Helping customers create and manufacture advanced technology products for our future.

TERMS AND CONDITIONS OF SALE

for CUSTOM EQUIPMENT and PRODUCTS

SHIPMENT & DELIVERY DATES

Third Millennium Engineering ("TME”) shall ship in accordance with TME's standard practices, unless otherwise agreed by TME in a signed writing.  Shipment of any products purchased is subject to TME's availability schedule.  TME shall use reasonable, good faith, efforts to meet any delivery date(s) quoted or acknowledged.  However, TME shall not be liable for its failure to meet such date(s).  TME shall not be liable for delays in performance due to unforeseen circumstances or causes beyond its reasonable control.  This includes, but is not limited to, acts of nature, acts of government, labor disputes, personnel unavailability, delays by suppliers, or customer changes.  Once a purchase order ("Order") is accepted by TME, purchaser ("Buyer") may not change shipment dates of such Order without TME's signed written consent or formal acknowledgment of acceptance.  TME reserves the right to fabricate the entire Order quantity upon receipt of Buyer's Order unless otherwise agreed in a signed writing.  Blanket orders must be released within one (1) year from the Order date.

DELINQUENT PAYMENT & SECURITY TERMS

If Buyer becomes delinquent in the payment of any sum due TME, TME shall not be obligated to continue performance under any agreement with Buyer.  In addition, Buyer shall pay TME a delinquency charge (liquidated damages) on all amounts payable to TME pursuant hereto which are past due at a rate equal to the lower of (i) 18% per annum or (ii) the highest rate permitted by applicable law.  The imposition of such delinquency charge does not imply or constitute an agreement to forbear collection of such delinquent account.  Buyer shall reimburse TME for all collection costs, including reasonable court costs and attorneys' fees and expenses, incurred by TME in collecting any amount past due hereunder.  Buyer hereby grants and TME hereby reserves a purchase money security interest in each product purchased pursuant hereto, and any proceeds thereof, for the amount of its purchase price.

TITLE AND RISK OF LOSS

Title to and risk of loss on all products purchased pursuant hereto, whether or not such products conform to any Order submitted by Buyer, shall pass to Buyer when such items are shipped from TME's plant of manufacture.  Customer purchased equipment, components, material, etc. that is shipped to TME for inclusion in the Goods being manufactured by TME or provided to TME for development purposes shall be insured by TME for the time located on TME premises, unless buyer provides a written statement that it is already insured by buyer.  The charge for this insurance coverage is not included in any quotations under this Agreement and shall be added to the final invoice as a separate line item.

ACCEPTANCE

Buyer acknowledges that it shall have the opportunity to inspect the products supplied by TME pursuant to Buyer's Order.  Buyer agrees that such products shall be deemed accepted by Buyer unless written notice of non-acceptance and the reasons therefore are provided to TME within 30 days following the date of delivery of such products.  In lieu of the foregoing, Buyer may elect, in a signed writing on its Order or in a signed writing delivered to TME no later than TME's delivery of the first product deliverable to Buyer under such Order, for acceptance to be accomplished through applicable test procedures or programs by TME.  In such event, acceptance shall be at the time of completion of final tests at TME's plant.  If Buyer has indicated in its Order its intention to witness such final tests, TME shall (i) give Buyer at least five days advance notice of the date of such tests, and (ii) notify Buyer of any additional charges that may be associated with witnessing such tests.  Acceptance of the Goods, if applicable, shall be deemed to occur upon the earlier of either the successful completion of the acceptance tests or the productive use of the Goods by Customer.  If the Goods fail any acceptance test and has not been in productive use, TME shall have the right, without liability, to a sixty (60) day period for correction and rerun of the tests, which may be extended and renewed by mutual agreement.  TME and Customer recognize the uncertainty and difficulty of estimating Customer's damages in the event of TME's failure to cure.  Both parties agree that Customer's sole and exclusive remedy for such failure shall be to terminate this Agreement and to retain as liquidated damages any holdbacks which would otherwise be due TME.  In no event shall TME or its subcontractors, if any, be liable for indirect, special, incidental or consequential damages, including loss of profits, downtime and loss of data.  TME’s liability for direct damages shall not exceed the amount of any payments made by Customer for the products ordered.  Any action against TME hereunder must be brought within one year after the cause of action accrues.

NON-RECURRING ENGINEERING AND/OR TOOLING CHARGES

Charges separately listed for non-recurring engineering and/or tooling are based on the production of electronic subsystems, modules and/or components in the quantities quoted hereby.  If listed, non-recurring engineering and/or tooling charges shall be billed at the time of initial shipment of electronic subsystems, modules or components, unless otherwise specified on the quotation.  Orders for greater or smaller quantities may necessitate additional non-recurring engineering and/or tooling charges.  Tools are kept in repair and necessary replacements are made without additional charge.  Although the tooling may be used solely for the manufacture of electronic subsystems, modules and/or components for Buyer, TME shall retain all rights and title in and to such tooling and all technology relating thereto.  Tooling may become customer property if negotiated as part of the contract or subcontract for government customers only.

INTELLECTUAL PROPERTY RIGHTS

In all cases, all intellectual property rights and all technology relating to the products supplied to Buyer, their design and all improvements thereto or thereof, whether or not such product, design and/or improvement is made pursuant to Buyer's specifications or at Buyer's expense, shall be and remain the exclusive property of TME.  For Products sold, TME will typically supply customer with a manual describing operation, maintenance, specifications, block diagrams, programming instructions, representative schematics, etc.

PROPRIETARY INFORMATION

Any knowledge or information that Buyer may disclose to TME shall not be deemed to be confidential or proprietary information, unless otherwise stated in writing delivered to TME, and shall be acquired by TME free from any restriction as part of the consideration of this quotation.

CANCELLATIONS, CHANGES, AND CHARGES

An Order for Products sold by TME may not be cancelled or its delivery date delayed within 60 calendar days of its originally scheduled delivery date.  Orders for Products cancelled more than 60 calendar days of their originally scheduled delivery date and after 10 calendar days from TME's receipt of such Orders shall require a minimum cancellation fee of 75% of the total order amount.  Orders for Products cancelled less than 10 calendar days from TME's receipt of such Orders shall require a minimum of 10% of the total order amount or total TME costs incurred, whichever is higher.  No shipment may be delayed more than 60 calendar days beyond its original delivery date.  Either party may request changes at any time prior to product acceptance by written request.  Changes shall only be effective if agreed to by TME and Customer and documented in writing.  If Customer requests changes or if TME determines that any Customer supplied information is inaccurate or incomplete, TME reserves the right to either agree to appropriate changes in a revised quote or to proceed with the original Order for Products.

WARRANTY

TME warrants to the original purchaser all Products sold by TME to be free of defects in material and workmanship for one (1) year from the date of shipment from TME.  TME's warranty hereunder shall not apply if: (i) any repairs, alterations, tampering, or other work has been performed by Buyer or others on such item, other than work performed with TME's authorization and according to its approved procedures; or (ii) the alleged defect is a result of abuse, misuse, high usage, electro-static discharge, fiber optic damage, operation in unusual environments, improper maintenance, improper handling, accident and/or the negligence of any party other than TME.  The warranty set forth herein is conditioned upon proper storage, installation, use, and maintenance in accordance with applicable written recommendations of TME.  The warranty furnished hereunder does not extend to items purchased hereunder resulting in whole or in part from the use of components, accessories, parts or supplies not furnished by TME or supplied by Customer to TME.  TME's sole obligation shall be to repair or replace, at TME's option, any defective component or item which TME confirms is defective under warranty.  In such case, TME will pay for insured domestic USA transportation expenses and all material and labor costs for the repair or replacement at no charge to Buyer.  Buyer shall be responsible for insured international transportation and customs expenses if applicable.  Buyer shall bear all risk of loss or damage to returned goods while in transit with transportation insurance proceeds as the only remedy.  If no defect or breach of warranty is discovered by TME upon receipt of any returned item, TME will provide buyer with an estimate of repair costs and effect the repair upon Buyer's written consent.  Such item shall be returned to Buyer at Buyer's expense and Buyer shall reimburse TME for the insured transportation charges and either the labor and associated charges incurred in testing the allegedly defective item or the charges for repair if the Buyer has elected so.

TME does not warrant that use or operation of the Goods will be uninterrupted or error free.  TME does not warrant that all parts or software used in the Goods will be available beyond the warranty period.  Customer acknowledges that parts or software obsolescence may require a hardware or software re-design in order to maintain out-of-warranty Goods or to procure additional Goods of the same design.

EXCEPT AS EXPRESSLY PROVIDED HEREIN, TME MAKES NO WARRANTY OF ANY KIND, EXPRESSED OR IMPLIED, WITH RESPECT TO ANY GOODS, PARTS AND/OR SERVICES PROVIDED BY TME INCLUDING, BUT NOT LIMITED TO, THE IMPLIED WARRANTIES OR MERCHANTABILITY AND FITNESS FOR A PARTICULAR PURPOSE.  THE SOLE AND EXCLUSIVE REMEDY FOR BREACH OF ANY WARRANTY IS LIMITED TO THE REMEDIES PROVIDED IN THIS "WARRANTY" SECTION OF THESE TERMS AND CONDITIONS OF SALE.  TME SHALL NOT IN ANY EVENT BE LIABLE FOR ANY OTHER DAMAGES INCLUDING, BUT NOT LIMITED TO, ANY INDIRECT, SPECIAL OR CONSEQUENTIAL DAMAGES ARISING OUT OF OR IN CONNECTION WITH THE FURNISHING OF GOODS, PARTS AND/OR SERVICES HEREUNDER (WHETHER OR NOT TME KNEW OR SHOULD HAVE KNOWN OF THE POSSIBILITY OF ANY SUCH DAMAGES), OR THE PERFORMANCE, USE OF, OR INABILITY TO USE ANY GOODS, PARTS OR SERVICES, OR OTHERWISE, WHETHER BASED ON CONTRACT, TORT OR ANY OTHER LEGAL THEORY.

To exercise this warranty, Buyer shall contact TME's Sales Department in Plano, Texas USA promptly, but no later than 10 days following expiration of the warranty period, to obtain a return material authorization (RMA).  No product shall be accepted for return without a RMA.  The TME replacement or repaired product received by Buyer pursuant to this warranty is warranted to be free from defects in material and workmanship for the longer of (i) the balance of the original warranty period, or (ii) 90 days from date of shipment to Buyer of the replacement or repaired product, and all of the warranty limitations listed in this "Warranty" section of these Terms and Conditions of Sale shall also apply to such warranty.

PATENTS

TME warrants freedom from patent infringement only those items comprising its regularly established line of products.  Should any claim be asserted that any such products infringe a patent of any third party and the use of such patent is enjoined or TME and such third party otherwise settle the issue, Buyer agrees that TME shall be entitled, at TME's sole option, to: (i) procure on behalf of Buyer the right to continue using such product; or (ii) replace such product with a non-infringing product; or (iii) modify such product so that it becomes non-infringing; or (iv) refund the fair market value of such product and accept return of same.  Notwithstanding the foregoing, Buyer shall assume, indemnify TME against, and hold TME harmless from, any loss, expense, damage and liability relating to any infringement of any patent, copyright, trademark or other intellectual property rights resulting from compliance with Buyer's design specifications or instructions or from products specifically designed by TME to meet Buyer's requirements.  The foregoing states the entire liability of TME to Buyer for infringement of intellectual property rights by products furnished hereunder.

ORDER OF PRECEDENCE

These Terms and Conditions of Sale and any attachments take precedence over Buyer's additional or different terms and conditions, if any, to which notice of objection is hereby given.  Acceptance by Buyer is limited to TME's Terms and Conditions of Sale contained herein.  Neither TME's commencement of performance nor delivery shall be deemed or construed as acceptance of Buyer's additional or different terms and conditions.  Buyer's purchase of TME products hereunder represents acceptance of these Terms and Conditions of Sale and any attachments, which together constitute the entire understanding between the parties and supersede any previous communications, representations or agreements by either party, whether verbal or written, with respect to this matter.

DELAYS IN PERFORMANCE

TME shall not be liable for any failure to perform hereunder due to unforeseen circumstances or due to causes beyond its control, including, but not limited to, acts of nature, acts of government, labor disputes, regulatory issues, energy shortages, materials or supply shortages, delays in transportation, and delays in delivery or inability to deliver by TME's suppliers.

EXPORT

Unless otherwise expressly agreed to by TME, Buyer assumes all responsibility for obtaining all required export authorizations for products purchased hereunder and exported from the U.S.  Buyer shall not export or re-export technical data supplied by TME, or any products subject to this quotation or otherwise delivered by TME to Buyer, either directly or through others, in violation of any applicable U.S. or other export regulations.

INDEMNIFICATION

If Buyer's officers, employees and/or agents or any of them enter premises owned, leased, occupied by, or under the control of TME, or if any of TME's officers, employees and/or agents enter into premises owned, leased, occupied by or under the control of Buyer, in the course of performance of or otherwise in connection with this quote, Buyer shall indemnify and hold harmless TME, its shareholders, directors, officers, employees and agents from and against any liabilities, damages, costs, expenses, and attorneys' fees for any claim of loss, damage, cost, or injury of whatsoever kind or nature, including bodily injury of death, relating to or occasioned in whole or in part by the acts or omissions of Buyer, its shareholders, directors, officers, employees and/or agents.

MISCELLANEOUS

In the event of any insolvency or inability to pay debts as they become due by a party hereto, or voluntary or involuntary bankruptcy proceeding by or against a party hereto, or appointment of a receiver or assignee for the benefit of creditors, the other party may elect to cancel any unfulfilled obligations hereunder, except as may be prohibited by US bankruptcy laws.  Any required notices shall be given in writing at the address of each party set forth in this quotation, or to such other address as either party may substitute by written notice to the other and shall be deemed given upon personal delivery or three days following deposit in the mail.  Neither party may assign any of its rights or obligations hereunder without the prior written consent of the other party.  No change or modification of any of the terms or conditions herein shall be valid or binding on either party unless such change or modification is made in a signed writing by an authorized representative of each party.  TME's failure to or delay in exercising any of its rights hereunder shall not constitute or be deemed a waiver or forfeiture of such rights.  No U.S. Government Procurement Regulations shall be (i) included hereunder or (ii) be binding on either party, unless specifically agreed to in a signed writing prior to incorporation herein.  Any disputes arising in connection with these Terms and Conditions of Sale and any attachments shall be governed by and construed in accordance with the internal laws of the State of Texas.  The Courts within the State of Texas shall have personal jurisdiction over each of the parties hereto.  If technical advice is offered or given in connection with the use of any products, it shall be as an accommodation to Buyer, and without charge, and TME shall have no responsibilities or liabilities whatsoever for the content or use of such advice.  If any term or condition of this Agreement is invalid under any applicable statute or rule of law, it shall to that extent be deemed omitted without effect on the validity of the remainder of this Agreement.  Neither party may assign or transfer any of its rights, duties, or obligations herein without the prior written consent of the other.  Any purported attempt to do so shall be null and void.  Nothing in this Agreement shall be construed to prohibit TME from performing similar services for or offering similar products to others.

NUCLEAR, AVIATION AND LIFE SUPPORT APPLICATIONS

TME's products are not generally specifically designed, manufactured or intended for sale as parts, components or assemblies for the planning, construction, maintenance, operation or use of any nuclear facility, for the flight, navigation or communication of aircraft or ground support equipment, nor for use in life support equipment where malfunction of such product can reasonably be expected to result in a personal injury.  Any Buyer using TME products for these applications agrees that, except as otherwise provided herein, TME is not liable, in whole or in part, for any claims or damages arising from such use.  If Buyer uses TME products for these applications, Buyer shall indemnify and hold TME harmless from any claims for loss, damage, expense and liability arising out of or in connection with the use and performance of TME's products in such nuclear, aviation or life support applications.

PRODUCT SAFETY

TME's products are specifically designed, manufactured, intended, and sold only for internal industrial use by the Buyer.  TME's products are built using UL, CSA, and VDE certified safety agency approved components and safe engineering practices (grounding, fusing, labeling, flammability, insulation, etc.), particularly for AC power primary circuitry.  However, TME's products are not safety agency approved and are therefore not suitable for general retail sale to individual consumers where improper use or malfunction of such product may result in a personal injury.  TME will seek safety agency approval upon customer’s request and cost.  Upon receipt, Buyer assumes liability for use or resale of purchased TME product.  Any Buyer using TME products for use by individual consumers or another legal entity agrees that, except as otherwise provided herein, TME is not liable, in whole or in part, for any claims or damages arising from such use.  If Buyer uses TME products for use by individual consumers or another legal entity, Buyer shall indemnify and hold TME harmless from any claims for loss, damage, expense and liability arising out of or in connection with the use and performance of TME's products in such cases.

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