GENERAL

These General Terms and Conditions of Sale (“Terms and Conditions”) shall govern all business transactions for the sale of products and/or services (individually a “Product” and collectively the “Products”) between MilSource, LLC (“MilSource”) and the buyer of such Products (“Buyer”). MilSource and Buyer may hereinafter be referred to individually as a “Party” and collectively as the “Parties”.

MilSource’s acceptance of any purchase order issued by the Buyer (“Order”) is expressly conditioned upon Buyer’s acceptance of these Terms and Conditions, whether or not referenced in such Order. Any terms or conditions set forth on any documents or forms utilized by Buyer and any communications (written or oral) between the Parties that are inconsistent with, or are not included within these Terms and Conditions shall be of no force or effect unless signed by an authorized representative of MilSource. These Terms and Conditions supersede any prior written or oral agreements or understandings, or any preprinted or standard terms on any Order, invoice, acknowledgement, or similar document exchanged between the Parties, and shall not be supplemented by any previous course of dealing, performance, or usage of trade. In the event that MilSource and Buyer specifically agree to different terms in writing, such terms shall be exclusive only as to the particular subject covered. Notwithstanding the foregoing, if any Order is issued under a blanket or master agreement which the Parties agree will relate to all Orders between the Parties (“Master Agreement”), the terms and conditions of the Master Agreement shall supersede those contained herein.

ORDERING PROCEDURES

All Orders are subject to acceptance by MilSource. Nothing contained herein shall be deemed to place an obligation on MilSource to accept any Order from the Buyer. MilSource hereby reserves the right to reject any Order submitted for its acceptance. Any typographical, clerical or other error or omission in any sales literature, quotation, price list, Order acknowledgement, invoice or other document or information issued by MilSource shall be subject to correction without any liability. The Buyer shall be responsible for ensuring the accuracy of the terms of any Order issued by it (including any applicable specification) and upon MilSource’s request, shall promptly provide all information necessary for MilSource to perform its obligations hereunder.

All Orders shall specify: (1) Product part number; (2) requested delivery dates; (3) applicable price; (4) quantity; (5) location to which the Product is to be shipped; and (6) location to which invoices will be sent for payment.

PRICES

Unless otherwise expressly agreed by MilSource in writing, Product prices: (i) shall be paid in U.S. Dollars; (ii) are FOB Destination; (iii) are subject to adjustment due to any Change Order; and (iv) excludes taxes. MilSource will invoice Buyer for any applicable taxes unless, at the time of the issuance of the Order, Buyer furnishes MilSource with a certificate of exemption.

All Orders are accepted subject to MilSouce’s quoted prices and the validity period stated therein. With the exception of the prices in accepted Orders, all prices are subject to change without notice.

QUANTITY DISCOUNTS

MilSource may offer the Buyer quantity discounts where the Buyer undertakes to purchase a specified quantity of Products as set forth in a relevant Order. Notwithstanding the foregoing, if Buyer cancels any Order or reduces the quantity of the Products prior to purchasing the required quantity, MilSource may invoice the Buyer for any pricing differential and Buyer shall promptly reimburse MilSource for the total invoiced amount.

CHANGES

Unless controlled by the Buyer’s specifications, MilSource reserves the right, without Buyer’s consent or the necessity of a Change Order, and at no charge to Buyer, to incorporate, among other things, any design modifications, engineering changes or improvements in the specification of a Product provided that the form, fit, function, price, or delivery schedule of the Products are not affected.

Change Order. Buyer may by written notice request changes within the general scope of this Order to any one or more of the following: (a) drawings, designs or specifications; (b) method of shipment or packaging; place of delivery; and (d) quantity of the Products (“Change Order”). A Change Order shall only be effective if accepted in writing by an authorized representative of MilSource. If such change increases the cost or time required to perform this Order, an equitable adjustment shall be made in the price or schedule, or both, and the Order shall be modified accordingly.

PAYMENT TERMS

Unless otherwise stated on the Order, payment terms shall be net thirty (30) days from the date of invoice. (“Payment Terms”) Any credit extended by MilSource to Buyer is conditional upon MilSource’s continued satisfaction with Buyer’s creditworthiness, which may be re-evaluated by MilSource at all times. MilSource reserves the right to suspend Buyer’s credit terms and demand cash in advance or on delivery for all or any part of the Order or to alter payment terms based on its assessment of Buyer’s creditworthiness. Pending correction of any unsatisfactory credit situation, MilSource may withhold shipments without incurring any liability.

If MilSource believes in good faith that Buyer’s ability to make payments may be impaired or if Buyer shall fail to pay any invoice when due, without prejudice to any other remedies available to it by law or in equity, MilSource may demand immediate payment and at MilSource’s option (i) suspend delivery of any Order or any remaining balance thereof until such payment is made; (ii) cancel any Order or any remaining balance thereof for breach; (iii) recover all costs of collection including but not limited to reasonable attorneys’ fees; (iv) repossess the Products for which payment has not been made; (v) charge interest at one point five percent (1.5%) per month on the past due amount, not to exceed the interest percentage allowed by law.

DELIVERY, TITLE AND RISK OF LOSS

Incoterms. Unless otherwise specified on the Order, all domestic shipments will be delivered FOB Destination via FedEx Ground. Expedited shipments are available at an additional charge.

Title and Risk of Loss. Title shall pass to Buyer once MilSource has received full payment for the Product(s). Risk of loss shall pass to Buyer when MilSource places the Product at the disposal of the Buyer at MilSource’s facilities in El Segundo, CA. Notwithstanding the foregoing, Product (s) held for Buyer, or stored for Buyer, shall be at the risk and expense of the Buyer.

Buyer acknowledges that the delivery dates provided by MilSource are only an estimation of the lead times and shall not be binding on MilSource. Notwithstanding the foregoing, MilSource will use commercially reasonable efforts to initiate shipment and schedule delivery as close as possible to Buyer’s requested delivery schedule but in no event shall MilSource be liable to Buyer for failure to meet any delivery schedule, for the costs or procurement of substitute products, for any kind of damages or penalties, nor such delay shall constitute grounds for cancellation or termination of any Order, regardless the cause of the delay. Unless otherwise stated on the face of the Order, MilSource reserves the right to make deliveries in installments and deliver in advance of the scheduled delivery date whenever possible. Delivery of a quantity that varies from the quantity specified in Buyer’s Order shall not relieve Buyer of its obligation to accept delivery and pay for the Products delivered in accordance with Payment Terms. Notwithstanding the foregoing, delays or changes in delivery schedules due to Buyer directed actions are subject to price adjustments.

Order Schedules. Orders shall be scheduled for delivery within twelve (12) months from the Order date. Products containing precious or volatile price materials (i.e. gold) are priced for shipment within three (3) months after the Order date, and thereafter are subject to price adjustment in accordance with the then prevailing prices for such materials.

PACKAGING

MilSource shall provide adequate protective packing to prevent damage and deterioration of the Products. Buyer shall be responsible for the cost of any special packaging or special handling requested by it. All packages containing electrostatic discharge (ESD) sensitive items will be marked with an appropriate caution label.

WARRANTY

Products purchased through MilSource will be covered under the products manufacturer’s warranty. MilSource at its discretion may assist the client with coordination and logistics of the repair of the product through the manufacturer. MilSource will not be responsible for a loss due to carrier, nature or any other event that is out of its control.

COUNTERFEIT PRODUCTS PREVENTION

MilSource represents and warrants that it maintains procedures for the detection and avoidance of counterfeit electronic parts.

EXCUSABLE DELAY | FORCE MAJEURE Neither Party shall be liable to the other as a result of any delay or failure to perform its obligations under this Order if and to the extent such delay or failure is caused by an act of God, fire, flood, war, acts of terrorism, riot, civil commotion, governmental actions (including regulatory change), wreck or delay in transportation, major equipment breakdown, inability to obtain necessary labor, materials or manufacturing facilities from usual sources, delays or refusals to grant an export license or the suspension or revocation thereof, or any act, delay or failure to act of the affected Party’s suppliers and subcontractors of any tier and any similar events beyond the reasonable control of the affected Party (“Force Majeure”). If any Force Majeure event affects either Party’s ability to perform, the Party affected by such event shall give the other Party a notice as soon practicable under the circumstances. In the event that MilSource’s performance is delayed due to a Force Majeure event, the due date of its performance shall be extended by a period of time necessary to overcome the effect of such delay. If the inability to perform continues for longer than three (3) months, either Party may terminate the affected Order by providing written notice to the other Party. Notwithstanding the foregoing, Buyer shall remain responsible for payment of Products delivered prior to the termination.

COMPLIANCE WITH LAWS

The parties shall comply with all statutes, laws, ordinances, regulations, rules and orders enacted or adopted by any federal, state, local, municipal or other authority or governmental body which may pertain to the conduct of the Parties’ business and their obligations hereunder. The Parties shall obtain and pay for all permits, fees and licenses required to perform their respective obligations hereunder.

1. FAR/DFARS Compliance. Upon Buyer’s request, MilSource will consider and confirm compliance with FAR, DFARS or related regulations as necessitated by Buyer’s Order.

EXPORT COMPLIANCE

The Parties shall comply with the laws and regulations of the United States of America (USA) relating to exports and foreign transactions, including but not limited to, the International Traffic in Arms Regulations (ITAR) (22 C.F.R. Parts 120-130), the Arms Export Control Act (22 U.S.C. 2778), the Export Administration Regulation (EAR) (15 C.F.R. Parts 730-774) and the Export Administration Act of 1979, as amended (50 U.S.C. 2401 et. Seq.). In particular, the Parties shall not disclose any technical data nor deliver, export, re-export or re-transfer any Products out of the USA, or to foreign persons or entities within or outside the USA, without the proper written authorization and/or licenses from the U.S. Government. A Party who is found to be in violation of the laws and regulations set forth in this Article shall fully indemnify the other Party against any damages, costs, losses, and/or liabilities arising out of such violation.

LIMITATION OF LIABILITY

IN NO EVENT SHALL EITHER PARTY’S AGGREGATE, CUMULATIVE LIABILITY TO THE OTHER PARTY ARISING OUT OF OR RELATED TO AN ORDER EXCEED THE TOTAL VALUE OF THE RELEVANT ORDER. NEITHER PARTY SHALL BE LIABLE FOR ANY LOST PROFITS OR SPECIAL, INCIDENTAL, PUNITIVE, INDIRECT, OR CONSEQUENTIAL DAMAGES ARISING OUT OF OR RELATED TO THIS ORDER (WHETHER FROM BREACH OF CONTRACT, BREACH OF WARRANTY, OR FROM NEGLIGENCE, STRICT LIABILITY, OR ANY OTHER FORM OF ACTION BY OPERATION OF LAW, OR OTHERWISE). THE EXISTENCE OF MORE THAN ONE CLAIM AGAINST THE PARTICULAR PRODUCT(S) SOLD TO BUYER UNDER THIS ORDER SHALL NOT ENLARGE OR EXTEND THIS LIMIT. NOTWITHSTANDING ANYTHING STATED HEREIN NOTHING SHALL EXCLUDE OR LIMIT THE LIABILITY OF EITHER PARTY FOR: (i) DEATH OR PERSONAL INJURY ARISING OF A PARTY’S OWN NEGLIGENCE; (ii) FRAUD; (iii) GROSS NEGLIGENCE; (iv) LIABILITY UNDER ARTICLE 19 (INDEMNIFICATION); OR (v) ANY MATTER FOR WHICH IT WOULD BE ILLEGAL TO EXCLUDE OR LIMIT OR TO ATTEMPT TO EXCLUDE OR LIMIT A PARTY’S LIABILITY HEREUNDER.

INDEMNIFICATION

Each Party hereto shall defend, indemnify, and hold harmless the other Party and its affiliates and their respective directors, officers, and employees from and against any and all liabilities, costs and expenses, claims, demands, actions, proceedings, judgments or award of damages (collectively, “Damages”) incurred in connection with any claim, demand, suit, or proceeding by a third-party: (a) arising from or related to property damage, personal injury or death caused by the indemnifying Party’s Products; (b) arising from negligence or willful misconduct of the indemnifying Party; or (c) arising from failure to comply with applicable laws or regulations.

Intellectual Property Infringement. With the exception of Products manufactured in accordance with Buyer’s drawings or specifications, MilSource shall, at its expense, defend, indemnify and hold harmless Buyer against direct damages actually incurred by the Buyer in connection with any claim that any Products sold hereunder infringe or misappropriate any patent, copyright, trademark, trade secret, or other intellectual property right belonging to any third party; provided that the Buyer: (i) immediately provides MilSource written notice of the claim; (ii) gives MilSource sole and complete authority for the defense and disposition of such claim; (iii) provides MilSource with all necessary assistance in connection therewith; (iv) does not, at any time, admit liability or otherwise settle or compromise or attempt to settle or compromise the said claim or action except upon the express instructions of MilSource.

MilSource’s sole obligation under this Article shall be to settle the claim or judgment on the claim. In addition, MilSource may, at its option and expense, either: (a) procure for Buyer the right to continue to use the Product, (b) replace or modify the Product so that it becomes non-infringing but functionally equivalent, or (c) grant a refund of the price paid for the individual units of Product which are the subject of the claim.

This Article shall not apply in the event that the infringement is due to (1) the combination of the Product with other equipment to the extent that the Product alone would not have resulted in a claim of infringement; (2) any modifications, alterations to the Product performed by anyone other than MilSource, (3) use of the Product outside of the intended use; (4) continued use of the Product by Buyer after receiving notice of an infringement claim, or (5) failure of Buyer to replace the Product with a non-infringing substitute provided by MilSource.

Buyer agrees, at its expense, to protect and defend MilSource against any claim of patent infringement arising from compliance with Buyer’s designs, specifications or instructions and to hold MilSource harmless from damages, costs and expenses attributable to any such claim.

TERMINATION FOR CONVENIENCE

Upon giving a thirty (30) days prior notice to MilSource, Buyer may terminate, in whole or in part, with or without cause, Orders that are outside MilSource’s lead times. In the event Buyer terminates, in whole or in part, Orders that are within MilSource’s lead times, Buyer shall be liable to MilSource for all of the following: (i) the purchase price of all finished Products delivered to Buyer but not yet paid for at the time of termination ; (ii) the purchase price of all finished Products not yet delivered to Buyer at the time of termination; (iii) the value of all work in progress and the cost of all raw materials acquired by MilSource for the performance of Order; and (iv) reasonable profits (collectively, the “Costs”). Buyer shall pay the Costs to MilSource within thirty (30) days of termination or cancellation. No refunds or returns will be allowed once finished Product is shipped to the Buyer.

DISPUTE RESOLUTION AND GOVERNING LAW

Arbitration. Any dispute arising out of or relating to these Terms and Conditions or any Order, which is not resolved by the Parties themselves, shall be resolved by binding arbitration. The place of the arbitration shall be Los Angeles, California U.S.A. and the language shall be English.
Governing Law. This Order and the performance thereof shall be governed by the laws of the State of California, U.S.A., to the exclusion of its rules of conflicts of laws. The Parties exclude the application of the United Nation Convention on Contracts for the International Sale of Goods.

MISCELLANEOUS

The provisions of these Terms and Conditions, together with the provisions contained within any accepted Order (but expressly excluding any of the terms and conditions proposed by the Buyer) constitutes the entire agreement, and supersedes all prior agreements, of the Parties hereto relating to the subject matter hereof. Any amendment to or variation of these Terms and Conditions, an Order or any part thereof shall only be effective if made in writing and signed by a duly authorized representative of the Parties. If any provision of these Terms and Conditions or any Order shall be determined by a court of competent jurisdiction to be invalid or unenforceable, such determination shall not affect the remaining provisions of such Terms and Conditions or Order, all of which shall remain in full force and effect. The Parties hereto are independent contractors and nothing herein shall be construed to create a partnership, joint venture, franchise, fiduciary, employment or agency relationship between the Parties.