SCOPE

General Application. Unless otherwise expressly agreed to in writing by both parties, these terms and conditions shall apply to all transactions between Industrial Accessories Company., Inc. (“IAC”) and Supplier regarding the purchase and sale of products, goods, and services manufactured or produced by Supplier (the “Products”). Without limiting the generality of the foregoing, the terms and conditions set forth herein shall apply to the Purchase Order and other documents of purchase (collectively, the “Purchase Order(s)”) which IAC may place with Supplier for Products after the date of the Purchase Order, and all order acknowledgments (“Order Acknowledgements”) and other documents issued by Supplier to IAC after the date of the Purchase Order with respect to the purchase of Products. These terms and conditions shall apply to all Purchase Orders and Order Acknowledgements and other documents of Supplier, regardless of whether or not these terms and conditions are expressly referenced in such Purchase Order or an Order Acknowledgment and other documents issued by Supplier.

Additional and /or Inconsistent Terms. Unless otherwise expressly agreed to in writing by both panics, no inconsistent or additional term or condition in any document delivered by Supplier shall be applicable to a transaction between IAC and Supplier, unless the terms are additional terms and are expressly accepted in writing by IAC.

OFFER AND ACCEPTANCE OF THE PURCHASE

Issuance of Purchase Order. This Purchase Order shall be deemed an offer to purchase Products on the terms and conditions set forth in the Purchase Order and herein. IAC may rescind, withdraw or revoke such offer to purchase at any time prior to acceptance by Supplier. In order to accept IAC’s offer set forth in the Purchase Order, Supplier must, within forty-eight (48) hours of its receipt of the purchase Order, send IAC an Order Acknowledgment. Thereafter, Supplier shall promptly supply such Products to IAC on the terms and conditions described in the Purchase Order. Any modifications or additional terms and conditions included in the Order Acknowledgment shall not become effective unless and until IAC notifies Suppler in writhing that the proposed modifications and /or additions are acceptable.

Delays or Non-deliver. If, after supplier has transmitted an Order Acknowledgment to IAC, Supplier finds that the Products cannot be delivered within the term specified in the Purchase Order, Supplier will promptly notify IAC and advise IAC of the revised delivery date. IAC shall then have the option (in its sole Discretion) of terminating the Purchase Order without obligation for payment or of accepting the revised delivery date. In the event of delays in delivery due to a cause which constitutes Force Majeure (as described below), the date of delivery shall be extended for a period equal to the time lost by reason of such occurrence; provided however IAC may, at its option, cancel the Purchase Order, and any appropriate cancellation charges will be negotiated between the parties, subject to the provisions of the paragraph entitled “Option of IAC to Terminate” herein.

OTHER STANDARD TERMS AND CONDITIONS OF SALE

Title and Risk of Loss. Unless the Purchase Order specifies otherwise, title to and risk of loss for all Products delivered hereunder shall pass to IAC’s customer (the “Customer”) at FOB destination (i.e. customer’s “ship to” address contained in the Purchase Order), notwithstanding any contrary term in Supplier’s documents. Risk of loss for nonconforming or rejected Products shall remain with Customer.

Inspection. All Products shall be subject to inspection by IAC and/or its Customer. Payment for any Products shall not constitute an acceptance thereof or a waiver of inspection rights, and said Products shall remain subject to the inspection rights of IAC and/or its Customer.

Rejection and Return of Products. IAC and its Customer shall have the right to reject and return Products, in whole or in part and at any time if any Products are found to be defective, or not in accordance with specifications, designated quantities or any term of the Purchase Order. Supplier shall bear all fees, costs and expenses associated with the storage, maintenance and transportation of rejected Products. If at any time after inspection, a defect not normally discoverable by visual inspection becomes apparent, IAC and/or its Customer may reject the defective Products. Rejected Products shall not be replaced or cured except upon receipt by Supplier of a replacement Purchase Order or Purchase schedule from IAC which IAC may deliver or withhold in its sole discretion. Supplier shall promptly reimburse IAC and/or its Customer for the cost of inspecting rejected Products.

Delivery. Suppliers shall deliver Products to the Customer at the address, in the quantities and on the dates specified in the Purchase Order. On partial or periodic shipments, a 5% over or under shipment is permitted. However, quantities in excess of the total order will be returned at Supplier’s expense. IAC requires, and Supplier shall meet, 100 percent on time deliveries. IAC and/or its Customers may reject any deliveries made in advance of or on any date after the date of delivery specified in the Purchase Order. Supplier will not charge IAC or its Customers for any costs, expenses or other amounts resulting from the restocking, packing, crating, freight, express, cartage of returned Products or packages. Each package delivered must be individually numbered as well as labeled with IAC’s Purchase Order number and/or contract number. Except as otherwise clearly stated on a Purchase Order, all Products must be shipped prepaid with cost of transportation included in Supplier’s invoice. IAC reserves the right to select Supplier’s method of shipment and the carrier to be used by Supplier for shipment of the Products to IAC’s Customers.

Packing and Invoicing. Supplier shall include with each shipment an itemized packing list, clearly indicating IAC’s Purchase Order number, quantity shipped, IAC’s part number and the number of packages included in the shipment each package must be numbered and labeled with IAC’s Purchase Order number. Invoices, shipping notices, and bills of lading must include the Purchase Order number and Product number(s) and shall be mailed within one business day after shipment, unless IAC specifies a different time, to the address specified in the Purchase Order. Supplier’s name must not appear anywhere on nor in the shipment without IAC’s prior written permission.

Option of IAC to Terminate. IAC may at any time terminate the Purchase Order in whole or in part by written notice to Supplier. If the Purchase Order is terminated for the convenience of IAC, any claims of Supplier shall be settled on the basis of the reasonable incidental costs (excluding anticipated profits) Supplier has incurred in performance of the Purchase Order. If termination is occasioned by Supplier’s breach of any condition of the Purchase Order, including these terms and conditions, Supplier shall not be entitled to any costs, and IAC shall have against Supplier all remedies provided by law and equity. Termination payments by IAC, if any, shall not be in duplication of prior payments, nor shall the sum of all such payments exceed the total Purchase Order price. All Products for which reimbursement is sought shall be the property of IAC. Supplier must submit any claim with respect to work performed prior to termination within ninety (90) days of the date of its receipt of IAC’s written notice of termination. IAC may terminate any Purchase Order immediately without further obligations if (A) Supplier become insolvent; (B) a receiver is appointed for Supplier; (C) Supplier makes an assignment for the benefit of creditors or a similar transfer of assets; or (D) a bankruptcy petition is filed by or against Supplier.

Change in Specifications or Delivery. IAC reserves the right at any time to make changes in any drawings, descriptions, specifications, and delivery dates as to Products covered by the Purchase Order. Any difference in price or time for performance resulting therefrom shall he equitably adjusted and the Purchase Order schedule shall be modified in writing accordingly.

Prices and Taxes. IAC shall not be billed for any Products or services at prices higher than those stated in the Purchase Order. The price stated in the Purchased Order shall include all taxes except those taxes that Supplier is required by law to collect from IAC, including without limitation state or local sales or use tax. Sales and use taxes, if any, shall be separately stated in Supplier’s invoices unless IAC has indicated in the Purchase Order that the Products ordered are exempt from such taxes.

EEOC Compliance. During the performance of the Work under this Purchase Order, the Supplier agrees as follows:
The Supplier will not discriminate against any employee or applicant for employment because of race, color, religion, sex or national origin. The Supplier will take affirmative action to ensure that applicants are employed, and that employees are treated equally during employment, without regard to their race, color, religion, sex or national origin. Such action shall include, but not be limited, to the following: employment, upgrading demotion or transfer; recruitment or recruitment advertising; layoff or termination; rates of pay or other forms of compensation; and selection for training, including apprenticeship. The Supplier agrees to post in conspicuous places, available to employees and applicants for employment, notices to be provided by the USDA setting forth the provisions of this nondiscrimination clause.

The Supplier will, in all solicitations or advertisements for employees placed by or on behalf of the Supplier, state that all qualified applicants will receive consideration for employment without regard to race, color, religion, sex or national origin.

The Supplier will send to each labor union or representative of workers with which it has a collective bargaining agreement or other contract or understanding, a notice, to be provided by the USDA, advising the said labor union or workers’ representative of the Supplier’s commitments under this Agreement as required pursuant to section 202(3) of Executive Order 11246, and shall post copies of the notice in conspicuous places available to employees and applicants for employment.

The Supplier will comply with all provisions of Executive Order 11246, and of all rules, regulations and relevant orders of the Secretary of Labor and of any prior authority which remain in effect.

The Supplier shall furnish all information and reports required by Executive Order 11246, rules, regulations, and orders or pursuant thereto, and will permit access to its books, records, and accounts by the USDA, Office of Civil Rights, and the Secretary for purposes of investigation to ascertain compliance with such rules, regulations, and orders.

In the event of the Supplier’s noncompliance with the Equal Opportunity (Federally Assisted Construction) clause or with any of the said rules, regulations, or orders, this contract may be cancelled, terminated, or suspended in whole or in part and the Supplier may be declared ineligible for further Government Contracts or Federally Assisted construction contracts on accordance with procedures authorized in Executive Order No. 11246, and such other sanctions may be imposed and remedies invoked as provided in Executive Order 11246, or by rule, regulation or order of the Secretary, or as provided by Law.

The Supplier will include the provisions of this Equal Opportunity (Federally Assisted Construction) clause in every subcontract or purchase order, unless exempted by the rules, regulations, or orders of the Secretary of Labor issued pursuant to section 204 of Executive Order 11246, so that such provisions will be binding upon each such subcontractor or vendor. The Supplier will take such action with respect to any subcontract or purchase order USDA may direct as a means of enforcing such provisions, including sanctions for non-compliance: Provided, however, that in the event the Supplier becomes involved in or is threatened with litigation with a subcontractor or vendor as a result such direction by the USDA, the Supplier may request the United States to enter into such litigation to protect the interest of the United States.

Warranties. Supplier expressly warrants and guarantees that the goods, Products and services covered by the Purchase Order: (A) will be delivered free from any claim of any third party by way of infringement or the like; (B) will conform to the specifications, drawings, sample or other descriptions furnished or specified by IAC; (C) will conform to oral or written representations, affirmations, promises, descriptions, drawings, models or samples furnished by Supplier to IAC or to its Customers; (D) will be merchantable, of good material and workmanship and free from defect; and (E) will be fit for their intended use. These warranties are in addition to all other express or implied warranties, all of which run to IAC, its successors, assigns, agents and Customers, and users of the warranted product or service. No warranty hereunder may be waived, excluded or modified by course of dealing, additional terms and conditions contained in any Purchase Order or in any Order Acknowledgment, confirmation, acceptance form or other agreement prepared and delivered by Supplier.

Insurance and Indemnifications. Supplier shall indemnify, defend (using counsel acceptable to IAC) and hold harmless IAC, its successors, assigns, agents, and customers, and users of goods or services covered by the Purchase Order (“indemnitees”) from and against all claims, damages, losses and expenses, including attorneys’ fees (collectively, the ‘Losses”), arising out of Supplier’s provision of the Products or services furnished under the Purchase Order, including, without limitation, any Losses that IAC, its successors, assigns, agents and/or Customers may incur which arise out of the death or injury to any person, or damage to any property alleged to have resulted from such Products or services, or out of a breach by Supplier of any of its representations, warranties, agreements and/or covenants contained herein. Supplier agrees that it will, upon the tendering of any suit or claim to Supplier, defend the same at Supplier’s expense as to all costs, fees and defend the same at Supplier’s expense as to all costs, fees and damages. This indemnification shall apply whether Supplier or IAC defends such suit or claims and whether the Losses are caused by the sole or concurrent negligence of Supplier. Supplier’s indemnification obligations shall not be limited in any way by any limitation on the amount or type of damages, compensation, or benefits payable by or for the Suppler, its compensation acts, disability acts or other employee benefit acts.

Supplier also shall continuously maintain appropriate insurance for protection against the claims of all persons or entities in an amount of not less than Two Million ($2,000,000) Dollars per occurrence covering injury or death to one or more persons, and not less than Three Hundred Thousand ($300,000) Dollars per occurrence covering property damage, insuring Indemnitees against all liability that may accrue against them or any of them by reason of the sale by IAC to third parties of Products produced or partially produced by Supplier or as to which Supplier provided services of any nature. The insurance shall be placed with insurance carriers satisfactory to IAC and shall not be subject to cancellation or any material change except after thirty (30) days’ prior written notice to IAC. A certificate of insurance reflecting full compliance with these requirements, including the naming of IAC as and additional insured, shall be furnished annually to IAC, and no change in or cancellation of insurance shall be made by Supplier without written notice to IAC.

Intellectual Property. Supplier shall indemnify, defend (using counsel acceptable to IAC) and hold harmless Indemnitees from all claims, damages, judgments, expenses or losses, including attorneys’ fees, resulting from any claims that the manufacture, use, sale or resale of any Products or services supplied under the Purchase Order infringe any patent, copyright, trademark or service mark. No limitation in Supplier’s documents shall operate to reduce this indemnification. If the use or sale of any Products or services with respect to which Supplier is obligated to indemnify the Indemnitees hereunder is enjoined, Supplier shall obtain for the Indemnitees, at no expense to them, the right to use and substitute an equivalent Product or service acceptable to IAC and extend the indemnity in this Paragraph to Indemnitees in respect of such equivalent item.

Potentially Harmful Materials. Supplier shall inform IAC of any toxic or potentially harmful materials used in the manufacture of Products purchased under the Purchase Order, and indemnify IAC from any liability arising out of any reasonable use of such Products. Supplier shall provide Material Safety Data Sheets as required by law.

Subcontracting and Assignment. Supplier may not subcontract, assign or delegate all or part of the manufacture and supply of Products or performance of services under the Purchase Order unless it has obtained IAC’s prior written approval; provided, however, that notwithstanding any such approval, Supplier shall nonetheless continue to be responsible to IAC for all of Supplier’s obligations under the Purchase Order, including without limitation its liability for any breach. IAC reserves the right to assign the Purchase Order and all related rights (with respect to all or part of the Products, performance or services which are the responsibility of Supplier) to IAC’s customer or any one or more of its affiliates upon written notice to, but without the consent of, Supplier.

Tools and Materials. IAC shall retain title to any designs, sketches, drawings; blueprints, patterns, dies, models, molds, tools, special appliances and materials (“Articles”) furnished or paid for by IAC in connection with the Purchase Order. Articles shall be marked as property of IAC, shall be held at Supplier’s risk, shall be properly insured (with loss payable to IAC) and shall be replaced by Supplier if lost or destroyed. Articles shall be used only for production of Products covered by the Purchase Order in the quantities specified and shall be returned to IAC or disposed of at the direction of IAC. Nothing in this Paragraph shall be construed as creating an obligation of IAC to furnish Articles for the Purchase Order, and IAC does not warrant or guarantee the accuracy or reliability of any Articles.

Remedies. The remedies herein reserved shall be cumulative and additional to any other remedies provided in law or equity. Supplier shall pay all damages incurred by IAC as a result of Supplier’s breach of the Purchase Order including these terms and conditions, and any warranty, including without limitation consequential damages. Failure of IAC to insist in any one or more instances upon performance of any of these terms or conditions or any other Purchase Order shall not be construed as a waiver of future performance of any such term or condition, but the obligation of Supplier with respect thereto shall continue in full force and effect.

Government Contracts. If Products or services are being purchased by IAC to fulfill the requirements of a government contract, supplier agrees to accept and accommodate any additional or different terms imposed upon IAC by the applicable government authority.

Compliance with Laws. In connection with the provision of Products hereunder, Supplier shall comply with all applicable federal, state and local laws, executive orders, rules and regulations, including but not limited to the Occupational Safety and Health Act of 1970 as amended (“OSHA”), Toxic Substances Control Act as amended (“TOSCA”), Equal Employment Opportunity Act and the Regulations and Standards issued pursuant thereto, and the Fair Labor Standards Act of 1938 as amended (“FLSA”). Supplier also shall supply IAC at the time of making its first delivery and at any subsequent time relevant to a Purchase Order, with such information as may be necessary to permit IAC to comply with the Federal Hazard Communication Standard as set forth in 29 CFR 1910, 1200. Supplier’s failure to supply such data shall be conclusively presumed to mean that such data is not required for the Product supplied. Further, Supplier warrants that all Products will be in compliance
with the Consumer Product Safety Act (“CPSA”), the National Highway Safety Act (“NHAS”) and regulations issued pursuant thereto.

Communications with Customers. Supplier shall not communicate directly with the Customer identified in the Purchase Order without IAC’s prior written consent.

IAC Trademarks. All of the logos and trademarks contained in any Purchase Order are the property of IAC and shall not be used without the express written consent of IAC.

Access to Supplier’s Facility. Upon a minimum of ten (10) day’s advance notice by IAC, IAC’s authorized representatives shall be provided access to Supplier’s and/or Supplier’s sub- vendor’s facilities to obtain information on production progress, to determine status, and to witness routine tests and inspections. Such access will not include any restricted area where development work of a proprietary nature is being conducted. Supplier shall be notified of, and may be represented at, all tests that may be made. The parties shall agree upon the conditions of any tests.

Excess or Incorrect Materials. Products delivered in error or in excess of the quantity called for in the Purchase Order may be returned at Supplier’s expense.

Payments. Except to the extent otherwise agreed to by the parties, IAC shall pay invoiced amounts within sixty (60) days of the date Supplier’s correct invoice is received by IAC, provided that Products have been received and accepted by IAC or its Customer as contemplated herein.

IAC shall have the right to offset against any payments owed by it to Supplier, any amounts that Supplier may owe to IAC.

ELECTRONIC DATA INTERCHANGE

Scope. IAC and Supplier acknowledge that they may (but shall not be required to) agree to exchange on an electronic basis, all transaction documents between them.

Charges. All electronically exchanged documents contemplated by the Purchase Order shall be channeled through one or more third party networks (“TPNs”). IAC shall arrange and pay for transmission of electronic documents between it and its TPN. Supplier shall arrange and pay for transmission of electronic documents between IAC’s TPN and Suppler. IAC and Supplier reserve the right to change TPNs upon sixty (60) days’ written notice. Each party agrees to provide to the other whatever access codes are required to establish necessary connections.

Security. Each party shall adopt and maintain reasonable security procedures to ensure (A) that documents transmitted electronically are authorized; (B) that its business records and data are protected from improper use; and (C) that the security of access codes and electronic identification codes is maintained.

Acknowledgments. Upon receipt of an electronic document, the receiving party shall promptly issue and acknowledgment to the sending party. Such acknowledgment is solely for the purpose of acknowledging receipt of electronic documents.

System Operations. Each party, at its own expense, shall provide and maintain the equipment, software, services and testing necessary to effectively and reliably transmit and receive documents electronically.

General Provisions. All terms and conditions set forth in this Article shall be applicable if the Purchase Order is placed electronically with Supplier by IAC.

The parties agree that a document properly transmitted electronically hereunder, including a part’s identification, shall be deemed to be a signed writing and, when printed from the electronic records established and maintained by a party in the normal course, shall be deemed to constitute an original document for all legal purposes, and neither party shall contest the validity or enforceability of any such signed writing under the provisions of the Kansas Uniform Commercial Code or other applicable law relating to whether certain agreements are to be in writing and signed by the party to be bound thereby. Further, such signed writings, if introduced as evidence on paper in any judicial, arbitration, mediation, or administrative proceedings, shall be admissible as between the parties to the same extent and under the same conditions as other business records originated and maintained in documentary form, and neither party shall contest the admissibility of a copy of any such signed writing under either the business records exception to the hearsay rule or the best evidence rule on the basis that it was not the original or was not maintained in the documentary form.

In the event either party receives an electronically exchanged document that is obviously garbled in transmission or improperly formatted, that party shall immediately notify the TPN and the other party for retransmission. If this does not remedy the situation, the receiving party shall notify the sending party for joint resolution of the transmission.

MISCELLANEOUS

Survival of Representations and Warranties. All representations and warranties of the parties made herein shall survive the execution, delivery and termination or expiration of the Purchase Order.

Binding Effect. These terms and conditions shall be binding upon and inure to the benefit of the heirs, successors, administrators, legal representatives, and permitted assigns, as the case maybe, of the parties.

Governing Law. The Purchase Order shall be interpreted and enforced under the laws of the State of Kansas applicable to contracts made and to be performed entirely within such State without giving effect to choice of law principles of such State.

Paragraph Headings. The paragraph headings herein are inserted merely for the convenience of the parties and shall not be used to construe or modify the terms set forth herein in any respect.

Partial Invalidity / Severability. If any provision of the Purchase Order is held by a court of competent jurisdiction to be invalid, void or unenforceable in any manner, the remaining provisions shall nonetheless continue in full force and effect without being impaired or invalidated in any way.

In addition, if a court of competent jurisdiction may modify any provision of the Purchase Order such that it may be enforced, then that provision shall be so modified and as modified shall be fully enforced.

Entire Agreement. The Purchase Order and these terms and conditions contains the entire understanding of the parties with respect to its subject matter, and supersedes all prior and contemporaneous agreements, understandings, and negotiations. No parol evidence of prior or contemporaneous agreements, understandings or negotiations shall govern or be used to construe or modify the Purchase Order. No modification or alteration of the Purchase Order or these terms and conditions shall be deemed effective unless in writing and signed by the parties.

Notice. Any notice or other communications required or permitted hereunder shall be sufficiently given if in writing and delivered personally or sent by confirmed facsimile transmission, telex, telecopy or other wire transmission (with request for confirmation in a manner typical with respect to communications of that type), overnight air courier (postage prepaid), or registered or certified mail (postage prepaid with return receipt requested) addressed to the respective party at their address specified in the Purchase Order. Unless otherwise specified herein, notices shall be deemed received (A) on the date delivered, if delivered personally, by wire transmission or confirmed facsimile transmission; (B) on the next business day after deposit with an overnight air courier: or (C) three (3) business days after being sent, if sent by registered or certified mail.

FORCE MAJEURE

Excused Performance. Each party will be excused for its failure or delay in performance at any time during which performance is prevented by events beyond its reasonable control and without its failure or negligence (Force Majeure), which events may include, but will not be limited to: (1) an act of God, epidemic, landslide, lightning, earthquake, fire, explosion, accident, storm, flood or similar occurrence; (2) an act of public enemy, war, blockade, insurrection, riot, general arrest or restraint of government and people, civil disturbance or similar occurrence; or (3) a strike, lockout, or similar industrial or labor action.

Reasonable Effort. This Article will not relieve the non-performing party from using reasonable efforts to overcome or remove such Force Majeure with all reasonable dispatch. A party claiming the benefit of this article will give prompt notice to the other party of the events giving rise to the assertion and the estimated duration thereof and will keep such other party reasonably advised as to the progress of such party’s attempts to overcome or remove such Force Majeure.