NORTEK SECURITY & CONTROL LLC – TERMS AND CONDITIONS OF PURCHASE



1. Applicability. The purchase order issued by Nortek Security & Control LLC (“NSC”) the seller (as identified on the face of the Purchase Order, “Seller”) (“Purchase Order”) together with these terms and conditions, which are hyperlinked from the Purchase Order or otherwise provided to Seller, collectively constitute a binding agreement (“Agreement”) and apply to all purchases of products (“Products”) and services (“Services” and together with the Products, “Ordered Items”) by NSC from Seller, as such Ordered Items are described on the face of the Purchase Order. Forecasts, to the extent any are provided by NSC, are strictly non-binding, do not constitute any commitment by NSC to purchase, and may not be relied upon. Seller must reject Purchase Orders within three (3) days after receipt or the Purchase Order will be deemed accepted by Seller. NSC expressly limits acceptance of the Agreement to the terms stated herein. NSC hereby rejects any additional, different, or inconsistent terms or conditions contained in any acknowledgment, acceptance, form, or confirmation used by Seller in connection with the implementation of the Purchase Order, however such proposal does not operate as a rejection of the Agreement by Seller (unless such variances are in the description, quantity, price or delivery schedule of the Ordered Items), but will be deemed a material alteration thereof, and the Agreement shall be deemed accepted by the Seller without the addition of any additional, different or inconsistent terms. As an exception to the foregoing, in cases of inconsistency between the terms of this Agreement and the terms of any written agreement between NSC and Seller in effect at the time NSC submits a Purchase Order, the terms of the written agreement will have priority over this Agreement.

2. Shipment and Delivery; Alternate Source.

(a) All Products must be (i) suitably packed or otherwise prepared by Seller for shipment to prevent damage, to obtain the lowest transportation and insurance rates, and to meet the carrier’s requirements, and (ii) shipped according to the instructions on the Purchase Order. Expenses incurred due to failure to comply with these terms are the responsibility of Seller. Seller’s name, complete ship to address, and Purchase Order number must appear on all invoices, bills of lading, packing slips, cartons and correspondence. Bills of lading must be attached to invoices submitted, showing carrier, number of cartons and weight and date of shipment. Packing slips must accompany all shipments listing contents of shipment in detail.

(b) Unless otherwise provided on the Purchase Order, the applicable shipping terms for each domestic deliveries of Products are DAP NSC Destination and the applicable terms for international delivery of Products are DDP. Time is of the essence. Deliveries are to be made only in the quantities and at the times specified in the Purchase Order. If delivery is not expected to be made on time, Seller must immediately notify NSC and take reasonable steps, at its sole expense, to expedite delivery. NSC may cancel any order if delivery is not made on time or if notice is given that a delivery is expected to be late.

(c) NSC may reject any delivery or cancel all or part of any Purchase Order if Seller fails to make delivery in conformity with the terms and conditions of the Agreement, including without limitation any failure of Products to conform to the specifications and performance criteria published or provided by Seller for Products (“Specifications”). NSC’s acceptance of any non-conforming delivery shall not constitute a waiver of its right to reject future deliveries. If Seller (i) fails to supply Products, (ii) fails to supply Products meeting Specifications, or (iii) fails to meet NSC’s delivery schedules and delivery requirements, then NSC may, in its sole discretion, purchase Products from another supplier as an alternate source. In such event, Seller shall reimburse NSC for any additional costs and expenses incurred by NSC in purchasing Products from such other supplier as an alternate source. Upon identification and notification of defective Products or nonconforming shipments, NSC shall receive full credit either for scrap or return, which credit will include full costs paid to Seller, together with shipping, processing and related costs, if applicable. Within one week of notification of the shipment of the defective Product, Seller shall submit to NSC a written explanation of the root cause and corrective actions implemented to prevent reoccurrence.

3. Prices; Payment. Prices for all Ordered Items will be as stated in the Purchase Order, and are inclusive of all applicable federal, state, provincial and local taxes; provided, however, that in no event will the price charged by Seller under the Agreement be less favorable than the lowest price charged by Seller to other customers purchasing the Ordered Items. Payment terms for all Ordered Items will be as stated in the

Purchase Order. NSC shall be entitled to set off any amounts owing at any time from Seller to NSC or any of its affiliated companies against any amount payable at any time by NSC or such affiliates in connection with the Agreement.

4. Inspection/Testing. Payment for the Ordered Items does not constitute acceptance thereof. NSC has the right to inspect all Ordered Items and, for thirty (30) days after receipt, to reject any or all Ordered Items that, in NSC’s judgment, are defective or nonconforming. NSC may request, at its option, repair or replacement of rejected Ordered Items or a refund of the purchase price. Ordered Items supplied in excess of the quantities specified in the Purchase Order may be returned to Seller at Seller’s expense. NSC reserves the right to use rejected Ordered Items, as it believes advisable or necessary to meet its contractual obligations to customers, without waiving any rights against Seller. Nothing contained in the Agreement relieves Seller from the obligation of testing, inspection, and quality control.

5. Confidentiality and Proprietary Rights. Any Specifications, drawings, sketches, models, financial information, pricing information, samples, tools, technical information, methods, processes, techniques, shop practices, plans, know-how, trade secrets, or data, written, oral or otherwise (collectively, the “Information”) furnished to Seller under, or in contemplation of, the Agreement remains NSC’s property. All copies of such Information, in written, graphic, or other tangible form must be immediately returned to NSC upon its request. The Information shall be kept confidential by Seller, shall be used only in the fulfillment of NSC Purchase Orders or in performing Seller’s obligations under the Agreement, and may be disclosed or used for other purposes only upon such terms as may be agreed upon between NSC and Seller in writing prior to such use. Seller hereby grants to NSC a perpetual, irrevocable, transferable, fully paid-up and royalty-free license to use, sell, offer for sale, import, distribute, advertise, market, and promote the Ordering Items (including through packaging, repackaging, labeling, bundling and documentation) that incorporate in whole or in part the patent, copyright, trademark, trade dress or other intellectual property rights of Seller. Seller hereby assigns to NSC, and agrees to assign to NSC in the future, the exclusive right to make use of any invention, improvement, or discovery (whether or not patentable), made, conceived, or reduced to practice by Seller or by any person working under its direction, which resulted from or is connected to the contemplation and fulfillment of the obligations of this Agreement, or resulted from a request by NSC. Such assignment shall be considered as additional consideration for the making of the Agreement. Seller shall deliver to NSC any and all information relating to any such invention, improvement or discovery, and shall cause employees or person working under the Seller’s direction to sign as appropriate all documents necessary to enable NSC to obtain intellectual property rights throughout the world, including applications for patents, and to obtain title thereto. In addition, all Services ordered by NSC are Work -for-Hire, and NSC shall own all right, title and interest in and to such Services; to the extent such rights do not automatically vest in NSC, Seller hereby grants to NSC a perpetual, irrevocable, transferable, fully paid-up and royalty-free license to copy, modify, distribute and publicly perform and display any such Services in its sole discretion.

‘6. Warranties. Seller represents and warrants that: (a) all Ordered Items and Seller’s performance under the Agreement will (i) conform to all applicable drawings, specifications, descriptions, and samples furnished to or supplied by the Seller, (ii) be free from defects in design, material, and workmanship, and (iii) be in compliance with all then applicable laws (whether foreign or domestic), including without limitation laws related to the health and safety of consumers and the protection of the environment and child labor laws; (b) the Ordered Items (including without limitation packaging, labeling, and documentation) do not infringe upon or violate any intellectual property, right of privacy, or other proprietary or property right of any third party; (c) it has the right to grant NSC a license to any intellectual property embedded or incorporated into any Ordered Items; and (d) it has complied and shall comply with all laws applicable to its performance under the Agreement.

7. Termination. NSC may terminate the Agreement in whole or in part upon 15 days’ written notice to Seller. If Seller defaults in the performance of its obligations under the Agreement and is unable to cure the default within 10 days following notice of the default, NSC may terminate the Agreement upon written notice. Upon the termination of the Agreement, in whole or in part, by NSC for any reason, Seller shall immediately (a) stop all work under the terminated Agreement, (b) cause any of its suppliers or subcontractors to cease work, and (c) preserve and protect work in progress and materials on hand purchased for or committed to under the Agreement in its own and in its suppliers’ or subcontractors’ plants pending NSC’s instructions. NSC shall not owe Seller any lost profit or payment for any materials or Products that Seller may consume or sell to others.

8. Indemnity. Seller shall defend, indemnify, and hold harmless NSC, its affiliates, and their officers, employees and agents against all claims, damages, liability, losses, fines, or judgments, including without limitation attorney fees and other costs and expenses, relating to or arising out of (a) Seller’s breach of the Agreement; (b) death or injuries to persons or property due to Seller’s breach of the Agreement; (c) the failure of the Products or Seller’s performance of the Services to comply with the warranties set forth herein; or (d) infringement of a third party’s intellectual property rights by any Products, including packaging, labeling and documentation, or by any Services.

9. Widespread Failure. Seller shall, within 30 days of NSC’s demand, indemnify NSC or its designated third party service provider for all costs and expenses of parts, labor, administrative costs, shipping, replacement product costs and other expenses (including reasonable attorneys’ fees and costs expenses) related to or arising from a Widespread Failure, Product recall, or Product field fix. “Widespread Failure” will be deemed to occur when: (a) the representations and warranties set forth in Section 6 are breached with respect to (i) three percent (3%) or more of the Products shipped within any three-month period, or (ii) one percent (1%) of the Products shipped within the first six months of the initial agreement between Seller and NSC; (b) the return and exchange rate of the Product sold by Seller to NSC is above the category average for the Product, as determined by NSC’s records; (c) a single or single group of defects in a Product (any manufacturing defect that affects the Product cosmetically or functionally) is determined by NSC to impact more than ten percent (10%) of such Products; (d) a Product (including any service parts, replacement parts, spare parts, assemblies and tools required for servicing Products) recall is necessary in the reasonable opinion of NSC or Seller; or (e) the Product should be pulled from the marketplace to comply with applicable Law

as determined by NSC in its sole discretion (including without limitation cases of a voluntary or mandatory consumer product safety recall); provided, however, that no Widespread Failure will be deemed to occur if the applicable defect results solely from an act or omission of NSC.

10. Insurance. Seller shall, at its own expenses, maintain at all times commercial general liability insurance, including without limitation products and completed operations liability, with limits consistent with industry standards. At NSC’s request, Seller shall have NSC added as an additional insured on the commercial general liability insurance policy and shall furnish NSC with a certificate of insurance and applicable insurance policy endorsements evidencing such insurance.

11. Limitation of Liability. IN NO EVENT SHALL NSC’S AGGREGATE LIABILITY FOR ANY LOSS OR DAMAGE ARISING OUT OF OR IN CONNECTION WITH OR RESULTING FROM THE AGREEMENT EXCEED THE AMOUNTS ACTUALLY PAID FOR ORDERED ITEMS HEREUNDER DURING THE THREE-MONTH PERIOD IMMEDIATELY PRECEDING THE FIRST EVENT GIVING RISE TO SUCH LIABILITY. NSC SHALL NOT BE LIABLE FOR INTEREST CHARGES OR PENALTIES OF ANY DESCRIPTION, OR FOR SPECIAL, INCIDENTAL, INDIRECT, PUNITIVE, OR CONSEQUENTIAL DAMAGES, INCLUDING WITHOUT LIMITATION LOSS OF ANTICIPATED PROFITS OR BUSINESS INTERRUPTION FOR ANY REASON. NO LAWSUIT MAY BE BROUGHT AGAINST NSC ON ACCOUNT OF ANY BREACH BY NSC UNLESS THE SUIT IS INSTITUTED WITHIN TWO YEARS OF THE DATE OF THE BREACH. SOME JURISDICTIONS DO NOT ALLOW THE EXCLUSION OR LIMITATION OF INCIDENTAL OR CONSEQUENTIAL DAMAGE, LOSS, OR LIABILITY FROM INTENTIONAL ACTS (INCLUDING FRAUD, FRAUDULENT MISREPRESENTATION, AND FAILURE TO DISCLOSE DEFECTS), PRODUCT LIABILITY, OR FOR DEATH OR PERSONAL INJURY. NOTHING IN THIS SECTION WILL BE INTERPRETED AS EXCLUDING LIABILITY THAT CANNOT UNDER APPLICABLE LAW BE EXCLUDED IN THOSE JURISDICTIONS. THE LIMITATIONS SET FORTH ABOVE SHALL BE DEEMED TO APPLY TO THE MAXIMUM EXTENT PERMITTED BY LAW AND NOTWITHSTANDING THE FAILURE OF ESSENTIAL PURPOSE OF ANY LIMITED REMEDIES, EACH PARTY ACKNOWLEDGES AND AGREES THAT THEY HAVE FULLY CONSIDERED THE FOREGOING ALLOCATIONS OF RISK AND FIND IT REASONABLE, AND THAT THE FOREGOING LIMITATIONS ARE AN ESSENTIAL BASIS OF THE BARGAIN BETWEEN THE PARTIES.

12. Governing Law. The Agreement and all rights and duties under the Agreement are governed by and interpreted according to the Laws of the State of California, without regard to conflicts of law. Each party disclaims the applicability of the United Nations Convention on Contracts for the International Sale of Goods to this Agreement. NSC shall have all rights and remedies granted it by the Uniform Commercial Code, without exclusion or limitation. NSC’s rights under the Agreement are in addition to any other legal or equitable remedies it may have against Seller. Any disputes arising from this Agreement shall be brought in a state or federal court located in San Diego County, California, and the parties hereby irrevocably consent to the exclusive jurisdiction and venue of the federal and state courts of San Diego, California. The prevailing party in any litigation shall be entitled to its reasonable attorneys’ fees and expenses. 13. Compliance Matters. Seller must comply with all NSC policies applicable to Seller, including without limitation the Melrose Industries PLC Code of Ethics and Compliance Polices found at https://secure.ethicspoint.eu/domain/media/en/gui/102157/resources.html. Seller must strictly comply with all applicable statutes, laws and regulations (“Laws”), including without limitation all applicable environmental, health and safety, trade, and import/export Laws.

14. Anti-Corruption. Seller confirms that it has not, so far as it is aware, nor has any of its employees or associated persons, committed an offence offense under the United Kingdom Bribery Act 2010 (UKBA), the US Foreign Corrupt Practices Act 1977 (as amended) (FCPA), or any other applicable anti-bribery or anti-corruption law in connection with this Agreement. In addition, Seller represents and warrants that as of the effective date of the Agreement, neither Seller nor any of its officers, employees or other persons associated with it: (i) has been convicted of any offense involving slavery and human trafficking; and having made reasonable enquiries, so far as it is aware, or (ii) has been nor is the subject of any investigation, inquiry, or enforcement proceedings by any governmental, administrative or regulatory body regarding any offence offense or alleged offense of or in connection with slavery and human trafficking.

  • (a) Seller undertakes to NSC that:
    1.  it will not, and will procure that none of its directors, officers or employees will, engage in any act of bribery in connection with its undertakings under this Agreement;
    2.  it will take all reasonable steps (including the completion of risk based training and due diligence) to ensure that its agents, sub-contractors, consultants and representatives do not engage in any act of bribery in connection with any matter relating to this Agreement;
    3.  it will, and will procure that its directors, officers and employees will, comply with NSC’s anti bribery and corruption policy as may be amended from time to time;
    4.  it will take all reasonable steps to ensure that its agents, sub-contractors, consultants and representatives comply with NSC’s anti bribery and corruption policy as may be amended from time to time, a copy of which is available upon written request if not already supplied to Seller by NSC;
    5.  it will not enter into any agreements with an associated person in connection with this Agreement, unless such agreement contains undertakings on the same terms as contained in this clause;
    6.  it has and will maintain in place adequate procedures within the meaning of the UKBA and to ensure compliance with the same and to ensure compliance with the FCPA and any applicable other anti-corruption laws;
    7.  it shall notify NSC as soon as practicable of any breach of any of the undertakings contained within this clause and/or any actual or potential breach of the UKBA, the FCPA, or any other applicable anti- bribery law of which it becomes aware; and viii. in performing its obligations under this agreement, Seller shall comply with all applicable anti-slavery and human trafficking laws, statutes, regulation regulations and codes from time to in force.
  • (b) For purposes of this Agreement, an act of bribery shall include direct or indirect offering, promising, authorizing, or giving of a financial or other advantage or anything of value to another person with the intention of inducing that person (or a third party) to give improper assistance or advantage, or to influence acts or decisions, or to induce acts or omissions that are contrary to a person’s duties (or as a reward for so doing) in order to direct, obtain, or retain business or an advantage in the conduct of business.
  • (c) Notwithstanding any other provision of this Agreement, NSC may immediately suspend this Agreement, and any payments thereunder, in the event it should receive information which it determines in good faith and in its sole discretion to be evidence of a breach by Seller of any undertaking in paragraphs (a) and (b) above in this Section 14. NSC shall not be liable to Seller for any claims, losses, costs or damages related to its decision to withhold payments under this paragraph.
  • (d) In the event of receipt of such evidence and/or such suspension, NSC and/or its authorized representative shall have the right to audit the Seller in order to satisfy itself that no breach has occurred, and Seller shall fully cooperate with any such audit or related inquiry.
  • (e) Without prejudice to Section 14(a), NSC shall be entitled to terminate this Agreement immediately by written notice and to recover from Seller the amount of any loss resulting from such termination if NSC, acting in good faith and in its sole discretion, is reasonably satisfied that:
    • a breach of any of the undertakings in Section 4(a) has occurred;
    • Seller or any officer or employee of Seller shall have engaged, or attempted to engage in, in any act of bribery;
    • Any person acting on behalf of Seller in connection with this Agreement, whether with or without the knowledge of the Seller, shall have engaged in any act of bribery; or
    • Seller refuses to cooperate fully with NSC’s audit or related inquiry.
  • (f) In the event of such termination, this Agreement shall be void ab initio, and NSC shall have no liability to Seller for any unpaid fees, reimbursements or other compensation owed under this Agreement, or for any other loss, cost, claim, or damage resulting, directly or indirectly, to Seller from such termination.

15. General. The Agreement constitutes the entire agreement between the parties and supersedes all other prior or contemporaneous communications between NSC and Seller relating to the Ordered Items. Seller acknowledges any terms or conditions in the hyperlink are incorporated in the Agreement by reference and that it is Seller’s responsibility to review the content of the hyperlinks referenced in the Agreement. NSC’s quotations are offers that may only be accepted in full. No conditions, usage or trade, course of dealing or performance, understanding or agreement purporting to modify, vary, explain, reject, or supplement the Agreement shall be binding unless made in writing and signed by both parties, expressly and specifically referencing this Agreement, and no modification or objection shall be caused by NSC’s receipt, acknowledgment, or acceptance of Seller’s acknowledgement, invoice, shipping instruction forms, or other documentation from Seller containing different or additional terms to those set forth herein. No waiver by either party with respect to any breach or default or of any right or remedy and no course of dealing, shall be deemed to constitute a continuing waiver of any other breach or default or of any other right or remedy, unless such waiver is expressed in a writing signed by both parties, specifically referencing this Agreement. Nothing in this Agreement confers upon any person other than NSC and Seller any right or remedy under or by reason of this Agreement. All typographical or clerical errors made by NSC in any quotation, acknowledgment or publication are subject to correction. NSC’s purchase of Ordered Items from Seller hereunder is hereby expressly made conditional on the terms and conditions of this Agreement to the exclusion of all other terms and conditions.

Revision August 4, 2020