Master Terms & Conditions for the Provision of Goods and/or Services to Electrosonic

DEFINITIONS

“Agreement”: refers to the combination of a Purchase Order, these subsequent terms, and potentially a Prime Contract, any approved Change Orders pursuant to the PO, and any other documents as specified in a PO. This Agreement shall have precedence over all other terms and conditions, including any terms or conditions which the supplier (defined below) may purport to apply or which are endorsed upon any correspondence or documents issued by the Supplier irrespective of their date of communication to Electrosonic.

“Purchase Order” (“PO”): the document in which Electrosonic specifies the deliverables which are to be supplied under this Agreement.

“Electrosonic”: refers to the Electrosonic entity requesting the order of the Services.

“Services”: refers to the provision of certain services and/ or the provision of certain materials by the Supplier to Electrosonic as specified in the agreement.

“Supplier”: refers to the entity providing the Services to Electrosonic or any of its affiliates pursuant to a PO.

“Prime Contract”: refers to the main agreement between Electrosonic or any of its affiliates, and its client.

“Price”: refers to the price of the Services as specified in the Purchase Order.

The Supplier understands that the Agreement will become binding and the conditions contained herein shall be deemed to have been accepted upon acceptance of the Purchase Order, or on delivery of the Services, whichever comes first.

Pursuant to the terms and conditions contained herein, Supplier and Electrosonic agree as follows:

1. The Prime Contract. Supplier understands that Electrosonic has been or may be engaged by clients to perform certain services and to provide certain deliverables. Electrosonic may furnish a copy of the contract with its client (“Prime Contract”) prior to the acceptance of an order. In such circumstances, and to the extent that provisions of the Prime Contract apply to the work of the Supplier, the Supplier shall assume toward Electrosonic all obligations and responsibilities that Electrosonic, under the Prime Contract, assumes towards its client. Electrosonic shall have the benefit of all rights, remedies, and redress against Supplier that the client under the Prime Contract has against Electrosonic. Except as otherwise specifically provided in the this Agreement contained herein, when a provision of the Prime Contract conflicts with a provision of these this Agreement, this Agreement shall prevail.
2. Engagement of Supplier; Services. Supplier agrees to provide the Services, at its sole expense, together with all necessary equipment, tools and other materials. If the Services (or any part thereof) are not delivered in accordance with this Agreement, the Supplier shall be responsible for all additional expenses incurred in delivering them in accordance with these Terms and Conditions or as otherwise advised in writing by Electrosonic. Except as otherwise specifically provided in these this Agreement.
3. Independent Contractor Relationship. Supplier’s relationship with Electrosonic is that of an independent contractor, and nothing in the Agreement is intended to, or should be construed to, create a partnership, agency, joint venture or employment relationship. Supplier shall be solely responsible for complying with all applicable local, state and federal laws governing its employees or agents, including but not limited to obligations such as compliance with occupational health and safety regulations and payment of employment taxes, social security, disability and other contributions attributable to the rendition of Services hereunder to Electrosonic. Supplier shall indemnify, hold harmless and defend Electrosonic from any and all claims, liabilities, damages, taxes, fines or penalties sought or recovered by any governmental entity, including but not limited to the Internal Revenue Service or any state taxing authority, arising out of Supplier’s alleged failure to pay such taxes or make such contributions. Nothing in the Agreement shall be deemed to constitute Supplier or Electrosonic the agent of the other. Supplier will not be entitled to any of the benefits that Electrosonic may make available to its employees, including, but not limited to, group health or life insurance, profit-sharing, paid vacations or retirement benefits.
4. Compensation. As full compensation for the Services, Electrosonic shall pay Supplier the amounts specified in the PO in the manner and at such rates provided in that PO. Electrosonic shall not be liable to Supplier for any per diem expenses of persons performing the Services unless Electrosonic expressly agrees in writing to pay per diem expenses; provided, however, that Electrosonic shall then be obligated to pay only those expenses accompanied by reasonable documentation. Supplier shall submit invoices for compensation within ten (10) days of the acceptance of Services by Electrosonic. Electrosonic shall have no obligation to pay Supplier for any invoices received for Services later than twenty (20) days after the due date set forth herein. Supplier shall not be entitled to undertake chargeable activity until Electrosonic has provided a signed PO to cover the chargeable activity, and has authorized the supplier to commence the chargeable activity in writing. Supplier agrees that each invoice will include a detailed statement of hours worked by each of Supplier’s personnel assigned to perform Services, a description of specific Services performed by each such person, and other information reasonably requested by Electrosonic. Invoices reflecting changes in the scope of the Services will not be paid unless they clearly reflect the Services performed and have been approved in writing by Electrosonic in accordance with the procedure detailed in Section 5 below. Electrosonic may withhold payment for any period during which the Supplier or its personnel does not perform the services in the manner or within the time frame set forth in the PO. Electrosonic reserves the right to reverse previously paid invoices if payments are not received from its client for the work performed by Electrosonic or its agents and Suppliers within ninety (90) days.
5. Change Orders. Changes to the PO that will result in any change in costs or the time of performance of the work from the original quote provided by Supplier must be approved in writing by Electrosonic prior to Supplier performing the related Services. Electrosonic may request changes to the PO by issuing a written request to Supplier (“Change Order”). Supplier shall accept all Change Orders submitted by Electrosonic and shall perform the Services in accordance with such Change Orders. If a Change Order changes the time of performance or materials required for Supplier to perform the Services, then the parties shall negotiate in good faith regarding a commensurate change in the related fees. The PO shall be amended to incorporate all Change Orders and any resulting change in fees.
6. Term; Termination.
   (a) The Agreement is effective as of the date set forth in an approved PO and shall continue in full force and effect until completion of the Services, unless sooner terminated pursuant to the provisions of this Section.
   (b) The Agreement may be terminated in whole or in part by Electrosonic for convenience by written notice delivered to Supplier. Upon such termination, Electrosonic shall pay Supplier reasonable termination charges equal to a percentage of the charges due under the PO which reflects the amount of work performed prior to the termination, in addition to direct out-of-pocket expenses actually incurred by the Supplier which it is unable to mitigate following best endeavor attempts to mitigate such charges..
   (c) Where conduct or performance of Supplier is unacceptable compared to generally accepted industry standards, Electrosonic may terminate the Agreement for cause effective immediately upon written notice to Supplier . If Electrosonic terminates the employment of Supplier for cause, Electrosonic shall pay to the Supplier that portion of the cost of the work incurred by the Supplier as of the date of termination that are not subject to dispute or a claim for loss or damage caused by Supplier .
   (d) Supplier may, upon written notice identifying specifically the basis for such notice, terminate the Agreement for material breach by Electrosonic of a term or condition of the Agreement, provided Electrosonic does not cure such breach within thirty (30) days following delivery of such notice. In the event of such termination, Electrosonic shall pay Supplier for all Services performed and expenses incurred (all in accordance with and subject to the provisions of Section 4 of the Agreement) by Supplier prior to the date of termination.
7. Non-Compete. Electrosonic has maintained and continues to maintain and use commercially valuable proprietary information which is vital to the success of Electrosonic's business, including, by way of illustration and without limitations, the names and addresses of the customers of Electrosonic and the marketing needs, habits and strategies of each of the customers of Electrosonic. The Supplier is engaged by Electrosonic in a capacity in which it will become acquainted with all or part of this information. To guard the legitimate interest of Electrosonic in this information, it is necessary for Electrosonic to protect this information by holding it confidential.
   Therefore, the Supplier agrees that during the term of this Agreement and for a period of twelve (12) months following the termination of the Supplier’s engagement with Electrosonic hereunder, it shall not directly or indirectly solicit Electrosonic’s customer for whom it performed services while engaged by Electrosonic. However, if Supplier has a business relationship with Electrosonic’s customer and has in the 12 months previous to the engagement with Electrosonic in connection with the PO provided products and/or services to the customer for which the Supplier has been compensated, Electrosonic will not restrict the Supplier from continuing to engage in a business relationship with Electrosonic’s customer as long as the services and products provided do not result in lost business to Electrosonic. 
   Supplier acknowledges that Electrosonic's remedy in the form of monetary damages for breach of this provision may be inadequate and that, in addition to any such remedy for said breach, Electrosonic shall be entitled to institute and maintain any appropriate proceeding including an action for specific performance and/or injunction.

8. Confidential Information. “Confidential Information” of Electrosonic shall be defined as any and all Electrosonic proprietary information, technical data, trade secrets, or know-how, including but not limited to, agreements, financial plans and arrangements, methods of operation, sales and marketing strategies, manuals, policies, plans and reports, personnel and payroll records, customer, prospect and recruiting lists, inventory, costs and pricing policies or other business information disclosed to Supplier by Electrosonic either directly or indirectly, in writing, orally or by drawings or observation. Such Confidential Information is the sole property of Electrosonic and constitutes confidential trade secrets of Electrosonic, to be held by Supplier in trust and solely for Electrosonic’s own benefit. Supplier agrees that, except as reasonably necessary in connection with the performance of a PO (and these this Agreement), Supplier shall not disclose, publish, reproduce, or make any use of any Confidential Information of Electrosonic without the express written consent of Electrosonic. Confidential Information does not include any information that: (a) enters the public domain other than by a breach of this Section 8 by Supplier or its employees or personnel; (b) becomes known to Supplier from a documented source other than Electrosonic, other than by the breach of an obligation of confidentiality owed to Electrosonic or other than by a third party acting to assist Supplier in connection with the Agreement; or (c) Electrosonic authorized the publication or disclosure of in writing. In the event that Confidential Information is required by law to be disclosed, Supplier shall first give a minimum of ten (10) days prior written notice to Electrosonic so that Electrosonic may seek a protective order limiting disclosure or requiring that the information and/or documents to be disclosed be used only for purposes for which the order was issued. It is understood that disclosure of Electrosonic’s client or the PO for the use of promotion after the PO is complete (either via publication or orally) by the Supplier is strictly prohibited.
   Supplier agrees to take at least the same precautions to ensure the protection, confidentiality and security of Electrosonic’s Confidential Information entrusted to it and to satisfy its obligations under the Agreement as it would to protect its own Confidential Information, but in no event less than a reasonable standard. Supplier shall also limit the access to such Confidential Information to only those employees or personnel having a need to know, and such employees and personnel shall be instructed concerning their obligations to maintain confidentiality. Supplier shall return to Electrosonic the Confidential Information, or destroy and certify such destruction of such Confidential Information, promptly upon the Electrosonic’s request or upon termination of the Agreement.
   Supplier will notify Electrosonic promptly upon learning of the occurrence of any unauthorized disclosure or use of Confidential Information and will assist Electrosonic in remedying the breach. Supplier acknowledges that monetary damages may not alone be a sufficient remedy for unauthorized disclosure of Electrosonic’s Confidential Information and that Electrosonic shall be entitled, without waiving any other rights or remedies, to such injunctive or equitable relief, without any requirement of posting a bond or other security, as may be deemed proper by a court of competent jurisdiction.

9. Remedies. If Supplier commits or, in the reasonable belief of Electrosonic, threatens to commit a breach of any provision of this Agreement, Supplier acknowledges that any such breach or threatened breach will cause irreparable injury to Electrosonic for which money damages will not provide an adequate remedy; therefore, Electrosonic shall have the right and remedy, in addition to any other remedy that may be available at law or in equity, to have the provisions of the Agreement enforced by any court having equity jurisdiction together with an accounting for any benefit or gain by Supplier in connection with any such breach. Such injunction shall be available without the posting of any bond or other security, and Supplier hereby consents to the issuance of such injunction.
   Where conduct or performance of Supplier is unacceptable compared to generally accepted industry standards, in addition to Electrosonic’s right to terminate this Agreement and withhold payment for the cost of the work incurred by the Supplier as of the date of termination that is subject to dispute or a claim for loss or damage caused by Supplier under Section 6(c), Supplier agrees that Electrosonic shall be entitled to either obtain substitute performance from a third party or perform the services itself, and Supplier shall pay Electrosonic the costs of such substitute performance within ten (10) days of the invoice date.
   All rights and remedies provided in the Agreement are cumulative and not exclusive, and the exercise by either party of any right or remedy does not preclude the exercise of any other rights or remedies that may now or subsequently be available at law, in equity, by statute, in any other agreement between the parties, or otherwise. Despite the previous sentence, the parties intend that the Supplier’s exclusive remedy for Electrosonic’s payment breach shall be Supplier’s right to damages equal to its earned but unpaid fees.

10. Title; Ownership. If Supplier is working on a “work made for hire” basis under the copyright laws, all reports, programs, manuals, tapes, listing and any other material prepared exclusively for Electrosonic pursuant to the PO by Supplier shall belong exclusively to Electrosonic. All records, files, specifications, technical data and the like relating to Electrosonic’s business, which Supplier shall prepare, use, or come into contact with, shall be and remain Electrosonic’s sole property.
    To the extent that title to any works may not, by operation of law, vest in Electrosonic or such works may not be considered “work made for hire,” all rights, title and interest therein are hereby irrevocably assigned by Supplier to Electrosonic without further consideration. All such materials shall belong exclusively to Electrosonic, with Electrosonic having the right to obtain and to hold in its own name, copyrights, registrations or such other protection as may be appropriate to the subject matter, and any extension and renewals thereof. Supplier agrees to give Electrosonic and any persons designated by Electrosonic, reasonable assistance, at Electrosonic’s expense, required to perfect the rights defined in this Section.

11. Project Representatives. Each of Electrosonic and Supplier shall designate a representative who shall be fully acquainted with the PO and have authority to issue and approve requests for changes in the scope of the Services, render decisions promptly, and furnish information expeditiously.
12. Warranty; Indemnification. Supplier warrants that the Services will conform to the requirements and written specifications contained in the PO, and assumes all liability for any breach of these terms by it or any of its employees, agents or representatives. Supplier agrees to indemnify, hold harmless and defend Electrosonic and any director, officer, employee or agent thereof (each, an “Indemnified Party”) from and against all claims, liabilities, losses, expenses, (including attorneys’ fees and legal expenses related to such defense), fines, penalties, taxes or damages (“Liabilities”) asserted against any Indemnified Party where such Liabilities arise out of or from (1) the acts, omission and performance obligations of Supplier or its employees, agents or representatives in the course of providing the Services pursuant to the Agreement; (2) a breach of any representation, warranty or other obligation of Supplier under the Agreement or (3) the infringement of a copyright, patent, trade secret, trademark or any other proprietary right of a third party by any of the deliverables created by Supplier or materials otherwise provided by Supplier. Electrosonic shall promptly notify Supplier of any third party claim subject to indemnification hereunder.
13. Insurance. The Supplier shall have in force and maintain adequate insurance with a reputable insurance company in respect of its liabilities under this Agreement for a minimum of $1 million per event and $2 million aggregate Employers Liability (or local currency equivalent).
14. Intellectual Property.
    Where Services provided to a specification, model, or plans, the rights in or to exploit or to license any right or interest of any kind arising out of or granted or created in respect of any and all patents, trademarks, service marks, domain names, registered designs, inventions, know-how, confidential information, unregistered trademarks and service marks, trade and business names, unregistered design rights and other rights in designs and rights in databases, subsisting anywhere in the world or rights of the same or similar effect or nature as or to those above, in each case, in any jurisdiction (“Intellectual Property Rights”), in so far as they relate to the specification, model, or plans, and any improvements or developments thereof shall be the absolute property of Electrosonic, and the Supplier will assign all such Intellectual Property Rights to Electrosonic when requested by Electrosonic.
    The Supplier shall, at its expense, defend any actions arising from infringements or alleged infringements of the Intellectual Property Rights in connection with the Services.

15. General Provisions.
    (a) Timing. Time is of the essence in the performance of and compliance with each of the provisions and conditions contained herein pursuant to a PO.
    (b) Governing Law; The Governing law and jurisdiction shall vary depending upon the domicile of the Electrosonic Group Company (“Domicile”) specified in the PO.
    (b)(i) If the Domicile is within the USA, then the contract is made in accordance with and shall be governed and construed in accordance with the laws of the State of Minnesota, United States, without regard to its rule of conflicts of laws. All claims arising under or related to this contract or the negotiation, validity or performance of the terms of the contract by the parties hereto, shall be venued in a Federal or state court sitting in the State of Minnesota, and each party irrevocably consents to the sole and exclusive personal jurisdiction of such courts, waives any objection to the laying of venue in any such court and agrees not to plead or claim that such litigation has been brought in any inconvenient forum or that there are indispensable parties that are not subject to the jurisdiction of such courts.
    (b)(ii) If the Domicile is the United Arab Emirates (“UAE”), then this contract and any dispute or claim whatsoever relating to it or its formation shall be governed by and construed in accordance with English law and the parties irrevocably agree that the Dubai International Finance Centre (DIFC) shall have exclusive jurisdiction. Nothing in this Clause shall (or shall be construed so as to) limit the right of the Supplier to take proceedings against the Customer in the courts of any country in which the Customer has assets for the purposes of enforcing any judgment or award nor shall the taking of proceedings in any one or more jurisdictions preclude the taking of proceedings in any other jurisdiction (whether concurrently or not) if and to the extent permitted by applicable law.
    (b)(iii) If the Domicile is the Netherlands, then this contract, and any dispute or claim arising out of or in connection with this contract or its subject matter or formation, including any non-contractual disputes or claims, will be exclusively governed by and construed in accordance with the laws of the Netherlands, excluding conflict of law rules and choice of law principles that provide otherwise. The United Nations Convention on the International Sale of Goods will not apply to this contract. Any dispute or claim arising out of or in connection with the contract, including any non-contractual claim, will be finally and exclusively resolved by arbitration under the Netherlands Arbitration Institute (“Nederlands Arbitrage Instituut”) Rules of Arbitration (the “RULES”).
    (b)(iv) For all Domicile’s other than the USA, UAE, or the Netherlands, then these terms and any dispute or claim (including non-contractual disputes or claims) arising out of or in connection with it or its subject matter or formation shall be governed by and construed in accordance with the law of England and Wales.
    (c) Entire Agreement; Modification; Waiver. This Agreement is applicable to a PO and constitute the entire agreement between the parties with respect to its subject matter and supersedes all prior and contemporaneous agreements, representations, and understandings of the parties, whether written or oral. No supplement, modification, or amendment of these this Agreement shall be binding unless executed in writing by both the parties. No waiver of any of the provisions of these this Agreement shall be binding unless executed in writing by both of the parties. No waiver of any provision of these this Agreement shall constitute a waiver of any other provision, whether or not similar, nor shall any waiver constitute a continuing waiver.
    (d) Surviving Obligations. The provisions contained herein which, by their nature, would continue beyond the termination or expiration of the Agreement will survive the termination or expiration of the Agreement.
    (e) Severability. Whenever possible, each provision shall be interpreted in such manner as to be effective and valid under applicable law, but if any provision is held to be prohibited by or unenforceable or invalid under applicable law, such provision shall be ineffective only to the extent of such prohibition or invalidity, without invalidating the remainder of such provision or the remaining provisions..
    (f) Assignment. This Agreement may not be assigned or delegated by either party without the written consent of the other party.
    (g) Legal Fees. If Electrosonic brings an action or other proceeding to enforce or interpret the provisions contained herein, and if Electrosonic prevails in such proceeding, it shall be entitled to reasonable attorneys’ fees in addition to any other relief to which it may be entitled.
    (h) Successors and Assigns. This Agreement will be binding upon on inure to the benefit of the parties hereto and their respective heirs, if any, successors and assigns.
    (i) Notices. All notices or other communications required or permitted pursuant to a PO and these this Agreement shall be in writing and shall be deemed to have been duly received (a) if given by facsimile, when transmitted and the appropriate telephonic confirmation received if transmitted on a business day and during normal business hours of the recipient, and otherwise on the next business day following transmission, (b) if given by certified or registered mail, return receipt requested, postage prepaid, three (3) business days after being deposited in the U.S. mails (or local equivalent where Services are being provided) and (c) if given by courier or other means, when received or personally delivered, and, in any such case, addressed to the parties at their respective addresses set forth in a PO. If either party changes its address, such party shall give written notice of the other party of the new address in the manner set forth above, but any such notice will not be effective until actually received by the addressee.
    (j) Headings. The headings contained herein are for reference only and will not affect the meaning or interpretation of the Agreement.
    (k) Force Majeure. Neither party shall be liable for any delay or failure of performance due to causes that are not reasonably foreseeable and which are beyond a party’s reasonable control, including, but not limited to, acts of God, acts of civil or military authorities, fire, power surges or outages, epidemics, quarantine restrictions, flood, natural disasters, riot and war, provided that the affected party shall have given notice to the other party of any such cause for delay or anticipated delay reasonably following the commencement thereof. In the event of a delay for any of the foregoing reasons and if requested by Electrosonic, Supplier shall, immediately upon receipt of the notice from Electrosonic, hold up delivery until further notice from Electrosonic, regardless of whether such hold extends beyond any delivery date specified in the applicable PO. Upon receiving further notice from Electrosonic, Supplier shall promptly make delivery of the material specified in the applicable PO. If Supplier fails to make delivery within a reasonable time, which in no event shall be later than 30 days, Supplier shall be responsible to Electrosonic for all loss incurred by Electrosonic as a result of a change in the market price for the material purchased hereunder from Supplier by Electrosonic.
    (l) Property and Risk. Unless otherwise applicable under the specified Incoterms, property and risk in any goods provided under the Agreement shall pass to Electrosonic only when such goods have been delivered in accordance with the Agreement.
    (m) Suppliers Code of Conduct. The Supplier shall comply with Electrosonic’s Supplier Code of Conduct, and Data Processing Agreement https://www.electrosonic.com/company/legal-information
    (n) Shipping Terms. If a shipping term is not specified in the applicable Purchase Order, shipping terms for the provision of any goods or materials provided under this agreements are DDP (Delivered Duty Paid) for domestic shipments, and DAP (Delivered at Place) (INCOTERMS 2020) for international shipments. All products must be shipped in accordance with the shipping instructions stated on the applicable Purchase Order or as otherwise specified by Buyer, including without limitation, with respect to the required delivery date. Shipping charges shall be paid by Seller. Unless otherwise stated in the Agreement, the Supplier is responsible for obtaining all export and import licenses, consents and permits for the Services, and shall be responsible for any delays due to such licenses, consents and permits not being available when required.
    (o) Inspection. All materials, products and services are subject to testing and approval by Buyer, either before, during or after manufacture, or after delivery, by inspectors designated by the Buyer or by the government at the Buyer’s discretion at the Buyer’s request. The exercise of this right of inspection and test, however, shall in no way relieve the Seller of its obligation to furnish all articles or materials in strict accordance with these Terms and Conditions and the applicable Purchase Orders. If inspection and test is made on the premises of Seller or its supplier, the Seller shall furnish without additional charge all reasonable facilities and assistance for the safety and convenience of the inspectors in the performance of their duties. All inspections and tests shall be performed in such a manner as not to delay the work unduly. Buyer may reject any products or services which do not conform to the Warranties provided in Section 7 hereof. In the case of rejection, the remedies set forth in Section 8 hereof shall be available to Buyer in its discretion. Exercise of these remedies shall not be exclusive of any other remedies provided in law or equity or which are otherwise available to Buyer.