FLUX MARINE SUPPLIER TERMS AND CONDITIONS

Issue Date: May 2, 2025

1. Purpose

   These General Terms and Conditions are made between Flux Marine ("Flux") and the Supplier, identified in the corresponding Purchase Order as the Seller. The Supplier agrees to provide the goods specified in the Purchase Order ("Goods" or "Products"). These terms govern the supply of such Goods or Products as detailed in the corresponding Purchase Order documents.

   For this document, (i) “PO” refers to purchase orders submitted to Supplier from Flux; (ii) “T&Cs” refers to these Terms and Conditions; and (iii) “Manufacturer Supplier Agreement” refers to the documentation provided by Flux and acknowledged and signed by all Flux suppliers. The requirements defined in this document are in addition to Supplier Agreements, specification documents, POs and payment agreements, previously established with Flux Marine.

   These T&Cs are subject to change at any time at Flux’s sole discretion. The most current version shall apply to all active and future POs and be provided to Supplier by Flux Marine. Terms, conditions or contractual documents issued by Supplier that conflict with the PO are deemed null and void, whether issued before or after the corresponding PO.

2. Scope of Work and Ordering Procedure

   Supplier agrees to provide the Goods as specified in the PO issued by Flux. Acceptance of a PO constitutes full acceptance of, and agreement to, these T&Cs. The Supplier acknowledges that time is of the essence in the performance of its obligations under this Agreement. Should the Supplier not be able to meet outlined requirements of the PO, these T&Cs, or any additional requirements communicated by Flux, the Supplier must immediately notify Flux.

   Supplier shall implement industry-standard methods for tracking and/or serialization of goods, and other components used in the production of Goods to reliably ensure traceability of Goods (including as set out in the Manufacturer Supplier Agreement). Records and documentation ensuring such traceability must be provided to Flux upon request. Supplier shall responsibly source all materials and inputs for the Goods and Services and implement a responsible procurement policy in accordance with industry standards (including responsible sourcing of raw materials and interdiction of forced labor).

3. Notice of Delay

   The Supplier must notify Flux in writing within three (3) business days of becoming aware of any actual or anticipated delays that cannot be recovered and are expected to increase overall schedule by seven (7) or more calendar days. Such notice must include the reason for the delay, the estimated duration, and the proposed corrective actions to minimize the impact.

   Such corrective actions may include expedited shipping at the Supplier’s cost, increased production shifts or overtime, partial shipments, engagement of approved subcontractors, or reallocation of internal resources to prioritize Flux’s order.

   Flux reserves the right to request a formal recovery plan detailing the proposed corrective actions, associated timelines, and progress updates. Implementation of corrective actions shall not relieve the Supplier of its obligations under this Agreement, nor shall it preclude Flux from exercising any other rights or remedies available under these T&Cs.

4. Subcontractors

   Supplier must provide Flux upon request with a list of all subcontractors involved in the requested manufacturing process including as set out in the Manufacturer Supplier Agreement. Supplier may not subcontract any portion of the work under this Agreement without Flux’s prior written approval.

   The Supplier is responsible for ensuring that all subcontractors adhere to the same standards of quality, compliance, ethical practices, confidentiality, and performance as required of the Supplier under this Agreement. The Supplier shall remain fully liable for all acts, omissions, and performance of its subcontractors as if they were the Supplier’s own. Use of subcontractors does not relieve the Supplier of any obligations under this Agreement.

   Should any subcontractor be unable to meet the outlined requirements of the PO, these T&Cs, or any additional requirements communicated by Flux, the Supplier must immediately notify Flux. Flux reserves the right to review, approve, or reject any proposed or alternative subcontractor, and may require removal or substitution of any subcontractor at any time for reasonable cause.

   If directed by Flux, the Supplier shall promptly facilitate the removal or substitution of any subcontractor and provide all necessary technical, logistical, and documentation support to enable a smooth transition without disruption to the project schedule or quality of Goods.

5. Delivery

   Supplier shall deliver all Goods in accordance with the delivery schedule specified in the PO. Time is of the essence in this Agreement. The Supplier shall package all parts in accordance with the terms and instructions outlined in the Manufacturer Supplier Agreement and Purchase Order.

   Supplier shall provide all necessary export and/or import documentation required for the proper transport and customs clearance operations including, but not limited to, commercial invoice with all relevant information as required by customs, packing list, certificate of origin, material safety data sheet (MSDS), dangerous goods declaration, and any other certifications or special documentation without which the Goods may not be accepted for transport or customs clearance.

6. Late Delivery and Liquidated Damages

   If Supplier fails to deliver in accordance with the delivery schedule specified in the PO, Flux may impose liquidated damages of 1% of the order value per full week of delay, up to a maximum of 10%, depending on the agreed total lead time. Liquidated damages shall apply to each late shipment, batch, or milestone event and shall be calculated from the originally scheduled delivery date, regardless of the cause of delay, including production, shipping, or internal processing failures.

   Flux’s acceptance of late deliveries shall not be construed as a waiver of any rights, including the right to claim liquidated damages or terminate the order.

7. Force Majeure Exceptions

   The term “Force Majeure” shall mean any event, which (i) is beyond the reasonable control of the affected party, (ii) could not have been reasonably foreseen at the date of PO issuance, and (iii) the affected party, having acted with all due diligence, could not have prevented, mitigated or overcome, such as war, natural disaster, riots, fire, explosion, terrorist acts, or any act of God.

   The following are not considered Force Majeure events:

   • Factory unrest and employee strikes of any kind (whether national, state-wide, or specific to Supplier)
   • Production delays
   • Lack of the required import/export licenses or import/export authorizations
   • Lack of qualified personnel or workforce
   • Lack of material
   • Financial problems
   • Sub-contractors experiencing any of the above issues

   The supplier affected by a Force Majeure event shall notify Flux within forty-eight (48) hours of the occurrence of the event and shall take all reasonable steps to mitigate the consequences of such an event to avoid or limit any potential delay in the delivery of the Goods.

   During any Force Majeure event affecting Supplier’s performance, Flux may purchase Goods from other sources and reduce POs by such quantities or require Supplier to provide Goods from other sources in quantities and at times requested by Flux at the price set out PO Agreements.

8. Reporting and Communication Requirements

   The Supplier shall define critical Milestone and dates upon acceptance of each Purchase Order. Milestones are key production dates used to track production progress and on-time-delivery or trigger corrective action. The Supplier must notify Flux of any delays or changes to the milestone schedule promptly. Critical Milestones may include:

   • Completion of a successful casting pour
   • Completion of CAM programming and fixturing
   • Completion and approval of first article or sample batch

   Supplier shall comply with Flux’s reporting requirements, including:

   • Use of a designated reporting tool or dashboard (e.g., Smartsheets)
   • Reporting tool to be kept up-to-date; updated at least every Friday
   • Weekly updates on production, quality, key Milestones and delivery
   • Prompt escalation of any Milestone delays, risks of delays, or deviations

   Supplier shall participate in scheduled calls or meetings and designate a primary contact responsible for program status and escalation.

9. Cancellation and Right to Cover

   Flux may cancel all or part of an order, without penalty, if Supplier fails to meet any critical Milestone. In the event of such failure, Flux may obtain the affected goods from an alternative source and Supplier shall reimburse Flux for any reasonable and documented additional costs incurred. Flux will notify Supplier of intent to exercise this clause with supporting evidence of the milestone failure and the cost basis for any claims.

10. Quality Assurance and Inspection

    All goods must conform to specifications, drawings, samples, and quality standards provided or approved by Flux. Flux may inspect and test any goods or processes at any time prior to shipment. Supplier shall provide access to relevant facilities, records, and personnel upon reasonable notice. Flux may reject goods that are defective, nonconforming, or delivered late. Supplier shall, at Flux’s election: replace, rework, credit, or refund the goods and cover all return shipment costs.

11. Warranty

    Supplier warrants that all goods will be free from defects, conform to specifications, be merchantable, and fit for their intended purpose. The warranty period shall be 12 months from the date of delivery to Flux or longer if required by Flux’s end customer.

12. Confidentiality

    All technical, commercial, and operational information disclosed by Flux to Supplier is considered confidential. Supplier agrees not to disclose or use such information for any purpose other than fulfilling Flux’s orders. These obligations shall survive for 5 years from the date of disclosure or for so long as the information remains confidential.

13. Intellectual Property

    Any designs, specifications, drawings, or tooling provided by Flux or created by Supplier under Flux’s direction shall remain the exclusive property of Flux. Supplier shall not use Flux’s intellectual property for any third party or for internal development purposes. All Flux-funded tooling shall be marked as Flux property and returned upon request.

14. Data Security and Protection

    Supplier shall implement and maintain appropriate administrative, technical, and physical safeguards to protect Flux’s data, including confidential information, product data, drawings, and business records, against unauthorized access, disclosure, alteration, or destruction. Supplier shall restrict access to Flux’s data to only those employees, agents, or subcontractors who require access to fulfill their duties under this agreement, and shall ensure that such parties are bound by confidentiality and data security obligations at least as protective as those herein.

    Supplier shall promptly notify Flux of any actual or suspected breach of security involving Flux’s data, no later than 48 hours after discovery, and cooperate fully in any investigation and remediation. Upon request or termination, Supplier shall securely return or permanently destroy all copies of Flux’s data in its possession or control.

15. Termination

    Flux may terminate any order, in whole or in part, without penalty if Supplier materially breaches these T&Cs, fails to meet schedule or quality, or becomes insolvent. Flux shall pay only for conforming goods delivered and accepted prior to termination.

16. Payment Terms

    Supplier shall issue invoices only after delivery of goods or completion of services in accordance with the purchase order. Invoices must reference the applicable purchase order number and include all required documentation. Unless otherwise agreed in writing, Flux shall pay undisputed invoices within Net 30 days of receipt of goods. Flux reserves the right to withhold payment for non-conforming goods or services until defects are corrected or replacements provided. Flux may offset any amounts owed by Supplier against amounts payable to Supplier, including costs arising from Supplier’s breach of these Terms.

17. Survival

    The termination or expiration of these Terms or any related purchase order shall not affect the continuing obligations of the parties under provisions that by their nature are intended to survive. The following sections shall survive termination:

    • Quality Assurance and Inspection
    • Warranty
    • Confidentiality
    • Intellectual Property
    • Data Security and Protection
    • Termination
    • Survival
    • Dispute Resolution
    • Governing Law and Jurisdiction
    • Any provisions related to indemnity, limitation of liability, or remedies

18. Dispute Resolution

    In the event of any dispute arising under these Terms, the parties shall first attempt to resolve the dispute through good faith negotiations between senior representatives with authority to settle the matter. If the dispute is not resolved within 30 days, either party may request non-binding mediation to be conducted by a mutually agreed neutral mediator. If mediation fails to resolve the dispute within 30 additional days, the matter shall be submitted to final and binding arbitration under the rules of the American Arbitration Association (AAA). The arbitration shall be conducted in English by a single arbitrator with experience in manufacturing or commercial disputes.

    Either party may seek interim or injunctive relief from a court of competent jurisdiction as necessary to protect its rights pending arbitration. If arbitration is deemed unenforceable, disputes shall be subject to the courts identified in Section 16 (Governing Law and Jurisdiction).

19. 16 Governing Law and Jurisdiction

    These T&Cs shall be governed by the laws of the State of Delaware. Any disputes shall be subject to the exclusive jurisdiction of the State of Delaware.