Controlling Provisions:  The terms and conditions and supplemental exhibits contained herein (the “Terms and Conditions”) shall supersede any provisions, terms, and conditions contained on any purchase order or other written form any direct buyer (“Buyer”) may use or provide (whether received by S.J. Electro Systems, Inc. or any of its subsidiaries or affiliates (collectively, “SJE”) prior or subsequent to the date hereof), and the rights of the parties shall be governed exclusively by the Terms and Conditions as described herein.  SJE sells certain services, products, replacement parts and related software (collectively, the “Goods”). The purchase of the Goods is governed by the Terms and Conditions.  Any communication by Buyer to SJE to purchase Goods will be treated by SJE as a request to purchase the Goods. The response, however communicated, will be understood by all parties as an agreement by SJE to sell to Buyer the requested Goods pursuant to the Terms and Conditions.  SJE specifically opposes any terms or conditions that are in addition to or different from the Terms and Conditions, unless specifically agreed to in each instance in writing by SJE.

Quotations, Acceptance, and Agreements:  Any quotation is a good faith estimate.  To the extent that SJE has been provided by or on behalf of Buyer any specifications, description of operating conditions or other data and Information In connection with the selection or design of the Goods, and the actual operating conditions or other circumstances differ from those provided by Buyer and relied upon by SJE, any warranties or other provisions contained herein which are affected by such conditions shall be null and void. 

Acceptance of a quotation, whether by a separate purchase order or by other means, shall constitute an acknowledgement and approval of the quotation as written and an acceptance of the Terms and Conditions.  Written quotations which have not been finalized by a binding purchase order shall expire on the date specified in the quotation or, in the absence of such specification, thirty (30) calendar days from the date issued.  SJE may revise or withdraw a quotation at any time prior to the finalization of a binding purchase order.

Per company policy, a separate written agreement signed by both parties or a purchase order accepted and acknowledged by SJE is required to form any legally binding agreement.

Intellectual Property:  All devices, patents, designs (including drawings, plans and specifications), software existing or to be developed, estimates, prices, notes, memos, summaries, electronic data and other documents or information prepared or disclosed by SJE shall remain the sole intellectual property of SJE.  Following acceptance and final payment, SJE shall grant to Buyer a non-transferable, non-exclusive license for use and sale of the Goods.

Credit Approval:  The credit terms granted on each order are subject to SJE’s continuing approval of Buyer’s credit.  SJE may withdraw the extension of credit and require modified payment terms if, in SJE’s sole judgment, Buyer’s credit or financial standing is impaired such that SJE in good faith deems payment insecure.

Prices and Taxes:  All prices are FOB shipping point, unless otherwise stated or referenced in attached exhibits.  All prices are subject to any commercially reasonable additions that may be necessary to cover any duties, taxes or charges. All prices are in U.S. Dollars. Prices may be subject to change without notice.

Shipping Policy: Shipping and handling charges cover the transportation of the Goods from SJE’s warehouse to Buyer, unless otherwise specified. Standard shipping rates are assessed upon placement of order. SJE uses many methods of shipment including UPS shipping services but reserves the right to substitute carriers without notice. UPS next-day air, UPS second-day air, UPS three-day ground, UPS Express and UPS Expedited are services available to Buyer for expediting orders. Expedited orders will be shipped based on the method Buyer selects. These services may not be available for shipment into all countries.

While SJE will use all reasonable commercial efforts to maintain the delivery date(s) acknowledged or quoted by SJE, all shipping dates are approximate and not guaranteed.  SJE reserves the right to make partial shipments. SJE, at its option, shall not be bound to tender delivery of any Goods for which Buyer has not provided shipping instructions and other required information. If the shipment of the Goods is postponed or delayed by Buyer for any reason, Buyer agrees to reimburse SJE for any and all storage costs and other additional expenses resulting therefrom. The actual shipping weights may vary.

Title, Risk of Loss, Inspection of Equipment:  Title and risk of loss to the Goods shall pass to Buyer upon delivery of the Goods to the respective delivery carrier.  Buyer shall immediately inspect the Goods upon receipt and any damage must be noted on the delivery carrier’s bill of lading at time of receipt.  SJE is not liable for any damages caused by shipping.  SJE is not liable for any shortages or nonconformance unless notified by Buyer within two (2) business days of Buyer’s receipt of the Goods.

Operations/Maintenance Manuals:  Installation, maintenance and operation manuals will be furnished to Buyer in the number of copies specified at the time of quotation or order.  Additional copies subject to charges as outlined in attached exhibits.

Installation and Use: Buyer will be solely responsible for the proper application, installation and service of the Goods.  Installation instructions are supplied by SJE and must be followed.

Export/Import: Buyer agrees that all applicable import and export control laws, regulations, orders and requirements, including, but not limited to, those of the United States and the European Union, and the jurisdictions in which SJE and Buyer are established or from which Goods may be supplied, will apply to their receipt and use. In no event shall Buyer use, transfer, release, import, or export Goods in violation of such applicable laws, regulations, orders or requirements.

Payment:  Buyer shall pay SJE the full purchase price as set forth in the respective order between SJE and Buyer.  Unless otherwise agreed to in writing between SJE and Buyer, freight, storage, insurance, taxes, duties, and any governmental charges relating to the Goods shall be paid by Buyer.  If SJE is required to pay any such charges, Buyer shall immediately reimburse SJE upon notice from SJE of same.  All payments are due within approved credit terms.  Buyer may be charged the lower of 1.5% interest per month or the maximum legal rate on all amounts not received by the due date described therein.

Security Interest:  SJE shall retain a security interest in the Goods until the full purchase price has been paid.  Buyer’s failure to pay any amounts due, including interest, shall give SJE the right to possession and removal of the Goods after providing ten (10) days written notice to Buyer.  SJE’s taking of such possession shall be without prejudice to any other remedies SJE may have.

Changes, Cancellations, Returns:  Buyer may request changes or additions to the Goods consistent with SJE’s specifications and criteria. In the event such changes or additions are accepted by SJE, SJE shall have the absolute right to revise the prices and dates of delivery, and to add charges for work and materials rendered unnecessary by such changes or additions. All changes, cancellations, or returns must have SJE prior written approval and subject to restocking fees and service charges.  Authorized returns must be packaged and shipped prepaid to SJE. 

Return Policy: SJE will only accept Goods returned within one (1) year from the date of manufacture, un-used, and current production models. Returned Material Authorization (“RMA”) numbers must be assigned to any Goods Buyer wishes to return for credit.  To obtain an RMA, Buyer must contact SJE’s Service Center at 218-847-1317 or toll free at 888-342-5753. Buyer is responsible for payment of return shipping fees unless such returned Goods result from an SJE order processing error.  Upon return, SJE shall reimburse Buyer for the return freight resulting from the return of Goods due to such SJE order processing error. In the event of any return in compliance with this paragraph, SJE will provide Buyer credit for the returned Goods and work to reship correct Goods to Buyer.  SJE reserves the right to refuse acceptance of returned Goods after inspection.  SJE will not accept returns for Goods that are custom-built for Buyer as such items cannot be resold by SJE; however, custom-built Goods remain subject to applicable warranty provisions in each case. 

Notwithstanding the foregoing (and so long as the return is not due to an order processing error of SJE), a restocking fee shall be charged to Buyer for returned Goods as outlined in the attached Exhibits.

Force Majeure:  SJE shall not be liable or responsible to Buyer, nor be deemed to have defaulted under or breached any agreement with Buyer, for any failure or delay in fulfilling or performing any term of any agreement with Buyer, when and to the extent such failure or delay is caused by or results (directly or indirectly) from acts beyond SJE’s reasonable control, including, without limitation: (a) acts of God; (b) flood, fire, earthquake or explosion; (c) war, invasion, hostilities (whether war is declared or not), terrorist threats or acts, riot or other civil unrest: (d) government order or law; (e) actions, embargoes or blockades in effect on or after the date of any subject agreement between SJE and Buyer; (f) action by any governmental authority; (g) national or regional emergency; (h) strikes, labor stoppages or slowdowns or other industrial services; or (i) any other cause beyond the reasonable control of SJE. 

Indemnification and Default:  In addition to all other amounts due hereunder, Buyer shall reimburse SJE in full for all collection costs or charges, including reasonable attorney fees, which SJE may incur in the collection of any past due amounts from Buyer, including applicable interest on overdue accounts.  If Buyer is in default under this or any other agreement with SJE, SJE may defer performance hereunder until such default is resolved.  SJE shall have no obligation to provide factory startup assistance or factory training (when requested) until all invoices (including retentions) for equipment have been paid in full.  Furthermore, SJE shall have no liability to Buyer to the extent Buyer damages, or any damages are suffered by, or claims are made against Buyer as a result of Buyer’s negligence, willful misconduct, misrepresentation of any Goods, or failure to utilize the Goods properly.

Warranty and Liability:  During the warranty period, Buyer’s exclusive remedy will be either repair or replacement, at the sole discretion of SJE and subject to the Terms and Conditions of any component which proves to be defective due to defective materials or workmanship of SJE. 

SJE DISCLAIMS ANY IMPLIED WARRANTIES OF MERCHANTABILITY OR FITNESS FOR PARTICULAR PURPOSE, AND SJE SHALL NOT, IN ANY MATTER, BE LIABLE FOR ANY SPECIAL, INDIRECT, PUNITIVE, INCIDENTAL OR CONSEQUENTIAL DAMAGES, INCLUDING LIQUIDATED DAMAGES, OR PENALLTIES THAT RESULT FROM A BREACH OF CONTRACT, BREACH OF WARRANTY (EXPRESS OR IMPLIED), STRICT LIABILITY, PRODUCT LIABILITY OR OTHERWISE. IN NO EVENT SHALL SJE’S LIABILITY TO BUYER OR ANY OTHER PARTY EXCEED THE LESSER OF (i) THE COST OF REMEDIATING ANY DEFECT OR DEFICIENCY IN THE PERFORMANCE OF SJE HEREUNDER OR (ii) THE PURCHASE PRICE OF THE GOODS IN RESPECT OF WHICH THE CLAIM IS MADE.

ANY ELECTRICAL WIRING AND SERVICING OF THE GOODS MUST BE PERFORMED BY A LICENSED ELECTRICIAN.  WARRANTY CLAIMS FOR GOODS WHICH WERE AT ANY TIME WIRED OR SERVICED BY ANYONE OTHER THAN A LICENSED ELECTRICIAN SHALL NOT BE HONORED IN WHOLE OR PART BY SJE.

Furthermore, this warranty shall not apply to: (a) damage due to any weather-related or other conditions beyond the control of SJE; (b) defects or malfunctions resulting from the Goods not installed, operated, or maintained in accordance with instructions provided, applicable local codes, ordinances, or accepted trade practices; (c) failures resulting from abuse, misuse, accident, or negligence; or (d) Goods repaired and/or modified without prior written authorization from SJE.

Some states do not allow limitations on implied warranty duration, as such, this limitation may not apply to Buyer.  Some states do not allow the exclusion or limitation of incidental or consequential damages, as such, these limitations or exclusions may not apply to Buyer.  The above-described warranty gives Buyer specific legal rights, and Buyer may also have other rights which vary from state to state.

TO OBTAIN WARRANTY SERVICE: Buyer shall assume all responsibility and expense for removal, reinstallation, and freight associated with any warranty service. Any Goods to be repaired or replaced under this warranty must be returned to SJE, or such place as designated by SJE. Buyer can contact SJE Service Center at 218-847-1317 or toll free at 888-342-5753 for an RMA on any Goods being submitted for a warranty claim.

Applicable Law and Forum:  Any disputes between Buyer and SJE shall be venued in Becker County District Court in the State of Minnesota.  Buyer agrees to submit to such jurisdiction and agrees that the dispute shall be governed by and construed in accordance with the laws of the State of Minnesota without giving effect to any choice or conflict of law provision or rule.   

EXHIBIT

1. W. ALLEN
2. W. ALLEN is a trademark in the SJE family of products.

Submittal Drawings:  Submittal of drawings for approval, if required, will be made after receipt of complete information from Buyer.  The quantity of the submittal drawing sets will be specified in the purchase order or contract documents.  Complex submittal packages will be subject to a documentation upgrade fee.  Buyer must return to L. W. ALLEN two (2) final approved drawing sets; such return shall constitute notice to L. W. ALLEN of final acceptance of Buyer of such drawing sets and binding indication to L. W. ALLEN to proceed with manufacturing.  If Buyer’s order is conditioned upon “engineer approval”, Buyer must also provide written notification of such approval to L. W. ALLEN with such drawing sets in the form required pursuant to the submittal.  If an order is cancelled after a submittal has been provided, the order will be subject to a cancellation fee.

Prices and Taxes:  Non-project or replacement parts are shipped pre-paid and added to any service-related invoices. Prices do not include sales, excise, municipal, state, or any other governmental taxes.  Buyer shall be responsible for payment of all taxes.

Delivery: Unless otherwise specified in this quotation, delivery will be F.O.B. Seller’s point of shipment.  Buyer will accept delivery within twenty (20) days after Seller notifies Buyer that the equipment is ready for shipment.  If Buyer does not furnish exact shipping instructions within ten (10) days after acceptance of this proposal, Seller will select, at its discretion, the means and terms of shipment.  Seller will not be liable for any loss resulting from such selection.  The time of delivery is an estimate only, and Seller may change such time if it does not receive the information and approvals necessary to proceed with the manufacture of equipment.

Changes, Cancellations, Returns: All changes, cancellations, or returns must have Seller’s prior written approval and are conditional on compliance with manufacturer’s cancellation/return policies and subject to restocking fees and service charges. Authorized returned equipment must be packaged and shipped prepaid to manufacturer.

Payment: Unless the Seller extends alternative credit terms, 90% of the total purchase price is due net 30 days after delivery of equipment (but in all cases prior to field service start-up, if earlier) and the remaining 10% is due upon start-up of equipment by Seller’s field technician, but in no event more than 90 days after shipment of equipment. Any balance owed by Buyer after the due date is subject to a 1.5% per month delinquency charge until paid. FIELD START-UP SERVICE CANNOT BE AUTHORIZED WITHOUT RECEIPT OF PAYMENT IN THE AMOUNT OF 90% OF THE TOTAL PURCHASE PRICE. If no start-up is required, 100% payment is due net 30 days from invoice date. BUYER’S PAYMENT OBLIGATION IS IN NO WAY CONTINGENT UPON BUYER’S RECEIPT OF PAYMENT FROM ANY OTHER PARTY.

Operations/Maintenance Manuals:  Buyer’s installation, maintenance and operation manuals will be furnished in the number of copies specified at the time of quotation or order with additional copies at $300.00 each.

Restocking Fees:

Switches and alarms: 25% of net invoice price.

Engineered Custom Panels: cannot be returned.

1. W. ALLEN reserves the right to adjust restocking fees at any time without notice.

Warranty and Liability:  Such warranties typically do not cover force majeure or Acts of God. All warranties shall be immediately voided if any party other than a L. W. ALLEN employee or authorized representative makes any changes, additions, deletions, or adjustments to the Goods, software or computers provided by L. W. ALLEN. 

1. W. ALLEN shall not be liable for any damages, charges for labor, or expenses incurred in making repairs or adjustments to the Goods without prior written approval of L. W. ALLEN. L. W. ALLEN shall not be liable for any damages, charges or expenses sustained in the adaptation or use of the engineering data or service by Buyer or any third party. L. W. ALLEN shall not be liable for start-up or any other field work performed by personnel other than an employee or authorized representatives of L. W. ALLEN, unless expressly approved in writing in advance by L. W. ALLEN.

Warranty and Liability: Two-Year Limited Warranty Policy

Unless otherwise agreed, L. W. ALLEN warrants to Buyer that the Goods shall be free of manufacturing defects for 18 months from the date of shipment or 12 months from date of startup, whichever comes first.