damage, claim, demand, or liability, including reasonable attorney and professional fees and costs, and the cost of settlement, compromise, judgment, or verdict incurred by or demanded of an Indemnitee arising out of, resulting from or occurring in connection with Supplier's negligence, willful misconduct, or breach of the terms of this Purchase Order. In no event will Supplier enter into any settlement without NFM s prior written consent, which will not be unreasonably withheld. 10.2 Intellectual Property Indemnification. For Goods provided under this Purchase Order, Supplier will, at its expense, defend and indemnify Indemnitee from and against any and all loss, cost, expense, damage, claim, demand, or liability, including reasonable attorney and professional fees and costs, and the cost of settlement, compromise, judgment, or verdict incurred by or demanded from Indemnitee arising out of, resulting from, or occurring in connection with any alleged: (a) patent, copyright, or trademark infringement; (b) unlawful disclosure, use, or misappropriation of a trade secret; or (c) violation of any other third-party intellectual property right, and from expenses incurred by Indemnitee in defense of such suit, claim, or proceeding if Supplier does not undertake the defense thereof. Supplier will have the right to conduct the defense of any such claim or action and, consistent with Indemnitee's rights hereunder, all negotiations for its settlement. But in no event will Supplier enter into any
settlement without NFM s prior written consent, which will not be unreasonably withheld. Indemnitee may participate in a defense or negotiations to protect its interests. If any injunction or restraining order is issued, Supplier will, at its expense, either obtain for Indemnitee the right to continue using and selling the Goods or replace or modify the Goods to make them noninfringing. Supplier shall also indemnify NFM s customers and agents for such infringement if and to the extent that NFM has agreed to so indemnify them, but to no greater extent than Supplier has indemnified NFM herein and under the same conditions as set forth herein. 11. INSURANCE. Supplier will maintain all insurance and/or bonds necessary to satisfy its obligations under this Purchase Order. Such insurance shall apply and respond in all jurisdictions, and without limiting the foregoing, shall include general liability insurance, automobile insurance, errors and omissions insurance, recall insurance and worker s compensation insurance as required by law and necessary to satisfy its obligations under this Purchase Order. 12. PROTECTION OF INFORMATION. All information, including without limitation specifications, samples, drawings, data, documents, computer software, materials, know-how, designs, inventions, processes, and other technical, business, or financial information, that: (a) is supplied to Supplier by or on behalf of NFM, whether transmitted in writing, orally, or otherwise and whether supplied to Supplier prior to or after the issuance of this Purchase Order and is marked as proprietary ; (b) Supplier designs, develops, or creates in connection with this Purchase Order at NFM s expense; (c) Supplier designs, develops, or creates to meet NFMfurnished technical requirements; or (d) is a derivative of (a), (b), or (c) that Supplier designs, develops or creates in connection with this Purchase Order is deemed to be Information. Information will remain the property of NFM, may not be used by Supplier for any purpose other than for performing this Purchase Order, may not be disclosed to any third party, and will be returned to NFM upon the earlier of NFM s written request or completion of the Purchase Order. 13. ASSIGNMENT AND SUBLEASE. None of the work to be performed under this Purchase Order shall be assigned nor shall Supplier subcontract for completed or substantially completed Goods without NFM s prior written consent. Any NFM-approved subcontract work shall be subject to these terms and conditions, and Supplier in all events shall be responsible for the subcontracted work as if performed by Supplier. 14. COMPLIANCE WITH LAWS. Supplier and all persons controlled by Supplier shall at all times comply at their own expense with all applicable national, state, and local laws. 15. GOVERNING LAW. All matters relating to the interpretation and effect of this purchase Order, these Terms and Conditions, and any authorized changes, modifications, or amendments thereto shall be governed by the laws of the State of Utah, USA, without giving effect to that state s principles governing conflicts of laws. 16. REMEDIES. All NFM remedies set forth in this Purchase Order are in addition to, and will in no way limit, any other rights and remedies that may be available to NFM at law or in equity. 17. WAIVER. The failure of either party to enforce at any time any of the provisions of this Purchase Order will not be construed to be a continuing waiver of any provisions hereunder, nor will any such failure prejudice the right of such party to take any action in the future to enforce any provisions hereunder.
18. SEVERABILITY. If any provision of this Purchase Order is held to be illegal, invalid, or unenforceable by a court of competent jurisdiction, that provision will be severed from this Purchase Order; the remaining provisions will remain in full force and effect; and a similar legal, valid and enforceable provision will be substituted in lieu of the severed provision. 4812-6995-6376, v. 1