TERMS AND CONDITIONS TO ND’S PURCHASE ORDERS

 1.         Background.  ND Industries, Inc. ("ND") develops, manufacturers, markets, sells and distributes various coatings and other products for the fastener and other industries, as well as the equipment utilized to apply such coatings.  The Seller (as identified in the related quote or Purchase Order) is interested in selling ND those goods and/or services as more fully described in Seller’s quote or ND's Purchase Order, as applicable (the "Products").  These Terms and Conditions shall be deemed incorporated into ND’s Purchase Order for the Products whether or not specifically referenced therein.  Unless otherwise expressly agreed in writing, all purchases are subject to the following terms and conditions:

2.         Prices. All prices shall be stated in this Purchase Order and are firm and not subject to escalation.  Seller represents and warrants that the prices set forth in this Purchase Order are at least as low as those currently being quoted by Seller to commercial users for the same products, in like quantities, under similar circumstances.  If no price is stated for any product, the price for that product shall be the lowest price currently quoted or charged by Seller for that product, but in no event higher than the price most recently quoted or charged to ND by Seller for that product.

3.         Taxes.   Unless otherwise provided in this Purchase Order, the price includes, and Seller shall pay, all excise, sales, use, transfer or other taxes, federal, state, and local, in connection with the sale or delivery of the products to ND.

4.         Terms Of Payment.  Unless ND has otherwise agreed in writing, payment terms shall be net thirty (30) days from the later of the date ND receives Seller's invoice or the date on which ND accepts the products.

5.         Quantities.   Unless ND has otherwise agreed in writing, Seller must deliver the exact quantities specified.  ND reserves the right to reject incomplete deliveries and to return at Seller's risk and expense excess quantities delivered.

6.         Packaging and Shipment.  All products shall be packaged, marked, and otherwise prepared for shipment by Seller in suitable containers in accordance with sound commercial practices.  Seller shall mark on all containers all necessary handling, loading, and shipping instructions, including but not limited to:  ND's Purchase Order number; ND's item number and bar code; description of product contained and quantity therein.  An itemized packing list shall be included with each shipment on the outside of shipping container stating same information.  Bills of lading and delivery slips must also include Purchase Order number and description of product.

7.         Delivery.  ND’s sale schedules are established in part in reliance upon the delivery information specified in this Purchase Order.  The date specified (if any) is the date of arrival at ND's facility. Time and place of delivery are of the essence in the performance of this Purchase Order. Any provision for delivery in installments shall not be construed as making the obligations of Seller severable. If delivery cannot be made at the specified time and place, Seller shall promptly notify ND of the earliest possible date for conforming delivery. Notwithstanding such notice, and unless otherwise agreed by ND in writing, Seller’s failure to effect conforming delivery shall entitle ND to revoke any acceptance, to cancel this order without liability to Seller, to receive a full refund on any amounts paid, to purchase substitute products elsewhere, to return at Seller’s risk and expense all or any part of a nonconforming delivery and to hold Seller accountable for any loss or additional costs incurred. ND’s receipt or acceptance of all or part of a nonconforming delivery shall not constitute a waiver of any claim, right or remedy ND has under this Purchase Order or under applicable law.

8.         Title and Risk of Loss.  Title to and risk of loss for products purchased which conform to this Purchase Order shall pass to ND upon receipt and acceptance at ND's premises. Title to and risk of loss for nonconforming products and for all property provided to ND by Seller shall remain with Seller.

9.         Inspection and Rejection. ND may inspect and test all products at reasonable times before, during and after manufacture.  All products shall be received subject to ND's inspection, testing, approval and acceptance at ND's premises.  Products rejected by ND as not conforming to the Purchase Order may be returned to Seller at Seller’s risk and expense and shall not be replaced by Seller without ND's written authorization.

10.      Warranties. In addition to any other express or implied warranties, Seller warrants that all products delivered hereunder will be merchantable, new, suitable for the uses intended, of the grade and quality specified, free from all defects in design, material and workmanship, will conform to all samples, drawings, descriptions and specifications furnished, and will be free of liens and encumbrances.  These warranties shall survive any delivery, inspection, acceptance, payment or resale of the products and shall extend to ND and ND's customers. These warranties shall be construed as conditions as well as warranties and shall not be deemed to exclude Seller’s standard warranties or other rights or warranties which ND may have or obtain. At its expense and option, Seller shall replace or repair any products not conforming to the foregoing warranties and shall correct all software products not performing substantially in accordance with applicable product specifications. If after notice Seller fails promptly to replace or repair any such product or to correct any such software product, Seller shall promptly refund to ND the full purchase price paid by ND for all such products.

11.       Intellectual Property; Non-Infringement.  Seller acknowledges and agrees that all intellectual and industrial property provided to Seller by ND, as well as the terms of this Purchase Order and the existence and content of the relationship between the Seller and ND, shall be treated as confidential, and shall not be used or disclosed by Seller except as required in the course of performing this or other Purchase Orders for ND.  Seller represents and warrants that the products delivered hereunder do not infringe any United States or foreign patent, trademark, trade secret or copyright, or any proprietary, intellectual property, industrial property, contract or other right held by any third party.

12.      Changes.  ND may, at any time and from time to time, by notice to Seller, make changes in specifications, designs, drawings, method of packing or shipments, quantity ordered, destinations and delivery schedules and Seller shall immediately comply therewith.  If any such change causes a material increase or decrease in Seller’s cost or the time for performance, an equitable adjustment shall be made to the price or delivery schedule, or both.  No change, modification or revision of this Purchase Order by Seller shall be binding upon ND unless in writing and signed by ND's duly authorized representative.

13.      Compliance with Laws.  

            A. Seller shall comply with all applicable governmental laws, ordinances, codes, rules, regulations, programs, plans and orders in the performance of this Purchase Order. At ND's request, Seller shall provide appropriate certificates of compliance.

            B. Seller shall obtain all permits or licenses required in connection with the manufacture, sale, shipment and installation of the products ordered hereby.

            C. If in connection with the products to be delivered under this Purchase Order, Seller is required to comply with Occupational Safety and Health Act’s hazardous communications standard (48 Fed. Reg.53280(1983)), Seller agrees to provide ND with copies of the applicable Material Safety Data Sheets at the time of delivery to ND's premises of the products ordered hereunder which require such compliance, and any updates of such sheets required to be delivered by Seller to ND under such laws and regulations and/or upon request.

14.      Cancellation.

            A. ND may, by notice to Seller, cancel the whole or any portion of this Purchase Order in the event of:

                            (i)        proceedings, voluntary or involuntary, in bankruptcy or insolvency, by or against Seller;

                            (ii)       the appointment, with or without Seller’s consent, of any trustee or receiver for any substantial portion of Seller’s assets;

                            (iii)      any assignment for the benefit of Seller’s creditors; or

                            (iv)       Seller’s breach of any provision contained herein. In the event of any such cancellation, ND may procure, upon such terms and in such manner as ND may deem appropriate, products comparable to the products covered by the Purchase Order so terminated, and Seller shall be liable to ND for any excess cost of such comparable products.

                          In the event of any such cancellation, ND may require Seller to deliver to ND in the manner and to the extent directed by ND, any completed or partially completed products, and such delivery shall be credited against any prepayment by ND properly allocable to such products. Seller shall continue performance of this Purchase Order to the extent not canceled. Except to the extent specifically set forth herein, ND shall have no obligation or liability to Seller in respect of the canceled portion of this Purchase Order. ND's rights set forth in this Section 14 shall be in addition to ND's other rights in the event of Seller’s default. In the event of any such cancellation all deposits or prepayments shall be deemed to have been held in trust for ND's benefit and shall be returned to ND promptly upon request.

            B. All of Seller’s obligations set forth in this Purchase Order shall survive the cancellation, termination or completion of this Purchase Order.

15.      Assignment.  Seller shall not delegate or subcontract any duties or assign any rights or claims under this Purchase Order without ND's prior written consent, and any such attempted delegation, subcontract or assignment shall be void.

16.      Governing Law.  This Purchase Order and the rights and obligations of the parties hereunder shall be governed by and interpreted, construed and enforced in accordance with the laws of the State of Michigan, United States of America, and the courts sitting in Oakland County, Michigan, or the U.S. District Court for the Eastern District of Michigan shall have exclusive jurisdiction and venue over any dispute arising hereunder.

17.      Authorization.  Seller represents and warrants that it has been duly authorized to execute, deliver and perform this Purchase Order, and the person signing on the Seller’s behalf has the power and authority to do so.

18.      Indemnification.  Seller shall indemnify and hold ND harmless against any and all claims, losses, liabilities, damages, costs or expenses, including attorneys’ fees and court costs, and shall defend all actions and proceedings at its sole expense, resulting from the breach or alleged breach of any representation, warranty or agreement made by Seller in this Purchase Order, including, without limitation, Seller’s obligations to deliver products pursuant to this Purchase Order and Seller’s representations, warranties and agreements contained in this Purchase Order.

19.      Insurance.  Seller shall maintain with an insurance company or companies Comprehensive General Liability Insurance (including liability hereunder) in the minimum amount of $1,000,000. At ND's request, a certificate of such insurance shall be filed with ND and shall provide for 10 days prior written notice to ND of cancellation or material change. Liability insurance limits shall not be construed to limit ND’s right of indemnity hereunder.

20.      Set-Off.  Any amount owed to Seller by ND or any of ND's affiliates shall be subject to deduction for any set-off counterclaim or indemnification right arising out of this or any other Purchase Order to Seller from ND or any of ND's affiliates.

21.      Severability.   In the event that any one or more provisions contained in this Purchase Order shall be held by a court of competent jurisdiction to be invalid, illegal or unenforceable in any respect, the validity, legality and enforceability of the remaining provisions contained herein shall not in any way be affected or impaired thereby. The remedies contained herein are cumulative and in addition to any other remedies at law or equity. ND's failure to enforce, or waiver of a breach of, any provision of this Purchase Order shall not constitute a waiver of any other breach or of such provision.

22.      Entire Agreement.  This Purchase Order is the complete and exclusive statement of the contract between ND and Seller with respect to ND's purchase of the products or services. In case of a conflict between the terms and conditions on the face of this Purchase Order and the terms and conditions contained on this reverse side to this Purchase Order, the terms and conditions on the face of this Purchase Order shall control.

23.      Additional or Inconsistent Terms.  Any term or condition set forth in any Purchase Order provided to ND by Seller which is in any way different from, inconsistent with or in addition to the terms and conditions set forth herein will not become a part of this Purchase Order or be binding upon ND. If Seller objects to any term or condition set forth herein, this objection must be in writing and received by ND at the address stated on the opposite side prior to Seller’s delivery. ND's failure to object to terms contained in any communication from Seller will not be a waiver of the terms set forth herein. Seller shall not condition any delivery upon the abrogation or modification of any of the terms and conditions included in this Purchase Order.

24.      Work to be Completed on ND’s Premises by Seller.  In the event that Seller is required, as a part of its fulfillment of the terms of this Purchase Order, to perform work or services on ND's premises, Seller assumes entire responsibility and liability for (and shall indemnify and hold ND harmless from) any losses, expenses, damage, demands and claims in connection with or arising out of any injury or alleged injury (including death) or damage to property, sustained or alleged to have been sustained in connection with or to have arisen out of the performance of such work or services by Seller.