Terms and Conditions – Zekelman Procurement

1. Applicability

These Purchase Terms and Conditions (“Terms”) are the only terms which govern the purchase of goods (“Goods”) or services (“Services”) by Zekelman Industries, Inc. or any of its affiliates (“Buyer”) from the seller or vendor (“Seller”) named on the Purchase Order, Proposal or similar purchasing document (the “Purchase Order”). The Purchase Order and these Terms (collectively, this “Agreement”) comprise the entire agreement between Seller and Buyer, and supersede all prior or contemporaneous understandings, agreements, negotiations, representations and warranties, and communications, both written and oral. Buyer’s purchase of the Goods or Services is conditioned on the Seller’s agreement that any terms different from or in addition to those in this Agreement, whether communicated orally or contained in any quote, proposal, order confirmation, invoice, or other written correspondence, irrespective of timing, shall not form a part of the Agreement, even if Seller purports to condition its acceptance of any purchase order on Buyer’s agreement to such different or additional terms.  Fulfillment of or other performance under the Purchase Order by Seller constitutes acceptance of these Terms.

2. Payment Terms and Invoicing

Invoices not rendered in accordance with Buyer’s instructions will be returned and discount rate will be based upon the date the corrected invoice is received by Buyer. Payment terms will begin on the later of the receipt of the Goods or Services or the receipt of the Invoice.

3. Discount Policy

Discount periods will be computed as commencing on the later of (1) the invoice date or (2) the date the Invoice was received by Buyer.

4. Packing

All Goods shall be shipped fully assembled, (or where not practicable to do so, as completely assembled as permitted by the carrier), suitably packed and accompanied by a packing list.  Cartons containing packing lists must be marked.  Uncrated or bundled Goods must be tagged with waterproof tags.

5. Identification; Shipping Notices

Seller shall show Purchase Order Number and item part number on all invoices, packing lists, packages and pieces.  Shipping notice shall be sent electronically via email to Buyer’s Purchasing Department at the email address shown on the Purchase Order.

6. Additional Charges

No additional charges of any kind, including charges for packing or drayage will be allowed unless arranged for and agreed to in writing by Buyer’s authorized representative at time of purchase.

7. Modification of Terms

The Purchase Order is expressly subject to, and Seller’s acceptance is expressly conditioned upon Seller’s assent to each and all of these Terms.  No addition to or modification of these Terms shall be binding upon Buyer and no Goods or Services shall be substituted for those specified in the Purchase Order except upon the written consent of Buyer’s Purchasing Department. Where Seller’s quotation, order acknowledgement or other correspondence contain terms or conditions contrary to or in addition to these Terms, neither acceptance by Buyer of the Goods or Services nor payment therefore shall constitute a waiver by Buyer of these Terms or assent to any other conditions.  Reference to Seller’s proposals, if noted on the Purchase Order, shall not affect the terms and conditions hereof unless specifically provided to the contrary herein.

8. Process Changes

Once the Buyer and Seller have conducted material trials and the trial material has been approved for use in the Buyer’s operations, the Seller may not change the process without the Buyer’s written approval.

9. Non-Conforming Goods

All Goods received shall be subject to Buyer’s right of inspection and rejection.  Seller shall reimburse Buyer for all costs associated with  excess Goods or defective Goods not in accordance with Buyer’s specifications.  Excess or Defective Goods will be held for disposition in accordance with Seller’s instructions at Seller’s risk and expense and, if Seller directs, will be returned at Seller’s expense.  Returned Goods may be replaced by Seller upon Buyer’s formal Purchase Order placed by a duly authorized representative of Buyer.  If inspection discloses that a portion of the Goods are not in accordance with specifications or descriptions hereof, Buyer shall have the right to cancel any unshipped portion of this order.  Payment for Goods or services furnished or performed pursuant to this order shall not constitute acceptance thereof by Buyer and such payments shall be deemed to have been made without prejudice to any and all claims Buyer may have against Seller.

10. Warranty

In addition to any other warranties provided by Seller, Seller expressly warranties that all Goods and Services covered by the Purchase Order will conform to the specifications, drawings, plans, instructions, samples or other description furnished or adopted by Buyer, will be merchantable, fit and sufficient for the purpose intended including any special requirements of Buyer which have been disclosed to Seller, and shall be free from defects, whether latent or patent, in material and workmanship and shall be free from all liens and encumbrances created by or through Seller.  Such warranties, and the remedies provided herein shall survive delivery, shall not be deemed waived either by reason or acceptance or payment, and shall be in addition to those implied by or available at law.

11. Confidential Information

All non-public, confidential or proprietary information of Buyer, including but not limited to, specifications, samples, patterns, designs, plans, drawings, documents, data, business operations, customer lists, pricing, discounts or rebates, disclosed by Buyer to Seller, whether disclosed orally or disclosed or accessed in written, electronic or other form or media, and whether or not marked, designated or otherwise identified as “confidential” in connection with this Agreement is confidential, solely for the purpose of performing this Agreement and may not be disclosed or copied unless authorized in advance by Buyer in writing. Upon Buyer’s request, Seller shall promptly return all documents and other materials received from Buyer. Buyer shall be entitled to injunctive relief for any violation of this Section.

12. Subcontractors

All subcontractors or other third parties that are engaged by Seller in connection with the provision of Goods or Services under this Agreement (“Subcontractors”) shall be subject to Buyer’s approval at all times.  Seller shall be responsible and liable for all acts and omissions of any of its Subcontractors.  Seller shall require each Subcontractor to be bound in writing by these Terms, as applicable, including confidentiality provisions.  Seller shall provide Buyer proof of insurance for any Subcontractor upon Buyer’s request, which conforms to the requirements in Section 17 of these Terms.

13. Delays

Shipment and delivery date(s) specified are of the essence of the Purchase Order.  However, Seller shall not be liable for delays in manufacture or delivery of goods and services and Buyer shall not be liable to accept any part of such Goods and Services to the extent that such delays are due to causes beyond its reasonable control such as acts of God, acts of civil or military authorities, Governmental priorities, fires, strikes, lockouts, floods, epidemics, war, not of contingency the non-occurrence of which was a basic assumption on which the Purchase Order was made, provided Seller uses its best effort to remedy the situation and first allocates all available production and  delivers to Buyer and provided further that Seller has notified Buyer promptly (but in any event with seven calendar days) of the occurrence which causes such delay.

14. Advertising

Seller may not, without written consent of an authorized representative of Buyer, advertise or publish, in any manner, the fact that the Seller has furnished or contracted to furnish to Buyer the materials or services specified.

15. Compliance with Laws

All Goods and Services furnished shall conform to the requirements of all applicable federal and state laws and regulations, local and municipal ordinances and the regulations of any agency of public authority having jurisdiction over the performance of any services hereunder or the manufacture, delivery or installation of any Goods required to be manufactured, delivered or installed hereunder.  Acceptance of the Purchase Order by Seller shall constitute certification to the Buyer that the prices charged hereunder will not exceed any applicable legal pricing ceiling.

16. Fair Labor Standard Act; Country of Origin

Seller certifies  that the Goods  have not been produced, and will not be produced, in violation of any of the provisions of the “Fair Labor Standards Act of 1938” as amended. 

17. Personal Injury, Death, and Property Damage

Seller shall indemnify and hold harmless Buyer and its affiliates, successors or assigns and their respective directors, officers, shareholders and employees (“Indemnified Parties”) from and against any and all losses, claims, damages, liabilities and expenses of any kind or nature (including attorney’s fees), which may arise out of result from, or be reasonably incurred in connection with Seller’s or any Subcontractor’s acts or omissions relating to the Purchase Order, jointly and severally, to which any Buyer Indemnified Party may become subject, including, without limiting the generality thereof, losses, claims, damages, liabilities and expenses (and actions in respect thereof) which relate to injury to or death of persons or damage to property that may have been caused, or that may be alleged to have been caused, directly or indirectly, by Seller, its Subcontractors or their employees, or agents, or its subcontractors, their employees or agents.  In the event Buyer’s machinery or equipment is used by Seller in the performance of any work that might be required under the Purchase Order, such machinery or equipment shall be considered as being under the sole custody and control of Seller during the period of such use by Seller, and if any person in the employ of Buyer should be used to operate said machinery or equipment during the period of such person or persons shall be deemed during such period of operation to be an employee or employees of Seller.

18. Insurance

Where fulfillment of the Purchase Order requires Seller to perform work on Buyer’s premises, Seller shall procure at its own cost and keep in force the following insurance, satisfactory to Buyer as to form and limits of liability until completion and final payment hereunder: (a) Workmen’s Compensation Insurance, as required by the Workmen’s Compensation laws of the state in which the work is being performed; (b) Public Liability and Property Damage Insurance, including contractual liability insurance as required to cover liabilities assumed in Paragraph 16 and (c) Automobile Liability and Property Damage Insurance if automobiles trucks, trailers or other vehicles to be used. Prior to the commencement of any work hereunder, evidence of such insurance in policy or certificate form, shall be provided to Buyer.  Where any part of the Purchase Order is performed by a subcontractor of Seller, evidence of such Insurance on behalf of such subcontractor similarly shall be provided by Seller to Buyer.

19. Liens and Claims

Seller shall pay promptly all claims and demands for all labor performed, for machinery fuel or any other material or equipment furnished in the performance of the work contemplated by the Purchase Order, and shall fully protect and indemnify Buyer against any and all claims or debt on account of which liens might be obtained.  Seller also shall indemnify Buyer against court costs and attorneys’ fees incurred or sustained by Buyer by reason of any such claims, debts or liens.  Buyer reserves the right to satisfy and obtain the release of any liens filed against the property of Buyer as a result of work performed or materials furnished by Seller hereunder, and in such cases to use sums otherwise payable by Buyer to Seller hereunder.

20. Bankruptcy, etc.

In the event, Seller files a voluntary petition in bankruptcy, makes a general assignment for the benefit of creditors, takes any action or adopts any procedure available to Seller under any provision or chapter of the Federal Bankruptcy Act or State Receivership Laws or fails to secure the immediate dismissal of an involuntary petition in bankruptcy, or if a receiver is appointed to liquidate or conduct the business of Seller, then Buyer may immediately terminate the Purchase Order without liability to the Seller in respect of any portion of the Goods or Services not theretofore delivered or performed.

21. Proprietary Rights

Seller agrees to indemnify, hold harmless and defend Indemnified Parties from and against any and all claims, demands, suits actions, legal proceedings, judgments, decrees, awards, damages, royalties, costs, including reasonable attorneys’ fees and any other expenses arising from (a) the infringement or alleged infringement of any United States or foreign patent by the Goods or Services  furnished hereunder, or by the normally intended use or mode of operation of the Goods or Services so furnished, (b) any unfair competition resulting from any similarity of design or appearance of, or trademark on, the Goods furnished hereunder, and (c) the unauthorized use or alleged unauthorized use of any trade secrets, proprietary rights incorporated in the Goods or Services furnished hereunder necessary or appropriate for the use of furnished of any Goods or Services hereunder.  Buyer may be represented in any such suits, action or legal proceedings by counsel of its own selection.

22. Equal Opportunity

Where applicable, Seller shall abide by the following:  (a) the Equal Employment Opportunity clause referred to in Executive Order 11246, as amended, (b) all provisions of 41 CFR 60-250, as amended pertaining to Affirmative Action for Disabled Veterans and Veterans Era where the value of Goods or Services furnished hereunder exceeds $10,000, (c) all provisions of 41 CFR 60-741 as amended pertaining to Affirmative Action for Handicapped Workers where the value of Goods or Services furnished hereunder exceeds $2,500 and (d) similar applicable requirements of any state, local or municipal law.

23. Use of Buyer’s Products

To the extent that Seller will purchase raw materials or other products for the fulfillment of the Purchase Order, and such raw materials or other products are produced or sold by Buyer or any of its subsidiaries, Seller shall purchase such items from Buyer or its subsidiaries unless otherwise agreed to in writing by Buyer.

24. Time and Material Work

Where the purchase price is to be determined by Seller’s time or cost of materials or otherwise from records to be maintained by Seller, Seller will retain all records necessary for such determination for a period of at least one year after the completion of the Purchase Order and will permit Buyer access thereto at all reasonable times for the purpose of audit.

25. Pricing and Escalation

If price is omitted on the Purchase Order, it is agreed that Seller’s price will be the lowest prevailing market price.  Unless escalation terms are specifically stated on the face hereof, no escalation will apply.

26. Assignment

Seller shall not assign the Purchase Order or any interest therein or any payment due or to become due without the written consent of Buyer.  Any actual or attempted assignment without Buyer’s written consent shall entitle Buyer to withhold payment until Buyer has determined to whom such funds are payable and that Buyer is fully protected from any conflicting claims of Seller, Seller’s assignee or any third party and from any loss or expense in connection therewith. Buyer may assert any counterclaim or set-off which Buyer may have against Seller, against any assignee, whether or not such counterclaim or set-off arose under or with respect to the Purchase Order.

27. Termination

Buyer may terminate the Purchase Order or any part thereof for any reason at Buyer’s convenience upon written notice to Seller.  Upon such termination Seller agrees to waive all claims for damages including those for loss of anticipated profits and to accept as its sole remedy for termination the value of all work performed prior to the termination and reasonable costs occasioned by termination provided however, that Buyer shall have no liability whatsoever for Goods which are seller’s standard stock.  No such termination shall relieve Seller of any of its obligations for any Goods delivered or Services rendered hereunder.  Any claim for adjustment must be asserted within 90 calendar days from the date when the termination is ordered.

28. Anticipation of Delivery Schedule

Unless otherwise agreed to in writing, Seller shall not make material commitments or production agreements in excess of the amount or in advance of the time necessary to meet schedules that are within lead time.  It is Seller’s responsibility to comply with its scheduled lead times but not to anticipate Buyer’s requirements.

29. Complete Agreement

This Agreement, together with any other documents incorporated herein by reference, constitutes the sole and entire agreement between Buyer and Seller with respect to the subject matter hereof, superseding completely any oral or written communications unless the terms thereof are expressly incorporated herein.