Supplier Terms and Conditions

2. EMPLOYEE AWARENESS: The Supplier shall communicate to ensure its employees are aware their contribution to product or service conformity, applicable product safety, and importance of ethical behavior.

3. VERBAL ORDERS: Are accepted under the terms herein only. Any discrepancies between FRALOCK’s understanding of the verbal order (which is expressed in this Order) and the Supplier issued order acknowledgement are the responsibility of the Supplier.

4. ERRORS/CHANGES: Any clerical errors appearing in the typed portion of an FRALOCK Order may be corrected at any time by FRALOCK.

5. QUANTITIES: The quantities specified for delivery on this Order are the only quantities required by FRALOCK. Therefore, if Supplier delivers quantities in excess of those specified in this Order, FRALOCK shall not be required to make any payment for the excess goods and, at FRALOCK’s election, may keep or return the excess goods at Supplier’s risk and expense.

6. QUALITY SYSTEM REQUIREMENTS: Supplier shall maintain a Quality Management System in-line with AS9100/ISO9001 or equivalent or QMS System approved by Fralock Supply Base Management.

7. CONFORMANCE OF GOODS: Supplier warrants that all goods furnished hereunder will conform to the requirements of this Order (including all descriptions, specifications and drawings made a part of this Order), will be merchantable, fit for their intended purposes, free from all defects in materials and workmanship and free from defects in design. All warranties, including special warranties specified elsewhere herein or normally offered to buyers of goods of this kind, shall inure to FRALOCK, its employees, successors, assigns, customers and users of its products. FRALOCK’s approval of designs or specifications furnished by Supplier shall not relieve Supplier of its obligations under this warranty. Any tender of goods which is nonconforming as to the quality or quantity or the delivery schedule shall constitute a breach of this Order and FRALOCK shall have the absolute right to reject such goods, in whole or in part, and notify Supplier thereof. In the event of such a tender, FRALOCK shall be entitled to all remedies as provided by law, and in addition thereto shall have the right to do any or all of the following: (1) to hold such nonconforming goods for a reasonable period at Supplier’s risk and expense pending a determination to accept or reject any or all thereof; (2) to return such nonconforming goods to Supplier at FRALOCK’s election and at Supplier’s risk and expense for replacement or correction; (3) to accept such nonconforming goods subject to an equitable price reduction; (4) to replace or correct such nonconforming goods and charge to Supplier the cost occasioned to FRALOCK thereby; (5) to recover by offset or otherwise any and all expenses, costs, price reductions, and damages paid, incurred, or suffered by FRALOCK as a result of such holding, return, replacement, correction, reductions, or rejections of nonconforming goods; or (6) to terminate this Contract as provided herein.

8. CONTROL OF SUSPECT OR COUNTERFEIT PRODUCT: As applicable, Supplier shall establish a program to eliminate the risk of introducing both counterfeit electronic parts as well as non-electronic parts and materials. This includes:

• Identification, mitigation, detection, disposition, and avoidance techniques, and reporting of suspect or confirmed counterfeit parts, assemblies, and/or materials;
• Training for the detection and prevention of counterfeit parts.

For guidance, Supplier may refer to the following standards or equivalent:

• AS5553 – Counterfeit Electrical, Electronic, and Electromechanical (EE)
  Parts; Avoidance, Detection, Mitigation, and Disposition (for OEM);
• AS6081 – Counterfeit Electronic Parts (for distributor);
• AS6174 – Counterfeit Materiel; Assuring Acquisition of Authentic and
  Conforming Material.

Supplier shall establish and implement test and inspection activities necessary to assure the authenticity and conformance of purchased materiel, including: traceability and documentation verification, visual examination, and tests and inspections. Tests and inspections shall be performed by individuals that have been trained and qualified concerning detection of the types and means of counterfeiting and how to conduct effective product authentication.

9. LOT CONTROL AND TRACEABILITY: Identification for traceability by lot number, material type, specification, and applicable change letters is required. Traceability records shall be available for review by FRALOCK.

10. CALIBRATION: Supplier shall establish and maintain documented procedures to control, calibrate, and maintain inspection, measuring, and test equipment (including test software) used by the Supplier to demonstrate the conformance of bproduct or service the specified requirements (N.I.S.T. traceable per ANSI/NCSL Z540). Inspection, measuring, and Test equipment shall be used in a manner which ensures that measurement uncertainty is known and is consistent with the required measurement capability.

11. CALIBRATION LABORATORY: Shall have a quality system accredited certification or compliance to ISO 17025. All calibration service performed shall have documented traceability to NIST standards per ANSI/NCSL Z540 to demonstrate their conformance to the specified requirements.

12. SPECIAL PROCESS: In fulfillment of this purchase order, if any requirement for a special process (plating, coating, painting, thermal treatment, testing, etc.), FRALOCK Supplier shall use only approved “Special Process Suppliers”. Process certifications must be supplied with each shipment.

13. NOTIFICATION OF NONCONFORMING PROCESSES, PRODUCTS, OR SERVICES:
Supplier shall immediately notify FRALOCK when Supplier becomes aware that nonconforming processes, products or services and obtain approval from FRALOCK for their disposition of processes, products or services delivered to FRALOCK against this Order. FRALOCK’s remedies in relation to nonconforming product are as outlined in these terms and conditions.

14. RIGHT OF ACCESS: Supplier shall grant right of access to FRALOCK, FRALOCK’s customer(s), and regulatory authorities to all facilities involved in this order and to all applicable records related to this order upon written request from FRALOCK. Additionally, the Supplier shall flow down this right of access requirement to its subtier suppliers.

15. NOTIFICATION OF PRODUCT/PROCESS/ SERVICE CHANGES: Supplier is required to notify FRALOCK of changes in processes, products, or services, including changes of Supplier’s external providers or location of manufacture related to goods to be supplied on this Order and shall obtain FRALOCK’s approval prior to shipment of product, prior to change in processes, or prior to the performance of services. Supplier shall notify FRALOCK 365 days prior to the change implementation (design, process, manufacturing and component obsolescence and facility change).

16. SUBCONTRACTING: Supplier will not subcontract without FRALOCK’s prior written consent for the design, development or procurement of the whole or any substantial portion of any goods ordered hereunder. Supplier shall flow down to sub-tier suppliers the applicable requirements in this purchasing document as well as the purchase order, including key characteristics where required. This limitation shall not apply to Supplier’s purchases of standard commercial supplies or raw material.

17. DELEGATION OF AUTHORITY: Supplier under this purchase order hereby is given the delegation of authority for validation of furnish chemical and/or physical test reports and/or raw material certifications and acknowledges that the information provided are validated and found to be in compliance with FRALOCK’s purchase order requirements.

18. PACKING: All items are to be packed in suitable containers for protection in shipment and storage. Each container of a multiple container shipment shall be identified (a) to show the number of the container and the total number of containers in the shipment, and (b) the number of the container in which the packing sheet has been enclosed. All shipments by Supplier must include packing sheets containing the FRALOCK Order number, quantity, part number/size, and description of the items shipped. Materials for different contracts shall be listed on separate packing sheets.

19. INVOICES: Shall be submitted by the Supplier to the FRALOCK Accounts Payable Department at the address set forth on the face of this Order. The prices set forth in this order includes all taxes, duties, fees, packing, shipping and loading charges, levies and similar charges. All sales and use taxes must be separately itemized. The FRALOCK Purchase Order Number and Item Number (if applicable) must appear on all shipping documents, invoices, and packing sheets. Determination of payment due date, whether under net or discount terms, will be based on the latest of (1) the date goods are received or services are completed; (2) the date goods are scheduled to be received or services are scheduled for completion under this Order; or (3) the date an accurate invoice and packing sheet (including required product certifications) have been received. Unless early delivery of goods or services is expressly authorized by the FRALOCK Purchasing Representative, payment for goods or services received in advance of the contractual commitment date shall be made as set forth above. Payment will be deemed to have been made when deposited in the mail.

20. TIME: Is of the essence of this Order. Delivery dates are firm commitments to deliver goods on the specified date(s) unless specifically modified in writing. In the event of delivery before the agreed date, FRALOCK may refuse the goods, store goods at Supplier’s expense or return goods to Supplier at Supplier’s expense.

21. FLOW-DOWN OF TERMS AND CONDITIONS: The Supplier is required to flow down to sub-tier suppliers the applicable requirements in the purchasing documents including key characteristics, where required.

22. PLACE OF DELIVERY: Unless specifically stated otherwise, all deliveries shall be F.O.B. FRALOCK at the address shown on the face of this Order.

23. RECORD RETENTION: Supplier shall retain process and product related quality records pertaining to this purchase order from deterioration for a minimum of seven (7) years unless otherwise specified by the purchase order. FRALOCK shall be notified in writing thirty (30) days prior to destruction of any records not held for the agreed upon period related to material supplied against our purchase order.

24. INDEMNIFICATION: FRALOCK shall not be liable for any incidental or consequential damages or losses incurred by Supplier. By accepting this Order, Supplier assumes all liability for any damages of any kind which may result from use by FRALOCK’s employees, agents, or any other person(s) including third parties unknown to FRALOCK or Supplier, including damages due to failure of the goods. Supplier agrees to indemnify, defend and hold FRALOCK harmless from any and all such damages or losses, including, without limitation, reasonable attorneys’ fees incurred by FRALOCK in defending against the same, excepting such loss, cost or damage occasioned by fault or negligence of FRALOCK.

25. TERMINATION: FRALOCK may terminate the whole or any part of this Order in any of the following circumstances:

A. If Supplier fails to deliver the goods or to perform the services required by this Order within the time specified herein, or any extension thereof granted by FRALOCK in writing; or

B. If Supplier fails to perform any of the other provisions of this Order or so fails to make progress as to endanger performance of this Contract in accordance with its terms, and in either of these two (2) circumstances does not cure such failure within a period of ten (10) days after receipt of notice from FRALOCK specifying such failure; or

C. In the event of suspension of Supplier’s business, insolvency, institution of bankruptcy, liquidation proceedings by or against Supplier, appointment of a trustee or receiver for Supplier’s property or business, or any assignment, reorganization or arrangement by Supplier for the benefit of creditors.

26. NOTICES: Any notice submitted by Supplier, unless otherwise specified within this Contract, shall be in writing and directed to the FRALOCK Purchasing Representative indicated on the face of the Order.

27. DISPUTES: Pending the final resolution of any dispute involving this Order, Supplier agrees to proceed with performance of this Order, including the delivery of goods, in accordance with FRALOCK’s instructions. Supplier shall submit to FRALOCK’s buyer a written demand for FRALOCK’s final decision regarding the disposition of any dispute between the parties relating to this Order, unless FRALOCK, on its own initiative, has already rendered such a final decision. Any FRALOCK final decision shall be expressly identified as such, shall be in writing, and shall be signed by FRALOCK’s authorized Purchasing Representative, except that FRALOCK’s failure to render a final decision within ninety (90) days after receipt of Supplier’s demand shall be deemed a final decision adverse to Supplier’s contentions. FRALOCK’s final decision shall be conclusive and binding regarding the dispute unless Supplier commences an action to contest such decision within ninety (90) days following the date of the final decision or one (1) year following the accrual of the cause of action, whichever is later. FRALOCK and Supplier shall bear their own costs of processing the dispute.

28. WAIVER AND SEVERABILITY: Any action or inaction by FRALOCK or the failure of FRALOCK, on any occasion, to enforce any right or provision of this Order shall not be construed to be a waiver by FRALOCK of its rights hereunder, and shall not prevent FRALOCK from enforcing such provision or right on any future occasion. A determination that any portion of this Order is unenforceable or invalid shall not affect the enforceability or validity of any of the remaining portions of this Order.

29. RIGHTS AND REMEDIES: The rights and remedies of FRALOCK herein are cumulative, and are in addition to any other rights or remedies that FRALOCK may have at law or in equity.

30. GOVERNING LAW: This Order shall be governed by the laws of the State of California, except that its conflict of law rules shall not apply.

31. SPECIAL TERMS AND CONDITIONS: The following terms shall apply to the extent indicated on the face of this order:

• A. QUALIFIED PRODUCTS: In addition to the warranties identified in these terms and conditions, Supplier warrants that the goods conform in all respects with “Approved Source” and “Qualified/Certified Process” requirements of the
  applicable specifications.
• B. PRODUCT CERTIFICATIONS
• C. TEST REPORTS
• D. ADDITIONAL REQUIREMENTS LISTED ON THE FACE OF THE ORDER.
• E. SOURCE INSPECTION
• F. CUSTOMER/GOVERNMENT SOURCE INSPECTION
• G. BUY AMERICAN
• H. NON-DISCRIMINATION
• I. MINORITY-OWNED BUSINESS
• J. SMALL BUSINESS
• K. GOVERNMENT CONTRACT TERMINATIONS: To the extent required by law, including specifically, but not exclusively, terminations for convenience and terminations for default under the terms of a government contract or purchase order issued to FRALOCK or a FRALOCK customer.

32. OBSOLESCENCE/END-OF-LIFE: Supplier shall be aware and proactively monitor all items and material used in the manufacture of FRALOCK orders for impending obsolescence/end-of-life issues. If obsolescence/end-of-life issues are identified, the Supplier shall provide immediate notification to FRALOCK buyer and impacted personnel, describing the obsolete item, reason for obsolescence, estimated date the product will no longer be available, and any proposed alternatives. Timely notification is imperative to allow sufficient time to identify alternates for the affected parts, and perform any necessary certifications, which may involve regulatory agencies.

Supplier shall procure or will maintain, during the performance of FRALOCK’s orders, sufficient components and materials necessary to perform the orders, including obtaining commitments from its suppliers required to meet all requirements.

Supplier shall flow down and manage this requirement with its suppliers to ensure they can meet FRALOCK’s order obligations.

Supplier agrees to maintain an obsolescence policy/procedure adequate to ensure that the Supplier and its suppliers can provide FRALOCK adequate notice that components and material necessary to supply additional new-order quantities can be purchased through the Supplier by placing an order within ninety (90) days of receiving said notice. Further, the Supplier agrees to supply FRALOCK with such additional products or components of which are due to be discontinued subject to FRALOCK agreeing to compensate the Supplier for its reasonable cost plus profit for such additional orders.

Supplier shall notify FRALOCK 365 days prior to the component obsolescence.

33. MONITORING OF SUPPLIER PERFORMANCE: FRALOCK controls and monitors the performance of its suppliers, including on-time and quality performance. In addition, FRALOCK monitors the Supplier’s lead time, quote cycle time, cost reductions, and capacity, as appropriate. Supplier shall pass cost and lead times gains to FRALOCK and its Customers.

34.BUSINESS CONTINUITY PLAN: Supplier shall establish and implement business continuity plans to prevent data and production loss due to power loss, computer failure, cyber-attacks, natural disasters, work stoppages, pandemic, etc. Impact assessment shall be structurally performed based on complete loss scenario and progress shall be reported and overseen. Business Continuity Plans shall be formalized for all critical business processes, frequently updated, and comply with recovery time objectives, capacity requirements, and redundant resources. Supplier shall establish a communication structure for Business Continuity Plans for all relevant scenarios, including the notification of Fralock. Business Continuity Plans shall be communicated to key personnel who shall be trained to execute the plans. Supplier shall formalize, execute, and ensure the effectiveness of tests and performance measurements of the Business Continuity Plans.

FRALOCK reserves the right to review and validate the Supplier’s business continuity plans.

35. RISK MITIGATION: Supplier shall plan, implement, and control a process for managing risks to the achievement of applicable requirements. Supplier shall assess, mitigate, and report on risks related to Fralock products.

36. CONTROL OF CI, IP, EHS, AND SECURITY: Supplier shall establish and implement a process to control Customer Information (CI), Intellectual Property (IP), Environmental, Health, and Safety (EHS), and security.

37. NONDISCLOSURE AGREEMENT (NDA): Supplier shall establish Confidential Information control process and sign NDA with employees.

38. COPY EXACT: Key and critical component suppliers shall train their Sales, Engineering, Quality, and Purchasing staff on Copy Exacts and maintain records of training. FRALOCK reserves the right to request Copy Exacts’ training records.

39. CONFLICT MINERALS POLICY: Supplier shall comply with the requirements of the Dodd-Frank Wall Street Reform and Consumer Protection Act (the “Dodd-Frank Act”); and shall support Buyer’s compliance with Section 1502 of the Dodd-Frank Act – requiring all US publicly traded companies to file disclosures and reports with the U.S. Securities and Exchange Commission (SEC) related to the use of “Conflict Minerals” in their products. “Conflict Minerals” in this context refers to specific minerals originating from mines controlled by armed groups in the Democratic Republic of the Congo (DRC) or adjoining countries. The “Conflict Minerals” include Gold (Au), Tin (Sn), Tantalum (Ta), and Tungsten (W). These are also sometimes referred to as “3TG.” As part of this policy, we expect our suppliers to cooperate with us in the conflict minerals compliance process, to assist us in identifying the sources of the conflict minerals in the products and components they supply to us, and we request that they commit to responsible sourcing of 3TG used in the production of components supplied to us.

40. EQUAL OPPORTUNITY: Seller shall abide by the requirements of 41 CFR 60- 1.4(a), 60-300.5(a) and 60-741.5(a). These regulations prohibit discrimination against qualified individuals based on their status as protected veterans or individuals with disabilities and prohibit discrimination against all individuals based on their race, color, religion, sex, sexual orientation, gender identity, national origin, or for inquiring about, discussing, or disclosing information about compensation. Moreover, these regulations require that covered prime contractors and subcontractors take affirmative action to employ and advance in employment individuals without regard to race, color, religion, sex, sexual orientation, gender identity, national origin, disability, or veteran status.

Fralock is a government contractor or subcontractor to the United States government and is subject to the equal opportunity obligations of federal contractors under Executive Order 11246, Section 503 of the Rehabilitation Act of 1973, amended; and the Vietnam Era Veterans’ Readjustment Assistance Act of 1974, as amended (VEVRAA). As a supplier of our company, you may be subject to the rules and regulations set forth above. It is our intention to comply with all the applicable EEO rules and regulations, and we request your assistance in furthering these principles as well.

41. SUPPLIER CODE OF CONDUCT: Fralock is committed to conducting its business in a legal, ethical, and professional manner, and to treating its customers, suppliers, employees and the public with respect, honesty, and integrity. We view our suppliers as vital partners in achieving Fralock’s mission and strive to conduct business only with suppliers who share our commitment to compliance with legal requirements and the highest ethical standards, respecting human rights, and adhering to the industry standard’s latest version of RBA Code of Conduct, Responsible Business Alliance Code of Conduct (www.responsiblebusiness.org/code-of-conduct/). Buyer’s expectation is that although Seller is not required to be certified to RBA Code of Conduct, however, Seller is to start the transition to the RBA Code of Conduct and be able to show full compliance to the RBA Code of Conduct by December 31, 2026.

F413 G Terms and Conditions – Vendor