Terms of Purchase

These Standard Terms of Purchase (the “Terms”) are incorporated and made part of the contract (“Contract”), which consists of: (a) a signed agreement and/or purchase order (“PO”) generated by NWH identifying the parties and containing key business terms, (b) these Terms, and (c) any other attachments identified in the Contract and/or PO document. Any conflicts between various documents shall be resolved by giving precedence in the following order:

1. Terms of any signed agreement (if applicable);
2. Wording of the NWH issued PO;
3. This Attachment A; and
4. Any specifications, drawings, statement of work, or other attachments or documents incorporated by reference. If the Supplier’s quotation, proposal or invoice is referred to in a PO and/or attached to the Contract, the intent of such reference or attachment is only to specify the nature and description of the Products/Services ordered and only to the extent that such terms are consistent with these Terms. Unless all parties specifically agree in writing, with respect to conflicting terms and conditions in any document generated by Supplier, the terms of this Contract shall control. This Contract can only be amended by a writing signed by both parties.

Pricing is specified in the Contract or PO. Supplier will inform itself of and will comply with all federal, state and local tax laws, codes, and regulations that are applicable to performing this Contract. Pricing shall exclude all sales taxes and any such taxes shall be shown separately on the invoice. Supplier will also identify which services are taxable (if any) and the applicable sales/use tax which will become due on the Services. Supplier agrees to cooperate with NWH to accurately determine each party’s sales/use tax liability and minimize such liability wherever possible. NWH is required to file an information return to the Internal Revenue Service with respect to the income earned by Supplier if a PO includes the requirements of Supplier to provide installation supervision, start-up, training, performance testing or any other type of service.

NWH obligation to pay invoices is conditioned on receipt of a timely and correct invoice, as well as conforming Products or Services. Unless provided in the Contract or PO, NWH will pay net 30 days after receipt of conforming Products/Services and an accurate invoice. NWH retains the right of setoff for any amount due or owing to NWH or its affiliates. Supplier will accept direct deposit payments from NWH for all invoices and payments (i.e., ACH). Supplier will provide information necessary to permit NWH to make such direct deposit payments. Supplier will maintain records and accounting procedures sufficient to support invoices consistent with GAAP. Supplier’s records and processes pertaining to the performance of this Contract may be subject, after reasonable notice and during normal business hours, to inspection and audit by NWH. Supplier will preserve and make available such records/policies for two years from later of the conclusion of the term or the final payment on a Contract or PO.

NWH will be given a reasonable opportunity to inspect Products and Services for physical damage, defects, packaging integrity problems, and shortage. NWH will have 120 days from the time any latent or hidden defects in Products or Services are brought to NWH attention to notify Supplier of such defect. If Products or Services do not conform to the Specifications, or are otherwise defective, NWH will notify Supplier and offer Supplier a reasonable opportunity to remedy such defect. Alternatively, NWH may, at its sole election, return non-conforming Product to Supplier at Supplier’s sole expense, and receive either a credit or refund of purchase price. If NWH elects to return the Product, it may still exercise any other remedies that may be available at law or at equity. NWH review of drawings and/or specifications does not constitute approval and will not relieve Supplier of responsibility for compliance with all specifications, laws, codes or regulations as applicable in performing this Contract.

In the event that subcontractor(s) are used in performance of the Contract, Supplier shall be responsible for the performance of the subcontractor (regardless of tier) and agrees to indemnify and hold NWH harmless in the event of negligent, reckless or intentional misconduct by the subcontractor. In addition, Supplier represents and warrants that any on-Site subcontractors used by Supplier have complied with all the insurance requirements set forth in this Contract (including the naming of NWH as an additional insured). Supplier agrees not to employ a subcontractor to perform on Site Services without first obtaining NWH prior written consent.

Unless specified in the Contract or PO document, title to any Products sold under this Contract and risk of loss will pass to NWH when shipments are received by NWH at the specified delivery point (FOB Destination). Supplier will suitably pack, mark and ship materials in accordance with NWH instructions and in accordance with all applicable laws, and, if so instructed by NWH, will meet the transportation requirements of common carriers to secure the lowest transportation costs.

1. Warranty. Supplier represents, warrants and covenants that, for a period of no less than 12 months from the date upon which the Products are put into use or the Services are finished being performed, or from the date when the Performance Guarantees have been achieved, whichever occurs later (the “Warranty Period”), that:
   1. Products will be (i) consistent with or greater than prevailing industry standards of quality, (ii) appropriate for any specified application, (iii) free from defects in design, material and workmanship and (iv) compliant with all applicable specifications; and
   2. Services will be (i) professionally and competently performed in a manner consistent with or greater than prevailing industry standards of quality; (ii) appropriate for any specified application, and (iii) free from defects.
2. Performance Guarantee Achievement. For the purpose of determining whether Products or Service are defective or deficient (resulting from faulty design, material and/or workmanship), Supplier shall not be deemed to have achieved Performance Guarantees that are specified in the Contract or the PO until the defect or deficiency is remedied and the Products or Services are performing within all specifications at full production rates on a continuous basis.
3. Replacement of Products/Rework of Services. If Products do not comply with the warranty set forth in Section I.1, above or any defect develops under normal or proper operation as per Supplier’s instructions, during the Warranty Period, Supplier will provide, at its sole expense, technical expertise and the parts, materials and equipment, and labor, including freight and “in/out” costs, necessary to remedy any defect or nonconformity by promptly removing, repairing, correcting or replacing and reinstalling any defective or nonconforming part of component. If the Services do not comply with the warranty set forth in Section I.1, above, during the Warranty Period, Supplier will re-perform the Services, without cost of any kind to Northwest Hardwoods.
4.  
   Technical Support. During the Warranty Period, Supplier will provide all warranty service and telephone support, including after-hour technical support, at its own cost. Supplier will maintain a 24-hour technical support hotline to address equipment breakdowns and safety incidents.
5.  
   Right to Remedy. If the Supplier does not timely modify, adjust, repair or replace defective or inadequate Services or Products within 5 days written notice of such defect/inadequacy, or if any emergency exists rendering it impossible or impractical for NWH to have the Services performed by the Supplier, then NWH, after notice to the Supplier, may at its option and without prejudice to any other rights or remedies that may be available to it, make or cause to be made such modification, adjustment, repair or replacement it deems necessary. In such case the Supplier will reimburse NWH for its actual costs and expenses or, at NWH option, NWH may offset the costs from any amounts owing to Supplier.

Supplier represents and warrants that:

1. it has full power and authority to enter into this Contract and perform its obligations;
2. this Contract is the legal, valid, and binding obligation of the Supplier, enforceable against the Supplier in accordance with its terms;
3. it has good and marketable title to Products delivered to NWH and that Products and Services will be free from all liens and encumbrances;
4. the Products and Services do not infringe any patent, copyright, trademark, trade dress or other intellectual property right of any third party;
5. if Services are provided, Supplier has assured that its employees or subcontractors providing Services are adequately skilled and experienced; and
6. there is no past, threatened, pending or proposed future litigation, dispute, or claim that might prevent Supplier from fulfilling its obligations under this Contract. Further, Supplier represents and warrants that the signing and delivery of this Contract by the Supplier and the performance by the Supplier of all of the Supplier’s obligations under this Contract will not breach any Contract to which the Supplier is a party, or give any person the right to accelerate any obligation of the Supplier; violate any law, judgment, or order to which the Supplier is subject; or require the consent, authorization, or approval of any person, including but not limited to any governmental body.

Supplier will indemnify and hold harmless Indemnified Parties from any Claims arising out of any charge that the manufacture or sale of any Products or Services, or the use thereof, by an Indemnified Party or its customers constitutes an infringement of any patent, copyright, trade secret, trademark, service mark, or other intellectual property right of any third party; provided, that this indemnity will not apply to Products for which NWH both provided and controlled the detailed design of such Product. If because of infringement claims any Indemnified Party’s use of Products or Services provided by Supplier is enjoined, Supplier will, at its own expense, either procure for the Indemnified Party the right to continue using the Products or Services or, after consulting with NWH and obtaining NWH consent, replace or modify the Products or Services with substantially similar and functionally equivalent non-infringing Products or Services.

The Contract will be governed and construed in accordance with the laws of the State of Washington, without giving effect to any conflict-of-law principle that would result in the laws of any other jurisdiction governing the contract. Except in the case of a dispute where the remedy sought is injunctive relief, if a dispute arises under this Contract (“a Dispute”) the parties will use their best efforts to resolve any Dispute by good-faith negotiation and mutual agreement. The parties will meet at a mutually convenient time and place to attempt to resolve any such dispute. In the event that the parites are unable to resolve a Dispute within [30 days], either party may submit the Dispute to a non-binding mediation proceeding. In the event ay party to such mediation proceeding is not satisfied with the results thereof, then any unresolved Disputes shall be finally settled in accordance with an arbitration proceeding.

At all times, Supplier will keep NWH property free of liens arising out of the Service performed or Products delivered hereunder. NWH may withhold any payment otherwise due Supplier until Supplier submits proof of waiver of lien, in a form satisfactory to NWH, that all lienable claims have been fully paid.

Supplier will implement this Contract in compliance with all applicable federal and state laws, regulations, ordinances, permits and orders regarding labeling, environmental, health, safety, child welfare, nondiscrimination, wage & hour and other workplace laws and regulation. Further, Supplier will obtain all necessary permits and approvals and give all stipulations, certifications and representations that may be required for it to perform this Contract. Supplier represents and warrants that IF it provides any product which incorporates wood, wood fiber, chips or other plants, plant products or derivatives thereof (“Plants”), Supplier is in compliance with the Lacey Act, 16 U.S.C. 3371 et seq. which requires that all Plants incorporated into Products are harvested, taken, possessed, transported or sold in compliance with all applicable laws. Unless this Contract is exempted by regulations of the Secretary of Labor (e.g., Section 3 of Executive Order 13496; Section 503 of the 1373 Rehabilitation Assistance and Section 402 of the Vietnam-Era Veterans Readjustment Assistance Act of 1974 or other applicable laws, regulations or orders), this Contract incorporates by reference paragraphs:

• 1-4 of the Contract Clause Section of Executive Order 13496;
• a-m of the affirmative action clause set forth in the Affirmative Action Obligations of Contractors and Subcontractors for Disabled Veterans and Veterans of the Vietnam Era; and
• a-f of the affirmative action clause set forth in the Affirmative Action Obligations of Contractors and Subcontractors for disabled workers. If applicable, Supplier shall comply with any notice requirements under Executive Order 13496 (29 CFR part 471.2.
• Finally, Supplier agrees to abide by the Northwest Hardwoods Supplier Code of Ethics, available at: https://www.northwesthardwoods.com/company/code-of-ethics/.

Except for a party’s indemnification obligations under this Contract, neither party will be liable to the other for consequential or indirect damages, including loss of profits or loss of revenue; provided, however, that nothing contained herein shall in any way exclude or limit:

• a party’s liability for any and all damages arising out of that party’s intentional acts or omissions;
• liability for any and all direct damages which may fairly and reasonably be considered naturally from a breach; or
• the operation of any warranty of Supplier as may be provided in this Contract. Any limitation of Supplier’s obligations hereunder, either by provisions of Supplier’s delivery slips or other instruments shall be void.

All information regarding this Contract shall be treated as confidential by Supplier, including but not limited to volumes and pricing of Products and/or Services sold under this Contract. Supplier will hold such information in strict confidence and not communicated to any other party, except as required by law, and as needed by contractors in performing this Contract; provided that such contractor agree to be bound to a nondisclosure agreement no less stringent than the obligations in this section. For five years from the date of disclosure, the Supplier will exercise the same degree of care as it exercises for its own information of similar nature, but not less than reasonable care, to

• prevent disclosure of information received from NWH, and
• not use NWH information for any purpose other than as needed to perform the Contract.

However, these non-disclosure and non-use provisions do not apply after and to the extent such information:

1. is or becomes generally available to the public through no act or failure to act by Supplier;
2. was already in the Supplier’s possession at the time of its disclosure as shown by Supplier’s prior written records;
3. is subsequently disclosed to Supplier on a non-confidential basis by a third party without violating any obligation of secrecy relating to the information disclosed; or
4. is subsequently developed independently by an employee or agent of the Supplier who did not have access to the information. Neither party will use the name of the other in publicity releases, referrals, advertising, or similar activity without the prior written consent of the other. During the longer of the term of the Contract and for a period of one year thereafter or after completion of the applicable Services or final delivery of the Product, Supplier agrees that it will not, without NWH written consent, directly, or indirectly through third parties, employ, solicit, engage or retain the services of NWH employees or personnel.

If Supplier is selling Products, Supplier will obtain and maintain insurance to protect the Products for all risks of loss until received by NWH at the point of delivery. If Supplier works at or provides Services on NWH facilities, prior to commencing work or Services, Supplier will obtain and maintain for the entire duration of this Contract the following insurance coverage on its operations under this Contract:

• Commercial General Liability (occurrence form), covering bodily injury and property damage liability, contractual liability, products and completed operations liability; and, if performing construction or repair services, including broad form property damage liability (BFPD), with minimum limits of $1,000,000 per occurrence, $2,000,000 products and completed operations aggregate, and $2,000,000 general aggregate;
• Comprehensive Automobile Liability (if applicable) covering owned, leased or scheduled vehicles with minimum limits of $1,000,000 per person and $1,000,000 per accident for bodily injury and $1,000,000 property damage or combined single limit of $1,000,000;
• Workers’ Compensation or Industrial Accident insurance providing statutory benefits as required by law; and
• Employer’s Liability/Stop-Gap Liability coverage (U.S. only) with minimum limit of $100,000 each accident, $100,000 each employee, and $100,000 policy limit.

If work or Service is performed on Site(s) by Supplier, “NWH Company and its Subsidiaries” shall be endorsed as an Additional Insured to the Supplier’s Commercial General Liability policy evidenced by a copy of the endorsement or a copy of the applicable insurance policy form which is to be attached to the Certificate of Insurance, and delivered to: NWH, 820 A Street, Suite 500, Tacoma, WA 98402. If providing Services on NWH facilities, the Additional Insured endorsement form or policy language will include coverage for Supplier’s “completed operations” for NWH and will be equivalent to the ISO form CG 2010 1185. The above required liability limits can be provided by any combination of primary and umbrella/excess insurance policies. Supplier will provide NWH with a Certificate of Insurance and endorsements or policy forms, noted above, evidencing compliance with the above requirements prior to commencing any work on v facilities. Supplier will require its insurance carrier(s) to give NWH at least 30 days written notice prior to cancellation of coverage. Supplier and its subcontractors will cause their insurance companies to waive rights of subrogation against NWH and its affiliates. Supplier acknowledges that this waiver was mutually negotiated. Insurance companies providing coverages for Supplier and its subcontractors will have an A.M. Best’s rating of no less than B+ VII. All insurance or self-insurance of NWH and its affiliates will be excess of any insurance provided by Supplier or subcontractors. Supplier will ensure that its subcontractors (that will be on NWH facilities) have insurance coverage and endorsements consistent with the above.

Supplier acknowledges that time is of the essence in its performance. However, neither party will be liable to the other for damages for failure to carry out this Contract in whole or in part when the failure is due to fires, hurricanes, floods, earthquakes, or other natural disasters, freight embargoes, governmental or administrative prohibitions, riots, and acts of public enemies or terrorists. A party affected by such an event will immediately notify the other, describing the event and estimating its duration. The parties will cooperate in good faith to mitigate the effects of the event. Regardless, if Supplier is unable to honor the Contract in a timely fashion, NWH will be entitled to seek Products and Services from another vendor without penalty and those Products and Services will count towards any volume requirements that NWH has committed to purchase. Alternatively, at its sole election, NWH may terminate this Contract. Unless excused per this Section S, if NWH must acquire Products/Services from another supplier on an emergency basis because Supplier is unable to timely perform on the agreed schedule, Supplier will reimburse NWH for all commercially reasonable additional costs and expenses incurred to obtain the Products/Services.

At NWH convenience and at any time, NWH may terminate the applicable PO by written notice as to all or any part of the Products and/or Services not delivered prior to receipt by Supplier of the notice. Upon receipt of such notice, Supplier shall immediately discontinue all efforts under the applicable PO. As to Products and/or Services that are standard manufactured items, NWH only obligation shall be to pay for Products and/or Services delivered to NWH prior to receipt of the notice of termination. As to Products and/or Services specially manufactured for NWH, Supplier will stop all work on receipt of notice of termination, unless otherwise directed by NWH. Upon such termination, NWH will pay reasonable costs incurred by Supplier directly connected with the PO, including costs and cancellation charges actually incurred by Supplier under subcontracts. Such accounting of the costs shall be provided to NWH within ten (10) days of receipt of the notice to terminate. Such payment shall not exceed the total price of the order, and shall be reduced by any deposits, refunds or salvage values available to Supplier. Upon such payment, title to any work-in-progress shall pass to NWH.

A party will be in default under this Contract if it fails to cure a breach, within 10 business days of receipt of written notice of breach, is adjudicated bankrupt, files for reorganization, becomes insolvent, or if a receiver is appointed for it. In addition to any other available remedies, the non-defaulting party may immediately terminate this Contract without liability by written notice to the defaulting party. Any such termination will not affect rights or obligations accrued or owed prior to the effective date of the termination notice.

“NWH” means NWH, Inc. or an affiliate of Northwest Hardwoods as may be designated in writing by NWH from time to time. Northwest Hardwoods may assign any of the benefits or liabilities of this Contract to any of its affiliates or other wholly-owned subsidiaries of NWH without Supplier consent. At NWH request, Supplier shall provide separate billing for such affiliate at no additional charge. NWH may, without seeking consent, assign this Contract to an entity acquiring substantially all the assets of a NWH business or a NWH affiliate. Supplier cannot assign the responsibilities of this Contract without the prior written consent of NWH. Supplier and NWH agree that all notices, requests, demands and other communications required by the Contract must be in writing and be delivered to the parties at the addresses as set forth in on the first page of the Contract or PO document or any other address that a party may designate by notice to the other parties.

The parties to this Contract represent that they have negotiated and understand its provisions and agree that no presumptions should be made against the drafter. This Contract will be binding on the parties and their respective heirs, personal representatives, successors, and permitted assigns, and will inure to their benefit. If a provision of this Contract is determined to be unenforceable in any respect, the enforceability of the provision in any other respect and of the remaining provisions of this Contract will not be impaired. The provisions of the Contract that, by their nature, would continue beyond the termination, cancellation, or expiration of the Contract shall so continue and survive. This Contract contains the entire understanding of the parties regarding the subject matter of this Contract and supersedes all prior and contemporaneous negotiations and agreements, whether written or oral, between the parties with respect to the subject matter of this Contract. No waiver will be binding on NWH unless it is in writing and signed by the party making the waiver. NWH waiver of a breach of a provision of this Contract will not be a waiver of any other provision or a waiver of a subsequent breach of the same provision.