PETER PAUL ELECTRONICS CO., INC.

PURCHASE ORDER TERMS AND CONDITIONS Peter Paul Electronics

1. Acceptance

This purchase order terms and conditions Peter Paul Electronics shall become a binding contract subject solely to these Terms and Conditions and those on the face of this order with (i) it is accepted in writing by Seller, (ii) Seller commences performance of this order, (iii) Seller ships any of the goods ordered hereby; or (iv) Seller accepts any payment hereunder. Any terms and conditions proposed by Seller in any document, whether issued by Seller before or after the date of this order, which add to, vary from or conflict with the terms herein are hereby objected to and shall be void. No change or modification of this order shall be valid unless in writing signed by an authorized representative of Buyer.

2. Definitions

As used throughout this order, the following definitions apply unless otherwise specifically stated:
a. “Buyer” means Peter Paul Electronics Co., Inc. the legal entity issuing this order.
b. “Order” or “purchase order” means this contractual instrument, including change notices, supplements, or modifications hereto.
c. “Seller” means the legal entity performing work for buyer pursuant to this order.
d. “Goods”, “supplies” or “items” mean those identified by the part numbers, model numbers, and/or descriptions as set forth on the face of this order.
e. “Services” means any effort supplied by Seller incidental to the sale of goods by Seller under this order including, without limitation, installation, repair and maintenance services. The term “services” shall also include, without limitation, any effort specifically required by this order such as design, engineering, repair, maintenance, technical, construction, consulting, or professional services.

3. Early Delivery

Unless otherwise agreed in writing, buyer shall have not obligation to Seller for any costs incurred for material commitments or production arrangements made in excess of the amount, or in advance of the time, necessary to meet the delivery schedule in this order. Goods shipped to Buyer more than seven (7) days in advance of such schedule may be returned to Seller at Seller’s expense.

4. Inspection; Rejection; Quality Control

a. All materials and workmanship entering into the performance of this order may be inspected and tested at all times and places by representatives of Buyer. If made on the premises of Seller or its supplier, such tests and inspections shall be made in a manner that will not unduly delay work under this order, and Seller shall furnish without additional charge all reasonable facilities and assistance for the safety and convenience of Buyer’s representatives in the performance of their duties. Seller shall tender to Buyer for acceptance only goods that have been manufactured under, and inspected by, appropriate quality control and inspection systems maintained by Seller and have been found to be in conformity with the requirements of this order. As part of these systems, Seller shall prepare records evidencing all inspections made under this order and their outcome, which records shall be complete and available to Buyer upon request during the performance of this order and for two years after final payment hereunder.
b. Notwithstanding: (i) prior inspection, (ii) payment for, or (iii) use of the goods ordered hereunder, Buyer shall have the right to reject any of such goods which do not conform to all requirements of this order. Such right shall be exercisable at the earlier of final inspection and acceptance by Buyer or within two (2) months following Buyer’s receipt of the goods called for hereunder, after which time the goods shall be deemed accepted. All such rejected goods shall be returned to Seller at Seller’s risk and expense (transportation collect declared at full value, unless Seller advises otherwise), for full credit or refund (at Buyer’s option) excepting, however, those goods which Buyer elects to repair at Seller’s expense or to retain at an equitable reduction in price. The rejected goods returned to Seller shall not be repaired or replaced by Seller except upon written instructions from Buyer. Rejected goods shall not again be tendered for acceptance without disclosure of former rejection. Resubmitted goods must be shipped separately. Should Buyer elect to repair the non-conforming goods, all terms and conditions of this order shall remain in full force and effect as to the goods furnished by Seller other than the particular parts or components so repaired. Acceptance shall be conclusive except as regards latent defects, fraud, or such gross mistakes as amount to fraud. Buyer’s rights under this paragraph shall be in addition to and shall not be deemed to diminish its rights under this Clause 4 or under Clause 5 hereof entitled “Warranty”.
c. In addition to remedies set forth in Article 4 “Inspection; Rejection: Quality Control”, Buyer may charge back Seller for inspection and handling of all non-conforming or rejected material. The Seller will be charged an administrative fee of $100.00 and a handling fee of $50.00 per man hour. Charges will be debited against current invoices.
d. Additional costs associated with part shortages due to seller quality problems, including but not limited to freight, labor, line stoppages, etc. may become the responsibility of the Seller. Seller’s liability for additional costs shall not exceed twenty five hundred dollars (USD $2500.000).

5. Warranty

a. Seller warrants to Buyer, its successors, assigns, customers, and users of goods sold by Buyer that all goods provided hereunder shall be (i) merchantable; (ii) new; (iii) free from defects in material and workmanship; (iv) with regard to goods designed by Seller, free from defects in design; (v) suitable for the purposes intended where expressed or reasonably implied; (vi) in compliance with all applicable specifications, drawings, and performance requirements; and (vii) free from liens or encumbrances on title. This warranty, and all other warranties express or implied shall survive, and shall not be affected by, delivery, inspection, test, acceptance, payment and use. Seller agrees to correct defects in or replace, at Buyers option, any goods not conforming to the foregoing warranty promptly, without expense to Buyer, when notified of such nonconformity by Buyer. Deliveries of corrected or replaced goods shall be accompanied by a written notice specifying that such goods are corrections or replacements. In the event that Seller fails to correct defects in or replace non-confirming goods promptly, Buyer, after reasonable notice to Seller, shall have the right to correct or replace such goods and charge Seller for the cost incurred by Buyer in do so; such right to include, without limitation, Buyers’ right to deduct or setoff against other claims pursuant to the clause hereof entitled “Setoff”.
b. If services or technical data are to be provided by Seller hereunder, Seller warrants to Buyer that such services and/or technical data have been properly performed or prepared in a professional and workmanlike manner. The remedies in paragraph a. above shall apply to any defective services or data.

6. Infringement Indemnity

a. As to the goods provided hereunder, Seller shall be liable for and shall indemnify and save Buyer and each subsequent purchaser or user thereof harmless from any infringement claim, suit or action, including proceedings under 28 U.S.C. Section 1498, alleging that the manufacture, use or sale of such goods infringes any patent, trademark, copyright, semiconductor chip, product mask work right or other proprietary right; except, however, that when such alleged infringement arises as a necessary consequence of Seller’s compliance with specifications or designs furnished by Buyer which describe that aspect of the goods on which such alleged infringement is based, then Buyer shall be liable and shall save Seller harmless therefrom, but this exception shall not apply if the subject matter giving rise to the claim for infringement either, (i) was derived from, or selected by Seller, or (ii) relates to materials or compositions, or processes relating to materials or compositions.
b. The party against whom an infringement claim is made, or such suit or action is commenced, shall promptly notify the other party in writing. The party required to indemnify under the provisions of paragraph a hereof shall promptly assume and diligently conduce the entire defense of such alleged infringement at is own expense, provided that such party receives prompt written notice of such claim, suit or action, I such is commenced against the other party. Insofar as its interests are affected, the other party shall have the right at its own expense and without releasing any obligation, liability, or undertaking of the party required to indemnify, to: (i) cooperate in the defense of such claim, and (ii) with permission of the court, intervene in any such suit or action.

7. Software License

Buyer is licensed to copy any software provided under this order onto a computer memory device and to make back-up copies of such software. Unless otherwise provided for in this order, or in a prior written order directed to the software provided hereunder, Buyer’s sole obligation with respect to software provided hereunder shall be to use such software in compliance with applicable U.S. copyright laws and regulations, irrespective of any other license agreement including but not limited to, any license agreement packaged with such software.

8. Copyrights

Seller agrees that, for any works of authorship created by Seller or any employees or subcontractors of Seller in the course of this order, and those works that come under one of the categories of “Works Made for Hire” in 17 U.S.C. 101 shall be considered Works Made for Hire. For any warranting that it has right to do so, hereby assigns and agrees to assign all right, title and interest it has to any copyright in such works and will execute or cause to be executed at Seller’s expense any documents required to establish Buyer’s ownership of such copyright.

9. Changes

a. Buyer may, at any time, unilaterally make changes within the general scope of this order, including, but not limited to, changes in any drawings, designs, specifications or delivery schedule. If any change under this clause causes an increase or decrease in the cost of or the time required for performance, an equitable adjustment shall be made in price or delivery schedule or both, and the order shall be modified in writing accordingly. Any claim by Seller or adjustment under this clause, however, must be submitted in writing in the form of a complete change proposal, fully supported by factual information, to Buyer’s Purchasing Department not later than thirty (30) days after the date of receipt by Seller of the change order, or within such extension of that thirty-day period as Buyer, in its sole discretion, may grant in writing.
b. Notwithstanding the pendency of any claim for an adjustment submitted by Seller hereunder, Seller shall diligently proceed with the performance of the order, as directed by Buyer, and nothing herein shall be construed as relieving Seller of its obligations so to perform, including without limitation the failure of the parties to agree upon Seller’s entitlement to, or the amount or nature of, any such adjustment.

10. Assignment

Assignment of this order or any interest therein or any payment due thereunder without the written Consent of Buyer shall be void.

11. Set Off

Buyer shall be entitled at all times to set off any amount owing from Seller to Buyer or any of its affiliated companies any amount due or owing to Seller in connection with this order.

12. Notice of Delays

Whenever an actual or potential cause of delay occurs or threatens to delay the performance of the work, Seller shall immediately notify Buyer in writing. Seller shall keep Buyer advised of all relevant information concerning such cause of delay, its effects on the schedule and of measures being taken to remove or avoid it. In the event the Seller fails to make deliveries as such, or on the date(s) stipulated, the Seller shall be assessed liquidated damages in the amount of 1.0% of the total purchase order value per calendar day delivery is delayed except in the case of delays which are considered excusable delays hereunder. The Buyer is here with duly authorized and entitled to deduct liquidated damages from any payment(s) due Seller. Delivery shall not be deemed complete until the goods have been actually received by Buyer at its facility. The risk of loss and damage in transit shall be upon Seller and shall not pass to Buyer until received at Buyer’s facility in condition in accordance with the terms of any Purchase Order. The packaging, shipping and all other costs of all return shipments shall be borne by Seller.

13. Excusable Delays

a. Seller shall not be charged with any liability for failure or delay in making deliveries when such failure or delay is due to any cause beyond the control and without the fault or negligence of Seller or its subcontractors or suppliers; provided that Seller shall give to Buyer prompt notice in writing when it appears that such cause will result in failure or delay in making deliveries under this order and shall work diligently to remove the cause of such failure or delay while it continues; and provided further that where the failure or delay is caused by a subcontractor or supplier of Seller, Seller shall not be excused if the goods to be furnished by the subcontractor or supplier were obtainable from other sources in sufficient time to permit Seller to meet the required delivery schedule. In the event of any such excusable failure or delay, Buyer shall have the right at its option and without being under any additional liability to Seller to cancel the portion or portions of this order so affected pursuant to the cause hereof entitled, “Termination for Convenience”.
b. Buyer shall be excused for failure or delay in performance under this order due to any cause beyond its control and without its fault or negligence.
c. As used in this clause, the terms “subcontractor” and “subcontractors” mean subcontractor(s) at any tier and the terms “supplier” and suppliers” means supplier(s) at any tier.

14. Buyer, Furnished Materials, Tooling and Equipment

a. Title to any materials, tooling and equipment furnished by Buyer to Seller shall remain in Buyer. Title to all tooling acquired or fabricated by Seller under this order at Buyer’s expense shall vest in Buyer upon acquisition or fabrication.
b. Seller agrees that it will (i) label, identify an segregate any and all material, tooling and equipment in its possession, the title to which is in Buyer, so as to clearly identify it as being the property of Buyer, (II) assume responsibility for all taxes, maintenance, and risk of loss or damage with respect to said material, tooling and equipment at all times while it is in the custody, care or control of Seller, including while in the hands of carriers, and, (iii) use the material, tooling and equipment exclusively for the performance of this order unless otherwise authorized by Buyer in writing.
c. Upon completion of this order, any of the material furnished by Buyer and not properly consumed in the performance of this order, and any tooling and equipment, the title to which is in Buyer, shall be disposed of in accordance with instructions from Buyer.

15. Confidential Disclosure

Technical and business information and ideas disclosed to Seller by Buyer in connection with this order at any time in any form (including without limitation, orally, or in drawings of goods provided hereunder) which Buyer considers proprietary and so indicates to Seller in writing at the time of disclosure or within a reasonable time thereafter (“proprietary information”), are entrusted to Seller only for ruse on behalf o Buyer. Seller shall keep proprietary information in confidence and shall neither use (other than in performance under this order or other orders from Buyer) nor disclose such proprietary information except as authorized in writing by Buyer. On completion of this or all subsequent related orders (as appropriate), Seller shall deliver to Buyer or destroy to Buyer’s satisfaction all material embodying proprietary information, unless otherwise instructed by Buyer. However, Seller shall not be liable for use or disclosure of any proprietary information which is shown by clear and convincing proof to either have been known to the Seller at the time of first receipt form Buyer under this or a prior order, to have been disclosed to Seller without restriction by a third party having the right to do so, or to be in the public domain.

16. Seller’s Information

Any knowledge, information or drawings which Seller shall have disclosed or may hereafter disclose to Buyer incident to the placing and filling of this order shall not unless otherwise specifically agreed upon in writing by buyer be deemed to be confidential or proprietary information and accordingly shall be acquired free from any restrictions (other than restrictions which may result from a claim or patent infringement).

17. Seller’s Financial Status

a. Buyer may, at its sole discretion, terminate this order for default pursuant to the clause hereof entitled “Termination for Default” upon the occurrence of any of the following events: (i) the Seller is unable to pay its debts generally as they become due; (ii) the Seller is insolvent; (iii) a receiver, trustee, liquidator, assignee, custodian, sequestrator or similar official is appointed of all or a substantial part of Seller’s property, with or without the consent of Seller; (iv) the Seller executes an assignment for the benefit of creditors; (v) upon demand by the Buyer, the Seller is unable to promptly provide Buyer with adequate assurance of timely performance of the Buyer’s obligations under this order.
b. Termination of this order pursuant to this section shall be by written notices and shall be effective upon receipt.

18. Termination of Convenience

a. The performance of work under this order may be terminated, in whole, or from time to time in part, by Buyer in accordance with this clause in which case Buyer and Seller shall negotiate, and Buyer shall pay, equitable termination/cancellation charges.
b. Buyer shall not be liable to Seller for any finished goods, work in process, or materials which Seller with reasonable efforts is able to use for other orders, or which, on the date of termination are not scheduled for delivery within 30 days, in the case of finished goods, within 60 days, in the case of work in process, or within 90 days, in the case of materials.

19. Termination by Default

a. Time is of the essence of this order. Buyer may be written notice terminate the whole or any part of this order for default in any of the following circumstances: (i) if Seller fails to deliver the supplies or perform the services required by this order within the time specified herein, or any extension thereof granted by Buyer in writing; or (ii) if Buyer becomes entitled to terminate this order for default under any of the clauses hereof entitled “Seller’s Financial Status: “Gratuities or “Advertising”, or (iii) if Seller fails to perform any of the other provisions of this order or so fails to make progress as to endanger performance of this order in accordance with its terms and Seller does not cure such failure to Buyer’s reasonable satisfaction within a period of ten (10) days after receipt of notice from Buyer specifying such failure.
b. In the event Buyer terminates this order as provided in this clause, Buyer, in addition to any other rights herein provided, may require Seller to transfer title and deliver to Buyer any completed goods, at the order price, and may procure, upon such terms and in such manner as Buyer may deem appropriate, goods similar to those so terminated, and not delivered, and Seller shall be liable to Buyer for any excess costs for such similar goods, provided, however, that if, after notice or termination of this order under this clause, it is determined for any reason that Seller was not in default, or that the default was excusable, the rights and obligations of the parties shall be the same as if the notice of termination had been issued pursuant to the clause hereof entitled “Termination for convenience”.

20. Indemnification

Seller shall at all times defend, hold harmless and indemnify Buyer, its parent and affiliated companies and their respective directors, officers, employees, successors and assigns (collectively referred to as “Buyer) from and against any and all expense, claims and legal proceedings for loss, damage or injury, including death, brought against Buyer, or incurred by Buyer, arising, or growing out of (a) the negligent or malicious acts of Seller, its agents or employees, (b) the design, manufacture or installation, or materials used in the manufacture or installation, of the goods, or (c) any services supplied hereunder. Seller’s covenants of indemnity herein shall continue in full force and effect notwithstanding the termination of this order.

21. Price Warranty

Seller warrants that the prices for the articles sold Buyer hereunder are not less favorable than those currently extended to any other customer for the same or similar articles in similar quantities. In the event Seller reduces its price for such articles during the term of this order, Seller agrees to reduce the prices hereof correspondingly for articles shipped after such price reduction. Seller warrants that prices shown on this order are complete and no additional charges of any type shall be added without Buyers’ express written consent. Such additional charges include, but are not limited to, shipping, packaging, labeling, custom duties, taxes, storage, insurance, boxing and crating.

22. Advertising

Seller shall not, without first obtaining the written consent of Buyer, in any manner advertise or publish the fact that Seller has contracted to furnish Buyer the goods or services ordered by Buyer from time to time, or use any trademarks or trade names of Buyer in Seller’s advertising or promotional materials. Seller’s breach of this provision shall give Buyer the right to terminate this order for default.

23. Gratuities

Seller warrants that neither it nor any of its employees, agents or representatives has offered or given any gratuities to any of Buyer’s employees, agents or representatives. If it is found that Seller or any of its employees, agents or representatives has offered or given any gratuities to Buyer’s employees, agents or representatives with, in Buyers opinion, a view toward securing purchase orders or contracts form Buyer or securing favorable treatment with respect thereto. Buyer may by written notice to Seller, terminate this purchase order for default.

24. Applicable Law

This order shall be interpreted in accordance with the plain English meaning of its terms and the construction thereof shall be governed by the laws of the State of Connecticut, United States of America, excluding its conflict of laws rules.