Supplier Shipping Policy

Dear Farrel Supplier:

For the purpose of improving communications, material handling, and paperwork, Farrel Corporation (“Farrel”) requests your adherence to the following policies and procedures

1. Farrel’s Purchasing Department has the authority to negotiate for and commit Farrel to the purchase of goods and services. Individuals outside the Purchasing Department do not have the authority to purchase goods and services. Farrel has no obligation to honor any commitments to pay for goods and services unless authorized in advance by a properly executed purchase order or interim authorization.
2. Changes in the scope of supply or services that may impact cost and delivery, inclusive of premiums and overtime charges, are not to be made unless authorized by the Purchasing Department via a purchase order change notification or interim authorization. Every purchase order clearly states Farrel will pay purchase order price only. Any adjustment must be agreed in writing and confirmed by the buyer.
3. To facilitate material handling, please mark or stamp Farrel purchase order numbers and Farrel part numbers on all boxes and packing slips. All invoices should be identified with Farrel purchase order numbers and Farrel part numbers as well.
4. Whenever supplying documents such as approval drawings, certified drawings or manuals, please ship directly to the Farrel Purchasing Department to the attention of the Buyer. Component test reports, inspection reports and material certifications are to be shipped to Farrel in the container with the part. These documents are considered as receivables against the purchase order and as such payment will not be made until all line items on the purchase order are satisfied.
5. Suppliers should coordinate all visitations to Farrel through the Purchasing Department .
6. Farrel employees are strictly prohibited from accepting, receiving or soliciting gifts and gratuities.

In addition, the following Farrel Shipment Policy, Farrel Inbound Routing Policy, Farrel Drawing Security Policy and Farrel Direct Shipment Policy are applicable to any purchase by Farrel:

Due dates on Farrel purchase orders are to be interpreted as date due at Farrel. Suppliers are requested to back off the appropriate transit time to ensure timely material arrival at Ansonia, CT or a destination other than Ansonia (drop shipment).

Do not deliver material/equipment itemized on Farrel purchase orders more than two weeks earlier than the purchase order delivery date(s) without expressed authorization from the Farrel Purchasing Department. Unauthorized delivery more than two weeks prior to the purchase order delivery date(s) will result in the following action: 1) The invoice will not be processed for payment until the purchase ship to arrive date; and/or 2) The material/equipment will be returned to your facility or facilities at your expense.

Conversely, if supplier is in danger of failing to comply with the Ship-to- Arrive date for reason other than the occurrence of a force majeure event, supplier must ship the materials/equipment by the fastest means available and any charges resulting from such expedited shipping must be fully prepaid and absorbed by Supplier .

The following Routing instructions are to be followed when making shipments FOB your plant to Farrel locations in either Connecticut or Texas. This also applies to Farrel’s customers and suppliers. These instructions supersede all other previous instructions.

1. 1 to 70 pounds (.45 to 31.8 KGS) ship via UPS Ground Collect
2. All standard size shipping containers or skids with an individual weight of 71 lbs. (32.2 KGS) and over to an individual, or combined shipment weight of 5000 lbs. (2273 KGS), ship via FedEx Freight collect to either Farrel location (Texas or Connecticut). Shipments made to Farrel Suppliers should specify on the bill of lading “3rd party billing – bill Farrel Corporation, 25 Main St., Ansonia, CT 06401” and should reference the Farrel P.O. number.
3. Farrel Traffic Department is to be contacted at (203) 736-5507 or (203) 736-5500 Ext.4340 for all the following shipments:
1. All oversize freight length, width or height 92 (234 CM) or greater.
2. All freight 5001 lbs. (2273 KGS) or greater, either as a single piece or the combined weight of all pieces.
3. All International shipments (including ground from Canada).
4. All Air freight shipments.
5. All exclusive use of dedicated truck shipments.
6. ALL SHIPMENTS TO FARREL CUSTOMERS.
7. If carriers listed under #2 do not offer direct service into or out of your area or the consignees area.
8. All hazardous material shipments must be made in conformance with 49CFR.

When Farrel is responsible for the freight, all charges must be either freight collect or 3rd party billing to Farrel. ANY PREPAID CHARGES ADDED TO YOUR INVOICE OTHER THAN UPS, WILL BE DEDUCTED FROM YOUR BILLING.

Any deviation from these instructions that result in higher transportation charges will result in charge-backs to Supplier.

Pursuant to U.S. Department of Agriculture regulations, all solid wood packing material used in shipments originating from outside the U.S. or Canada must be treated and must be marked with an International Plant Protection Convention logo, including country code, treatment facility number and treatment method abbreviation. Paper treatment certificates may be included but do not substitute for the treatment logo. Any costs incurred by Farrel as a result of the supplier's failure to comply with this regulation will be charged to the supplier.

It is Farrel’s policy to have all original Farrel drawings returned upon completion of work and/or services. items (CVC).

• Suppliers are instructed to return original Farrel drawings with shipment or delivery of material to Farrel. Please mark purchase order number on blueprint. Farrel’s Receiving Department will record receipt of drawings against the purchase order. Receipt of Farrel drawings becomes a condition for payment of supplier invoice(s).
• Invoice(s) will not be paid until Farrel drawings are received with supplier material.
• NOTE: This policy does not cover commercially available items (CVC).

All invoices covering direct shipments to a location other than Farrel must be accompanied by a copy of the packing slip, bill of lading or proof of shipment. Invoices will be aged from the date proof of shipment is received. Suppliers are to ship exact amount shown on the purchase order. Over-shipments or under-shipments are not acceptable. Invoices received without proof of shipment may be returned to the supplier indicating that a proof of shipment is required in order to process the invoice for payment. All applicable shipping documents, inspection and test reports shall be sent to the appropriate buyer.

All purchases of goods and services are subject to Farrel’s Purchase Order General Terms and Conditions B-145J (latest revision).

Thank you for your cooperation.

Sincerely,

Farrel Corporation Purchasing Department

Form: PUR024, REV8