Technical Policy - PeerlessXnet Info All Sales Manuals... · All quotations involving penalties on...

Peerless Pump Company Indianapolis, IN 46207-7026

COMMERCIAL & TECHNICAL POLICY

SECTION 10 June 27, 2007

Subject to change without notice

Technical Policy QUOTATION POLICY

All quotations involving penalties on delivery or performance must be approved by the factory prior to quotation per Peerless Pump Company Delegation of Authority

We will not quote jobs where a Liquidated Damages clause is applied to Peerless Pump Company. Where there is a Liquidated Damages clause applicable to the contractor, the job must have approval per the Delegation of Authority and the Chief Financial Officer’s approval. Penalties on Delivery will not be accepted, except in special situations.

Penalties on Performance will not generally be accepted; however, in special cases clearance may be requested from both a Hydraulic Engineer and Applications Engineer. Job requirements for motors and other buy-outs that involve penalties, performance, delivery, warranties, etc. not in accordance with our standard terms must receive prior clearance from the Purchasing Department of the operation involved. This does not preclude final price negotiation in the field.

Terms and Conditions which include "time is of the essence," "for the purpose intended" or "material guaranty" clauses are to be considered penalty jobs because they generally provide for cancellation at no charge and purchase of another vendor's equipment with Peerless Pump Company paying for the loss incurred. Thus they will not be accepted without approval of the Chief Financial Officer.

Each Product Group Application Department offers quotation assistance whenever pricing cannot be obtained from the Sales Manual. They also offer assistance whenever difficult application problems are encountered. In order to quote, they need the following data:

Technical Section of the Specification: The customer's complete specifications with pertinent comments by the requestor are required at the factory. The Business Partner or Business Development Manager's completed estimate sheet, specifically detailing the items requiring special pricing, additions, or modifications, is also required. The customer's drawings will be reviewed, if requested, for evaluation of sump design, submergence and application. Comments along with a disclaimer statement will be submitted by the Peerless Pump.

NOTE: We generally do not recommend pump installation in sumps with designs other than those approved by the Hydraulic Institute. Submergence requirements to overcome vortexing are also published by the Hydraulic Institute. These submergence values should be utilized whenever possible, as directed in our Sales Manual. When available submergence does not conform to the Hydraulic Institute requirements, contact the Product Groups Application Department for approval of submergence values to meet your particular application.





Commercial (General and Special) Sections of the Specification Conditions of sale either must be in accordance with Sales Manual Section 10 or must be approved by the Business Development Manger per Peerless Pump delegation of Authority. For complete evaluation these items are required at the factory: the general and special provisions of the specification, together with a copy of the bidding documents, and the Business Partner or Business Development Manager's completed proposal data sheets covering these items.

Specification Review The Business Partner or Business Development Manager will be responsible for performing a preliminary review of the specification prior to forwarding it to the Product Group’s Application Department. It is their responsibility to examine the general, special, and technical sections of the specification. Reviewer should also perform a preliminary pump selection, pointing out potential problem areas in the specification, suggesting equipment to be furnished and providing other detailed information.

A specification which is long (ie 50+ pages of text and drawings) and complicated (book form) must be reviewed by the field sales personnel and pertinent comments made by them. A specification attached to an order or referenced on a purchase order sent to the factory without comments will not be processed. If the quotation is made through a Business Partner/distributor on behalf of Peerless Pump Company, a copy should be requested and reviewed for conformance with Peerless Pump Company policies. This copy should be forwarded to the factory's Product Group Application Department. On buy-resell jobs, Business Partners are not required to forward specifications but acknowledge product will be supplied as ordered vs specification.

A price addition for installation and start-up supervision shall be included in all quotations exceeding $200,000 for each pump. A price addition for installation and start-up supervision is recommended to be included in all quotations under $50,000 for deep setting pumps greater than 200 feet, pumps with unusual service requirements and for pumps of special construction that require factory expertise. For pricing for Field Service, refer to page xx of this section. Whenever permitted by the customer, shipment shall be "EXW (Ex-works) Plant of Manufacture" refer to page xx of this section for standard freight policy in the terms and conditions. Hazardous liquids as named, identified or defined by agencies such as (but not limited to) the American Chemical Society, ANSI, NFPA, etc. can require special materials of construction or shaft closures. The customer shall be responsible to identify any hazardous liquid to be pumped and to specify any pump construction materials or special design characteristics required to assure safe operation within acceptable performance limits.





REQUIRED STATEMENT ON ALL QUOTATIONS Standard terms are net thirty (30) days. Prices are for acceptance within thirty (30) days, but in the meantime prices may be changed upon proper notice. Quoted prices are firm for the quoted shipping time. Any shipment requested beyond this time is subject to a price change. Our ability to meet the quoted shipping time is subject to the availability of materials and supplies at the time of manufacture. (Add this statement if approval is required.) Prices are based on receiving approval to proceed with manufacture within thirty (30) days after correct submittal data are sent. After thirty (30) days the price will be adjusted to the price in effect at the time of release of the order. PEERLESS PUMP COMPANY ‘S STANDARD “TERMS & CONDITIONS” MUST BE SPECIFICALLY REFERRED TO IN THE BODY OF ALL QUOTATIONS. UNLESS OTHERWISE NEGOTIATED, PRODUCTS NOT OF PEERLESS PUMP COMPANY MANUFACTURE WILL CARRY THE TERMS AND CONDITIONS OF THAT SUPPLIER.

JOB APPROVAL POLICY The following is a procedure for accepting penalty jobs and open ended retainage, as well as quotation and job approval sign off procedures. Please refer to requirements as outlined in the Major Project Bid Form.

Penalties/Retainage: As jobs with penalties and open ended retainage become more prevalent, it is necessary to put the following procedures and policies in effect. • Peerless Pump Company will not accept open ended retainage as part of its payment terms.

Open ended retainage is defined as funds held until start up, owner acceptance or any other milestones without a specific date of conclusion, or one in which Peerless Pump Company. has no control.

• A 5% or 10% retainage may be acceptable but should be payable at the time of start up or within 90 days of shipment, whichever comes first. This must be approved by a General Sales Manager, VP Sales/Chief Commercial Officer and/or Chief Financial Officer. Approval level will be determined by project size as specified in the Job Proposal and Acknowledgment Authorization policy. If an extended term of retainage, such as 120 days from shipment is considered, approval from the Peerless Pump Company Credit Manager or Chief Financial Officer will be required.

• Penalty and liquidated damage clauses have always been points on which to take exception. Approval must be secured by the General Sales Manager, Chief Financial Officer, VP of Sales and/or President before such provisions can be accepted on a particular job. Further, if the corporation accepts such penalty clauses, Peerless Pump Company exposure must be properly limited.

• A “time is of the essence” clause in a contract means that performance of the supplier within a specified period is essential to enable the contract to be completed. Failure to meet the time frame listed will subject Peerless Pump Company to potential consequential and/or liquidated damages. As specified above, we do not accept contracts with these provisions. When such a phrase is included in the contract, failure to do what is required within the time specified is a breach of contract. Without such language in the contract, parties would have a reasonable time in which to carry out obligations under the agreement. If an order contains a “time is of the essence” clause, the signature of the President and Chief Financial Officer are required before acceptance of the order.

BUYOUT ITEM FREIGHT Peerless Pump Company reserves the right to ship all buyout items which are prepaid to destination direct to the job site. When customer requests combined pump/driver shipment from our factory, freight will be added on the driver from manufactures shipping plant to Peerless Pump Company plant of manufacturing and from the factory to the final destination point.





DEFINITION OF DUPLICATE, INTERCHANGEABLE & IDENTICAL PUMPS Please use these descriptive terms when entering orders for replacement pumps. Duplicate Performance Pump: A duplicate performance pump is one in which the performance characteristics are the same as another within the variations permitted by Hydraulic Institute Standards and parts are of the same type, but by reason of improved design and/or materials, mounting dimensions and parts are not necessarily interchangeable. Dimensionally Interchangeable Pump: A dimensionally interchangeable pump is one in which the mounting dimensions are such that the replacement pump can be mounted on the existing bed plate and match existing piping and driver, with hydraulic characteristics and materials to be specified. Interchangeability may involve some variation, not necessarily significant, as a result of manufacturing tolerances. Identical Performance and Dimensional Pump: An identical performance and dimensional pump is a duplicate of, and in addition is interchangeable with a specific pump. Where it is intended, therefore, that a pump is to be identical in all respects including parts, mountings, connecting flange dimensions, and materials, it should be identified as "identical with Pump Serial Number ______________ ", not "duplicate."

Approval

Hold for Approval (HOEN): Certain projects require customer approval on documentation prior to release for manufacture. The customer should be informed in writing that no work other than drawing creation is being performed on their order at time of receipt of orders or letters of intent. Final equipment delivery date is subject to full release for manufacture from the customer and not dependent on time of purchase order creation.

After thirty (30) days from time of initial Peerless Pump submittal, if the customer fails to furnish Peerless Pump with all necessary drawings duly approved, Peerless Pump reserves the right to review and update prices at Peerless Pump's sole discretion after notice is given to the Customer. Price escalation will be subject to review of relevant material market index and review of Vendor quotations.

Hold for curve approval (HOFR) Certain projects require customer approval of tested performance curve prior to release for shipment. At no time should this hold be used for delaying shipment of product because the site is not ready. Once Peerless Pump Company is satisfied they have meet the requirements for a given jobs, the curves will be forward to the appropriate parties. Standard lead time to receive a response is 5 working days with a maximum of two (2) weeks from the time the data is supplied unless agreed upon differently in writing at time of order entry. Any slippage beyond two weeks, can result in a movement of the delivery date of equal or greater amount of time until the approval is received. In most instances, no further work will be performed until a release is given. Peerless Pump Company reserves the right after the standard lead time to continue with manufacturing of product and prepare for shipment. Payment for the equipment is due upon notification that the equipment is packed for shipment EXW (Ex-works) Plant of Manufacture unless agreed upon differently at time of order entry. Any additional work requested to the equipment would be considered a change to the order and appropriate fees would be added. Any delay beyond 30 days from





submittal, Peerless Pump Company may at its discretion add a delayed delivery storage fee at the rate of three percent (3%) of the equipment price per month.

Hold for shipment release (HOFR) At this point the pump will be complete in shipping waiting on the customer to release it for shipment. This is either a final hold point for witness final dimensions or waiting on final shipping instructions. Peerless Pump Company requires that no project remain in this hold longer than one (1) week. After such time, we will be requesting payment for service rendered. Peerless Pump Company would have considerable amount of time and money associated with any job at the point it arrives in shipping. We expect minimal delays from the customer so that we can secure payment for this work. Peerless Pump Company will be working with all parties to either secure shipment release or work out an agreed method for storage and payment. All efforts should be made before the product reaches the shipping floor to clear up issues that would prevent shipment and cash collection.

Bare Pump / Bowl only Orders

When a customer purchases a bare shaft pump or bowl only Vertical Turbine Pump, Peerless Pump Company standard warranty applies only to the equipment supplied or manufactured (see standard warranty). At no time will Peerless Pump Company accept responsibility for equipment supplied by others. Payment for equipment will be subject to Peerless Pump Company standard terms and conditions and not subject to customer’s acceptance of complete pump units.

At Peerless Pump Company discretion we may elect to comment on design concerns surrounding package units. At no time should this be considered approval of system design. If system or site design approval is required, suitable third parties can be recommended by Engineering. All requests for review should be made in writing with all necessary documentation to the correct parties before any comments would be issued.

Pump Performance

Performance of a pump is supplied to operate at one specified design point. Any additional points are for reference only and not subject to performance acceptance. Performance will conform to the latest standards for Hydraulic Institute, NFPA pamphlet 20 and/or Peerless Pump Engineering Standards.

Data shown in electronic or paper published curves represent typically performance of an average pump sampling. Due to casting variations and manufacturing tolerances, performance results can vary from this typical data on any given pump. Performance can only be guaranteed if a factory performance test is included in the order. Peerless Pump reserves the right to require pre-approval of any guaranteed performance before acceptance of purchase orders.





CUSTOMER'S INSPECTION AT THE FACTORY For witnessing performance, NPSH or Hydrostatic tests refer to RAPID or Sales manual for appropriate charges.

Customers' quality assurance requirements vary extensively. Inspection requirements are subject to interpretation depending on individual contract requirements. Typical inspection categories that should be referred to the factory before quoting include but are not limited to the following:

Disassembly and mechanical inspection after performance test

Dimensional clearance check or material inspection of parts at any time

Examination of welding procedures and personnel

Material certification or non-destructive tests

Mandatory hold points during the manufacturing cycle other than witness testing or surface inspection after preparation for shipment.

Every effort is made to ensure we have pre-tested the pump before bringing in the witness as time is available. Once a unit has reached the desired milestone, no further work will be performed until the witness has released the hold point or it has been waived. It is strongly recommend that the witness be the approving party for any test conducted.

Prior to the witness entering the factory floor, it is important that the witness(s) are properly covered by insurance should some unforeseen event happen. Due to safety issues, the number of witness on the shop floor at one time maybe limited depending on the situation.

At no time are witnesses to attempt work on, manipulate or adjust any equipment during their visit. Only Peerless Pump Company employees are authorized to perform work on our equipment for safety and liability issues. At all times, all safety policies and directions must be followed; failure could result in the witness being asked to leave the shop floor. Witness hold points at any sub-supplier generally are not acceptable In the instance where it is required, a Peerless Pump Company representative must be present to escort the client inspector at the vendor site. Refer to the Applications Engineering Group for appropriate approval, cost and lead time.





DRAWINGS PERFORMANCE CURVES AND INSTRUCTIONS

Only when specifically requested on order write (RAPID or other) will Peerless Pump Company supply drawings, curves, manual or other data. Many of documents can be obtained directly from RAPID or Peerless Pump Company website in order to have fast access to this information. Refer to the below chart to see what type and quantity of documents can be obtained from the factory. Shop or pattern drawings (parts' manufacturing drawings, etc.) are never furnished under any circumstances. These are considered proprietary documents to Peerless Pump regardless of part type. If certified performance curves are required, a factory performance test must be ordered. Certified performance curves cannot be furnished after shipment of unit if a factory performance test has not been run.





DRAWINGS General Comment Outline

Standard Dimension Print (outline drawing) "A" size shows horizontal pump and basic driver or vertical discharge head, column and bowl assembly with driver. Shows basic dimensions and data using catalog cuts. (Not to scale)

RAPID generated (upon request) Bus. Partner print from RAPID Factory generated in PDF electronic file from Autocad file (upon request)

One copy emailed to Bus. Partner

Factory generated paper copy from Autocad file (upon request)

Nominal charge for paper copy for collation and binding

Detailed Dimension Print (outline drawing) "B" size expanded dimension prints showing engines, flexible shafting, starting equipment and pump mounted accessories such as lube lines, gauges, air release valves and etc. (Not to scale in PDF electronic file.)

Nominal charge for drafting time to create drawing.

Cross Sectional Standard Cross Sectional Prints of horizontal pump (single page) or for vertical three "A" size drawing which show discharge head, column and bowl assembly. List item number, basic part description and general material description. (Not to scale)

RAPID Created Bus. Partner print from RAPID Factory Created ( PDF electronic file) upon request One copy emailed to Bus.

Partner Cross Sectional Prints with Bill of Material of horizontal pump (single page) or for vertical on three "A" size drawing which show discharge head, column and bowl assembly. List item number, specific part number, basic part description and general material description. (Not to scale)


Outline and Cross Sectional Cross Sectional Drawing - "D " size cut-away drawing of horizontal pump or for vertical discharge head column head, column and bowl assembly with typical head mounted driven includes major dimensions and all parts are numbered which refer to parts list for part number, material and quantity. (Not to scale.)


Special Drawing Requirements Electronic format adder (.DXF or .DWG) per file (not to scale). Nominal charge for file Special or modifications to standard print (5 hours min.) Nominal charge for drafting

time to modify drawing. CURVES

Standard Performance Curve from RAPID "A" size shows capacity in GPM, total dynamic head, laboratory head and predicted laboratory efficiency, corrected for staging and efficiency. Although published curves are considered to be accurate, the factory guarantees only one design point for a specific application. Other points on the curve may vary from those published. (Refer to the factory for multiple guaranteed points.) (upon request)

Bus. Partner print from RAPID

Single Line Performance Curve - same notes as for Published Curve apply, except "A" size curve may be drawn for laboratory and/or field conditions as specified.

Nominal charge for file may apply

Speed-Torque Curve (plotted for anticipated performance) "A" size curve is for pump conditions only, not the driver. (From RAPID or Bus. Partner print from RAPID





Sales Manual)

General Comment

Bill of Material (BOM) as built Computer generated BOM listing part number, description, quantity per assembly for job. (Peerless Pump Company standard format)

Nominal charge for file

Computer generated BOM listing part number, description, quantity per assembly for job with current pricing valid for 30 days. (Peerless Pump Company standard format)

Nominal charge for file

Progress Reports WEB posted updates from the Peerless Pump Company website on changes or improvements to the date the job is scheduled to ship. Requires recipient to be an authorized distributor or agent with a working email address.

WEB site automatic updates with changes

Initial report showing major milestones and predicted shipment date. (Peerless Pump Company standard format only) Nominal charge for file

Month updates of actual manufacture schedule for the duration of the order. Nominal charge for program

Procedural Information (work instructions) for review only, not for approval or comment by customer

Factory performance test procedure per HI and Peerless Pump Company Standards (WI 8.2.09EN). Factory performed hydrostatic test procedure (WI 8.2.01QA). Factory string test procedure (WI 8.2.17QA). Shipping and Packaging procedure (WI 7.5.31MM).

Consult Business Development manager for copies

Installation, Operation & Maintenance Manual Peerless Pump Company standard pump IOM downloaded from website.

Bus. Partner download from site

Peerless Pump Company standard pump IOM (with pump at time of shipment)

One standard copy with pump skid

Modified Peerless Pump Company IOM specific to job. Nominal charge for modifications

Manufacturer’s standard IOM and drawing for mechanical seal. Manufacturer’s standard IOM and drawing for motor. Manufacturer’s standard IOM for engine drives. Manufacturer’s standard IOM for other products not listed.

Nominal charge for manuals may apply depending on vendor, consult Customer

Service for details Country of origin (export documentation) Nominal charge for file Material Quality Requirements

Peerless Pump Company general statement that the material supplied meets our requirements. Nominal charge for report

Material physical and chemical analysis/ certification each different material per order each casting Nominal charge for report

Non-destructive examination analysis (dye penetrate machine surface, ultra sonic, magnetic particle) Nominal charge for report

Note: Standard overall dimensions for drawings are:

Size Dimensions Designation (Inches)

A 8-1/2 x 11 B 11 x 17 C 17 x 22





D 22 x 34

General Comment

Documentation Packages Level I

Peerless Pump Company standard pump IOM (with pump at time of shipment).

One standard copy with pump skid

Items printed by user from RAPID or website as needed. Bus. Partner print from RAPID Level II (does not include binder) includes:

Standard Performance Curve (from RAPID) "A" size Standard Dimension Print (outline drawing) "A" size. (Not to scale) Standard Cross Sectional Prints on three "A" size. (Not to scale) Peerless Pump Company standard pump IOM.

Nominal charge for information per set applies. Does not include binder for each set.

Level III (does not include binder) includes:

Level II documents Computer generated BOM listing part number, description, quantity per assembly for job. (Peerless Pump Company standard format) Manufacturer’s standard IOM and drawing for mechanical seal. Manufacturer’s standard IOM and drawing for motor.

Nominal charge for information per set applies. Does not include binder for each set.

Special Requirements

Hardcover binder with dividers by section (as requested) Nominal charge for binding and collating

Electronic (PDF) copy of documentation collated and divided by section.

Electronic copy by CD or email preferred method.

Project Management A factory assigned Project Manager will help manage the order throughout the production cycle. Project Manager will assist in: submittal preparation, response to comments, order entry, tracking, monthly status reports, and coordination of testing and start-up service.

Nominal charge for service, consult Engineered

Applications Group of availability and cost.

REFER TO FACTORY FOR ADDITIONAL CHARGE FOR ANY DATA NOT COVERED ABOVE





ENGINEERING DATA General Comment

Seismic calculations review the anchor bolts of the unit at the job site. We compare the results against the UBC code for comparison to illustrate potential issues with the installation. The majority of the time, these are accompanied by a request to have a professional engineer (PE) stamp the results. Peerless Pump Company has a limited number of PE’s; please ensure that we can comply with the requirements. Lead Time: Add 4 weeks to perform calculations and obtain results.

Standard Peerless Pump Company Factory Calculations Outside Firm Calculations or PE stamp (specify state of certification if required)

Nominal charge for calculations

Shaft Critical calculations review the lateral natural frequency (first and second) mode of the shafting in the pump. Peerless Pump Company will provide a “Dry Critical Speed”. Things that impact this calculation are shaft diameter, bearing spacing, and pump speed and down thrust. This is not standard and RAPID does not take this into account when determining lengths. All VFD driven units should have this calculation performed to ensure the customer does not operate the pump in a speed range that will cause a problem. Customer must supply their speed range for operation with request. Our standard (HI recommendations) is to have an avoidance range of +/- 15% for pumps less than 30 feet in length. Lead Time: Add 2 weeks to perform calculations and obtain results.

Price for pumps < 30 feet in length,

for longer settings contact factory.

Peerless Pump Company Factory Calculations < 16” >18”


Outside Firm Calculations or PE stamp (specify state of certification if required) Reed critical calculation reviews the lateral natural frequency of the driver, head, column and bowl. Peerless Pump Company will provide an undamped lumped mass analysis including mass participation values for each irrational mode. Things that impact this calculation are support structure/head, frame size, and mounting. Driver information is required from the manufacture to complete this calculation so this calculation may take several weeks to perform based on availability of information. Specifically we will need the reed frequency, motor weight and center of gravity. Lead Time: Add 5 weeks to perform calculations and obtain results (this includes time to obtain motor information).

Peerless Pump Company Factory Calculations Outside Firm Calculations or PE stamp (specify state of certification if required)


FEA (finite element analysis) is a calculation and review of the entire unit, bowl, column, head and motor. This calculation requires a computer generated model of the pump to be created and results will show potential failure concerns. This can be done in house unless a specific design requirement can not be meet or a special PE calculation stamp is required. Specifically we will need the reed frequency, motor weight and center of gravity of the motor in addition to design parameters for the pump. Lead Time: Add 5 weeks to perform calculations and obtain results (this includes estimated time to obtain motor information).


Model Testing is typically done with a reduced/scaled down version of the pump system. This type of calculation is conducted to see what effect the sump design will have on the pump. Typically the pump is not modeled completely but is represented by disc and tubes. These are not actual models of the pump for predicting head, flow or efficiencies. Lead Time: Consult factory for appropriate lead time based.


Sump Design Review will be for review only; Peerless Pump Company does not warranty sump design. A hydraulic engineering review of the customer’s proposed or existing design to make suggestions based on Hydraulic Institutes standards recommendations. A detailed plan view of the sump and installation in addition to details of pump operation is required to perform this review.

Lead Time: Add 2 weeks to perform calculations and obtain results






STANDARD AND LONG TERM STORAGE

Standard Packaging 1) This is suitable for protection during shipment and during covered storage at jobsite for a short period

between installation and start-up. The preservatives applied at the factory have an effective life of three (3) months (plus/minus) from date of domestic shipment depending on the severity of the environment in which the equipment. For international destination this will vary depending on the sea worthiness of export boxing.

Recommended Storage Atmosphere 1) Controlled storage facilities should be maintained at and even temperature 10 degrees F or more

above the dew point with relative humidity less than 50% and little or no dust. If these requirements cannot be met the pump is to be considered in uncontrolled storage.

2) For uncontrolled storage periods of six (6) months or less, the equipment is to be inspected weekly to insure that all preservatives are intact and internals are protected.

3) Inspect and recoat periodically the equipment with water displacement rust inhibitors (VPCI-368-021 (Rust-Ban 392 or equal) crusting grease (Rust-Ban 326 or equal), vapor phase inhibitor (Shell VPI-260 or equal), rust preventative coating (Rust-Ban 373 or equal).

Uncontrolled Storage Moisture Protection 1) All pipe threads and flanged pipe covers are to be sealed with tape. Furthermore you should place

10 pounds of moisture absorbing desiccant or 5 pounds of vapor phase inhibitor crystals near the center of pump.

2) If the pump is assembled, place an additional one pound in the discharge of the pump securely fastened.

3) Also install a moisture indicator near the perimeter of the pump.

4) A cover the equipment with 6 mil minimum thickness black polythene or equal and seal it with tape. Provide a small ventilation hole approximately half-inch in diameter.

5) Provide a roof or shed shelter to protect from direct exposure to the elements.

Engine, Gearbox, Motor 1) The engine, gearbox, or motor cannot be left idle for extended periods without concern of corrosion

attack. For the above equipment the shaft must be rotated to coat the bearings with lubricant and to retard oxidation and corrosion.

2) Provisions must be made to “store” the equipment in a reasonably protected environment as outlined above (dry and indoors if possible) and that the engine, gearbox be started at least once per month for five to ten minutes till the engines is hot so as to lubricate the internals properly.

3) Please remove the engine exhaust covering used to protect the engine against damage in shipment before running engine. This cover as well as any other originally covered, or plugged openings, must be replaced and sealed each time you shut the engine down.

4) If the pneumatic control is integrated into the start-up sequence then you should use clean and dry shop air. More preferably, you should use nitrogen regulated to 100 psig, by use of nitrogen, you eliminate “water” getting into the control valves and piping system of the panel.

5) Oil and filter change interval should not exceed six months.





Engine, Gearbox, Motor- Continued 6) The motor windings should be protected from excessive moisture absorption by some safe reliable

method of heating. Space heaters, if supplied, may be used for this purpose. The temperature of the windings should always be maintained at 10° F. above the temperature of the surrounding air, otherwise you must install desiccant plugs and bags in all motors.

7) On all oil lubricated motors the bearing reservoir should be filled to the operating level with a high grade oxidation corrosion inhibiting turbine oil.

8) Coat motor shaft and flange surfaces with rust preventative (Ashland Tectyl no.502-c or equal)

9) Remove motor condensation drain plugs (if present) and insert silica gel (desiccant) plugs in openings.

10) Cover motor to completely exclude dirt, dust, moisture and other foreign materials. If possible, insert motor in a strong transparent plastic bag. Attach moisture indicator to side of motor and place several bags of silica-gel inside then seal the plastic bag.

11) Rotate the motor shaft several revolutions every month.

12) For outdoor humid condition you should spray all internal surfaces with one coat of anti fungus varnish (e.g. George no. 11137 sealer or equal).

13) Check motor insulation resistance periodically. A hand cranked ohm meter if not over 500 volts is the most convenient and safest method. The insulation resistance of the stator windings should be in accordance with IEEE Standard No. 43 recommended practice for insulation resistance testing of AC rotating machinery

14) If the insulation fails to meet this standard, the motor may be dried out by heat from a warm air oven, electric strip heaters, or heat lamps.

15) Prior to approving a unit for start-up, the storage condition, as well as the log of ohm meter readings and other maintenance performed during the storage period must be submitted.

16) When the units are finally set in place for start-up ready for commissioning, all oil should be drained out and changed, as well as new anti-freeze water changed.

17) All other requirements described in the original manufactures manual.

Horizontal Centrifugal Pumps 1) Remove and discard stuffing box packing, if pump is packed type. Spray the interior

portion of the pump case and the pump stuffing boxes with a water-soluble type of rust preventative.

2) After pump has been thoroughly drained, cover the pump suction and discharge flanges with full natural rubber gasket material and blank off these Openings with metal blank flanges and a minimum of four full sized bolts. Cover the pump stuffing box opening with a non-hygroscopic tape. If packed type pump the packing gland may be left on the pump shaft, but must be wired or otherwise securely fastened in position.

3) All exposed machined surfaces shall be thoroughly coated with a rust preventative material that is readily removable with a petroleum distillate product.

4) All exposed painted surfaces shall be dry, clean and free of grease and other contaminates.

5) The pump shall be covered with a weather resistant cover of waterproof paper or plastic to prohibit the build-up of dirt and dust accumulations.





6) The pump shall be inspected at regular periods during storage and pump shaft shall be rotated, at intervals of approximately 4 to 6 weeks, by hand.

7) To place the pump in operation, all protective coverings and coatings shall be properly removed; if packed type pump repack with the proper number of packing rings in each stuffing box in accordance with normal repair and maintenance instructions furnished with the pump.

8) Fill pump bearing frame (Series 8175, 8196, 8796) with a high-grade oxidation corrosion inhibited turbine oil.

9) Rotate pump shaft several revolutions at least once per week to coat the bearing with lubricate and to retard oxidation and corrosion, flat spots and staining.

10) On Series 8196 make sure rotation is clockwise to prevent impeller from screwing off the shaft.

11) “Long Term Storage Procedures” should be followed as detailed by the OEM manufacturer when the start-up of equipment is made over three months from the date of shipment from the factory.

Vertical Centrifugal Pumps 1) Rotate the shaft several revolutions every month in a counter clockwise rotation. Also check that the

shaft is not in an extreme raised or lowered lateral condition.

2) All exposed interior and exterior non-coated metallic surfaces are sprayed with a water displacement rust preventative (Rust-Ban 392 or equal)

3) Apply film of compatible lube oil (Rust-Ban 632 or equal) over the water displacement rust preventative.

4) Coat exposed machined surfaces with firm rust preventative (Rust-Ban 373 or equal)

5) Cover pump with plastic sheet (min 6 mil thickness) and tape in place with a one half-inch hole in pump suction to allow for breathing.

6) “Long term storage procedures” should be followed as detailed in Bulletin 44.5 when the start-up of equipment will occur over three months from the date of shipment.

Special notes 1) The purchase of “Long Term Storage Protection” is available for purchase of new equipment from

the factory prior to pump shipment, so as to extend the life of equipment and to maintain the integrity of the equipment.

2) Please note that the purchase of “Long Term Storage Protection” from the factory does not extend the warranty in any manner.

3) Warranty policy is twelve months from start-up or eighteen months from shipment, whichever occurs first. This warranty is valid only if equipment has been properly handled and stored as per the above requirements. Should the equipment be stored or handled improperly, then the warranty is invalid and may be reinstated only after a factory representative is allowed to inspect the equipment prior to start-up. Expenses for the representative will be billed in accordance with the latest schedule for field service engineer. Any repairs or repair parts needed shall be billed to the customer at prices in effect at time of shipment of these repairs/parts.

Closing comments 1) The customer shall agree that procedures will be adhered to so that the integrity and reliability of the

equipment will be maintained.

2) The warranty and operational performance of equipment is strictly dependent and valid upon, proper handling, maintenance and storage of equipment.





3) Refer to the factory for further information is required.





Customer Receives

Wrong Part

Customer Missing Part

Customer Receives Damaged

Part

Missing or Damaged After

Arrival?

Missing or Damaged by

Carrier?

Missing or Damaged Before

Shipment?

Yes Yes

Factory Enter NO CHARGE

Order for Replacement

Customer Enter CHARGEABLE

Order for Replacement

Factory issue RMA

to Customer & Issue Credit to Customer

when Original Part

Received

No No

DAMAGED OR MISSING PARTS POLICYIt is the intent of Sterling Fluid Systems (USA), Inc. to provide products as desired by the customer. However, occasionally

products may be supplied incorrectly. At these times, Sterling's desire is to correct the problem as quickly as possible.

A Chargeable Order will be Entered if any of the following apply: 1. Original Job Number or Serial Number Not Supplied. 2. Request is 30 Days past date of shipment - US only. International Shipments past 2 weeks from delivery to job-site. 3. RMA material involved. 4. Freight Damaged not noted on proof of delivery. 5. Freight Damage reported after 10 working days of shipment. (Most carriers require freight claims to be filed within 15 working days)

Damaged or Missing Parts Policy Guidelines: 1. Customer must supply Original Job Number or Serial Number. 2. The party who files the freight claim is determined by the agreed shipping terms on the order. Example, if FCA Indianapolis is the shipping terms and damage occurs in transit, then the customer files the freight claim. 3. A Customer Complaint Form (via Extranet) should be used as the method to request replacement shipments. If original order was a parts order, send customer complaint to Parts Department. If the original shipment was a pump order, send customer complaint to the respective Business Unit. (If the Extranet is not available, contact the Business Unit Customer Service Representative or Business Unit Manager.) 4. Damaged or incorrect shipments must be noted on the proof of delivery by the customer/carrier at the time of delivery. 5. Defective parts (as opposed to damaged or missing items) are subject to the warranty policy, not this policy.

Customer or Sales fills out

Complaint Form

Customer or Sales fills

out Complaint

Form

Signature of receipt of product by the customer and/or carrier indicates an acceptance of responsibility for contents and indicates that the shipment has been verified and inspected by the receiving party. Factory may exercise the

right to enter a chargeable order when a signature of receipt is verified.

The flowchart below shows the Damaged or Missing Parts Policy Procedure:

Factory files freight claim and

supplies NO CHARGE replacement

Customer ordered Wrong

Part?

Yes

Customer or Sales fills

out Complaint

Form

No

Factory Enters CHARGEABLE Replacement

Order

QS 3.1 Rev. 2

Customer files freight claim and

enters CHARGEABLE

order

Yes

COL or PPA FA





Installation Supervision and Factory Service Technician

Peerless Pump Company provides highly qualified and well-trained field service technicians who are able to assist customers on their site with startups, trouble shooting, installation and repairs. This section defines the policy for the use of our Service Technicians.

Scheduling Service Technician scheduling is controlled by the Indianapolis Service/Warranty Coordinator who can be contacted on 317-925-9661 or at [email protected]. Generally we try to accommodate customer requests for urgent service, but two weeks notice for a job in the contiguous United States and at least 4 weeks notice for elsewhere are normally required. In some cases, pre-payment of the estimated bill will be required. If the actual invoice is less than the pre-payment then the overpayment can be refunded by check or retained as a deposit against any future work. For overseas work only, discounts are available from our normal rates for pre-payment. Note that in some very special cases (e.g. very large projects) specially discounted rates have been negotiated for the purchase of services with a project. In these cases, no further discounts shall be allowed. When you book a service appointment, the Service Technician handling the job will contact you directly for the job details, contact information and detailed directions/ scheduling. You will also be provided with a checklist, which will need to be completed in advance of the service date. The checklist is designed to ensure that all preliminary work, connection of services, availability of water etc. are ready before the visit. If a form is not completed fully and returned or the site is not ready in any way, then the full charges shall be applied. If it is necessary to cancel a service appointment within 1 week of the scheduled date, then a minimum charge of 50% of one day’s normal fees shall apply to the cancelled job.

Charges The following charges on page are “Distributor Net” prices for authorized Peerless Pump Company Distributors with a current valid contract. Charges for all other classes of customers will be in excess of those listed on following page.

SECTION 10 October 29, 2015




FIELD SERVICE Charges

Service Provided

Net Charges per Normal Working Day (8AM to 5PM Monday through

Friday)

Net Charges for OT (outside of normal working day, and

weekends – Saturday / Sunday)

Net charges for work on a Public Holiday

Work within the 48 contiguous United States

$1200 per day

(includes Standby days)

$225 per hour $450 per hour

Work within a 4 hour radius of the Indianapolis Service Center

$125 per hour $200 per hour $300 per hour

Work outside of the 48 contiguous United States. (Note this daily charge is for a 10 hour working day)

$2,200 per day

($1,500 Standby Day)


Premium Service or “Hazardous Conditions” – including, but not limited to the following installations: Offshore platforms, Nuclear sites, Oil / Gas, “Compounds”

$3,000 per day (10 hour working day)

($1,800 Standby Day)


Overseas discount for pre-payment of the estimated bill

A discount of 10% on these rates is available if the estimated charge is settled full in advance of the Service Engineer’s departure to the job site.

Provision of equipped Company Service Vehicle (only in contiguous 48 states)

$100 per day + $0.75 per mile



Provision of laser alignment equipment when included in a regularly scheduled service trip

$250 per pump ($150 for each subsequent pump)



Provision of vibration analysis equipment when included in a regularly scheduled service trip




Provision of engineering and technical backup / consultancy / assistance from home base (Indianapolis) including report writing, inspection reports, etc.

$200 per hour $250 per hour $350 per hour

Minimum call out costs to ship parts, find information, etc from factory

Price of part only $150 + Hourly rate + price of part

$300 + Hourly rate + price of part

Reports / Analysis $200 per report $200 per report $200 per report





Chargeable time shall be calculated for all hours worked including travel time from home base and back (portal to portal). Premiums may also be added to the normal price of the part if express shipment or special manufacturing treatment/ handling are required.

Costs incurred, including, but not limited to travel tickets, accommodation, meals, freight and import of parts, equipment and tools, telephone, living expenses, passports, visas, inoculations etc. will be added to the invoice at cost plus 10%.

General conditions for Field Service Technician Support 1. An order (with a purchase order) will be required for all field service trips, including those to

investigate a potential warranty situation. 2. Credit will only be extended to customers upon the agreement of Peerless Pump Company

Accounts department. All other customers will be required to provide payment in advance. For International trips an irrevocable, confirmed letter of credit draw on a US bank with terms satisfactory to Peerless Pump Company Accounts department shall normally be required.

3. All service work shall be based on Peerless Pump Company. Standard terms and conditions of sale. 4. All checklists etc. provided by Peerless Pump Company in advance of the trip must be returned

within 24 hours of receipt. Charges will be made if the site is not ready in any way. 5. All flights over 5 hours shall utilize Business Class travel. Economy (Y) class shall be used for flights

less than 5 hours. Exceptionally, if Economy Class travel is agreed to and used then this shall normally be billed at the Full (“Y”) refundable rate. If a flight is then taken of over 5 hours duration then a 24 hour “rest and recovery” period shall be allowed for and billed into each segment of the travel (i.e. outbound and return). This shall be payable by the purchaser at the full rate plus expenses for the accommodation and food etc. taken during the “rest and recovery” period.

6. The purchaser may elect to provide their own portions of living accommodations; meals etc. to the Service Technician on the job site, but these must be of a high quality and fully acceptable to Peerless Pump Company and the Service Technician and must be arranged and authorized prior to Service Technician departure.

7. The Service Technician is authorized by Peerless Pump Company to withdraw them from the job site with no notice and without explanation if they do not feel secure, safe or comfortable with any situation. Peerless Pump Company reserves the right to withdraw its personnel and services at any time with no notice. Peerless Pump Company Service Technicians are authorized by the President of the company to make all decisions and take whatever lawful action they deem necessary to protect themselves including ceasing work and leaving the site.

8. The purchaser is required to provide a safe, secure and healthy working environment (equal to US OSHA regulations) with adequate insurance and first aid services etc. at all times. Appropriate safety training and briefings including equipment are to be provided to the Service Technician. All local and international standards of safety and compliance with Health and Safety regulations are the responsibility of the Purchaser.

9. If special work or residence permits are required in the country where the work is to be performed, then the Purchaser will arrange for these documents. Any local taxes or fees shall be borne by the purchaser.

10. The Service Technician shall not depart from home until they are satisfied that all preparations and documentation is in order.

11. If assistance on site is required, then this shall be provided in the form of competent, safe and skilled personnel, who can work to the direction of the Service Technician. No charges for such personnel shall be accepted unless agreed in advance with pre-agreed costs by Indianapolis QRC personnel.

12. The Purchaser will be provided with a copy of the Service Technicians’ preliminary site report and shall be asked to sign this as confirmation of the work completed and the Purchasers’ satisfaction with same.

13. If further work at home base is required then this shall be conducted to the Purchasers account at the prevailing rates shown above or net prices of equipment, parts etc.





14. Peerless Pump Company will try to accommodate requests for specific personnel, but this cannot be guaranteed.





DEFERRED START OR EXTENDED WARRANTY

Deferred Warranty Often, customers install our equipment and need to pass on the warranty provisions to the end user, once a project is completed and put into operation. Under these circumstances, they often asks for a deferred warranty, meaning, a 12 month warranty, but the warranty is to start from perhaps 6 months after shipment is made. We handle this as follows:

1. We can generally offer a warranty of 12 months duration not to exceed 18 months after shipment.

2. With Sales Management approval, we can offer a deferred warranty that starts from 6 months to 2 years after shipment provided the Purchaser agrees to the following:

a. The Purchaser purchases long term storage from us to protect the equipment while not in use.

b. The Purchaser complies with any standard or special long-term storage and maintenance instructions supplied by us or our suppliers for the equipment concerned. In the absence of these the customer should request special storage and maintenance instructions for the equipment supplied. This applies for all components of the package.

c. The purchaser pays a fee for the arrangement of the deferred warranty (see below) d. When the Purchaser is ready to invoke the 12-month operational warranty, then he

must purchase the services of our field service engineer to inspect the equipment to determine if it is a “like-new” condition.

e. The Purchaser must agree to pay for any replacement parts and labor, if necessary in the judgment of our field service engineer, in order to bring the pump back to a like new condition.

f. If the above is adhered to, then we will warrant the pump for a period not to exceed 12 months after the inspection (conditional upon the repairs being undertaken as directed by us).

g. The terms of our warranty shall be as per our standard terms and conditions of sale as published from time to time by Peerless Pump Company

Extended Warranty Once in awhile, a customer will ask for an operational warranty period that exceeds 12 months, this would be referred to as an extended warranty. Sometimes this is combined with a deferred warranty as well. This results in additional cost for both extending the warranty and/or deferring the warranty, which must be passed on to the Purchaser. If you should run into this situation, please call it to the attention of sales management who will work with you to try to accommodate the Purchaser’s request. Guidelines for added costs of extended warranties are listed in the table below. Any warranty beyond two years total will also require the Purchaser to contract with us for our field service engineer to inspect the equipment. The Purchaser must agree to pay for any replacement parts and labor to install any materials in order to bring the pump back to “as new” condition, as judged by our field service engineer. Costs for Extended and Deferred Warranty The following guidelines have been established for charges for Extended and Deferred Warranties. The standard warranty period starts on the date of shipment of the product and ends 365 days after that date. Anything other than this standard is either a Deferred or Extended warranty and





must comply with the terms listed above. Additional charges as follows should be added to the quotation/ order.

Period or extension/ deferral beyond standard (12 months from shipment)

+6 months +12 months +18 months +24 months > 24 months

Deferred start warranty 0.5% of order 0.75% of order 1% of order 1.25% of order

Refer to Management

Extended warranty 1.5% of order 3% of order 4.5% of order 6% of order Refer to Management

Note that no combination of the above deferred start or extended warranties may result in a warranty extending beyond 36 months from shipment without the written approval per the Delegation of Authority.

Note also that the terms of the warranty shall be exactly per the current version of our Terms and Conditions of Sale, prevailing at the time of agreement to extended or deferred warranty and published by Peerless Pump Company. Note 1 In addition, as specified above, customer needs to purchase inspection from our Service department under the prevailing costs and conditions at the time of inspection. Also he agrees to comply with and implement a documented system for long term storage and maintenance instructions as listed in our Installation-Operation & Maintenance manuals or those of the supplier of any piece of equipment. Note 2 It is a condition of any warranty beyond two years that an annual inspection is purchased from our service department under the prevailing costs and conditions at the time of inspection. In addition, as specified above, customer needs to purchase inspection from our Service department under the prevailing costs and conditions at the time of inspection. Also he agrees to comply with and implement a documented system for long term storage and maintenance instructions as listed in our Installation, Operation & Maintenance Manuals or those of the supplier of any piece of equipment. Note 3 It is a condition of any warranty beyond two years that an annual inspection is purchased from our service department under the prevailing costs and conditions at the time of inspection.





Commercial Policy FREIGHT POLICY

All sales are made Ex-works our facilities, domestic packed, in accordance with INCOTERMS 2000. The origin point of shipment, method of transportation, and routing are at the Seller’s discretion. If freight charges are prepaid and added, freight will be calculated in accordance with our carrier’s rates. Should Purchaser require a freight invoice, we will provide a Peerless Pump freight bill. We are unable to supply a copy of the carrier’s invoice as we have confidential contracts with them. If Purchaser specifies the carrier, freight charges will be collect or third party billed to them. If Purchaser requests expedited shipment, freight charges incurred will be billed to the Purchaser. If shipment is accepted by the Purchaser at one destination and re-forwarded by him, the cost of re-forwarding is at the Purchaser’s expense. Special charges beyond normal handling of shipment will be added. These items include but are not limited to:

1. Re-consignment of freight enroute or at the destination terminal. 2. Re-delivery after first attempt by carrier. 3. Storage after first two working days. 4. Pier delivery and containerization unless these charges are incorporated into the

selling price. 5. Heavy lift charges or lift gate charges

LOST OR DAMAGED GOODS

The bill of lading, including clean on board ocean or air way bill or carrier receipt is the consignee’s acknowledgment of the receipt of shipment IN GOOD CONDITION. If any of the goods called for in our bill of lading or carrier receipt are short or damaged, they are not to be accepted until the freight or carrier agent makes a damage notation on the freight bill or carrier receipt.. This will provide supporting documentation for customer’s claim. The shipment is to be thoroughly inspected as soon as it is received. If any concealed loss or damage is discovered, the carrier is to be notified immediately and requested to make an inspection. Unless notification is done, transportation companies will not honor any claim for loss or damage. This inspection, with other documentation, will properly support the customer’s claim. Peerless Pump Company will not be responsible for loss or damage when the transportation company is given a clean receipt. Peerless Pump Company is willing to assist its customers in every possible manner in collecting claims for loss or damage, but this willingness does not make Peerless Pump Company responsible for collection of claims or replacement of material.





INTERNATIONAL FREIGHT POLICY

Terms other than Ex-Works must be approved before the order is acknowledged. The salesperson must obtain a quote from Peerless Pump Company covering all charges including, but not limited to, freight, forwarding, consular and legalization charges. FCA (named place),* (used for any mode of transportation) Peerless Pump Company will select the inland carrier and pay the pre-carriage charges to the destination point. FOB (named place),* (used for ocean transport only) Peerless Pump Company will arrange for and pay the pre-carriage charges to the named destination and arrange to deliver the goods “over the ship’s rail.” We will use our nominated forwarder. If buyer appoints their own forwarder, terms will be changed to FCA (named place). CPT (named port of destination)* (used for any mode of transportation) Peerless Pump Company will arrange for and pay the charges for pre-carriage, carriage, and clearance of the goods for export. Unless previously agreed, we will use our nominated forwarder. CIP (named port of destination)*, (used for any mode of transportation) Peerless Pump Company will arrange for and pay the charges for pre-carriage, carriage, clearance of the goods for export, and marine insurance. Marine insurance coverage shall cover the contract price plus ten percent (i.e. 110%) in the currency of the contract. Unless previously agreed, we will use our nominated forwarder. * All shipping terms are in accordance with INCOTERMS 2000. LOST OR DAMAGED GOODS The clean on board ocean bill of lading or air way bill is confirmation of receipt of shipment in good condition. If the goods are received short or damaged, the consignee must note the damage on the receipt of goods or inland bill of lading. Peerless Pump Company will not be responsible for loss or damage if the carrier has issued a clean bill of lading. Peerless Pump Company will assist its customers in filing claim for loss or damage, but cannot accept responsibility for collection of claims or no charge replacement of material.





INTERNATIONAL COMPLIANCE GUIDELINES BOYCOTT RESTRICTIONS

Orders must be read carefully to ensure compliance with United States law. Watch for requirements in the quote or purchase order asking us to make statements regarding content, origin of material, nationals, etc. Negative statements contained in quotation requests and/or purchase orders must be reported to the United States government. Positive statements are acceptable. For example, “This material is wholly produced in the United States.” Refer all questions to International Traffic Department at our corporate offices.

DENIED ENTITIES Persons subject to the jurisdiction of the United States are prohibited from engaging directly or indirectly with certain countries. This list is subject to change by the U.S. Government for an updated list always checks the following website www.bis.doc.gov. As of this printing, the current list consists of:

Cuba Rwanda Iran Sudan North Korea Syria

This includes transhipping U.S. Goods to one of the countries listed above through another country or diverting the goods after shipment leaves the U.S. In addition to the countries listed, there are twelve other lists of entities, companies and individuals with whom we cannot do business.

EXPORT LICENSES

Pumps and pump parts may require an export license be issued by the U.S. before the goods can be shipped. The International Traffic Department will review orders to determine whether a license is required and process the application.

Disclaimer: This information is provided for guidance only and is a sampling of some U.S. export regulations and does not constitute legal advice. Questions should be directed to the appropriate U.S. agency to ensure compliance. Following are websites that can provide assistance. Websites: www.bis.doc.gov www.treas.gov/offices/enforcement/ofac/sdn/.





EXPLANATION OF TYPICAL CUSTOMER TERMS & CONDITIONS ESCALATION

Manufactured Products - Escalation will be charged on any customer requested delays beyond our normal shipping schedules. Prices for equipment of standard materials and standard design will be adjusted to the Peerless Pump Company listed prices and applicable discounts in effect at time of shipment.

ORDER ACCEPTANCE

Each price published in the Peerless Pump Company. Sales Manual or in RAPID applies to a specific product which has materials of construction, design characteristics, dimensions and/or performance characteristics which are described in the technical data published in the Peerless Pump Company Sales Manual. ANY deviation from the published specifications requires factory approval of pricing and technical requirements prior to acceptance of the order by Peerless Pump Company. Peerless Pump Company reserves the right to adjust any price for a standard item which is applied to a non-standard item.

RETAINAGE

Retainage by the purchaser normally is not acceptable. Except optionally per the Delegation of Authority (DOA) it may be allowed with approval of the Chief Financial Officer. Order must then include a finance charge to offset financing costs of retainage. Retainage must be limited to a specified time frame with trigger points that are in Peerless Pump Company control. No open ended retainage will be accepted. In lieu of retainage by purchaser, Peerless Pump Company. may prefer to furnish a performance bond. To arrange for a performance bond, contact the Chief Financial Officer. The actual cost of all performance bonds and stand-by L/C’s must be included as a line item in the order.

ORDER DELAYS

After the order is ready for shipment, but the customer requests delay, we will hold invoicing for thirty (30) days. After thirty (30) days, the Purchaser, under the terms of our “Ex Works” contract will be invoiced from the goods. Payment against the invoice will be expected within the credit terms agreed of the order. Further, they may be invoiced for a minimum of 1% of equipment price for each month of storage beyond the normal shipping date. The storage fee will be invoiced monthly or quarterly. Upon shipment of the equipment, the storage fee will discontinue and Purchaser will be invoiced for the full amount of the equipment.

APPROVAL AND PROJECT DELAYS

If approval or release is not received within thirty (30) days after correct submittal data is sent, billing may be processed at the price in effect at the time of release of the order.

ORDER CHANGES

A customer order change is usually very costly in time and disruption of order flow. Changes in the order by the customer after the order is entered may incur a minimum net charge of $200.00 to be added to the billing price. This charge will be over and above any changes in prices resulting from the change order.





HOLD FOR RELEASE • Orders not released or awaiting customer approval are subject to cancellation after a 60 days

waiting period. • Special pricing orders are subject to price change after 30 days and cancellation at 60 days. • To avoid cancellation, written justification must be approved before the 60 day time limit. Request

for quotes or special pricing must be resubmitted.

Orders held from release or awaiting customer approval after 90 days will be subject to cancellation at 120 days. To avoid cancellation written justification must be approved before the 120 day time limit. After cancellation, all canceled orders must be resubmitted through the appropriate channels to reinstate the canceled order.

Job Proposal and Acknowledgment Authorization:

Refer to the Peerless Pump Delegation of Authority (DOA) document (Company Policy Manual, A3.0) for the appropriate level and signatures required for proposal and authorizations.

PROGRESS PAYMENT POLICY Any job over $300,000 must be quoted with a progress payment. Any deviation from this policy below must be approved per the Delegation of Authority (DOA).

Standard Progress Payment Plan

A. 15% of sales price - prior to release for production or on approval of drawings. B. 60% of sales price - in equal payments every 60 days, to commence 60 days after

first prepayment and to continue through the balance of the proposed manufacturing schedule.

C. 25% of sales price - when shipment is made, but not later than 30 days after shipment is made or notification that Sterling Fluid Systems (USA), Inc. is ready to ship.

In lieu of progress payments as specified above, Peerless Pump may authorize additional moneys to be added to the quotation to cover the cash flow financing for the job. NOTE: The escalation policies of Peerless Pump Company shall be included even when progress payments are included.





ORDER CANCELLATION Cancellation policy as stated in Terms and Conditions of Sales for Pumps remains unchanged. An amplification of this policy is as follows.

Potential Cancellation – continue with manufacture but determine potential cost if cancelled.

Hold Cancellation – hold manufacture to determine potential cost but do not cancel purchase orders.

Complete Cancellation – cancel all purchase orders, work orders and stop all manufacture of work on this order immediately.

1. In the event of a request for Order Cancellation, contact Customer Service.

Approval of the cancellation and its cancellation charges will be made by the Product Manager or his designate.

2. A minimum cancellation charge of either $200 or cost of product (Peerless Pump Company or accessories), whichever is greater, will apply. Special consideration will be given on engineered projects.

3. Charges for engineering, order processing and assembly/disassembly will apply based on current labor rates.

4. If an order is canceled after it is released to production or after any special components have been ordered for it, then, in addition to the minimum cancellation charge referred to above, an additional cancellation charge will be assessed in proportion to the percentage of completion at the time of cancellation. a) Any non-standard material purchased or manufactured will be subject to

a 100% cancellation charge. b) The customer will be liable for all vendor cancellation charges on outside

purchases. c) Stock material that is salvageable will be assessed a 25% restocking

charge. d) Any material that cannot be salvaged will be assessed a 100%

cancellation charge. This includes major items such as trimmed impellers, special fabrications, etc.

Name on the Purchase Order

All purchase orders should be issued to Peerless Pump Company. We cannot accept purchase orders made out to LaBour Pump Company or any distributor or representative. We can accept purchase orders listing the distributor on it as “in care of.”





Letter of Intent (LOI) or Letter of Awards (LOA) A not so common approach by some customers to start the manufacturing process while terms are negotiated is to issue a LOI (also know as LOA, Expression of Interest, Agreement in Principle, or Memorandum of Understanding). Peerless Pump Company standard practice is not to accept these as a binding agreement to reduce the risk if agreement can not be reached with the customer for obtaining a purchase order. It maybe argued in a court of law the validity of the LOI as a binding contract or simple a document. It is important that if the LOI is to be used as a binding contract that it have significant wording (complexity) to ensure an understanding of the risks are properly covered. The LOI must be a binding document for Peerless Pump Company to take the necessary steps to begin working on the job. It is required that the LOI be reviewed by legal representation and management approved to ensure it is a binding document. Things to look for are:

Does it describe in detail terms and condition equivalent to official contracts? Does it show a delivery date subject to a specified period of time from the creation date? Does the LOI bind the Buyer to cover any and all cost associated with work should a

purchase order not be awarded at a later date? As a minimum any response to the customer should state that “any loss incurred by canceling the LOI shall be absorbed by the buyer.”

Delivery / Required Date

The delivery date should always be tied to the fully release date for manufacture and not the date the purchase order was created. Typical lead time is generated based on so many weeks to do each task in the process. Dates tied to after receipt of order (ARO) may not fully take into account time for creation, submittal, and review of engineering drawings. On average, engineered orders take approximately 2 months to get full release from the time the order is entered (hold for approval) to released from the engineer for a final BOM to be created. Delivery dates that do not take into account after release of approval should be avoided.

ARAD = after receipt of approval drawings AROATP = after receipt of order to proceed ARO = after receipt of order





Discrepancies to specifications There are many ways to handle discrepancies, we should always avoid not taking exceptions in the quote phase and hope to clarify in the submittal phase. Many engineers now stamp approval documents but state their approval does not relieve our obligation to the specification. One good way is to have a listing in the purchase order for handling discrepancies in order of importance. In the list if our quote supersedes all other documents should be covered. Any exceptions taken should be communicated by Sales to the customer with copies given to the factory when entering the order. Additionally text similar to those listed below may aid in clarifying design conditions with the customer:

Submittals are provided for your review and approval to insure that you, our customer can be sure that we have the correct perception of what is required for the project. They are forwarded to you for your agreement that the equipment and configuration offered is correct. Any order you provide us for equipment will be contingent upon your approval of provided shop drawings which, when approved, shall become the only specifications for the equipment manufactured for your project Your must signify that your requirements for the subject project have been correctly addressed and are properly illustrated as what you want manufactured for your use on this project. Your signature of agreement will constitute your waiver of liability for any errors in dimensions, quantities, performance, and materials of construction that might have been overlooked or submitted upon, otherwise. THIS IS WHAT WE SHALL MANUFACTURE FOR YOU! Your equipment will not be released for manufacture and shipment to you without your written agreement to these concepts as attested to by your signature on THIS DOCUMENT, per below.

This should have the contractor or customer signature as proof of understand and incorporated in the purchase order. Any exception taken by any sub-vendor (motor, engine, controller, etc) should also be relayed to the customer during the bidding phase.





EXPLANATION OF TYPICAL CUSTOMER TERMS & CONDITIONS

CONFLICT BETWEEN PEERLESS PUMP COMPANY AND CUSTOMER TERMS & CONDITIONS

The exact meanings of some of the terms and conditions, which are often made a part of a customer’s purchase order, and to identify those items which may be objectionable, or in some cases completely unacceptable to Peerless Pump Company, can be difficult. This is an attempt to clarify some of these points.

TIME IS OF THE ESSENCE A time is of the essence clause implies that charges for unlimited damages may occur if the equipment is not shipped on the date specified in the purchase order. The damages can be consequential in nature, i.e., crop loss, loss of profit, additional cost to rent equipment to perform the job. This can also be interpreted to mean that if we do not ship on the scheduled date, the customer may cancel. This phrase is unacceptable. There can be many variations of this clause and any form will not be acceptable in their entirety from the customer. It maybe possible to remove this clause by offsetting it with liquidated damages, but this to is not an acceptable term. The below example is the acceptable version for Peerless Pump:

The dates specified herein for shipping of Equipment or for Service are approximate only.

Seller recognizes the desirability of delivering Equipment and Service promptly. Seller will give its best efforts to the prompt delivery of Equipment and Service. Seller shall not be responsible for any loss or damage resulting from any delay in delivery or failure to deliver the Equipment or Service where such delay or failure is caused by fire, flood, natural causes, labor troubles (including strikes, slowdowns and lockouts), war, government regulations, riots, civil disorders, interruption of or delay in transportation, power failure, inability to obtain materials and supplies, accidents, acts of God or any other cause beyond Seller's control

Below are examples of non-acceptable terms. Please not the wording may not specifically state “time is of the essence” but the implied message is still there and still unacceptable.

“Time is of the essence of this order. Seller shall fully indemnify and save harmless Buyer from and against any and all claims or damages it may incur due to Seller’s failure to provide timely performance in accordance with the order.”

This places all cost incurred by the customer at the expense of Peerless. Pump Company “Timely performance” also implies that we are liable for additional cost incurred by the Buyer for any minor or major item.

“Time of delivery of this order is of the essence, and purchaser reserves the right to cancel without cancellation charges, all or any part of this order if not filed within the specified time. Exercise of such right of cancellation shall not be deemed a waiver of any other right reserved to the Purchaser herein, or by law for any delay or failure to deliver as specified.”

This implies that the customer can cancel the order at no cost to them. Additionally the door is still open for them to assess other damages (liquidated damages, cost for purchasing other product, etc).

“Timely performance and delivery in accordance with the agreement schedule is essential to this agreement. However, seller will not be liable for delays in performing its obligations to the extent the delay is caused by an even of Force Majeure.”

Our only out is if the reason for being late is an act of God, catastrophic national or international issues such as rots, war, strikes, etc.

“Time is a material provision of this purchase order and Supplier acknowledges that purchaser relies upon suppliers’ timely performance in completing the several portions and whole of the work in accordance with the completion dates set forth in this purchase order.”

Again this refers to ‘timely performance’ as stated above.





LIQUIDATED DAMAGES Liquidated Damages and/or penalties are specific financial losses that the customer may incur resulting from the seller’s action or inaction. Peerless Pump Company should under no circumstances be held liable for consequential or to other damages, losses or expense arising from installation, use or any other causes, regardless of advise or recommendations that may have been rendered concerning such installation or use of its product, nor shall the company be liable for penalties of any description. We prefer to avoid liquidated damages of any type, but when it is necessary to accept them, they should be reasonable and limited to a maximum amount. The penalties should never exceed the value of the order. All potential damages and/or penalties will require approval before acceptance. We should be sure a force major clause is included, i.e., strikes, slowdowns, lockouts, vendor delays, wars, acts of God, government regulations, power failure or any other cause beyond the seller’s control. There are several types of damages/penalties that referenced, some are:

Liquidated Damages (also called special) are typically punitive for late delivery of product. Product could be submittal drawings, product, or service.

Indirect damages are damages that are beyond the physical property. These could be loss of sales or customers.

Incidental damages are damages caused by product not performing as expected. These could be loss of product (time and money), push pull charges, or replacement charges of pumps (new piping, foundation issues, etc).

Consequential damages are damages that the buyer suffers due to down time. These could be anticipated profits or repair costs.

CONSEQUENTIAL DAMAGES

Peerless Pump Company always disclaims consequential damages. For example, we would not be willing to pay for the destruction of a building because we installed a solenoid on one of our fire pumps which subsequently would not start when the fire occurred. This clause is completely unacceptable and should be referred to the factory.

INDEMNIFICATION OR HOLD HARMLESS AND INDEMNIFY

Many indemnification clauses require Peerless Pump Company to defend, indemnify and hold harmless the purchaser regardless of fault. What this means is that Peerless Pump Company will pay all attorney’s fees, court costs, defend liability suits by the customer’s employees or third parties even though the accident causing the damage was due, in whole or in part, to the customer’s negligence. This clause should be referred to the factory.

PAYMENT THIRTY DAYS AFTER ACCEPTANCE OR PAYMENT ONE YEAR AFTER ACCEPTANCE

These phrases, if left in, could tie up our money indefinitely. We must have a time limit on the acceptance of our product. These phrases also do not make clear who is responsible for accepting our products and will not be allowed. Acceptance must be clearly defined and specific to an action. It should never be linked to start-up, filed testing, or owner acceptance. Rather the milestone should have a fix number of days after a known or fixed date (typically shipment).





FIT FOR PURPOSE INTENDED OR WARRANTY OF MERCHANTABILITY These phrases are all designed to protect the buyer in case the equipment does not perform as he wants. The difficulty from the seller’s position is that he has no control over the application. If we agree that our equipment meets the test of merchantability or is fit for the purpose intended, we are agreeing that the pump will deliver a specified amount of liquid on the job and that we know every facet of the application, so that the equipment will do everything the customer desires. You are agreeing that, as an expert, you know everything about the application and guarantee its operation. This would apply even though the following factors might prevent the pump from meeting the conditions quoted. This list includes but is not limited to: 1. Well water is extremely sandy 2. The water is very corrosive 3. The well will not support a pump of the capacity furnished 4. The head is lower than specified, thus allowing the pump to cavitate 5. Although the customer specified an oil lube pump, water lube must be furnished to meet a local

code. 6. The pump is destroyed by abrasives due to dredging operation on the river upstream. The above phrases are unacceptable to Peerless Pump Company and should be referred to the factory.

Changes to the purchase order

Changes are part of the nature of our business. It should be understood that any changes to the scope of supply, specification or order will effect not only the time to delivery but also the cost. All request for changes should be made in writing. Only after all parties (Peerless Pump Company and Customer) have agreed in writing on change scope and delivery and cost impact, will the changes be incorporated into the design.

Progress Payment

Peerless Pump has established a level at which we require progress payment to aid in covering the cost of procurement of large orders. Always refer to the Business Development Manager or General Manger for correct level when we should request progress payments. Please note in the terms that progress payments are due upon receipt, not after 30 days. Milestones should be well defined and measurable.





Escalation of price while hold for approval. On average, the typical project could remain on hold for approval from two to four months. During this time, our vendors many have increased their price to us for the quoted product. This is especially true of buyout like motors and will drastically affect the expected margin of the job. It is recommended that some form of escalation be included to deal with cost increase due to the length of time a job remains on hold.

Unless otherwise specified by Seller, prices set forth herein are firm, provided, within thirty (30) days after the date of Seller's Acknowledgment, this proposal becomes a binding contract (Seller approves Purchaser's credit and accepts the order), and provided further that Purchaser furnishes Seller with all necessary drawings duly approved by the Purchaser within thirty (30) days after submission of drawings to Purchaser by Seller. Failure to send release will result in prices for equipment to be evaluated at prices in effect at time of release.

Escalation of price while under manufacture.

There are times when the customer will request a delay in shipment once the product is released. Depending on the timing of notification, Peerless Pump Company may already have expended considerable amount of capital for product to meet the initial date. It is expected to have some way to recover the cost of holding parts longer than planned. Additionally if we experience a cost increase during the production cycle, it would be appropriate to attempt to cover these additional costs. Below would be examples of possible terms.

Price for motors, gear drives and other equipment included in this quotation are subject to price in effect at time of shipment. Where shipment is requested by Purchaser beyond the normal shipment schedule, or in the event that shipment is deferred at the request of the Purchaser or by reason of Government action, Purchaser agrees to pay at Seller's option a delayed delivery storage fee at the rate of three percent (3%) of the Equipment price per month beyond the normal shipping date.

Retention

Retention is typically used to withhold a percentage of money from payment by the customer to ensure that service or documentation is delivered as required by the contract. Often this retainage is used as leverage to force Peerless Pump Company into accepting customer demands after the product has left our possession. In certain instances it is withheld until the customer is satisfied all warranty issues are resolved to their liking. Like acceptance, retention should be limited to a set percentage (typically less than 10%) and a specific date. It should never be linked to start-up, filed testing, or owner acceptance. These are outside of Peerless Pump Company control and could take months to be accomplished.

It should be noted that the cost to Peerless Pump Company for any retention could be sizeable. This could be the difference from a profitable or a non-profitable job. We should always try to cover the cost or potential loss revenue. Additional Cost = {Contract Amount} * {Retention %} * {Duration of retention in months} * {% / month interest rate} Accounting estimates monthly interest rate from 1% to 2% but this is subject to current banking rates.





Sales Tax A common cause for credit memos deals with the inclusion of tax on the order. When tax is included in the purchase order as a separate line item, it is not necessary to include it on the order write up. The accounting department will add the tax per the local codes as needed. If tax is included in total sum price, a line item should be added to order to note this for order entry and accounting. If the customer is tax exempt, a copy of their form is required with each order.

Guaranties and Bonds There are several different types of bonds and guaranties that can be issued depending on the customer requirements and Peerless Pump Company abilities. Bid Bond is a requirement for a guarantee (certified check, bid bond, or standby letter of credit) to

accompany the bid to the customer. This will guarantee that we will enter into the contract if we are successful in winning the award of the job. To secure a bid bond, Sales needs to notify the Credit Manger in a sufficient enough time to enable them to initiate a request with our banking authority. Approval to bid is outlined in the DOA. The cost for creation of the bond should be included in the quotation.

Performance Bond (final bond) is submitted after the job is awarded (typically within 30 days)

often equal to 10% of the quoted price. This bond guarantees that we perform to the contract and specifications or the customer can draw against the bond. This can be a significant cost to Peerless Pump Company as much as 4% of the bonding amount. Approval to accept this type of bond is required by the DOA. Notification to the Credit Manager is required early in the process to have sufficient funds available. The cost for creation of the bond must be included in the quotation.

Warranty Bond (maintenance) is for the customer to draw against in the event to cover defective

workmanship or faulty material. This bond can be costly for Peerless Pump Company if the customer choice to with draw funds even after the warranty has been addressed by Peerless Pump Company. There can be significant cost associate with this type of bond and required DOA approval. Limiting the percentage of coverage is important to reduce the risk. Notification to the Credit Manager is required early in the process to have sufficient funds available. The cost for creation of the bond must be included in the quotation.

Down Payment Bond also called an Advance Payment Bond, is for the customer and provided

when a down payment is made. This bond is to secure reimbursement of the customer’s down payment in the event we cannot deliver the product.. Approval to accept this type of bond is required by the DOA. Notification to the Credit Manager is required early in the process to have sufficient funds available. The cost for creation of the bond should be included in the quotation.





Letter of Credits Letters of Credit (L/C) are opened by the buyer on their bank and sent to a US bank to be advised to Peerless Pump Company. We prefer that L/C be advised through ABN LaSalle Chicago as most international banks will have a correspondent relationship with them. L/C’s will be prepared by the International Traffic Department to ensure that we can comply with all of its requirements. We may need to contact the customer or salesperson if amendments are required such as extensions for ship date or expiration date and ask them to help process the amendment. All efforts are made to ensure we clarify the L/C once issued to reduce the risk of delay in shipping. Failure to obtain any clarification could result in delayed or nonpayment by the customer. L/C’s should be payable at Sight. Any request for extended terms should be approved by the Credit Department. Should the need arise; an extension will need to be filed to ensure prompt payment. Failure to obtain any extension or clarification could result in delayed or nonpayment by the customer. Depending on the reason for the delay, the customer may request that Peerless Pump Company pay for the extension. Only the credit manager and CFO have authority to approve this charge. Typically Peerless Pump Company pays the US bank fees and the customer pays for the bank fees in their country. Bank fees are a percentage of the value – normally 2%-3%.

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GRUNDFOS USA - GENERAL TERMS AND CONDITIONS

1. ACCEPTANCE. These Terms of sale (these "Terms") are the only terms which govern the sale of the goods ("Goods") and services ("Services") by Grundfos Pumps Corporation and any of its affiliates or subsidiaries in the United States (“Grundfos”) (including, but not limited to, Grundfos CBS Inc. (“PACO”), Yeomans Chicago Corporation (“Yeomans”), and Sterling Fluid Systems USA LLC D/B/A Peerless Pump Company (“Peerless”) (collectively, Grundfos, PACO, Yeomans and Peerless are referred to herein as the “Seller”) to the purchaser (the “Purchaser”) named in the accompanying confirmation of sale (the “Sales Confirmation”). The Sales Confirmation confirms Purchaser's order (the “Order”). The Order will be filled only after credit approval and acceptance of the Order at Seller's administrative offices. Any acceptance of the Order is subject to the most recent Terms, as modified from time to time, and which supersede any inconsistent or additional Terms contained in the Order. There are no agreements or representations, oral or otherwise, outside of the Terms. Submittal of technical information does not constitute acceptance of any terms contained Purchaser’s order form, and no agent, distributor, business partner, or manufacturer’s representative of Seller has the authority to change or modify these Terms. No change or modification to these shall be valid unless it is agreed to in writing by Seller. Any Purchaser document which contains terms in addition to or inconsistent with these Terms, or terms that reject any term or condition set forth herein, shall be deemed to be a counter offer to Seller, and shall not be binding upon Seller unless specifically accepted in writing by a duly authorized representative of Seller. The preceding clause shall constitute a continuing objection to any such terms not specifically so accepted by Seller. 2. SHIPPING DATE. Seller will make commercially reasonable efforts to promptly deliver Equipment and Service. The dates for shipping of Equipment or delivery of Service specified in the Sales Confirmation (if any) are approximate. Seller will ship Equipment upon completion of manufacturing and after the Equipment meets design and performance specifications. SELLER SHALL NOT BE RESPONSIBLE FOR ANY LOSS OR DAMAGE OF ANY KIND; INCLUDING LIQUIDATED DAMAGES, RESULTING FROM ANY DELAY IN DELIVERY OR FAILURE TO DELIVER THE EQUIPMENT OR SERVICE, UNLESS AGREED TO IN ADVANCE AND IN WRITING PRIOR TO ACCEPTANCE OF THE ORDER. 3. FORCE MAJEURE. Seller shall not be responsible for any loss or damage, including liquidated damages resulting from any delay in delivery or failure to deliver the Equipment or Service where such delay or failure is caused by fire, flood, natural causes, labor troubles (including strikes, slowdowns and lockouts), war, government regulations, riots, civil disorders, interruption of or delay in transportation, power failure, acts of vandalism, force of nature, inability to obtain materials and supplies, accidents, acts of God or any other cause beyond Seller's control.

4. SHIPMENTS. All prices are EXW (Ex-works) Seller’s designated location, packed for domestic shipment (Incoterms® 2010), unless

otherwise agreed in writing. The origin point of shipment, method of transportation, and routing are at the Seller's discretion. Unless otherwise noted, the Equipment will be shipped prepaid with the charges added to Purchaser’s invoice. If Purchaser specifies “freight collect, 3rd-party carrier or will call” in Purchaser’s Order, it is clearly understood that there will be no freight allowance and an additional fee of 2% of the order or minimum of $100, with a maximum of $500 will be charged to the Purchaser as a handling fee. Purchaser may request shipment via a transportation mode other than truck, and all additional expenses incurred will be billed to the Purchaser. If shipment is accepted by Purchaser at one destination and re-forwarded by Purchaser, the re-forwarding is at the Purchaser's expense and risk. The risk shall pass to Purchaser when the Equipment is made available for delivery in accordance with this paragraph. Where shipment is (a) requested by Purchaser beyond Seller’s normal shipment schedule; (b) deferred at Purchaser’s request; (c) delayed by failure of Purchaser to fulfill its obligations to facilitate shipment as agreed; or (d) delayed by any other act or failure to act on the part of the Purchaser without fault on the part of Seller (including but not limited to Purchaser’s failure to provide necessary shipment information to Seller, or Purchaser’s failure to schedule their carrier in a timely manner) Purchaser agrees to pay a delayed delivery storage fee at the rate of three percent (3%) of the Equipment price per month beyond the normal shipping date as established by Sellers internal production lead times. Purchaser may designate in the Purchaser’s order form that the Equipment will be picked up at Sellers designated location. If Purchaser does not pickup Equipment within 5 days of the date they are notified the Equipment is available, the Order will be cancelled and subject to cancellation charges as outlined in Paragraph 14 below. 5. PRICES. Unless otherwise specified by Seller in writing, Purchaser shall purchase the Goods and Services from Seller at the price set forth in Seller’s published price list in force as of the date of the Order as accepted by Seller, or as contained in a written quotation to Purchaser (the “Quote”). Prices contained in a Quote are valid for thirty (30) days from the date of the Quote unless otherwise specified. Services shall be billed at the hourly/daily rate provided in a Quote. Any price quoted to Purchaser may be modified in the event of Purchaser’s delay or failure to provide Seller all necessary credit information. Prices as set forth in the price list are subject to change without notice. All other costs, including packing for storage, freight, insurance, taxes, customs duties and import/export fees, or any other item specified in the Quote shall be paid by Purchaser unless separately stated in the Quote. If Purchaser fails to furnish Seller with all necessary drawings duly approved by the Purchaser within thirty (30) days after submission of such drawings to Purchaser by Seller, Seller’s prices are subject to change at Seller’s sole discretion after notice to Purchaser. 6. CHANGES. By delivering a written notice to Seller, Purchaser may request changes in the designs, drawings and specifications of the Equipment. As promptly as practicable after receipt of such request, Seller will advise Purchaser what amendments to the agreement between Seller and Purchaser may be necessitated by such requested changes, if any. Possible amendments would include but are not limited to the price, specifications, shipment schedule or date of delivery. Any changes agreed upon by the parties shall be evidenced by a change order signed by both Seller and Purchaser. If at any time the Purchaser causes changes or modifications to the Order, the Order will be subject to a minimum change fee of 12% of the Order value or a $250 charge; whichever is greater, plus the actual cost of the Equipment change. 7. CONFIDENTIAL INFORMATION. All non-public, confidential or proprietary information of Seller, including but not limited to, specifications, samples, patterns, designs, plans, drawings, documents, data, business operations, customer lists, pricing, discounts or rebates, disclosed by Seller to Purchaser, whether disclosed orally or disclosed or accessed in written, electronic or other form or media, and whether or not marked, designated or otherwise identified as "confidential" in connection with this Agreement is confidential, solely for the use of performing this Agreement and may not be disclosed or copied unless authorized in advance by Seller in writing. Upon Seller's request, Buyer shall promptly return all documents and other materials received from Seller. Seller shall be entitled to injunctive relief for any violation of this Section. This Section does not apply to information that is: (a) in the public domain; (b) known to Buyer at the time of disclosure; or (c) rightfully obtained by Buyer on a non-confidential basis from a third party. 8. EXPRESS ORDER FEE. Purchaser may request shipment in advance of the normal shipping date designated by Seller. In consideration of such request, Purchaser shall be charged 12% of the Order total or $50.00, whichever is greater (the “Express Fee”) on orders less than $10,000. This charge does not guarantee that Seller will ship Equipment on or before the date requested by Purchaser. If the Order is not shipped on or before the Purchaser’s requested shipping date, the Express Fee will not apply. Orders without a requested shipping date will be subject to Seller’s internal standard lead times or the shipping date contained in the Quote.

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9. MINIMUM ORDER CHARGE. Extranet or EDI order values must be a minimum of $25 net. Faxed, emailed, or verbal orders must be a minimum value of $300 net. Order values less than the stated minimum value, will be automatically adjusted to the minimum order values listed in this Paragraph 10. 10. RETURN OF EQUIPMENT. Equipment may only be returned when authorized by the Seller pursuant to a written Return Material Authorization (a “RMA”) issued by Seller. All returned equipment shall be shipped to Seller’s designated location freight prepaid by the Purchaser and FOB destination. Any Equipment returned will be subject to an inspection. If after inspection, and in Seller’s sole discretion the Equipment is returned in good condition, credit will be issued for the purchase price less a minimum 30% restocking fee. Any Equipment returned to Seller without a RMA will be rejected and returned. 11. TAXES. Prices specified in Seller’s published price list, or in any Quote do not include any federal, state or municipal sales, use, excise or other taxes (collectively “Taxes”). Purchaser shall be responsible for payment of all Taxes, and in jurisdictions where seller is required by law to register and remit Taxes; Seller will invoice all Taxes to Purchaser at the applicable rates at the time of shipment. Purchaser may furnish Seller with exemption certificates (or the like) demonstrating that Purchaser is exempt from the payment of Taxes. The validity of such exemption certificates shall be determined by Seller in its sole discretion. Notwithstanding the foregoing, all Taxes due and payable outside the United States are the sole responsibility of the Purchaser, unless otherwise agreed in writing. 12. PAYMENTS. Terms of payment are Net 30 Days. Payment for the Equipment is due upon shipment or when Seller notifies Purchaser that Equipment is packed for shipment EXW (Ex-works) Seller’s designated location, whichever occurs first, unless otherwise agreed in writing. Payment for Service is due upon completion unless otherwise agreed in writing. Subject to a review of Purchaser’s credit history, additional payment terms and/or progress payments may be required for jobs over $300,000, which payment terms or progress payments shall be agreed to in writing.. 13. CANCELLATION. Orders that have been acknowledged by Seller are firm commitments and are not subject to cancellation without the consent of Seller. If cancellation is approved by Seller, Seller shall impose a cancellation fee. The minimum cancellation fee shall be 30% of the Order, and the maximum cancellation fee shall be the full price of the Order, as necessary for Seller to cover Sellers actual costs of material, fabrication costs, special engineering costs and the costs associated with testing, handling, and accounting. 14. LIMITED WARRANTY. NEW EQUIPMENT MANUFACTURED BY SELLER OR SERVICE SUPPLIED BY SELLER IS WARRANTED TO BE FREE FROM DEFECTS IN MATERIAL AND WORKMANSHIP UNDER NORMAL USE AND SERVICE FOR A MINIMUM OF TWELVE (12) MONTHS FROM DATE OF INSTALLATION, EIGHTEEN (18) MONTHS FROM DATE OF SHIPMENT, UNLESS OTHERWISE STATED IN PRODUCT WARRANTY GUIDE( AVAILABLE UPON REQUEST). IN THE CASE OF SPARE OR REPLACEMENT PARTS MANUFACTURED BY SELLER, THE WARRANTY PERIOD SHALL BE FOR A PERIOD OF TWELVE MONTHS FROM SHIPMENT. SELLER'S OBLIGATION UNDER THIS WARRANTY IS LIMITED TO REPAIRING OR REPLACING, AT ITS OPTION, ANY PART FOUND TO ITS SATISFACTION TO BE SO DEFECTIVE, PROVIDED THAT SUCH PART IS, UPON REQUEST, RETURNED TO SELLER'S FACTORY FROM WHICH IT WAS SHIPPED, TRANSPORTATION PREPAID. PARTS REPLACED UNDER WARRANTY SHALL BE WARRANTED FOR TWELVE MONTHS FROM THE DATE OF THE REPAIR, NOT TO EXCEED THE ORIGINAL WARRANTY PERIOD. THIS WARRANTY DOES NOT COVER PARTS DAMAGED BY DECOMPOSITION FROM CHEMICAL ACTION OR WEAR CAUSED BY ABRASIVE MATERIALS, NOR DOES IT COVER DAMAGE RESULTING FROM MISUSE, ACCIDENT, NEGLECT, OR FROM IMPROPER OPERATION, MAINTENANCE, INSTALLATION, MODIFICATION OR ADJUSTMENT. THIS WARRANTY DOES NOT COVER PARTS REPAIRED OUTSIDE SELLER'S FACTORY WITHOUT PRIOR WRITTEN APPROVAL. SELLER MAKES NO WARRANTY AS TO STARTING EQUIPMENT, ELECTRICAL APPARATUS OR OTHER MATERIAL NOT OF ITS MANUFACTURE. IF PURCHASER OR OTHERS REPAIR, REPLACE, OR ADJUST EQUIPMENT OR PARTS WITHOUT SELLER'S PRIOR WRITTEN APPROVAL, SELLER IS RELIEVED OF ANY FURTHER OBLIGATION TO PURCHASER UNDER THIS PARAGRAPH WITH RESPECT TO SUCH EQUIPMENT OR PARTS, UNLESS SUCH REPAIR, REPLACEMENT, OR ADJUSTMENT WAS MADE AFTER SELLER FAILED TO SATISFY WITHIN A REASONABLE TIME SELLER'S OBLIGATIONS UNDER THIS PARAGRAPH. SELLER'S LIABILITY FOR BREACH OF THESE WARRANTIES (OR FOR BREACH OF ANY OTHER WARRANTIES FOUND BY A COURT OF COMPETENT JURISDICTION TO HAVE BEEN GIVEN BY SELLER) SHALL BE LIMITED TO: (A) ACCEPTING RETURN OF SUCH EQUIPMENT EXW PLANT OF MANUFACTURE, AND (B) REFUNDING ANY AMOUNT PAID THEREON BY PURCHASER (LESS DEPRECIATION AT THE RATE OF 15% PER YEAR IF PURCHASER HAS USED EQUIPMENT FOR MORE THAN THIRTY [30] DAYS), AND CANCELING ANY BALANCE STILL OWING ON THE EQUIPMENT, or (C) IN THE CASE OF SERVICE, AT SELLER'S OPTION, REDOING THE SERVICE, OR REFUNDING THE PURCHASE ORDER AMOUNT OF THE SERVICE OR PORTION THEREOF UPON WHICH SUCH LIABILITY IS BASED. THESE WARRANTIES ARE EXPRESSLY IN LIEU OF ANY OTHER WARRANTIES, EXPRESS OR IMPLIED, AND SELLER SPECIFICALLY DISCLAIMS ANY IMPLIED WARRANTY OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE, AND IN LIEU OF ANY OTHER OBLIGATION OR LIABILITY ON THE PART OF THE SELLER WHETHER A CLAIM IS BASED UPON NEGLIGENCE, BREACH OF WARRANTY, OR ANY OTHER THEORY OR CAUSE OF ACTION. IN NO EVENT SHALL SELLER BE LIABLE FOR ANY CONSEQUENTIAL, INCIDENTAL, INDIRECT, SPECIAL OR PUNITIVE DAMAGES OF ANY KIND. FOR PURPOSES OF THIS PARAGRAPH, THE EQUIPMENT WARRANTED SHALL NOT INCLUDE EQUIPMENT, PARTS, AND WORK NOT MANUFACTURED OR PERFORMED BY SELLER. WITH RESPECT TO SUCH EQUIPMENT, PARTS, OR WORK, SELLER'S ONLY OBLIGATION SHALL BE TO ASSIGN TO PURCHASER THE WARRANTIES PROVIDED TO SELLER BY THE MANUFACTURER OR SUPPLIER PROVIDING SUCH EQUIPMENT, PARTS OR WORK. NO EQUIPMENT FURNISHED BY SELLER SHALL BE DEEMED TO BE DEFECTIVE BY REASON OF NORMAL WEAR AND TEAR, FAILURE TO RESIST EROSIVE OR CORROSIVE ACTION OF ANY FLUID OR GAS, PURCHASER'S FAILURE TO PROPERLY STORE, INSTALL, OPERATE, OR MAINTAIN THE EQUIPMENT IN ACCORDANCE WITH GOOD INDUSTRY PRACTICES OR SPECIFIC RECOMMENDATIONS OF SELLER, INCLUDING, BUT NOT LIMITED TO SELLER’S INSTALLATION AND OPERATION MANUALS, OR PURCHASER'S FAILURE TO PROVIDE COMPLETE AND ACCURATE INFORMATION TO SELLER CONCERNING THE OPERATIONAL APPLICATION OF THE EQUIPMENT. 15. COMPLIANCE WITH LAWS. Purchaser shall be solely responsible for securing any necessary permits under and for compliance with all safety, health and sanitation laws, ordinances and regulations in connection with the installation, service, repair and operation of the Equipment. Purchaser agrees to provide Seller, upon request, with evidence of the securing of any such permits and of compliance with any such laws, ordinances and regulations. Seller shall be responsible for requesting any U. S. Export License Permits which may be required, and Purchaser agrees to provide all necessary information to enable Seller to apply for such permits. Purchaser agrees to comply with applicable United Sates international trade laws and regulations in its business dealings with Seller and will deliver to Seller at the time of execution of this agreement a completed International Order Header form or End User Statement signed by an authorized officer or owner of Purchaser. Purchaser agrees to disclose the name and address and business of the user of the goods supplied upon Seller’s request. Purchaser shall automatically disclose this information if the goods are to be exported outside of the United States. Notwithstanding Purchaser’s sole responsibility to ensure compliance with all relevant laws, Seller reserves the right to cancel order without compensation to Purchaser if Seller considers or suspects that goods, or delivery of the same, may breach any laws of the United States. 16. INDEMNIFICATION. It is understood that Seller has relied upon data furnished by and on behalf of Purchaser with respect to the safety aspects of the Equipment, and that it is Purchaser's responsibility to insure that the Equipment will, when installed and put in use, be in compliance with safety requirements fixed by law and otherwise legally adequate to safeguard against injuries or damage to persons or property. Purchaser hereby agrees to defend, indemnify and hold harmless Seller, its agents and employees against any and all losses, costs,

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damages, claims, liabilities or expenses, including but not limited to reasonable attorneys' fees, arising out of or resulting from any injury or damage to any person or property caused by the inadequacy of safety features, devices or characteristics in the Equipment or arising out of the installation, Service, repair, or use or operation of the same, except where the injury or damage is solely caused by Seller's negligence and except for claims for repair or replacement of defective parts in accordance with Paragraph 15 hereof. Purchaser indemnifies Seller for any loss to Seller, including reasonable attorneys’ fees, caused by Seller's manufacturing, installing or building to specifications provided by the Purchaser. Purchaser shall indemnify Seller and hold Seller harmless from any claims or liability for patent or trademark infringement on the account of the manufacture or sale of the Equipment. 17. RISK OF LOSS. Full risk of loss (including transportation delays and losses) shall pass to Purchaser upon delivery, regardless of whether title has passed to Purchaser, transport is arranged or supervised by Seller, or start-up is carried out under the direction or supervision of Seller. Loss or destruction of the equipment or injury or damage to the equipment that occurs while the risk of loss or damage is borne by the Purchaser does not relieve Purchaser of its obligations to pay Seller for the Equipment. 18. LIMITATION OF DAMAGES AND DISCLAIMER OF CONSEQUENTIAL DAMAGES OR PENALTIES. TO THE EXTENT PERMITTED BY LAW, SELLER SHALL NOT BE LIABLE FOR CONSEQUENTIAL, INCIDENTAL, INDIRECT, SPECIAL OR PUNITIVE DAMAGES, ARISING OUT OF THE ORDER, OR OUT OF ANY BREACH OF ANY OF SELLER'S OBLIGATIONS HEREUNDER, OR OUT OF ANY DEFECT IN, OR FAILURE OF, OR MALFUNCTION OF THE EQUIPMENT, WHETHER OR NOT CAUSED BY SELLER'S NEGLIGENCE. CONSEQUENTIAL DAMAGES, FOR THE PURPOSE OF THIS AGREEMENT, SHALL INCLUDE BUT NOT BE LIMITED TO, PERSONAL INJURY, LOSS OF USE, LOST INCOME OR PROFITS, LOST INTEREST, LOST GOODWILL, WORK STOPPAGE, IMPAIRMENT OF OTHER EQUIPMENT, ENVIRONMENTAL DAMAGE, INCREASED EXPENSES OF OPERATION, COST OF PURCHASE OF REPLACEMENT POWER OR CLAIMS OF PURCHASER OR CUSTOMERS OF PURCHASER FOR SERVICE INTERRUPTION, DAMAGE TO PROPERTY (INCLUDING, BUT NOT LIMITED TO, PRODUCTS MANUFACTURED, PROCESSED OR TRANSPORTED BY THE USE OF THE EQUIPMENT), OR ANY OTHER LOSS OCCASIONED BY OR ARISING OUT OF THE OPERATION, USE, INSTALLATION, REPAIR OR REPLACEMENT OF THE EQUIPMENT OR OTHERWISE, WHETHER OR NOT SUCH LOSS IS BASED UPON CONTRACT, TORT (INCLUDING NEGLIGENCE AND STRICT LIABILITY) OR OTHERWISE. SELLER'S DAMAGES ARE LIMITED TO DAMAGES SET FORTH IN PARAGRAPH 15, WARRANTY. SELLER SHALL NOT BE LIABLE FOR ANY DAMAGES, PENALTIES OR LIQUIDATED DAMAGES BASED UPON OR RELATING TO SELLER'S FAILURE OR INABILITY TO SHIP WITHIN A SPECIFIED TIME. THE FOREGOING NOTWITHSTANDING, SELLER'S MAXIMUM AGGREGATE LIABILITY RELATED TO THE PERFORMANCE OF THIS CONTRACT SHALL NOT EXCEED THE PURCHASE ORDER AMOUNT OF THE EQUIPMENT OR SERVICE PORTION THEREOF UPON WHICH SUCH LIABILITY IS BASED. ALL SUCH LIABILITY SHALL TERMINATE FOUR YEARS FROM THE DATE OF THE PURCHASE ORDER IF NOT SOONER TERMINATED. 19. CHOICE OF LAW. All questions relating to the formation of or performance under the contract based hereon shall be determined in accordance with the laws of the State of Delaware. The United Nations Convention on contracts for the International Sales of Goods shall have no application to this Agreement or to any proceeding brought pursuant hereto. 20. DISPUTE RESOLUTION. The parties stipulate that the state and federal courts of Delaware have exclusive jurisdiction over all matters arising out of the Order and/or these Terms. For any sale of Equipment by Seller to a Purchaser outside of the United States or a Purchaser organized or with a principal place of business or substantial assets outside of the United States (“International Sale”), all disputes arising in connection with the International Sale shall be finally settled by arbitration in accordance with the rules set forth by the United Nations Commission for International Trade Law (UNCITRAL) Arbitration Rules, under the auspices of the American Arbitration Association (Arbitration). In the event of any dispute or difference arising out of or relating to an International Sale, the parties hereto first shall use their best endeavors to settle such disputes or differences. To this effect, the parties shall consult and negotiate with each other, in good faith and understanding of their mutual interest, to reach a just and equitable solution satisfactory to both parties. If the parties do not reach such solution within a period of ninety (90) calendar days from the commencement of consultations and negotiations, before arbitration may be invoked, one of the parties must, by written notice to the other party, have the dispute referred to their respective Chief Executive Officer (or the equivalent), or to their designated representatives who have the final authority to resolve the dispute, with the request that they attempt in good faith to resolve the dispute within ninety (90) calendar days after valid notice is served pursuant to this Paragraph 20. No party may invoke arbitration without first complying with the provisions of this Paragraph 20. In the event that the foregoing designated representatives of the parties are not able, for whatever reason, to resolve such dispute in good faith within the ninety (90) calendar day period, the parties agree that the disputes or differences shall be settled by arbitration in accordance with the rules set forth by the United Nations Commission for International Trade Law (UNCITRAL) Arbitration Rules, under the auspices of the American Arbitration Association (Arbitration). The arbitration shall take place in the State of Delaware, USA, or another location, at the sole discretion of Seller. The arbitration shall be conducted in and the award rendered in English and payable in US Dollars, and such award shall be final and binding on the parties, not subject to any appeal, and shall deal with the question of costs of arbitration and all matters related thereto. The parties agree that any judgment, decision, or award of the arbitrators shall be made enforceable in any court of competent jurisdiction, including courts in the country of Purchaser. Judgment upon the award rendered may be entered into any court having jurisdiction, or application may be made to such court for a judicial recognition of the award or an order of enforcement thereof, as the case may be. This paragraph 20 shall survive any termination or expiration of this Agreement. 21. MISCELLANEOUS. If any part of these Terms is contrary to, prohibited by, or deemed invalid under applicable laws or regulations, such provision shall be inapplicable and deemed omitted to the extent so contrary, prohibited or invalid, but the remainder hereof shall not be invalidated and shall be given effect so far as possible. No waiver of any term or condition or the breach of any term or condition of this agreement shall be deemed to constitute a waiver of any subsequent breach of such term or condition, nor justify or authorize a nonobservance upon any occasion of such term or condition or any other term or condition; nor shall the acceptance of payment by Seller at any time when Purchaser is in default of any term or condition be construed as a waiver of such default or waiver of Seller’s right to terminate this agreement on account of such default. The Purchaser warrants and represents that only those persons with authority to execute the documents related to these Terms will sign on behalf of the Purchaser, and electronic orders will be placed only by those persons so authorized by the Purchaser. All Orders so placed by Purchaser shall be binding on the Purchaser upon acceptance by the Seller with or without a hand written signature of Purchaser.

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