1. Risk of Loss. Unless otherwise specifically agreed to in writing by the NPI, all sales made hereunder shall be FOB NPI’s factory and title to products priced FOB NPI’s factory shall pass to Customer upon delivery at such shipping point.
2. Price. . All prices are based on shipments made FOB NPI’s factory. Price quotations shall remain in effect for the period of time specified in the quotation, but if no such time period is specified, billing shall be based on prices in effect at the time of shipment. Any other provisions notwithstanding, pricing for components and third party services and materials are subject to change without notice and billing will be based on prices in effect at the time of shipment. Unless specifically included in the price quotation, such quotations will not include supplying pre-production or evaluation samples or supplying test data of any kind.
3. Payment. Payment terms are net thirty (30) days unless otherwise specified. A one percent (1%) administrative late fee will be added for every month or part of a month that the amount due remains unpaid after its due date.
4. Delivery. NPI shall use its best efforts to make deliveries in the quantities and at the times specified in this order. Unless the Customer specifies shipping instructions, shipment and delivery will be made by the carrier and in the manner designated by the NPI. NPI shall not be liable for delays or defaults in deliveries due to causes beyond NPI’s control and without its fault or negligence.
5. Inspection. Customer shall perform incoming inspection and testing to monitor the quality of the products shipped hereunder. Customer may reject those products that do not meet specifications pursuant to section 6, provided that any such inspection or testing shall be performed by the Customer, and notice of rejection shall be served upon NPI within 30 days after delivery. Customer’s failure to provide timely notice of alleged defect as specified herein shall result in a waiver of Customer’s right to rejection.
6. Express Warranty. (a) NPI warrants that the Products will conform to Customer’s applicable specifications and will be free from defects in workmanship for a period of thirty (30) days from the date of shipment. Material and services purchased by NPI will be warranted per the terms offered by the Supplier; however, material warranty does not apply to material consigned by Customer to NPI. This express warranty does not apply to design defects or product failures resulting from Customer’s specifications or Product that has been abused, damaged, altered, or misused by any person, entity or cause other than NPI. (b) Notwithstanding anything else in this Agreement, NPI assumes no liability for, or obligation related to, the Product’s performance, accuracy, adequacy for use, or defects that are due to Customer supplied materials, test fixtures, designs, files or instructions, and Customer shall be liable for costs or expenses incurred by NPI related thereto. (c) Upon any failure of a Product to comply with the applicable warranties, NPI’s sole obligation, and Customer’s sole remedy, is for NPI, at its option, to promptly repair or replace such unit and return it to Customer freight prepaid. To the fullest allowed by law, NPI and its third party suppliers of services and materials shall not be liable for any incidental or consequential damages, damages or loss of any nature whatsoever relating to lost profits, business interruption or indirect, special or punitive damages arising out of or related in any way to this Agreement or either party’s performance or failure to perform hereunder. The Customer shall return Products covered by the warranty freight prepaid after completing a failure report and obtaining a Return Material Authorization (“RMA”) number from NPI to be displayed on the shipping container. (d) The warranties outlined in this Agreement are for the benefit of Customer only and are not assignable. (e) NPI MAKES NO OTHER WARRANTIES OR CONDITIONS ON THE PRODUCTS, EXPRESS, IMPLIED, STATUTORY, OR IN ANY OTHER PROVISION OF THIS AGREEMENT OR COMMUNICATION WITH CUSTOMER. NPI FURTHER SPECIFICALLY DISCLAIMS ANY IMPLIED WARRANTY OR WARRANTY OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE.
7. Product Liability. (a) Customer agrees to defend, indemnify and hold harmless NPI from any claim, action, loss, damage or injury, including death, or costs or expenses (including reasonable attorney fees) which arises from any alleged or actual defect in design, workmanship, or materials of any Products or the use thereof, and any failure to warn of any foreseeable use, improper use, misuse or defect of any Products. Customer shall maintain adequate policies of insurance, with limits approved by NPI, for product liability (including the manufacturing thereof) and contractual liability and shall name NPI as an additional insured thereunder. Said policy shall provide NPI with a minimum thirty (30) days’ notification prior to cancellation or reduction in coverage. A copy of the policy shall be delivered to NPI upon execution of this Agreement. Customer will also provide NPI copies of all renewals and extensions thereof, within ten (10) days’ issuance thereof. (b) In the event of any litigation, suit or other proceedings relating to or concerning any Products, NPI shall have the right to seek, and have the Customer pay, for separate counsel for NPI. Further, no settlements may be reached in any litigation, suit or other proceedings unless and until NPI, through its President, General Manager or General Counsel approves such settlements in writing.
8. Patents, Copyrights, Trade Secrets, Other Proprietary Rights. Customer shall defend, indemnify, and hold harmless NPI from all claims, costs, damages, judgments, and attorney fees resulting from or arising out of any alleged and/or actual infringement or other violation of any patents, patent rights, trademarks, trademark rights, trade names, trade name rights, copyrights, trade secrets, designs, proprietary rights and processes, or other intellectual property rights (“Intellectual Property rights”) in connection with the performance by NPI of its obligations under this Agreement. NPI shall promptly notify Customer in writing of the initiation of any such claims. In the event of any litigation, suit or other proceedings relating to or concerning Intellectual Property rights, NPI shall have the right to seek, and have the Customer pay, for separate counsel representing the interests of NPI. Further, any and all settlements regarding Intellectual Property rights shall be approved in writing by NPI’s President, General Manager or General Counsel before such settlements are reached.
9. Termination. (a) Customer may cancel any portion of an accepted purchase order at any time by providing written notice to NPI no later than five (5) working days before delivery. Upon any cancellation, NPI will take the necessary actions to implement the cancellation pursuant to Section (c) in addition to any other right or remedy available to NPI under the Agreement herein and common and statutory or other laws. (b) If there is a material breach of contract, or anticipatory material breach of contract by Customer, due to the failure of the Customer to pay NPI on a timely basis for any invoice or other payment due to NPI, or any other reason, NPI shall have the right and/or remedy as identified in Section (c), in addition to any other right or remedy available to NPI under the Agreement and common and statutory or other laws. (c) In the event of a Customer’s cancellation, material breach, or anticipatory breach of contract, NPI, shall have the immediate right to invoice, terminate further performance and seek recovery from, Customer to pay NPI for all Products and Inventory as follows: (i) 100% of the contract price (inclusive of labor, overhead, and profit) for all finished Products in NPI’ possession, (ii) 110% of the cost of all Inventory on order and not cancelable, and (iii) any third party cancellation charges. NPI will use reasonable commercial efforts to return unused Inventory and to cancel pending orders. Customer will be entitled to take delivery of all Products and Inventory to be paid for by Customer under this section, after NPI’ receipt of payment therefor.
10. Force Majeure. Neither NPI nor Customer shall be liable to the other for default or delay in delivering or accepting goods hereunder if caused by an Act of God, war, mobilization, riot, strike, embargo, shortage of utility, facility, material or labor, delay in transportation, breakdown or accident, or compliance with or action taken to carry out the extent or purpose of any law or regulation. When either NPI or Customer claims an excuse for non-performance under this paragraph, it must give notice in writing to the other party. Subject to section 9 above, should such inability to perform continue for a period in excess of sixty (60) days, either party may terminate further performance hereunder upon reasonable notice.
11. Changes. Customer may request in writing that NPI incorporate an Engineering Change into the Product. Such request will include a description of the proposed change sufficient to permit NPI to evaluate its feasibility. NPI will reply to the Engineering Change by outlining any impact on delivery schedule and expected cost. NPI will not be obligated to proceed with the Engineering Change until the Customer provides written acknowledgment of the proposed price and schedule impact, and authorizing NPI to implement the change with price modifications resulting from such changes, and related payment terms will be in accordance with section 9 above.
12. Sales and Other Taxes. The purchase price does not include sales, use, excise or other taxes Consequently, in addition to the purchase price specified herein, the amount of any present or future sales, use, excise or other tax applicable to the sale of products sold hereunder or the use of such products by the Customer shall be paid by the Customer or, in lieu thereof, the Customer shall furnish NPI with a tax exemption certificate acceptable to the appropriate taxing authority.
13. General.
13.1 Notice. Any notice or other communication required or permitted hereunder shall be in writing and shall be deemed to have been given when personally delivered, or when placed in the United States mail, registered or certified, return receipt requested, postage prepaid, and properly addressed to receiving party.

13.2 Relationship Created. It is agreed that for all purposes Customer shall be NPI’s customer. Neither this Agreement nor any act undertaken or omission allowed by either party shall be construed as creating a partnership, joint venture, principal-agent, co-proprietor arrangement or any other relationship of any type or nature whatsoever.

13.3 Entire Agreement. This Agreement constitutes the entire Agreement between the parties pertaining to the subject matter hereof and supersedes all prior or contemporaneous agreement, understandings, negotiations and discussions, whether oral or written, in connection with this subject matter hereof. No supplements or modifications or waivers or terminations of said Agreement shall be binding unless executed in writing by the party to be bound. No waiver of any provisions of the Agreement shall be deemed or shall constitute a waiver of any other provisions (whether or not similar), nor shall such waiver constitute a continuing waiver unless otherwise expressly provided in writing.

13.4 Severability. In case any one or more of the provisions contained in this Agreement shall be held invalid, illegal or unenforceable in any respect, the validity, legality and enforceability of the remaining provisions shall not in any way be effected or impaired thereby.

13.5 Binding on Successors. All of the terms and provisions of this Agreement shall be binding upon and shall insure to the benefit of the parties hereto, their assigns, heirs, administrators, executors or successors.

13.6 Arbitration. The Parties agree that any dispute or controversy arising out of or pertaining to any interpretations, construction, performance or breach of this Agreement, shall be settled by binding arbitration in accordance with California Code of Civil Procedure section 1280, et seq., before the Judicial Arbitration and Mediation Services, Inc. (“JAMS”) located in Orange, California. JAMS rules then in effect shall not apply to any such arbitration absent the Parties’ mutual consent. The decision of the arbitrator shall be final, conclusive and binding on the Parties to the greatest extent allowed by law.

13.7 Attorney’s Fees. In the event any party shall commence legal proceedings against the other to enforce the terms hereof, or to declare rights hereunder, as the result of a breach of any covenant or condition of this Agreement, the prevailing party in any such proceeding shall be entitled to recover from the losing party all damages, including without limitation its costs of suit and collection, and all attorney’s fees incurred in connection therewith.

13.8 Governing Law. The execution, validity, construction and performance of this Agreement shall be construed and enforced in accordance with the laws of the State of California.

This Agreement last executed and came into existence and is to be performed in Orange County, California.
NPI Services, Inc.Terms and Conditions of Sale

QD137 Rev. 3.0