Terms and Conditions

1.                  Introduction.  These terms and conditions and any accompanying Sales Acknowledgment (collectively, these “Terms”) are the only terms which govern the sale of Products (as defined herein) and Services (as defined herein) by LWO Acquisitions Company LLC d/b/a Circuitronics, Inc., a Texas limited liability company (“Manufacturer”), to any individual, partnership, corporation, limited liability entity, unincorporated organization association, governmental authority or any other entity (“Person”) who (a) purchases the products and technology that are specified in a Purchase Order (as defined herein) from Manufacturer (“Products”); or (b) engages the services of Manufacturer to perform certain manufacturing, assembly, or other services related to the Products (the “Services”). Any Person who purchases Products or Services from Manufacturer shall herein be referred to as “Customer”, and together with Manufacturer, the “Parties”, and each, a “Party”. These Terms are intended by the Parties as a final expression of their agreement with respect to the subject matter hereof, and shall supersede all previous understandings and agreements, both written and oral. These Terms prevail over any of the Customer’s general terms and conditions of purchase, regardless of whether the Customer submitted such terms. Fulfillment of Customer’s order does not constitute acceptance of any of Customer’s terms and conditions and does not serve to modify or amend these Terms. Notwithstanding anything herein to the contrary, if a written contract signed by both parties is in existence covering the sale of the Products and Services covered hereby, the terms and conditions of said contract shall prevail to the extent they are inconsistent with these Terms.

2.                  Scope of Work.  Except as otherwise provided herein, (a) these Terms shall expire two (2) years after the date of the most recent Sales Acknowledgment (unless terminated earlier in accordance with these Terms) (the “Contract Period”); and (b) during the Contract Period, Customer shall purchase Services from Manufacturer, and Manufacturer may accept a written order issued by Customer which includes the written specifications (including but not limited to drawings, schematics and bills of material) pursuant to which the Services shall be performed (the “Specifications”), requesting the Services from Manufacturer (the “Purchase Order”). If there is a conflict between these Terms and a Purchase Order, these Terms shall prevail, and any contrary terms contained in any Purchase Order or other request or communication made by Customer pertaining to the Services, and any attempt to modify, supersede, supplement or otherwise alter these Terms, will not modify these Terms or be binding on Manufacturer unless such terms have been fully approved in a Sales Acknowledgment.

3.                  Sales Acknowledgments.  Manufacturer will supply a written confirmation of Customer’s Purchase Order (the “Sales Acknowledgment”). Notwithstanding anything in these Terms, Manufacturer shall not be responsible for the Products (or the manufacture thereof) in any way unless such Products have been accepted in a Sales Acknowledgment. Customer makes an offer to purchase certain Services pursuant to these Terms, and on no other terms. Placement of a Purchase Order shall authorize Manufacturer to procure any items or materials necessary to manufacture the Products covered by such Purchase Order (including the raw materials, works in process, test and assembly fixtures, gauges, finished components, documentation (including test reports and the Specifications), and other equipment, tools and materials required for, or used by Manufacturer in connection with, the Services (the “Inventory”)). Customer is responsible for payment under these Terms for Inventory, materials and/or items purchased by Manufacturer under this Section 3. If Manufacturer has ordered or possesses any Inventory and there is any delay in connection with the Services that would cause the Delivery Date (as defined herein) to be delayed at least three (3) months, Customer shall immediately pay the cost of all Inventory, plus a fee equal to 15% of the cost of all Inventory to Manufacturer.

4.                  Price.  Customer shall pay Manufacturer for the Products and Services confirmed in a Sales Acknowledgment in the amount of United States (“U.S.”) Dollars set forth in the applicable Sales Acknowledgment (the “Price”). The Price does not include any and all future sales, income, and other taxes, levies, imposts, duties, deductions, charges, fees or withholdings imposed, withheld or assessed by any governmental authority, together with any interest or penalties imposed thereon (“Taxes”), insurance, freight, shipping, handling or other charges. Customer is solely responsible for, and shall pay all Taxes, insurance freight, shipping, handling or other charges. Customer agrees to pay all tooling costs and expenses that are unique to the assembly or testing of the Products including, but not limited to stencils, programming, PCB tooling, profile tooling, and fixtures

5.                  Delivery.  Unless otherwise agreed in writing by the Parties, Manufacturer shall deliver the Products to the location specified in the relevant Sales Acknowledgment (the “Delivery Point”) using Manufacturer’s standard methods for packaging and shipping. Customer shall be responsible for all unloading costs and shall provide equipment and labor suited for the receipt of the Products at the Delivery Point. Except as otherwise provided in these Terms, all sales are made “ex works” Manufacturer’s warehouse in Irving, Texas. The quantity of Products recorded by Manufacturer upon dispatch from Manufacturer’s place of business is conclusive evidence of the quantity received by Customer upon delivery thereof unless Customer provides conclusive evidence proving the contrary. If Manufacturer delivers to Customer (via any number of deliveries) up to 110% of the quantity of Products set forth in the Sales Acknowledgment (“Quantity”) or at least 90% of the Quantity, Customer shall not be entitled to reject any Product delivered because the quantity of Products delivered does not equal the Quantity. Customer shall pay the pro-rata Price for each unit of Products so delivered. Manufacturer shall not be liable for any non-delivery of Products (even if caused by Manufacturer’s negligence) unless Customer gives written notice to Manufacturer of the non-delivery within fourteen (14) days of the date when the Products would in the ordinary course of events have been received. Any liability of Manufacturer for non-delivery of the Products shall be limited to replacing the Products within a commercially reasonable time or adjusting the applicable invoice, to reflect the actual quantity of Products delivered.

(a)               Title and Risk of Loss.  Title and risk of loss to Products shipped under any Sales Acknowledgment pass to Customer upon Manufacturer’s tender of Products to the carrier. As collateral security for the payment of the Price, Customer hereby grants to Manufacturer a lien on and a security interest in and to all of the right, title and interest of Customer in, to and under the Products, wherever located, and whether now existing or hereafter arising or acquired from time to time, and in all accessions thereto and replacements or modifications thereof, as well as all proceeds (including insurance proceeds) of the foregoing. The security interest granted under this provision constitutes a purchase money security interest under the Texas Uniform Commercial Code.

(b)               Partial Shipment.  Manufacturer may, in its sole discretion, without liability or penalty, make partial shipments of Products to Customer. Each shipment will constitute a separate sale, and Customer shall pay for the quantity of Products shipped whether such shipment is in whole or partial fulfillment of the relevant Sales Acknowledgment.

(c)               Late or Impossible Delivery.  Any time quoted for delivery is an estimate only, provided, however, that Manufacturer shall use commercially reasonable efforts to deliver all Products on or before the delivery date set forth in a Sales Acknowledgment (the “Delivery Date”), which must be a calendar day, excluding Saturdays, Sundays and U.S. Federal holidays. If Manufacturer has delayed shipment of all or any Products for more than ninety (90) days after the Delivery Date and if such delay is not due to any action or inaction of Customer or otherwise excused in accordance with these Terms, Customer may, as its sole remedy therefor, cancel the portion of the related Purchase Order covering the delayed Products by giving Manufacturer written notice. Subject to Customer’s rights under this Section 5(c), no delay in the shipment or delivery of any Product relieves Customer of its obligations under these Terms, including accepting delivery of any remaining installment or other orders of Products. In the event that the Inventory necessary to fulfill Manufacturer’s Services is unavailable and prevents Manufacturer from meeting a Delivery Date, the Parties will amend the applicable Purchase Order and Sales Acknowledgment accordingly.

6.                  Inspection.  Customer shall inspect the Products as promptly as practicable, and always within the Warranty Period (as defined herein). A Product is “Defective” if it does not conform to the Warranty (as defined herein). Customer shall be deemed to have accepted the Products unless it notifies Manufacturer in writing within the Warranty Period that it deems that the Product received is Defective, stating with specificity all defects, and furnishing such other evidence as may be reasonably required by Manufacturer. All defects that are not specified in the writing described in the preceding sentence will be deemed waived by Customer, and such Products shall be deemed to have been accepted by Customer. Upon acceptance of each shipment of Products, Customer waives any right to revoke such acceptance for any reason, whether known or unknown at the time of acceptance. Customer shall have no right to reject any Product(s) based on any defect if such defect results from or was caused by a defect or deficiency in the Specifications and such Product(s) conform to the Specifications.

7.                  Consequences of Failed Delivery.  If for any reason Customer fails to accept delivery of any of the Products, or if Manufacturer is unable to deliver the Products at the Delivery Point on the Delivery Date because Customer has not provided appropriate instructions, documents, licenses or authorizations: (a) risk of loss for the Products shall immediately pass to Customer; (b) the Products shall be deemed to have been delivered; (c) Manufacturer, at its option, may store the Products until Customer picks them up; and (d) Customer shall be liable for all related costs and expenses including storage and insurance.

8.                  Rejection of Products.  A Product is “Properly Rejected” if Customer has complied with Section 6 and if Customer notifies Manufacturer of such rejection and receives a RMA number from Manufacturer and (a) the Product is Defective and Customer ships such Product, at Customer’s expense and risk of loss, to 1920 Hurd Drive, Irving, Texas 75038 or to such other location as Manufacturer may provide to Customer in writing; (b) the Product is a part of a shipment where less than 90% of the Quantity was delivered; or (c) in a shipment in which over 110% of the Quantity was delivered, the Product is in that portion of the Products delivered that exceeds 110% of the Quantity. If Customer fulfills all of its obligations in Section 6 and this Section 8, Manufacturer shall, in its sole discretion, either: (a) repair or replace such Properly Rejected Products; or (b) credit or refund to Customer the amount paid by Customer to Manufacturer for such Properly Rejected Products. If Manufacturer exercises its option to replace the Properly Rejected Products, Manufacturer shall ship to the Delivery Point, at Manufacturer’s expense and risk of loss, the replacement Products. THE REMEDIES SET FORTH IN SECTION 16 AND THIS SECTION 8 ARE CUSTOMER’S EXCLUSIVE REMEDY FOR PRODUCTS THAT ARE PROPERLY REJECTED OR DEFECTIVE. Customer shall not be obligated to pay for Properly Rejected Products. If Customer previously paid for Product(s) which are later Properly Rejected, Customer shall receive a credit which may be applied as an offset against any payment obligations to Manufacturer which are incurred in the future.

9.                  Limited Right of Return.  Except as otherwise set forth herein, Customer has no right to return Products to Manufacturer.

10.              Invoices.  Unless prepayment is required under another agreement between the Parties, Customer shall pay all invoiced amounts due to Manufacturer within thirty (30) days of the date of Manufacturer’s invoice. Customer shall make all payments hereunder by one or more of the following payment methods: check, MasterCard, VISA, Automated Clearing House, cash on delivery, cash in advance or wire transfer. Open account credit may be provided to Customer if so stated in the Sales Acknowledgment. All payments shall be made in U.S. Dollars. At any time, Manufacturer may require payment in advance of procuring Inventory for any Purchase Order. No action taken by Manufacturer related to this Section 10 (nor any failure of Manufacturer to act related to this Section 10) constitutes a waiver by Manufacturer of any of its rights and remedies under these Terms, including its right to enforce Customer’s obligation to make payments as required hereunder.

(a)               Excess Inventory.  Customer shall purchase all excess Inventory that Manufacturer has obtained or assembled solely to fulfill Purchase Orders (including non­cancellable, non-returnable Inventory) upon receipt of an invoice.

(b)               Fees.  Customer shall pay to Manufacturer (i) all costs incurred by Manufacturer in collecting any dishonored check; (ii) a fifty (50) dollar service charge for any dishonored check (in addition to all other sums owed under these Terms); and (iii) all costs incurred in collecting any late payments, including, without limitation, collection costs, court costs, and attorneys’ fees.

(c)               Interest Charges.  Customer shall pay interest on all late payments (whether during the Contract Period or after the expiration or earlier termination of these Terms), calculated daily and compounded monthly, at the lesser of the rate of 1.5% per month or the highest rate permissible under the laws of the State of Texas or the laws of the U.S., whichever laws allow the greater rate of interest, as such laws now exist or may be changed or amended or come into effect in the future. It is the intent of Manufacturer in the execution of these Terms and all other instruments now or hereafter related to these Terms to contract in strict compliance with applicable usury law.

(d)               Additional Consequences for Customer’s Failure to Pay.  In addition to all other remedies available under these Terms or at law or in equity (which Manufacturer does not waive by the exercise of any rights under these Terms), if Customer fails to pay any amounts when due, Manufacturer may (i) suspend the delivery of any Products; (ii) cancel any Sales Acknowledgment; or (iii) terminate these Terms pursuant to Section 21.

(e)               Withholding Prohibition.  Customer shall not withhold payment of any amounts to offset any claim or dispute with Manufacturer for any reason, including Manufacturer’s breach or bankruptcy.

11.              Confidential Information.  In connection with these Terms, a Party may disclose certain proprietary information and technology regarding itself (the “Disclosing Party”) or its business to the other Party (the “Receiving Party”). Such information shall hereinafter be referred to as the “Confidential Information.” The Parties agree that, except as otherwise set forth herein, the Receiving Party shall not disclose the Confidential Information and it shall use the same degree of care (but no less than a commercially reasonable degree of care) as it uses with respect to its own confidential and proprietary information. Confidential Information shall not include information that (a) was known or available to the Receiving Party before receipt from the Disclosing Party; (b) is or becomes publicly available through no fault of the Receiving Party in breach of this Section 11; (c) is rightfully received by or becomes available to the Receiving Party from a third party provided that, at the time of receipt, the Receiving Party did not know that the third party was under a duty of confidentiality with respect to such information; (d) is disclosed by the Disclosing Party to a third party without imposing a duty of confidentiality on the third party; (e) is independently developed by the Receiving Party; or (f) is disclosed by the Receiving Party with the Disclosing Party’s prior written approval. Notwithstanding anything in this Section 11, the Receiving Party may disclose Confidential Information to its partners, officers, employees, consultants, agents, affiliates, representatives, sources of capital and financing, auditors, or advisors (including but not limited to legal, financial or accounting advisors) (when used to describe the foregoing individuals for any Party, such individuals shall be “Representatives”). If the Receiving Party or any of its Representatives is requested or required in a judicial, legislative, or administrative investigation or proceeding, by a government, securities exchange or other regulatory agency to disclose Confidential Information, these Terms or any portion hereof, then the Receiving Party or its Representatives (a) may disclose the Confidential Information requested or required without violating these Terms; and (b) agree to give the Disclosing Party advance notice to the extent permitted by applicable law, and except in connection with a general examination of the Receiving Party unrelated to the Disclosing Party by a regulatory authority, so that the Disclosing Party may, at its sole cost, seek a protective order or otherwise contest the disclosure.

12.              Intellectual Property.  Customer acknowledges and agrees that (a) except to the extent provided in a separate written agreement between the Parties, Manufacturer (or its licensors) will retain all industrial and other intellectual property rights comprising or relating to:  (i) all patents (including all reissues, divisionals, provisionals, continuations and continuations-in-part, re-examinations, renewals, substitutions and extensions thereof), patent applications, and other patent rights and any other governmental authority-issued indicia of invention ownership (including inventor’s certificates, petty patents and patent utility models); (ii) all rights in and to U.S. and foreign trademarks, service marks, trade dress, trade names, brand names, logos, corporate names and domain names and other similar designations of source, sponsorship, association or origin, together with the goodwill symbolized by any of the foregoing, in each case whether registered or unregistered and including all registrations and applications for, and renewals or extensions of, such rights and all similar or equivalent rights or forms of protection in any part of the world; (iii) internet domain names, whether or not trademarks, registered by any authorized private registrar or governmental authority, web addresses, web pages, websites and URLs; (iv) works of authorship, expressions, designs and design registrations, whether or not copyrightable, including copyrights and copyrightable works, software and firmware, application programming interfaces, files, records, schematics, data, data files, and databases and other specifications and documentation; (v) all inventions, discoveries, trade secrets, business and technical information and know-how, databases, data collections, patent disclosures and other confidential and proprietary information and all rights therein; and all rights, interests and protections that are associated with, equivalent or similar to, or required for the exercise of, any of the foregoing, however arising, in each case whether registered or unregistered and including all registrations and applications for, and renewals or extensions of, such rights or forms of protection pursuant to the laws of any jurisdiction in any part of the world (“Intellectual Property Rights”) used to create, embodied in, used in and otherwise relating to the Products, and any of their component parts or any tools; (b) any and all any tools, reports, algorithms, databases, data collections, diagrams, domain names, inventions, methods and processes (whether or not patentable), know-how, brand identifiers, software (in any form, including source code and executable code), semiconductor chips, mask works and the like, all industrial and other intellectual property rights, proprietary information, protocols, schematics, specifications, techniques, interfaces, works of authorship, and all other forms of technology, and any associated past, present, and future rights whether or not registered with a governmental authority or embodied in any tangible form including Intellectual Property Rights and any and all intellectual property made available to Manufacturer by third parties (“Manufacturer Intellectual Property”) is the sole and exclusive property of Manufacturer or its licensors; (c) Customer shall not acquire any ownership interest in any of Manufacturer Intellectual Property under these Terms; (d) any goodwill derived from the use by Customer of Manufacturer Intellectual Property inures to the benefit of Manufacturer or its licensors, as the case may be; (e) if Customer acquires any Intellectual Property Rights in or relating to any product (including any Product) purchased under these Terms (including any rights in any trademarks, derivative works or patent improvements relating thereto), by operation of law, or otherwise, such rights are hereby irrevocably assigned to Manufacturer or its licensors, as the case may be, without further action by either Party; and (f) Customer shall use Manufacturer Intellectual Property only in accordance with these Terms and any instructions of Manufacturer. Customer shall not: (a) take any action that may interfere with any of Manufacturer’s rights in or to Manufacturer Intellectual Property, including Manufacturer’s ownership or exercise thereof; (b) challenge any right, title or interest of Manufacturer in or to Manufacturer Intellectual Property; (c) make any claim or take any action adverse to Manufacturer’s ownership of Manufacturer Intellectual Property; (d) register or apply for registrations, anywhere in the world, for Manufacturer’s trademarks or any other trademark that is similar to Manufacturer’s trademark or that incorporates Manufacturer trademarks; (e) use any mark, anywhere, that is confusingly similar to Manufacturer’s trademarks; (f) engage in any action that tends to disparage, dilute the value of, or reflect negatively on the products purchased under these Terms (including Products) or any Manufacturer trademark; (g) misappropriate any of Manufacturer trademarks for use as a domain name without prior written consent from Manufacturer; or (h) alter, obscure or remove any of Manufacturer trademarks or trademark or copyright notices or any other proprietary rights notices placed on the products purchased under these Terms (including Products), marketing materials or other materials that Manufacturer may provide.

13.              Export Compliance.  Manufacturer will provide Customer with certain Products and Services, pursuant to these Terms. The Products and Services are controlled under U.S. export control laws and sanctions programs. Customer agrees that it will not divert, transfer, or export any of the Products and Services contrary to U.S. export control laws and sanctions programs. Customer acknowledges that any change in end-use, end-user or country of end-use for Products and Services, may be prohibited by U.S. export control laws and sanctions programs. Customer shall not cause Manufacturer to enter into any transaction (a) with nationals or residents of any country subject to a sanctions program, whether now in existence or as may come into existence in the future, administered by the Office of Foreign Assets Control (“OFAC”) of the U.S. Department of Treasury; (b) in violation of export control, sanctions or boycott programs, now in existence or as may come into existence in the future, administered by the Department of Commerce, U.S. Bureau of Industry and Security, Department of State, Bureau of International Security and Non-proliferation and Directorate of Defense Trade Controls and the Department of the Treasury, OFAC; (c) with anyone on the lists maintained by these agencies and enforced by OFAC, as these lists, regulations, and laws may be amended from time to time, which lists are currently consolidated and can be found at http://export.gov/ecr/eg_main_023148.asp; or (d) that would violate the International Money Laundering Abatement and Anti-Terrorist Financing Act of 2001 (as it may be amended from time to time) and any regulations promulgated thereunder, or the U.S. Uniting and Strengthening America by Providing Appropriate Tools Required to Interrupt and Obstruct Terrorism Act of 2001. Customer acknowledges that Manufacturer and its affiliates are subject to the U.S. Foreign Corrupt Practices Act, as amended (the “FCPA”). Specifically, Customer represents, agrees, and acknowledges that neither it nor its Representatives nor anyone else acting directly or indirectly on behalf of or for Customer have, under any circumstances whatsoever, promised, offered or otherwise provided any kickbacks, fees, loans, gifts or anything of value, directly or indirectly, to any employee, agent or governmental official, officer or employee of a foreign government or anyone acting in an official capacity for a foreign government or any third party to obtain business. Customer acknowledges and agrees to promptly provide and prepare, upon request, all information or certifications that may be necessary, advisable or appropriate for Manufacturer and its parent entities, subsidiaries and its affiliates to demonstrate compliance with the FCPA (including any certifications that may be requested by Manufacturer). Customer acknowledges that it shall not take any action on behalf of, or for the benefit of, Manufacturer which would violate the FCPA. Customer acknowledges that (a) its failure to provide any such information or certification; or (b) any act which may be reasonably deemed by Manufacturer to cause Manufacturer or its affiliates to violate the FCPA, shall constitute an immediate and un-curable basis for termination of these Terms.

14.              Limited Product Warranty.  Manufacturer warrants to Customer that: FOR A PERIOD OF ONE (1) YEAR (THE “WARRANTY PERIOD”), ALL PRODUCTS WILL MATERIALLY CONFORM TO THE SPECIFICATIONS (THE “WARRANTY”) UNLESS OTHERWISE STATED IN A WRITTEN AGREEMENT BETWEEN THE PARTIES. MANUFACTURER MAKES NO EXPRESS OR IMPLIED WARRANTIES OR REPRESENTATIONS WITH RESPECT TO ANY PRODUCT OR THE SERVICES (IN THESE TERMS OR ELSEWHERE, INCLUDING MARKETING MATERIALS OR OTHER LITERATURE). MANUFACTURER EXPRESSLY DISCLAIMS ALL WARRANTIES OF ANY KIND, EXPRESS, IMPLIED, STATUTORY OR OTHERWISE, INCLUDING BUT NOT LIMITED TO, IMPLIED WARRANTIES OF MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE, TITLE, NON-INFRINGEMENT OR PERFORMANCE OF PRODUCTS TO STANDARDS SPECIFIC TO THE COUNTRY OF IMPORT. CUSTOMER ACKNOWLEDGES THAT IT HAS NOT RELIED UPON ANY REPRESENTATION OR WARRANTY MADE BY MANUFACTURER, OR ANY OTHER PERSON ON MANUFACTURER’S BEHALF, EXCEPT AS SPECIFICALLY PROVIDED IN THIS SECTION 14. The Warranty does not apply to any Product and any Product is not Defective if: (a) it has been subjected to abuse, misuse, neglect, negligence, accident, improper testing, improper installation, improper storage, improper handling, improper commissioning, improper maintenance, abnormal physical stress, abnormal environmental conditions or use contrary to any instructions issued by or on behalf of Manufacturer; (b) it has been reconstructed, repaired or altered by Persons other than Manufacturer or its authorized Representatives; (c) it has been used with any third party products or hardware that has not been previously approved in writing by Manufacturer; (d) any other Person used it after Customer gave the Defect Notice (as defined herein); (e) it contains a defect relating to its design, including component tolerance stack up, timing tolerances and specified materials; (f) it contains a defect that arose post assembly during any shipping, handling or conversion processes; or (g) it is Defective due to any act, inaction or item beyond the Manufacturer’s control. Manufacturer shall not be responsible for any damages related to the foregoing clauses in this Section 14.

15.              Limitations of Warranty.  Customer acknowledges that the Products purchased by Customer under these Terms may contain, be contained in, incorporated into, attached to or packaged together with products manufactured by third parties, and that such Products (a) are not covered by the Warranty; and (b) cannot be Defective. For the avoidance of doubt, Manufacturer makes no representations or warranties with respect to any of the Products described in the preceding sentence. Manufacturer shall not be liable for a breach of any warranty set forth herein unless: (a) Customer gives written notice of the purported defect, reasonably described, to Manufacturer (the “Defect Notice”) within seven (7) days of the time when Customer discovers or ought to have discovered the defect (but in any event before the expiration of the applicable Warranty Period); (b) Customer ships (at its expense and risk of loss) any allegedly Defective Products to 1920 Hurd Drive, Irving, Texas 75038 for inspection and testing by Manufacturer; (c) Manufacturer is given a commercially reasonable opportunity after receiving and the Defective Products to examine such Products; and (d) Manufacturer verifies Customer’s claim that the Products are Defective.

16.              Customer’s Exclusive Remedy for Defective Products.  Subject to Section 14 and Section 15, if Manufacturer’s inspection and testing reveals, to Manufacturer’s satisfaction, that any quantity of delivered Products are Defective, Manufacturer shall, in its sole discretion, either: (a) repair or replace such Defective Products; or (b) credit or refund the amount paid by Customer to Manufacturer for such Defective Products, provided that if Manufacturer so requests, Customer shall, at Manufacturer’s expense, return such Products to Manufacturer. SUBJECT TO SECTION 17, THE REMEDIES SET FORTH IN SECTION 8 AND THIS SECTION 16 SHALL BE CUSTOMER’S SOLE AND EXCLUSIVE REMEDY AND MANUFACTURER’S ENTIRE LIABILITY FOR ANY BREACH OF THE LIMITED WARRANTY SET FORTH IN SECTION 14. Customer’s remedy under this Section 16 is conditioned upon Customer’s compliance with its obligations described in Section 15. Customer has no right to return for repair, replacement, credit or refund any Product except as set forth in this Section 16 (or if otherwise applicable, Section 8 or Section 17). In no event shall Customer reconstruct, repair, alter or replace any Product, in whole or in part, either by itself or by or through any third party.

17.              Withdrawal of Products.  If Manufacturer determines that any Products sold to Customer may be Defective, at Manufacturer’s request, Customer shall withdraw all similar Products from sale and use and, at Manufacturer’s option, either return such Products to Manufacturer (pursuant to Section 15) or destroy the Products and provide Manufacturer with written certification of such destruction. Notwithstanding the limitations of Section 16, if (a) Customer returns all withdrawn Products or destroys all withdrawn Products pursuant to Manufacturer’s instructions and provides Manufacturer with written certification of such destruction within thirty (30) days following Manufacturer’s withdrawal request; and (b) any such defect has not been caused or contributed to by any of the factors described under Section 14(a)-(g), then Manufacturer may repair or replace any such returned Products pursuant to Section 16. THIS SECTION 17 SETS FORTH CUSTOMER’S SOLE REMEDY AND MANUFACTURER’S ENTIRE LIABILITY FOR ANY PRODUCTS THAT ARE WITHDRAWN PURSUANT TO THIS SECTION 17.

18.              Notice Relating to Customer’s Performance.  Within ten (10) days after receipt thereof, Customer will advise Manufacturer of Customer’s receipt of any oral or written notice from a third party that arises out of, directly relates to or affects Customer’s performance of these Terms (other than communications made in the ordinary course of business), including: (a) any claim, action, cause of action, demand, lawsuit, arbitration, inquiry, notice of violation, proceeding, litigation, citation, summons, subpoena or investigation of any nature (civil, criminal, administrative, regulatory or otherwise, whether at law, in equity or otherwise) (collectively, “Action”), warning, citation, or indictment, that is issued, instituted or made by any governmental agency that could adversely impact the Services or the manufacture or delivery of the Product; (b) revocation of any license, distribution agreement or permit or other document issued to Customer; or (c) any Action against or related to Customer that may reasonably be expected to impair the obligations of Customer under these Terms.

19.              Insurance.  Customer shall, at its own expense, maintain and carry insurance in full force and effect which includes, but is not limited to, commercial general liability (including product liability) with financially sound and reputable insurers. Upon Manufacturer’s request, Customer shall provide Manufacturer with a certificate of insurance from Customer’s insurer evidencing the insurance coverage specified in these Terms. The certificate of insurance shall name Manufacturer as an additional insured. Customer shall provide Manufacturer with thirty (30) days’ advance written notice in the event of a cancellation or material change in Customer’s insurance policy. Except where prohibited by law, Customer shall require its insurer to waive all rights of subrogation against Manufacturer’s insurers and Manufacturer.

20.              Limitation on Liability.  Neither Manufacturer nor any of its Representatives shall be liable, for damages or otherwise, to Customer or to any of its Representatives for any error of judgment or other act or omission performed or omitted in respect of these Terms regardless of (a) whether such damages were foreseeable; (b) whether or not Customer was advised of the possibility of such damages; and (c) the legal or equitable theory (contract, tort or otherwise) upon which the Action is based. MANUFACTURER AND ITS REPRESENTATIVES SHALL NOT BE LIABLE FOR ANY INCIDENTAL, SPECIAL, CONSEQUENTIAL OR PUNITIVE DAMAGES UNDER THESE TERMS. In the event that Manufacturer assists Customer in obtaining or negotiating for third party products or services, Customer understands and agrees that Manufacturer has no responsibility for and will be in no way liable for any Actions or damages arising in connection with Customer’s use of such products or services, or any vendor’s or provider’s performance of services. IN NO EVENT SHALL MANUFACTURER’S AGGREGATE LIABILITY ARISING OUT OF OR RELATED TO THESE TERMS, WHETHER ARISING OUT OF OR RELATED TO BREACH OF CONTRACT, TORT (INCLUDING NEGLIGENCE) OR OTHERWISE, EXCEED THE AMOUNTS PAID TO MANUFACTURER FOR PRODUCTS AND SERVICES (NOT EXPENSES) UNDER THE PURCHASE ORDER UNDER WHICH THE ACTION ARISES (OR IF NONE, THE LAST PURCHASE ORDER PERFORMED BY MANUFACTURER PRIOR TO THE ACTION). WITHOUT LIMITING THE GENERALITY OF THE FOREGOING, CUSTOMER ASSUMES ALL RISK AND LIABILITY FOR THE RESULTS OBTAINED BY THE USE OF ANY PRODUCTS, WHETHER IN TERMS OF OPERATING COSTS, GENERAL EFFECTIVENESS, SUCCESS OR FAILURE, AND REGARDLESS OF ANY ORAL OR WRITTEN STATEMENTS MADE BY MANUFACTURER RELATED TO THE USE OF THE PRODUCTS.

21.              Termination.  Manufacturer may terminate these Terms, by providing written notice to Customer, which shall be effective on the date set forth in such notice, if Customer: (a) elects to close or dissolve its business or fails to pay any amount when due under these Terms; (b) has not otherwise performed or complied with these Terms, in whole or in part; (c) becomes insolvent, files a petition for bankruptcy (or has one filed on its behalf) or commences or has commenced against it proceedings relating to bankruptcy, receivership, reorganization or assignment for the benefit of creditors; (d) or Manufacturer learns that a law, regulation, order or Action is promulgated, enacted, issued or commenced halting or making illegal in the U.S. the performance of the Services or the manufacture, sale, marketing or distribution of the Products, or the component parts, materials or supplies which are incorporated into the Products; (e) engages in any act or omission that constitutes a material violation of applicable law or that would cause Manufacturer to be in violation of applicable law; or (f) or Manufacturer terminates any other agreement between Manufacturer and Customer or Customer’s affiliates.

22.              Effects of Expiration/Termination.  Upon the expiration or termination of these Terms, Customer shall immediately be responsible for: (a) payment for all indebtedness to Manufacturer under these Terms or otherwise; (b) payment for all Purchase Orders placed by Customer prior to such termination that are actually fulfilled by Manufacturer; (c) reimbursement of Manufacturer’s costs pursuant to Section 3; and (d) reimbursement for any out-of-pocket expenses incurred by Manufacturer (including the purchase of Inventory) prior to such termination in connection with the development and creation of the Products plus a 15% penalty charge. Manufacturer may (in its sole discretion) charge Customer a fee equal to 2% of the expenses described in provision (d) above each month or part thereof that Customer fails to pay its obligations under this Section 22, or accepts the Products and Inventory. Except as otherwise set forth herein, the Party terminating these Terms, shall not be liable to the other Party for any damage of any kind (whether direct or indirect) incurred by the other Party by reason of the expiration or termination of these Terms. Termination of these Terms will not constitute a waiver of either Party’s rights, remedies or defenses under these Terms, at law, in equity or otherwise. Any termination of these Terms operates as a cancellation of any deliveries of Products that are scheduled to be made subsequent to such termination. However, Customer’s obligation to make payment for Products, Services or Inventory manufactured or obtained hereunder shall survive termination of these Terms. Notwithstanding the foregoing, (a) Manufacturer may delay shipping the Products until it has received full payment therefor; and (b) if termination is a result of Customer’s failure to pay the amounts owed hereunder, Manufacturer may demand assurances of payment, including prepayment. With respect to Products that are in transit on the date of termination, Manufacturer may require, in its sole discretion, that all sales and deliveries of such Products be made on either a cash-only or certified-check basis. Upon expiration or termination of these Terms, Customer shall promptly return to Manufacturer any and all of the Confidential Information of Manufacturer and all other documents and materials of which Manufacturer is the legal owner (including all such materials furnished or disclosed by Customer to any third party) (the “Manufacturer’s Confidential Materials”) and destroy any notes or other materials that are derivative of or developed from any of the Manufacturer’s Confidential Materials. Customer covenants that to the extent it furnishes or discloses any Manufacturer’s Confidential Materials to any third party, it shall require that all such materials be returned to Manufacturer upon expiration or termination of these Terms and that the third parties destroy any notes or other materials that are derivative of or developed from any of the Manufacturer’s Confidential Materials.

23.              Right to Manufacture Competitive Products.  These Terms shall not be construed to limit Manufacturer’s right to manufacture or sell any products or provide any services. Manufacturer shall be permitted to manufacture and sell products similar to the Products to any Person and to provide services similar to the Services to any Person without obligation or liability to Customer.

24.              Notice.  All notices and other communications hereunder shall be deemed given when addressed to the appropriate Party at its address set forth in the Sales Acknowledgment or to such other address as a Party has given to the other Party in writing, and when (a) delivered personally; (b) sent by electronic mail or facsimile, if receipt of such transmission is confirmed in writing; or (c) one (1) day after it was sent by Federal Express or other nationally recognized overnight courier service (receipt requested).

25.              Force Majeure.  Manufacturer shall not be liable or responsible to Customer, or be deemed to have defaulted or breached these Terms for any failure or delay in fulfilling or performing these Terms when and to the extent such failure or delay is caused by or results from acts or circumstances beyond the reasonable control of Manufacturer including, without limitation, acts of God, flood, weather conditions, fire, earthquake, explosion, governmental actions, war, invasion or hostilities, terrorist threats or acts, riot, civil unrest, quarantine restrictions, national emergency, revolution, insurrection, epidemic, unforeseen circumstances, computer interruptions, lockouts, strikes or other labor disputes (whether or not related to either Party’s workforce), restraints or delays affecting carriers, inability or delay in obtaining adequate materials, or product allocations, material shortages, materials or telecommunication breakdown, power outage or similar events, or restrictions of any federal, state or local government or agency. In the event of any of the foregoing occurrences, Manufacturer shall have the right (in its sole discretion) to allocate the Products and Inventory among third parties, including potential purchasers, or to delay or cancel any Service which is affected by such occurrence.

26.              Modification of these Terms.  Only a writing signed by both Parties hereto can modify these Terms. Manufacturer may, from time to time, change the Services without the consent of Customer provided that such changes do not materially affect the nature or scope of the Services, or the fees or any performance dates set forth in the Sales Acknowledgment.

27.              Assignment.  Customer shall not assign its rights or obligations under these Terms without the written consent of Manufacturer, except that either Party shall be permitted to assign these Terms to any unaffiliated third party formed under the laws of any State of the U.S. with which it may merge or consolidate, or to which it may transfer all or substantially all of its assets or business, subject to the third party or successor entity, as applicable, assuming all liabilities and obligations of the assignor under these Terms.

28.              Independent Contractors.  The relationship between the Parties is that of independent contractors. Nothing contained in these Terms shall be construed as creating any agency, partnership, joint venture or other form of joint enterprise, employment or fiduciary relationship between the Parties, and neither Party shall have authority to contract for or bind the other Party in any manner whatsoever.

29.              Governing Law and Jurisdiction.  These Terms shall be governed by, and construed in accordance with, the laws of the State of Texas, without giving effect to the conflict of law provisions thereof. Any dispute arising under or in connection with these Terms shall be resolved exclusively by a court of competent jurisdiction in Dallas County, Texas and both Parties hereby irrevocably submit to the personal jurisdiction of, and irrevocably consent to venue in, the state and federal courts in Dallas County, Texas.

30.              Waiver of Jury Trial.  Each Party acknowledges and agrees that any controversy that may arise under these Terms is likely to involve complicated and difficult issues and, therefore, each Party irrevocably and unconditionally waives any right it may have to a trial by jury with respect to any Action arising out of or relating to these Terms or the transactions contemplated hereby.

31.              Severability.  If any provision of these Terms is invalid, illegal or unenforceable in any jurisdiction, such invalidity, illegality or unenforceability shall not affect any other provision of these Terms or invalidate or render unenforceable such provision in any other jurisdiction; provided, however, that if any fundamental provision of these Terms is invalid, illegal or unenforceable, the remainder of these Terms is unenforceable. Upon a determination that any provision is invalid, illegal or unenforceable, the Parties shall negotiate in good faith to modify these Terms to affect the original intent of the Parties.

32.              Survival.  The provisions of these Terms relating to insurance, governing law, jurisdiction, compliance with laws, Confidential Information, intellectual property, as well as any other provision that expressly contemplates performance following expiration or termination, or in order to give proper effect to its intent, should survive such expiration or termination, shall survive the expiration or earlier termination of these Terms for the period specified therein, or if nothing is specified, for a period of twelve (12) months after such expiration or termination. Notwithstanding any right under any applicable statute of limitations to bring an Action, no Action based upon or arising in any way out of these Terms may be brought by either Party after the expiration of the applicable survival or other period set forth in this Section 32 and the Parties waive the right to file any Action after the expiration of the applicable survival or other period; provided, however, that the foregoing waiver and limitation do not apply to the collection of any amounts due to Manufacturer under these Terms.

33.              Waiver.  No waiver by Manufacturer of any of the provisions of these Terms is effective unless it is explicitly set forth in writing and signed by Manufacturer. None of the following constitutes a waiver or estoppel of any right, remedy, power, privilege or condition arising from these Terms: (a) any failure or delay in exercising any right, remedy, power or privilege or in enforcing any condition under these Terms; or (b) any act, omission or course of dealing between the Parties. No single or partial exercise of any right, remedy, power or privilege hereunder precludes any other or further exercise thereof or the exercise of any other right, remedy, power or privilege. Any waiver authorized on one occasion is effective only in that instance and only for the purpose stated, and does not operate as a waiver on any future occasion.

34.              No Third-Party Beneficiaries.  These Terms benefit solely the Parties and their respective permitted successors and permitted assigns and nothing in these Terms, express or implied, confers on any other Person any legal or equitable right, benefit or remedy of any nature whatsoever under or by reason of these Terms.