These terms and conditions of sale (these "Terms") govern the sale of the goods or products ("Products") by Laars Heating Systems Company d/b/a Electro Industries or its affiliates ("Electro") to the customer named on the invoice or sales confirmation for which Products are shipped or sold ("Customer").

1. Payment Terms

Payment shall be made within net thirty (30) days from the shipment date unless otherwise agreed in writing between the parties. Time is of the essence. Electro reserves the right to refuse, cancel or delay shipment or to require that all subsequent purchases be made on a C.O.D. basis when (a) Customer's ability to satisfy its obligations to Electro is impaired; (b) Customer is delinquent in payments or fails to meet other reasonable and customary creditor financial requirements established by Electro; (c) Customer's account exceeds Electro's established credit line for Customer; or (d) Customer has failed to perform its obligations under any agreement with Electro.

2. Credit Card and Wire Transfer Payments

All credit card information must be provided at the time of the order and payment will be applied to your credit card at the time of shipment. All invoices paid via credit card will include an additional 4% handling fee. Customer shall be responsible for all wire transfer fees relative to invoices paid by wire transfer.

3. One-Time Late Charge

If any amount due Electro is not paid within five (5) days of its due date, Customer shall pay Electro a one-time late charge equal to $50.00. The late charge shall apply individually to all payments past due with no daily adjustment and shall be used to defray Electro's cost incident to collecting such late payment.

4. Interest

If Customer fails to pay or reimburse to Electro any amount due Electro, Customer shall be obligated to pay to Electro interest on such sum equal to eighteen (18%) percent per year (1.5% per month) or the highest rate of interest then permitted by law, whichever is less.

5. Returned Check Fee

Customer shall pay Electro $50.00 for each of Customer's checks returned to Electro unpaid by Customer's bank.

6. Costs, Expenses, Attorneys' Fees

In case Electro shall, without fault on its part, be made a party to any litigation commenced by or against Customer, or Electro shall employ an attorney to enforce the terms of the parties' agreements or to collect any amount due Electro, then Customer shall pay all costs, expenses and reasonable attorney's fees incurred or paid by Electro in connection with such litigation or enforcement of Customer's agreements and payment obligations.

7. Taxes, Customs, Duties and Tariffs

Electro's prices do not include federal, state, local sales, use, value added, excise or other similar taxes or fees nor any customs, duties or tariffs. Customer shall be responsible for any taxes, duties, customs and tariffs Electro may be required to collect under any law now or hereafter enacted relative to the Products or services purchased from Electro. Customer shall promptly pay said taxes, duties, customs and tariffs upon Electro's written demand.

8. Shipment Terms

Subject to delay due to force majeure, Electro will deliver the Products to Customer within a reasonable time after receipt of Customer's purchase orders. All of the Products will be shipped by Electro to Customer's identified warehouse facility or freight forwarder, or may be drop shipped to a specified end user, pursuant to Customer's written instructions. Electro shall deliver Products for Customer based on FOB, 2150 West River Street, Monticello, MN 55362 ("Electro's Location"). Title and all risk of loss to or damage to the shipped Products will pass to Customer upon delivery by Electro to Electro's Location. If Customer changes or alters the date of Product shipment or delivery after submission of a purchase order, Electro reserves the right to cancel the order or collect monies from Customer sufficient to cover the cost of inventory purchased in contemplation of processing Customer's order.

9. Quotations

Alterations or modifications of the original quotation or specifications, including changes in quantity, material, design or other features, must be communicated in writing by Customer to Electro and may increase prices. Customer shall be liable for and reimburse Electro for any and all work in process, accepted or not accepted, at the time of Electro's receipt of notice of changes.

10. Cancellation of Orders

All cancellations must be in writing. Customer shall be responsible for all work in process and/or completed up to Electro's receipt of Customer's cancellation. Customer's responsibility includes but is not limited to liability for work in process, materials received, production runs, restocking fees, tooling, shipping and any other costs incurred by Electro prior to receipt of cancellation, plus a twenty percent (20%) surcharge on said costs. Customer shall make payment pursuant to this provision within ten (10) days of cancellation.

11. Terms in Customer's Purchase Orders

Terms contained in Customer's purchase orders are expressly rejected and shall not bind Electro or affect or invalidate any terms contained herein. All of the terms and conditions set forth herein shall not be modified except upon Electro's express written agreement.

12. Return Policy and Restocking Fees

All returns of new Products or Product parts, whether for credit, repair or replacement, shall be governed by Electro's Return Policy as set forth in Exhibit A below and shall be subject to the restocking fees set forth therein.

13. Governing Law

All matters arising out of or relating to these Terms are governed by and construed in accordance with the internal laws of the State of Michigan without giving effect to any choice or conflict of law provision or rule (whether of the State of Michigan or any other jurisdiction) that would cause the application of the laws of any jurisdiction other than those of the State of Michigan.

14. Submission to Jurisdiction

Any legal suit, action, or proceeding arising out of or relating to these Terms shall be instituted in the federal courts of the United States of America or the courts of the State of Michigan in each case located in the County of Kent, and each party irrevocably submits to the exclusive jurisdiction of such courts in any such suit, action, or proceeding.

15. Force Majeure

Electro is not responsible, nor be deemed to have default under or breached these Terms, for any failure or delay in fulfilling or performing a term of these Terms if the delay or nonperformance is caused by or results from acts of God, floods, fires, explosions, storms, transportation difficulties, strikes, lockouts or other labor or industrial disturbances; wars, terrorist acts, laws, rules, orders or actions of any court, agency or other instrumentality of any government; reduction or unavailability of supplies, products or materials; failure of performance by raw material or component suppliers or any subcontractor upon whom Electro may rely; failure of presupposed conditions, commercial impracticability or any other cause(s) beyond Electro's control. In the event of any condition listed or similar to those listed, Electro shall have the right to suspend delivery or allocate materials among customers in any manner which Electro determines is reasonable.

16. Assignment

Buyer shall not assign any of its rights or delegate any of its obligations under these Terms without the prior written consent of Electro. Any purported assignment or delegation in violation of this Section is null and void. No assignment or delegation relieves Buyer of any of its obligations under these Terms.

17. Relationship of the Parties

The relationship between the parties is that of independent contractors. Nothing contained in these Terms shall be construed as creating any agency, partnership, joint venture, or other form of joint enterprise, employment, or fiduciary relationship between the parties, and neither party shall have authority to contract for or bind the other party in any manner whatsoever.

18. No Third-Party Beneficiaries

These Terms is for the sole benefit of the parties hereto and their respective successors and permitted assigns and nothing herein, express or implied, is intended to or shall confer upon any other person or entity any legal or equitable right, benefit, or remedy of any nature whatsoever under or by reason of these Terms.

19. Notices

All notices, requests, consents, claims, demands, waivers, and other communications hereunder (each, a "Notice") shall be in writing and addressed to the parties at the addresses set forth on the face of the Sales Confirmation or to such other address that may be designated by the receiving party in writing. All Notices shall be delivered by personal delivery, nationally recognized overnight courier (with all fees pre-paid), facsimile (with confirmation of transmission), or certified or registered mail (in each case, return receipt requested, postage prepaid). Except as otherwise provided in these Terms, a Notice is effective only (a) upon receipt of the receiving party, and (b) if the party giving the Notice has complied with the requirements of this Section.

20. Severability

If any term or provision of these Terms is invalid, illegal, or unenforceable in any jurisdiction, such invalidity, illegality, or unenforceability shall not affect any other term or provision of these Terms or invalidate or render unenforceable such term or provision in any other jurisdiction.

21. Survival

Provisions of these Terms which by their nature should apply beyond their terms will remain in force after any termination or expiration of this Agreement including, but not limited to, the following provisions: Governing Law, Submission to Jurisdiction, No Third-Party Beneficiaries, Notices, and Survival.

22. Reservation of Rights

Electro reserves the right to change these Standard Terms and Conditions of Sale at any time and from time to time, with or without prior notice.

Exhibit A — Return Policy

Effective June 1, 2024

Return of New Products or Product Parts

Only Products or Product parts with a Return Goods Authorization (RGA) # issued by Electro will be accepted for credit or replacement. RGA #s are obtained by contacting Electro by phone, fax or email (returns@electromn.com) with the following required information: part/model number being returned, Product model number the part is from, Product serial/ARL/CSA number, nature of the Product failure, original installation date of the Product, failure date of the Product or Product part, contact person, phone number, dealer/contractor name, distributor name and original AR #. Electro will not accept returns sent without the above stated information.

Return of Product or Product Parts for Warranty (Part Repaired)

Only Product or Product parts with a Return Goods Authorization (RGA) # issued by Electro will be accepted for warranty repair. RGA #s will only be issued for Product or Product part failures after troubleshooting the issue with a representative of Electro (a representative is defined as a Sales Representative, Distributor, or Employee of Electro, Inc.). If an RGA # is to be issued, Electro must be contacted with the following required information: part/model number being sent in, Product model number the part is from, Product serial/ARL/CSA number, nature of the product failure, original installation date of the Product, failure date of the Product or Product part, contact person, phone number, dealer/contractor name, distributor name and original AR #. Electro will not accept returns sent without the above stated information.

Return of Product or Product Parts for Warranty (Part Replaced)

Only Product or Product parts with a Return Goods Authorization (RGA) # issued by Electro will be accepted for warranty credit. RGA #s will only be issued for Product or Product part failures after troubleshooting the issue with a representative of Electro (a representative is defined as a Sales Representative, Distributor, or Employee of Electro, Inc.). If an RGA # is to be issued, Electro must be contacted with the following required information: part/model number being sent in, Product model number the part is from, Product serial/ARL/CSA number, nature of the Product failure, original installation date of the Product, failure date of the Product or Product part, contact person, phone number, dealer/contractor name, distributor name and original AR #. Electro will not accept, and credit will not be issued for any Product part returned without the above stated information.

Distributors returning Product or Product parts on behalf of a contractor must provide the above stated information along with the date in which the replacement Product or Product part was sold to the contractor. Electro Industries will not accept returns from distributors on behalf of contractors without the original contractor purchase date.

All Product or Product parts being returned for warranty credit must be sent and received by Electro within sixty (60) days of receiving the replacement from Electro Industries or a distributor. Credit will not be issued for any Product or Product part being returned for warranty credit that is received by Electro after the sixty (60) days.

Restocking Fees

• There is a 15% restocking fee for new Product or new Product parts that are returned within the first thirty (30) days after the unit was purchased or shipped, whichever is later.
• There is a 25% restocking fee for new Product or new Product parts that are returned between thirty (30) days and ninety (90) days after the unit was purchased or shipped, whichever is later.
• There is a minimum of a 25% restocking fee for all installed or used Products or Product parts that are returned. The actual restocking fee is based on the amount it will cost to bring the Product or Product part back to salable condition.
• There is a 25% restocking fee for any Product or Product parts that were allegedly defective but deemed to be free of defects in material and/or workmanship by Electro.

Conditions and Limitations

• Electro will not accept any returns ninety (90) days after the unit was purchased or shipped, whichever is later.
• Electro will not accept any returns on programming chips.
• Generally credits will be issued within four (4) weeks of Electro receiving the Product or Product parts. However, the processing of Products and Product parts for return and credit may take four (4) weeks or longer depending on the season.
• Credits may not be applied to an account prematurely. A credit may only be taken and applied to an account once the return has been processed and a credit memo has been issued.

Reservation of Rights

Electro reserves the right to change its Return Policy at any time and from time to time, with or without prior notice.