Standard Terms and Conditions of Purchase


1.0   Definitions.

  In this “Agreement,” the following words and expressions have the following meanings:

“Agreement” means this “Friedrich” (as defined below) standard terms and conditions between Friedrich and the undersigned Vendor, as may be amended and supplemented from time to time.

“Applicable Laws” means all applicable United States Federal, state and local laws, statutes, regulations, orders, codes, rules, ordinances, decrees, rulings, directives, guidelines, policies and other legal requirements including, but not limited to, all applicable United States transportation, environmental, safety, health, labeling and flammability laws (including, by way of example but not by way of limitation, the California Safe Drinking Water and Toxic Enforcement Act of 1986 (also known as “Proposition 65”), all “Environmental Laws,” as defined below, and any applicable laws that apply to Vendor and Vendor’s industry in any jurisdiction in which Vendor products are manufactured, sold, imported, exported, transported or distributed, whether in effect as of the date of this Agreement or thereafter.

“Claim” means claim, action, legal proceeding, liability, loss, damage, judgment, settlement, costs and expenses, including attorneys’ fees and costs, arising from or in connection with the manufacture, labeling, advertisement, use, transportation, distribution, sale, exchange and/or service of a “Vendor Product,” as defined below.

“Dollars” and “$” mean lawful money of the United States of America.

“Environmental Laws” means any applicable international laws, treaties, conventions, agreements, orders or decrees relating to environmental or health protection, and any Applicable Laws relating to “Hazardous Materials,” as defined below, safety or protection of human or animal health or the environment (including ambient air, indoor air, surface water, ground water, land surface, or subsurface strata), including those relating to emissions, discharges, noise abatement, releases or threatened releases of Hazardous Materials, or otherwise relating to the manufacture, processing, distribution, use, treatment, storage, disposal, transportation, recycling, reporting or handling of Hazardous Materials.

”Extended Cost” means “Unit Cost,” as defined below, multiplied by the quantity of Vendor Product.

“F.O.B. – Origin” means delivery, title and risk of loss to Vendor Products passes to Friedrich upon delivery to Friedrich’s designated common carrier.

“Friedrich” means and includes Friedrich Air Conditioning, LLC  and any other trade name used by the foregoing entities, or any parent company, subsidiary, successor, assign, or other affiliate of the foregoing entities.

Friedrich’s System” means Friedrich’s then current computer software systems, platforms and programs relating to Friedrich’s operations including, without limitation, tracking and posting of Purchase Order placements, and the receipt of Vendor Products including, without limitation, quantity, weight, date and location. Vendor acknowledges and agrees that in the event of any discrepancy between Friedrich’s Systems’ records and Vendor records, information reflected in Friedrich’s System, including, without limitation, any quantity, weight, Dollar amount, Received Date, Received Vendor Product, or other relevant information, shall be conclusive and controlling.

“Hazardous Materials” means (i) chemicals, pollutants, polychlorinated biphenyls; (ii) petroleum or petroleum products, natural or synthetic gas, asbestos in any form that is or could become friable, urea formaldehyde foam insulation, and  radon  gas; (iii) any substance defined as  or included  in the  definition of  “hazardous  materials”, “hazardous substance,” “hazardous waste”, “extremely hazardous waste”, “restricted hazardous waste”, “hazardous product”, “controlled product”, “prohibited product”, “restricted product”, “dangerous goods”, “toxic substance”, “toxic pollutant”, “contaminant”, “pollutant”, “deleterious substance” or any words of similar meaning or import, relating to the protection of the environment, health or safety matters under any Environmental Laws; and (iv) any other substance regulated as such under any Environmental Laws.

“International” means any country, province, territory or other location outside of the U.S.

“Proprietary Rights” means any patent, copyright, trademark, trade name, trade dress, trade secret, or other proprietary right.

“Purchase Order” means the purchase order provided by Friedrich to Vendor to purchase Vendor Product under this Agreement.

“Received Date” means the date of receipt by Friedrich of Received Vendor Products as reflected in Friedrich’s System.

“Received Vendor Products” means Vendor Products reflected as received in Friedrich’s System pursuant to a Purchase Order.

“Related Persons” means Friedrich’s subsidiaries, affiliates, divisions, parents, and their respective associates, employees, directors, officers, agents, contractors, distributors, successors and assigns.

“Replacement Cost” means the actual current price charged to Friedrich by Vendor for a particular Vendor Product as reflected in Friedrich’s System from time to time.

“Returns” means any Vendor Product rejected, destroyed or returned to Vendor by Friedrich for any reason including, without limitation, defective or damaged Vendor Product, as reflected in Friedrich’s System.

”Unit Cost” means the net cost of a Vendor Product to Friedrich exclusive of any deductions, including but not limited to deductions for freight, cooperative or incentive program allowances or quantity or terms discounts.

“U.S.” means the United States of America.

“Vendor” means the undersigned merchant, whether resident within or outside of the U.S. engaged in the manufacture, import, export, distribution, transportation, supply and/or sale of Vendor Products to Friedrich.

“Vendor Product” means the Vendor’s products, materials, articles, equipment, parts, items, and services, together with all labeling, documentation, advertising, and other material related thereto, to be manufactured, imported, exported, distributed, transported, supplied, and/or sold to or on behalf of Friedrich under this Agreement.


In consideration of the mutual promises contained herein and for other good and valuable consideration Friedrich and the undersigned Vendor agree as follows:

2.1   Vendor Financial Information.

Vendor shall furnish to Friedrich, when submitting this completed, executed Agreement, complete set of current financial statements. If such statements are not available, a Dunn & Bradstreet or other similar financial report shall be provided by Vendor. Publicly-held companies shall provide Friedrich with Vendor’s most recent Annual Report.

2.2   Effective Date and Term.

The terms, conditions and standards in this Agreement are effective as of the date Vendor first supplies Vendor Product to Friedrich. Subject to the provisions for earlier termination in this Agreement, this Agreement shall expire on the date that the last Vendor Product is sold by or to Friedrich or is otherwise removed from Friedrich’s inventory, provided that the indemnity provisions herein shall survive the expiration or earlier termination of this Agreement (“Term”). The open Term of this Agreement does not apply to effective dates for pricing.

2.3   Representations and Warranties

Vendor represents and warrants to Friedrich that:

a.      All Vendor Products supplied to or on behalf of Friedrich: (i) are free from defects, conform to samples, specifications, or other descriptions furnished by the Vendor and/or agreed to by Friedrich (whichever standards result in a higher quality); (ii) are merchantable (as defined in the applicable version of the U.S. Uniform Commercial Code and any other Applicable Laws); (iii) are fit and appropriate for the particular and ordinary purpose for which such merchandise was designed (and for reasonable and foreseeable misuses of the merchandise); (iv) are not adulterated, misbranded, falsely labeled or advertised by Vendor; (v) are not falsely invoiced, that all weight, measures, sizes, legends or descriptions printed, stamped, attached or otherwise indicated with regard to the Vendor Products are true and correct; (vi) are in strict compliance with Vendor’s published specifications or specifications provided to Vendor by Friedrich as of the Effective Date (unless superseded by new specifications agreed to by Vendor and Friedrich in writing); (vii) are composed of all new materials and components; (viii) are produced and provided with the highest degree of care; (ix) are furnished promptly; and (x) ARE NOT MINED, PRODUCED, MANUFACTURED, ASSEMBLED OR PACKAGED BY THE USE OF FORCED LABOR, PRISON LABOR OR FORCED OR ILLEGAL CHILD LABOR AND THAT THE VENDOR PRODUCTS WERE NOT TRANSSHIPPED FOR THE PURPOSE OF MISLABELING, EVADING QUOTA OR COUNTRY OF ORIGIN RESTRICTIONS OR FOR THE PURPOSE OF AVOIDING COMPLIANCE WITH FORCED LABOR, PRISON LABOR, CHILD LABOR OR OTHER APPLICABLE LAWS.

b.      In addition to all warranties implied by law, that Vendor Product shall conform to and comply in all respects with all Applicable Laws including all applicable Environmental Laws. Vendor agrees to take all action necessary to extend to Friedrich and its customers the product-specific warranties and timeframes specified by or granted to Vendor, together with services warranties and guarantees, if any.

c.      Title conveyance to Vendor Products is good, its transfer and delivery is rightful and free from any security interest or other lien or encumbrance, and delivered free of the rightful claim of any third person including, without limitation, any actual or alleged claim of infringement, misappropriation or violation of any Proprietary Rights.

d.      That the Vendor Products are manufactured in the country of origin stated on the Certificate of Origin and/or NAFTA Certificates, as applicable, or any other documents required for customs entry, that Vendor shall comply with all import requirements of all applicable customs and other governmental agencies, that necessary invoices and required documentation will be provided in compliance with Applicable Law, that the commercial invoice shall, in English, accurately describe all the Vendor Products or merchandise contained in the shipment, and identify the country of origin of each article contained in the shipment. In the event Friedrich believes Vendor Products to be in violation of transshipment regulations, Friedrich may cancel any Purchase Order under this Agreement, in whole or in part, and return the Vendor Products to Vendor, for a full refund of the purchase price (including all handling, transportation, shipping, and other costs incurred by Friedrich in connection therewith). In addition, Vendor shall be liable for any penalties and/or fines resulting from breach of transshipment regulations, to the extent permitted by law, together with any costs, including attorney's fees incurred by Friedrich in defending against or responding to such charges.

e.      In addition to the representations and warranties contained herein, the warranties of the U.S. Uniform Commercial Code are specifically incorporated herein by this reference. Nothing contained here shall be deemed a waiver of warranties implied by law.

2.4   Indemnification

a.      Vendor agrees to indemnify, defend and hold Friedrich harmless from and against any Claim, even if such Claim is groundless or false, arising from or in connection with the manufacture, labeling, advertisement (provided to Friedrich by Vendor or otherwise advertised directly by Vendor), use, transportation, distribution, sale, exchange and/or service of Vendor Product including, without limitation, any Claim that arises from or relates in any way to: (a) Vendor’s failure to supply Vendor Product that conforms to and complies with all Applicable Laws; (b) Vendor’s breach of any covenants, express or implied warranties or representations made herein including, without limitation, improper manufacture, construction, labeling, transportation, distribution or design; (c) any intentional wrongful or negligent act or omission of Vendor or its employees, agents, contractors, successors, and assigns; (d) any Claim which alleges that Vendor Product, or any use or distribution thereof, infringes upon, misappropriates, or violates any Proprietary Rights of any third parties; and (e) any Claim arising out of or resulting from any actual or alleged defect in Vendor Product or that such Vendor Product is otherwise deficient in any respect in its manufacture, design, construction, distribution, transportation, labeling, assembly or otherwise, whether latent or patent, including any actual or alleged death of or injury to any person, damage to any property, or any other damage or loss by whomsoever suffered.

b.      In further consideration of the mutual promises contained herein and for entering into this Agreement, Vendor hereby agrees that the full benefit of this Agreement including all indemnities provided hereunder shall specifically extend to and include Friedrich’s subsidiaries, affiliates, and other Related Persons, and Vendor further acknowledges and agrees that, in the event of any Claim, such subsidiaries, affiliates, and other Related Persons may also assert the indemnity provisions of this Agreement directly against Vendor.

c.      Vendor’s indemnification obligations shall not extend to or include any Claim to the extent caused by the negligent or intentional wrongful acts or omissions to act by Friedrich, or its employees, agents, successors or assigns. The doctrine of comparative negligence shall apply in the event that a Claim is caused by both Friedrich and Vendor.

d.      The duties and obligations of Vendor herein shall not be affected or limited by Friedrich’s extension of express or implied warranties to its customers, except to the extent that any such warranties expressly extend beyond the scope of Vendor’s warranties, express or implied, to Friedrich.

e.      Friedrich shall give written notice to Vendor, in accordance with Section 11.22 of this Agreement, of any Claim as soon as reasonably practicable after the occurrence of such Claim has come to the knowledge of Friedrich, provided that failure to give such notice shall not relieve Vendor of its obligations hereunder, except to the extent of any prejudice incurred by Vendor as a result of such delay. Friedrich agrees to cooperate with Vendor in the defense of any action or other proceeding brought or filed with respect to a Claim. Vendor shall control the defense, settlement or compromise of any such Claim with attorneys reasonably acceptable to Friedrich, provided that Vendor must first obtain Friedrich’s prior written consent to settle any Claim if such settlement will directly or indirectly affect Friedrich’s ability to sell or advertise for sale, the Vendor Product that is the subject of the Claim. Friedrich may employ counsel at its own expense to assist with any such Claim; provided, however, that if such counsel is necessary because of a conflict of interest of either Vendor or its counsel or because Vendor does not assume control, Vendor will bear the expense of such counsel.

2.5   Insurance

a.      Vendor shall, at its own expense, obtain and maintain the following insurance for the Term of this Agreement: Commercial General Liability, with coverage including premises/operations, contractual, personal and products/completed operations liabilities, with limits of not less than $2,000,000 per occurrence for bodily injury and property damage combined.

b.      Vendor shall, at Friedrich's request, provide copies of requested insurance policies. The insurance will include product liability insurance that holds harmless the insureds against such liability to third parties resulting from an injury attributable to any Vendor Product manufactured, labeled, advertised, imported, exported, distributed, transported, supplied, sold, used, and/or serviced by Vendor under this Agreement.  Friedrich and any of its subsidiaries, affiliates, or other Related Persons, as Friedrich reasonably requests, shall be named as additional insureds, and such insurance shall be issued on a primary and non-contributory basis. Policies of insurance hereunder shall provide that they will not be cancelled or materially changed without at least thirty (30) calendar days’ prior written notice to Friedrich. Within such thirty (30) day period, Vendor shall obtain and maintain substitute coverage with the same terms as stated above. Vendor shall provide certificates of insurance evidencing coverage (or appropriate alternative evidence of coverage under the Applicable Law) in advance of or concurrent with the execution of this Agreement and on each insurance policy renewal thereafter, but no less often than annually, to the attention of Friedrich’s Risk Manager at Friedrich’s address. (Vendor shall, only at Friedrich’s request, provide copies to Friedrich of the insurance policy or policies procured in accordance with this Agreement). The purchase of insurance and furnishing of such certificates shall not limit Vendor’s obligations hereunder or in any way modify Vendor’s agreement to indemnify Friedrich as set forth hereunder.

2.6   Remedies, Limitation.

a.      In no instance will Friedrich be liable to Vendor in excess of the actual Unit Cost for a Vendor Product, less applicable discounts and/or other deductions, and no interest or other charges shall be payable by Friedrich upon any Purchase Order, any resulting invoice, or this Agreement, whether claimed by reason of late payment or otherwise.

b.      Each of Friedrich's rights and remedies specified in this Agreement shall be cumulative and shall be in addition to any other or further remedies provided in law or equity, including, without limitation, remedies under the Uniform Commercial Code. In addition to such other remedies, it is specifically agreed that Friedrich may, in its sole and absolute discretion, cancel any Purchase Order under this Agreement and return, at Vendor's expense, any Vendor Products which do not comply in any respect with the Friedrich terms specified in this Agreement. In such event, Vendor shall (i) refund the full Agreement price of the Vendor Products, if then paid, (ii) pay to Friedrich a return handling charge of 10% of the invoice total, and (iii) reimburse Friedrich for any and all costs or expenses, including attorneys' fees, suffered by Friedrich in connection with any breach by Vendor of its obligations hereunder.

c.      At Friedrich's election, for any amount due by Vendor to Friedrich hereunder including, without limitation, any non-compliance, shortages, Returns, damages and other charges outlined in this Agreement such payments will be paid in U.S. Dollars to Friedrich upon demand, or Friedrich may, in its sole and absolute discretion, credit such amount against other Vendor Products on order, may deduct such amount against outstanding invoices, whether or not related to the transaction to which such offset relates or set off such amount against Vendor's account. Friedrich shall not be obligated to take a credit against future purchases. Moreover, Friedrich may send to Vendor a debit memo reflecting the amount due and payable to Friedrich, either monthly or quarterly, at Friedrich’s election or Friedrich may receive a credit memo issued by Vendor, but in no event shall Friedrich be precluded from taking the applicable credit in the absence of sending or receiving, as applicable, such documentation. Alternatively, if Friedrich elects to bill Vendor for such amount, Vendor agrees to pay immediately upon demand the applicable amount due as reflected in Friedrich’s debit memo, invoice or other demand. Acceptance by Friedrich of a Vendor credit memo which varies from the amount reflected in Friedrich’s System or hereunder as due and owning to Friedrich by Vendor shall not relieve Vendor of any liability for such balance due.

d.      If on a subsequent invoice from an International Vendor a credit to Friedrich is reflected for a  prior shipment of Vendor Product, Vendor agrees to reflect the full invoice price and indicate as a separate line item the amount of the claimed deduction to ensure proper value declaration for U.S. customs. The International Vendor will pay by check in U.S. Dollars the amount reflected on any credit memo which is not taken by Friedrich within thirty (30) days of its submission.

e.      Friedrich reserves the right, in its sole and absolute discretion, to return any Vendor Products to Vendor, at Vendor's expense, and for full credit, and cancel any Purchase Order under this Agreement, where a claim is made (whether founded or unfounded) that the purchase, display or sale of the Vendor Products by Friedrich violates any Applicable Law including any legal requirement relating to the manufacture, sale, labeling, safety or transportation of Vendor Products, or infringes any alleged patent, design, trade name, trademark, copyright, trade dress, right to privacy, or other similar proprietary or property right. Without limiting any other rights or remedies which may be available to Friedrich with respect to such Vendor Products, such Vendor Products shall be considered to be non-complying and Friedrich shall be entitled to recover from Vendor for such non-compliance as provided herein. In the event Friedrich is precluded from returning the Vendor Products by act of any government agency or regulatory authority, Friedrich shall nevertheless be entitled to recover from Vendor for such non-compliance all amounts as provided in this Agreement.

f.       Moreover, Vendor agrees to notify Friedrich in writing within thirty (30) days of any disputes or discrepancies in connection with a credit taken or a demand for payment made by Friedrich. Otherwise, Vendor agrees that the amount of the credit taken or demand for payment by Friedrich shall be correct and Vendor shall thereafter be precluded from raising objections and releases Friedrich from any claims related thereto.

g.      Without limiting any of its other remedies, if Friedrich has good cause at any time to believe that any Vendor Products contain defects or hazards which could create a substantial risk of injury to any person or property, Vendor shall, upon Friedrich's request, and at Vendor's expense, use its best efforts to locate, identify and recall such Vendor Products whether in the possession of Friedrich or Friedrich's customers. Vendor, upon recalling such items, shall repair or replace them, or refund to retail Friedrich’s their full retail price.

h.      Vendor may not bring a claim, lawsuit, demand or other cause of action based upon the transactions under this Agreement including, but not limited to, debit memorandums, chargebacks or any other financial penalties assessed by Friedrich more than one year after the cause of action has accrued. Moreover, Vendor agrees that under no circumstances shall Vendor put Friedrich on a credit hold or otherwise refuse to ship Vendor Product to Friedrich for any disputes, discrepancies or other issues arising under this Agreement, the resolution of which shall be limited to the dispute resolution procedures set forth in this Agreement.


2.7   Vendor Warranty Policy

Vendor agrees to provide to Friedrich’s designated representative a complete copy of all Vendor warranties and warranty-related information relating to Vendor Product within 30 days of Friedrich’s request, and as any updates or changes are made thereto.

2.8   Confidentiality and Disclosure of Information

a.      The terms of this Agreement and all "Confidential Information" that the Vendor has received or will receive from Friedrich shall at all times be subject to the confidentiality provisions of this Section.  For purposes of this Agreement, the Friedrich's Confidential Information shall include, without limitation, the following categories of information (whether disclosed orally or in writing including and any information that is marked as “confidential” or should be reasonably understood to be confidential or proprietary to the Friedrich): computer software and related technology; financial and operational information and other matters relating to the operation of the Friedrich's business, including information relating to actual or potential vendors or customers of Friedrich; vendor and customer lists; business forecasts and projections; accounting, finance or tax information; pricing information; information relating to the corporate and/or operational structure of Friedrich; business strategies; methodologies; trade secrets; marketing plans; financial statements; freight shipments; projections; analyses; sales volume; expenditures; and any other nonpublic information or documentation provided by the Disclosing Party pursuant to the terms of this Agreement.
b.      The Confidential Information at all times will be exclusively owned by the Friedrich and the Vendor will have no right to use, license, rent, sell or otherwise transfer such Confidential Information for any purpose; provided, however, that the Vendor may have access to this Confidential Information to complete its obligations under this Agreement.
c.      The Vendor agrees that during the Term of this Agreement and the Restricted Period (defined below), the Vendor will not disclose any Confidential Information to any third party, nor use any Confidential Information for any purpose not permitted under this Agreement. For purposes of this Section, "Restricted Period" shall mean, with respect to each particular item of Confidential Information: (i) five (5) years (or the maximum period permitted under Applicable Law) following the expiration and non-renewal or termination of this Agreement if the item of Confidential Information at issue does not constitute a trade secret; or (ii) indefinitely, if the item of Confidential Information at issue constitutes a trade secret, until such item of Confidential Information at issue ceases to be a trade secret, but in no event for a period of less than five (5) years (or the maximum period permitted under Applicable Law) following the expiration and non-renewal or termination of this Agreement.
d.      Upon expiration or earlier termination of this Agreement, the Vendor shall destroy or deliver to Friedrich, at Friedrich's sole cost and as determined by Friedrich in its sole discretion, all such copies of the Friedrich Confidential Information and/or any other materials provided by Friedrich upon request. Within thirty (30) business days following such request, Vendor shall certify in writing the completion of such request.
e.      The duty of confidentiality and nondisclosure in this Section shall not apply to information that the Vendor can document is or was already lawfully in the Vendor’s possession at the time of receipt of the information from the Friedrich; is now or in the future otherwise publicly available (other than through breach of this Agreement), is provided to Vendor by a third party without restriction of the third party's right to disseminate the information and without notice of any restriction against its further disclosure, is independently developed by the Vendor through parties who have not had, either directly or indirectly, access to or knowledge of such Confidential Information, is approved for disclosure by prior written permission of an authorized signatory of Friedrich, or is obligated to be produced by law, under order of a court of competent jurisdiction or other similar requirement of a governmental agency, provided that, Vendor provides Friedrich with written notice of any required disclosure pursuant to such law, order or requirement prior to such disclosure (if reasonably practicable) and Vendor may disclose only that portion of the Confidential Information which Vendor’s counsel advises is legally required to be disclosed..
f.       The Vendor agrees to maintain Friedrich's Confidential Information in strict confidence using every commercially reasonable means to prevent the unauthorized use, disclosure or theft of such Information. In this regard, the Vendor agrees that all of its employees, consultants and representatives authorized to have access to the Friedrich's Confidential Information shall be informed of the confidential and proprietary nature thereof and Vendor shall be obligated for any breach of this provision by any such employee, consultant or representative. Vendor shall immediately notify Friedrich of any disclosure of any Confidential Information that is not permitted pursuant to this Section or other misuse of any Confidential Information or breach of this provision. Vendor acknowledges that a breach of this provision will cause the Friedrich irreparable harm, which monetary damages alone would not remedy, and Vendor therefore consents to the entry of preliminary and permanent injunctive relief to prevent any continuing or further breach of this provision by Vendor.
g.      Friedrich makes no representation or warranty of any kind, express or implied, with respect to any Confidential Information.  Friedrich may, at its sole discretion, elect at any time, by written notice to Vendor, to terminate Vendor’s further use of Confidential Information for any purpose. Upon receipt of such notice, Vendor shall, and shall cause Vendor’s employees, consultants, and representatives  to promptly cease all further use of Confidential Information, return to Friedrich all physical materials containing Confidential Information, whether the materials were originally provided by Friedrich or copied or otherwise prepared by Vendor or any of Vendor’s employees, consultants, or representatives, and erase or otherwise destroy any Confidential Information kept by Vendor or any of Vendor’s employees, consultants, or representatives in electronic or other non-physical form.  Such termination by Friedrich shall not affect Vendor’s continuing obligations in this subsection.

2.9   Gifts and Entertainment

a.      Vendor shall not make any payment or commit any act in violation of Applicable Law including, without limitation, the U.S. Foreign Corrupt Practices Act (“FCPA”). Further, Vendor shall not make any payment or commit any act that would constitute a violation of Applicable Law, including the FCPA, if such payment or act were made or committed by a person subject thereto. Accordingly, except as specifically set forth below, Vendor must not offer, make or authorize any payment or gift or anything of value, directly or indirectly, to any domestic or foreign government official, to secure, maintain, or direct business, or for any other purpose.
b.      Friedrich may accept nominal gifts, defined as tangible, non-cash items, only if Vendor shares or distributes any such gifts within Friedrich. Cash gifts may not be made or accepted under any circumstances. Friedrich may accept personalized gifts offered by Vendor only if the value is under $50.00. Personalized gifts, samples or products of any value that Friedrich carries shall not be offered by Vendor or accepted by Friedrich. Vendor may offer and Friedrich may accept entertainment, defined as meals, sporting events, trips, and the like, only if such entertainment is an integral part of conducting business. If the entertainment is offered for pleasure only, if accepted by Friedrich, Friedrich will pay fair market value for the entertainment or, with Vendor’s prior written consent, offer same as an incentive, award, reward or contest prize. Vendor must obtain the specific written approval of a Friedrich officer before offering any gifts or entertainment not specifically referenced above.



3.1   Standards

a.      Friedrich and Vendor agree that the Vendor Products to be purchased by Friedrich require a Purchase Order issued by Friedrich pursuant to its then current standard form, as amended from time to time in Friedrich’s sole discretion. All invoices, packages, shipping notices, and other written documents pertaining to the Purchase Order shall contain or make reference to the particular Purchase Order number issued.
b.      Unless otherwise expressly provided on the Purchase Order and agreed to in writing by Friedrich, this Agreement contains the entire terms and conditions of the Agreement between Vendor and Friedrich regarding the purchase of the Vendor Product. No additional terms or modifications proposed by Vendor in any acknowledgement, sales order, or other form of written or oral communication shall be binding on Friedrich, unless expressly authorized by Friedrich in writing. The price that appears on the Purchase Order is the price that Friedrich will pay when invoiced, subject to any reductions due to discrepancies in shipments, offsets, credits, fees or other reductions contemplated by this Agreement.

3.2   Purchase Order Notification

a.      Vendor agrees to receive Friedrich’s Purchase Orders and send Friedrich invoices via e-mail unless specifically waived by Friedrich.
b.      If Friedrich agrees to waive the EDI requirements of Vendor, Purchase Orders will be sent in the manner determined by Friedrich, including facsimile transmission.
c.      Vendor agrees to provide the following information to the designated Friedrich representative within two (2) business days of the receipt of the Purchase Order by Vendor: (i) confirmation of receipt of such Purchase Order; (ii) confirmation of expected delivery date; (iii) notification of any expected backorders and their delivery date(s), if such backorders are authorized and/or accepted by Friedrich; and (iv) any problems or discrepancies reflected in a Friedrich Purchase Order (e.g., quantities, standard packs, etc.).

3.3   Acceptance, Delivery, Backorders, Late Shipments and Cancellation

a.      Vendor shall be bound by the Purchase Order and its terms and conditions upon the earliest of: (a) the date Vendor acknowledges the Purchase Order, (b) five (5) business days after Friedrich issues with Purchase Order unless it receives a written rejection from Vendor, or (c) the first date that any Vendor Product on the Purchase Order is shipped to Friedrich or its customer, subsidiary or affiliate. Friedrich reserves the express right to cancel any Purchase Order at any time prior to acceptance of the Vendor Product by Friedrich.
b.      Friedrich reserves the right, and Vendor agrees, to require Vendor to drop ship Vendor Products to any Friedrich designated location.
c.      Vendor agrees to ship Vendor Product in accordance with the freight and shipping terms as directed by Friedrich.[1]
(i)      In the event Vendor Products cannot be shipped within the dates, quantities or other terms specified herein or in the Purchase Order, Vendor promptly shall notify Friedrich of the deviation, including the Purchase Order number and department number for the affected Vendor Products.
(ii)    In the event of a late shipment of Vendor Products, a shipment after the Purchase Order has been canceled, a shipment of Vendor Products to a location other than Friedrich’s designated location, or a shipment of Vendor Products which contains any deviation from the terms of the Purchase Order including, without limitation, short shipments, backorders or overages, Friedrich may, in its sole and absolute discretion: (A) cancel all or a portion of the Purchase Order prior to shipment; (B) reject and return all or a portion of the Vendor Products to Vendor, at Vendor's expense; or (C) accept and pay for all or a portion of the Received Vendor Products. In the event of early shipment, Friedrich may, at its option: (A) reject and return all or a portion of the Vendor Products to Vendor, at Vendor's expense, to be held by Vendor for Friedrich until dates specified; or (B) accept and pay for all or a portion of the Received Vendor Products. Friedrich shall not be obligated to pay for any Vendor Products shipped in excess of the quantity indicated on a Purchase Order.
(iii)   If Friedrich cancels a Purchase Order or rejects Vendor Products for any of the reasons permitted under this Agreement, each shipment of Vendor Products is to be considered separately, and Friedrich's right to reject a late shipment shall not be affected by acceptance of prior late shipments from Vendor.
(iv)   Vendor will be liable for any loss caused as a result of failure to ship conforming Vendor Products within dates specified, including, without limitation, costs incurred by Friedrich in obtaining the Vendor Products elsewhere, and/or the additional freight costs, including air freight, incurred by Friedrich to meet the delivery date, and other non-compliance charges. Moreover, Vendor, at its cost, shall expedite delivery of any new or out of stock Vendor Product which was not timely shipped pursuant to a Purchase Order.
(v)    If backorders are accepted under this Agreement, Friedrich, at its option, may send to Vendor a late order report. Vendor’s agrees to provide the designated Friedrich representative with the numbers and carrier for shipped Vendor Product and to provide such representative with the expected delivery dates of any unshipped Vendor Product reflected in the late order report. In any event, Friedrich requires notification of Vendor Product on backorder within 2 business days of the receipt of a Purchase Order by the Vendor.
e.      Any forecasts, commitments, projections or other estimates provided to Vendor, are for planning purposes only and shall not be binding upon Friedrich unless and only to the extent they are signed by an authorized agent or representative of Friedrich and Friedrich expressly agrees in writing that they shall be binding upon Friedrich. If this Agreement shall for any reason be deemed an acceptance of a prior offer by Vendor, such acceptance is limited to the express Friedrich terms. This Agreement constitutes the entire agreement between the parties and may not be modified except by a separate written agreement signed by an authorized agent or officer of Friedrich. Friedrich reserves the right to, from time to time, to amend the Friedrich terms with respect to future Purchase Orders with advance written or electronic notice to Vendor. Such amendment shall not affect any Purchase Order issued prior to the notice of amendment.
f.       Without prejudice to any other rights or remedies which Friedrich might have, Friedrich may cancel any Purchase Order under this Agreement, in whole or in part, in the event of any breach of this Agreement by Vendor, including without limitation: (i) any defect in workmanship or quality of the Vendor Products (including all related packaging, labeling and printed matter), (ii) any breach of Vendor's warranties, (iii) any delay in delivery or departure from delivery, routing, hanging, ticketing, labeling or packaging instructions, (iv) any deviation from or variation in quantities, assortments, prices, or other Friedrich Terms, (v) if the Vendor Products become the subject of any claim of infringement or other claim or enforcement action by any third party, (vi) insolvency, bankruptcy, reorganization, arrangement, receivership or liquidation by or against Vendor, (vii) if Vendor makes an assignment for the benefit of creditors or ceases to carry on business in the ordinary and normal course; or (viii) at any time, for any reason or no reason, prior to acceptance by Friedrich in accordance with Section 2.3(e) above. In the event of cancellation due to subsections (i) through (viii) herein, Friedrich shall not be liable to Vendor for any amount, and Vendor shall be liable to Friedrich for any damages sustained by reason of the default which gave rise to the cancellation. Vendor hereby waives the right to cure improper tender which might otherwise be available under lawIn the event of a cancellation pursuant to subsection herein, Vendor shall immediately stop all work on any Vendor Product and/or such cancelled Purchase Order and shall immediately cause any and all of its suppliers or subcontractors to cease such work. For any custom, special order or private label Vendor Products, Friedrich's liability to Vendor shall be limited to the unit price of Vendor Products commenced or completed prior to such cancellation, plus the actual amount of Vendor's costs reasonably incurred in contemplation of performance of the canceled portion, less any amount saved by Vendor as a result of  such cancellation and any amounts which could have reasonably been mitigated by Vendor, including, without limitation, work done after the receipt of the notice of cancellation, costs incurred by Vendor's suppliers or subcontractors which Vendor could reasonably have avoided, and amounts realized by Vendor from sale of the Vendor Products to third parties. Friedrich shall have no liability for cancellation of Purchase Orders of Vendor Products not constituting custom, special or private label Vendor Products. In the event of cancellation of a Purchase Order or this Agreement for any reason, Vendor shall, prior to disposing of Vendor Products, remove all of Friedrich's proprietary marks and identifying tickets, labeling and packaging. Moreover, for Friedrich custom or private label Vendor Products Vendor shall not dispose of such Vendor Products in Friedrich's trade area or to Friedrich's direct competitors.

3.4   Non-Compliance Charges

Vendor Products shipped before or after dates specified, and/or Vendor Products that are shipped in violation of the Friedrich terms specified in this Agreement, may be subject to non- compliance and/or handling charges.

3.5   Inspection

The Vendor Products are subject to Friedrich's inspection. The foregoing notwithstanding, Friedrich shall be under no obligation to unpack or inspect the Vendor Products before resale thereof and neither Friedrich's payment for nor retention of the Vendor Products shall constitute an acceptance of Vendor Products not in compliance with this Agreement, affect Friedrich's right to reject or return the Vendor Products, or constitute a waiver by Friedrich of any Vendor warranties.

3.6   No Variances

No variances, regardless of industry standards, with respect to quality, quantity, size, capacity, volume, content or other standard measure of the Vendor Products (including all related packaging, labeling and printed matter) are allowed. Vendor shall assume responsibility for and indemnify Friedrich against any fines, costs or expenses, including attorney fees, (a) imposed by any federal, state or local governmental body, or other third party, for variances in the Vendor Products shipped hereunder, and/or (b) incurred by Friedrich as a result of the variances.


 4.1   Price, Price Protection and Notice of Price Increases

a.      Vendor agrees to provide its cost for each Vendor Product to Friedrich for each calendar year by September 1st of the prior year. Such cost shall remain in effect from January 1 through December 31st of each year, subject to adjustment pursuant to Sections 3.1(b) and (c) below. If Vendor does not notify Friedrich’s designated representative of a price change by such September 1 deadline, then Vendor agrees that the current cost in effect shall remain in effect for the following year.  Vendor warrants that the price in a Purchase Order shall be complete, and no additional charges of any type shall be added for any reason without Friedrich’s express written consent, including current or increased costs of materials, labor or transportation, shipping, packaging, labeling, custom duties, taxes, storage, insurance, boxing and crating
b.      Notwithstanding the foregoing, Vendor warrants that: prices, benefits or allowances for the Vendor Products are not less favorable than those prices, benefits or allowances currently extended to any other customers for the same or similar Vendor Products in similar quantities. Accordingly, in the event that prior to the final shipment under any Purchase Order Vendor sells or offers to others Vendor Products substantially of the same kind as ordered at lower prices and or on terms more favorable to a third party than those stated on the Purchase Order, the prices and or terms shall be deemed automatically revised to equal the lowest prices and most favorable terms at which Vendor sold or shall have offered such Vendor Products and payment shall be made accordingly. Moreover, Vendor warrants and represents that in the event Vendor reduces its prices to Friedrich for the Vendor Products, Friedrich shall be entitled to claim from Vendor an amount equal to the difference between the existing cost and the decreased cost for the number of Vendor Product. Upon Vendor’s written request, Friedrich will provide a detailed inventory status report evidencing such “on hand” number. In the event Friedrich shall become entitled to lower prices hereunder, including if Friedrich has already made payment at any prices in excess thereof, such price reductions may, in Friedrich's sole and absolute discretion, be deducted from outstanding Vendor invoices or set off against Vendor's account for any Vendor Products on hand or in transit at the time of the reduction, or Vendor shall promptly refund the difference in price to Friedrich upon demand. Friedrich shall not be obligated to take a credit against future purchases at the time of the reduction.
c.      In the event that a court or regulatory agency or body finds that the prices on a Purchase Order are in excess of that allowed by any Applicable Law, the prices shall be automatically revised to equal a price which is not in violation of said law or regulations. If Friedrich shall have made payment before it is determined that there has been a violation, Vendor shall promptly refund an amount of money equal to the difference between the price paid for the Vendor Products and the price, which is not in violation of, Applicable Law. In the event of a price increase, Vendor shall give Friedrich written notice of any such increase at least sixty (60) days prior to the effective date of the increase.



 5.1   Consumer and Environmental Protection, and Hazardous Materials

a.      Vendor agrees to comply with all Environmental Laws including those relating to Hazardous Materials, and any other Applicable Laws relating to consumer health, safety and protection. Vendor agrees (a) to provide Hazardous Materials information on all applicable Vendor Product; (b) to package Vendor Product to meet any Applicable Laws relating to Hazardous Materials, packaging, labeling, shipping and consumer protection.
b.      Friedrich will notify Vendor in writing upon the occurrence of a Hazardous Materials violation in relation to any Vendor Product.
c.      Any costs incurred by Friedrich to bring the Vendor Product into legal or regulatory compliance with Applicable Laws will be charged to or borne by Vendor. Friedrich may, but shall not be obligated to, take all action necessary to remedy and pay any expenses charged for such violation, and Vendor agrees to reimburse Friedrich upon demand for such charges or hereby expressly authorizes Friedrich to credit any such costs as charges against any amounts due by Friedrich to Vendor.



 6.1   Terms for Payment

Vendor agrees to the standard Friedrich payment terms, which payments shall be paid within 45 days after Friedrich’s receipt of all items and quantities of Vendor Product reflected in Vendor’s approved invoice by the correct Friedrich designated location. Payment is subject to any offsets, credits or other reductions contemplated by this Agreement.


7.1   Entire Agreement

This Agreement constitutes and expresses the entire and exclusive agreement between the parties with respect to matters referred to in this Agreement. This Agreement contains all the terms and conditions in effect between Vendor and Friedrich relating to matters set forth in this Agreement. This Agreement supersedes any prior written or oral communications, representations, or agreements between the parties relating to matters set forth in this Agreement. No course of prior dealings between the parties and no usage of the trade may be used by Vendor to supplement or explain any term used in any Purchase Order.

7.2   Severability

If any provision in this Agreement is determined to be invalid in whole or in part, or is incapable of performance, that invalidity or incapability shall not affect the validity of any other provision, term or condition in this Agreement, all of which shall remain in full force and effect, and binding on the parties, provided that nothing in this Section shall be construed to relieve or release the Vendor from any material obligation required to be performed by it under this Agreement.

7.3   Waiver

No waiver shall be binding unless executed in writing by a duly authorized officer or representative of the party making the waiver. No waiver of any provision in this Agreement shall be deemed or shall constitute a waiver of any other provision, whether or not similar, nor shall any waiver constitute a continuing waiver. The rights and remedies of the parties to a Purchase Order are cumulative and not alternative.

7.4   Binding Effect

Each and all of the provisions in this agreement to be performed by, or on the part of, Vendor shall bind Vendor, its successors, and assigns and shall benefit Friedrich, its successors, and assigns.

7.5   Rules of Construction and Interpretation

Vendor and Friedrich hereby confirm their complete familiarity with this Agreement and agree that its provisions are not to be construed either for or against either party. The parties agree that any deletion of language from this Agreement prior to its mutual execution by Vendor and Friedrich shall not be construed to have any particular meaning or to raise any presumption, construction, or implication including, without limitation, any implication that the parties intended to state the converse, obverse, or opposite of the deleted language. Wherever possible, this Agreement will be construed and interpreted so as to be effective and valid under any Applicable Laws. If any provision of this Agreement is, for any reason, determined or deemed to be invalid or prohibited, such provision will be invalid or prohibited only to the extent of such invalidity or prohibition, which will not invalidate the remainder of such provision or the remaining provisions of this Agreement. As used in this Agreement and when required by the context, each number (singular or plural) shall include all numbers, and each gender shall include all genders. Section titles and headings in this Agreement are inserted for convenience of reference only and are not intended to be part of or to affect the meaning or interpretation of this Agreement. Except where otherwise provided, any reference to time shall be deemed to be a reference to San Antonio, Texas time.

7.6   Currency

Except where otherwise provided, any reference in this Agreement to currency shall mean the lawful money of the United States of America.

7.7   Relationship of the Parties

Nothing in this Agreement creates a partnership, joint venture, association, franchise, syndicate, or employment relationship between the parties. Nothing contained in this Agreement shall be deemed for any purpose as creating any relation between the parties involved other than the relationship of vendor/supplier/manufacturer/customer and Friedrich.

7.8   Time of the Essence

Time shall be of the essence in the performance of all obligations by all parties to this Agreement, and with respect to each term or provision of this Agreement.

7.9   Joint and Several Liability

To the extent Vendor consists of more than one party, entity or person, the obligations imposed by this agreement shall be joint and several.

7.10   Counterparts

This Agreement and any amendment to it may be executed in any number of counterparts, each of which, when so executed, shall be deemed to be an original, and such counterparts together shall constitute one and the same instrument. A counterpart will include any written document by which a party agrees to be bound by the terms of this Agreement. Where a party executes a counterpart, that counterpart shall be held in escrow pending the execution of similar counterparts by all other parties to this Agreement.

7.11   Limitation on Authority

Friedrich reserves the right, from time to time, to designate certain financial and other limitations on the authority that employees and associates have to bind Friedrich, which limitation may include, without limitation, employment and officer level limitations, financial commitment limitations, and specific parties limitations. Upon service of written notice to Vendor of such limitations, Vendor agrees that no Agreements, agreements, waivers, or other commitments made by such employees or associates in violation of such limitations will be binding on Friedrich, regardless of any reliance by Vendor in connection with same, and regardless of any implied ratification by Friedrich through silence or acceptance of benefits.

7.12   Successors

This Agreement shall inure to the benefit of and be binding upon the parties hereto and their lawful successors, heirs, administrators and successors.

7.13   Assignment.

a.      Notwithstanding any provision in this Agreement to the contrary, Friedrich shall have the right to assign, license, sublicense, pledge, hypothecate, encumber, or otherwise transfer this Agreement, or any portion of Friedrich’s interests herein (“Exempt Transfer”), without Vendor’s consent, whether or not such Exempt Transfer is made to an “Affiliated Party”. For purposes of this Section, the term Affiliated Party shall mean: (i) any parent, subsidiary, or affiliated corporation, or other legal entity of Friedrich; (ii) any corporation or other legal entity resulting from any merger or other reorganization of Friedrich; or (iii) any successor acquiring all or substantially all of Friedrich’s assets or business. Vendor agrees to execute any other and further instruments required by Friedrich to give effect to such Exempt Transfer. If Vendor fails to execute and deliver, or cause to be executed and delivered, the assignments or other instruments herein referred to, Friedrich is hereby irrevocably granted the power coupled with an interest to execute such assignments and instruments in the name of Vendor as Vendor attorney-in-fact. This Agreement shall inure to the benefit and be binding upon the assigns of Friedrich under this Section.
b.      Vendor shall not assign, subcontract, or otherwise delegate its rights or obligations under this Agreement, in whole or in part, without the prior written consent of Friedrich, and any purported assignment, subcontract, or delegation without Friedrich’s consent shall be void and of no legal effect, shall constitute a default under this Agreement, and shall entitle Friedrich to terminate the Agreement and claim for any damages thereby suffered or incurred.
c.      For any permitted assignment, Vendor shall provide Friedrich written notice of an assignment, factoring, or other transfer of its right or obligations arising under this Agreement 30 days prior to such assignment, factoring or other transfer taking legal effect. Such written notice shall include the name and address of assignee/transferee, date assignment is to begin, and terms of the assignment, and shall be considered delivered upon receipt of such written notice by the Vendor. Friedrich shall have the right to take deduction or other set-offs from such assignee for any obligation due Friedrich by Vendor hereunder and/or against any payment assigned, transferred, or factored by the Vendor and Vendor shall indemnify Friedrich against and hold Friedrich harmless from any and all Claims (including reasonable attorney fees, court costs, obligations, liabilities or liens) arising or imposed in connection with the such deductions or set-offs or with the assignment or transfer or factoring of any account or right arising hereunder. Vendor also releases and waives any right, claim or action against Friedrich for amounts due and owing under this Agreement where Vendor has not complied with the notice requirements of this provision.

7.14   Compliance with Law

Vendor, at its sole cost, agrees to comply with all Applicable Laws. Upon receipt, Vendor shall promptly provide Friedrich with a copy of any notice of violation, offence, complaint, summons, investigation, proceeding, or other action received by Vendor relating to any Applicable Laws. Vendor shall also promptly provide Friedrich with notice of any enactment , promulgation, order, directive, or any other legal or administrative process that creates any new Applicable Laws of which Vendor becomes or is made aware.

7.15   Export Statement

The supply of Vendor Product under this Agreement is subject to U.S. and other government export control laws and regulations.  Vendor hereby agrees to comply with all Applicable Laws that pertain to government export control.

7.16   Cancellation and Termination.

a.      Friedrich reserves the right to cancel any order, refuse any shipment, or otherwise cease to do business with Vendor in accordance with this Agreement, including in the event that Vendor fails to comply with all terms and conditions of this Agreement.   Any such cancellation or termination shall not affect Vendor’s indemnity obligations under this Agreement.
b.      If Vendor defaults in any of its obligations under this Agreement and fails to correct the default within ten (10) days after notice of such default from Friedrich, Friedrich may, at its option, and in addition to all other rights and remedies available to Friedrich herein, at law or in equity, terminate this Agreement, in whole or in part. For the purposes of this Agreement, Vendor is in default if Vendor fails to meet its obligations as provided in this Agreement. Vendor is also in default if any representation or warranty made by Vendor in this Agreement proves to have been misleading or false in any material respect when made.
c.      Moreover, Friedrich may terminate this Agreement at any time for no cause.

7.17   Changes to Agreement; Amendments.

Friedrich reserves the right at any time to make changes to the Agreement, including, without limitation, to the method of shipment, packaging, hanging, ticketing, labeling or packing, the time, place and manner of delivery, the specifications, or the quantity of Vendor Products. If any such change shall cause an increase or decrease in the cost or time required for performance of this Agreement, Vendor shall immediately advise Friedrich of any such increase or decrease, and an equitable adjustment shall be made to the Agreement price and/or delivery schedule. Any claim by Vendor for such adjustment must be approved by Friedrich in writing before Vendor proceeds with such change. Price increases shall not be binding on Friedrich unless evidenced by an Agreement revision duly signed by Friedrich. This Agreement shall not be deemed to be or construed as having been modified or amended as a result of any oral communication between the parties or as a result of any practice of the parties. All amendments to this Agreement shall be in writing and shall be signed by both parties, provided that any such agreement may be executed in counterpart form.

7.18   Governing Law, Jurisdiction

This Agreement and all rights and duties hereunder shall be governed by, and construed in accordance with, the laws of the State of Texas, United States of America, excluding its conflict of laws principles that would apply the law of another jurisdiction, for the purposes of enforcing any claim arising under this Agreement. Friedrich and Vendor agree that they submit to the jurisdiction of the state or federal courts of the State of Texas for any proceedings that may arise in relation to this Agreement. Vendor agrees that it will not bring any suit or judicial proceeding in any forum other than such courts, and agrees not to assert any objection which it may have to the venue or jurisdiction of such courts.  The United Nations Convention for the International Sale of Goods shall not apply to this Agreement.

7.19   Dispute Resolution

Any controversies or disputes arising out of, or relating to this Agreement or the interpretation or breach hereof, shall, in Friedrich's sole and absolute discretion, be settled by binding arbitration by an arbitration service of Friedrich's choice, in accordance with the laws of the State of Texas, United States of America, governing voluntary arbitrations. The location of such arbitration shall be in San Antonio, Texas. Discovery shall be permitted as provided by applicable state law or as the parties may otherwise mutually agree. The parties may also mutually elect to seek mediation as an alternative or precursor to arbitration. If this Agreement governs an international transaction, the applicable state law regarding the arbitration of international disputes shall apply.  The arbitrator shall agree to conduct proceedings under the laws relating to arbitration cited above, or such other rules to which the parties mutually agree.

7.20   Notice

Unless otherwise provided by this Agreement, any notice, instruction, payment, document , or other formal communication required or permitted to be given or served by this Agreement or by any Applicable Laws shall be in writing and may be delivered personally or by fax or by prepaid courier or registered mail to the intended recipient at its address as set out in signature page to this Agreement, and either party may by notice given in accordance with this Section change its address. Any notice shall be deemed, in the absence of evidence to the contrary, to have been received by the intended recipient the same day if personally served, the next business day if sent by fax, and on the fifth business day next following where sent by courier or by registered mail.


[1] Need to determine shipping terms.