TERMS AND CONDITIONS OF PURCHASE ORDERS

EODT TECHNOLOGY, INC.

(June 1, 2009)

1.                  DEFINITIONS

A. “EODT” means EOD Technology, Inc. and its affiliates acting through its or their duly authorized representative.

B. “Seller” means the individual, partnership, corporation or association contracting to furnish the articles to be furnished.

C.  “Terms and Conditions” means this document. 

D. “Order” means any Purchase Order or Order of EODT that references this document as: Terms and Conditions of Purchase Orders, EODT’s Standard Terms and Conditions, Terms and Conditions of Purchase, or any variation thereof.  As a result Seller shall be bound by this document.

E. “Articles” means the goods, products, supplies, parts, assemblies, technical data, drawings, services, work, or other items constituting the subject matter of this Order which are to be furnished by Seller to EODT hereunder and includes, without limitation, raw materials, components, and intermediate assemblies of such articles.

2.                  ACCEPTANCE AND MODIFICATION OF AGREEMENT – This Order becomes a binding contract subject to the terms and conditions hereof when accepted by written acknowledgement thereof or commencement of work hereunder. Any additional or different terms contained in Seller’s acknowledgement, invoice, shipping papers, or other documents relating to this Order are, in the event that the Seller accepts this Order, whether by acknowledgement or commencement of performance hereof, deemed null, void and of no effect with respect to the contract so arising. Any modification of this Order must be authorized in writing and signed by EODT’s authorized representative in order to be valid. Payment for articles hereunder prior to inspection and acceptance shall not constitute an acceptance thereof, nor will any acceptance affect Seller’s responsibility for defects or failure to comply with the terms and conditions of this Order.

3.                  PRICES – All articles shipped pursuant to this Order are purchased at prices specified herein. If price is not stated in this Order, it is agreed that Seller’s billing shall be at the price last quoted or the prevailing market rate, whichever is lower. EODT shall receive the benefit of any general price reduction in the articles covered by this Order that may be made by Seller during the term hereof.

4.                  DELIVERY – It is agreed that time is of the essence of this Order, and Seller shall pay all excess shipping charges made necessary by delays within Seller’s reasonable control.

5.                  INSURANCE – Seller shall maintain throughout performance hereof, at its own expense, Worker’s Compensation, Commercial General Liability, Automobile Liability, and Professional Liability (if applicable) insurance as follows:

Seller agrees to furnish, upon EODT’s request, the insurance carrier’s certificate evidencing the aforementioned minimum cancellation period of thirty (30) days.  The purchase of such insurance or the furnishing of such insurance certificate shall not be a satisfaction of Seller’s liability hereunder or in any way modify Seller’s indemnification of EODT or its Client.

6.                  INVOICING AND PAYMENT – Seller shall submit a separate invoice for each shipment made in fulfilling this order. Each invoice must reference: EODT purchase order number, release or charge order number, if applicable, quantity delivered, quantity backordered, net unit price, extend price, total amount due, date delivered, and EODT representative. Payment will only be made by EODT upon acceptance of articles and receipt of a valid invoice containing aforementioned data. Payment due dates, including discount periods, will be computed from date of receipt of valid invoice to the date EODT remittance is mailed. Discounts, if applicable, will be taken on the total amount of invoice unless freight and other charges are itemized separately. Terms of payment shall be as specified on the Order.  In the even terms of payment are not specified, Net 30 days will be the applicable terms of payment.

7.                  PACKING – No packing or boxing charges of any kind shall be paid by EODT without its prior written consent.

8.                  TRANSPORTATION/RISK OF LOSS – Transportation of articles purchased hereunder will be F.O.B. – Destination unless otherwise specified on the Order. Transportation charges on articles covered herein shall be prepaid in all cases. No transportation, freight or insurance costs shall be payable to EODT unless authorized in writing. Risk of loss of articles hereunder shall remain with Seller until final acceptance by EODT.

9.                  WARRANTY – Seller warrants that all articles delivered pursuant to this Order will have been produced, sold, and delivered in compliance with all applicable Federal, State and Local and / or Municipal laws including specifically all applicable Uniform Commercial Codes, rules, ordinances, and regulations. Seller further warrants that all articles furnished under shall be of merchantable quality, fit for the particular purpose intended, free from defects in material and workmanship and will conform to the applicable drawings, specifications, samples or descriptions provided by EODT. EODT’s approval of designs furnished by Seller shall not relieve Seller of its obligations hereunder. Seller warrants that any service provided will conform to all applicable specifications or descriptions furnished by EODT, and if the Seller is responsible for specifying the type of service procured, Seller warrants that such services shall be fit and sufficient for the purposes intended by EODT. The warranties of Seller, together with service guarantees, shall survive inspections, tests and acceptance, and shall extend to EODT and / or EODT’s client.

8.                  INSPECTION – EODT and EODT’s Client may, at any time by prior appointment inspect Seller’s facilities which will or may be used in the performance of this Order, and at any time and place before, during, or after manufacture or completion may inspect and test all material and workmanship entering into the performance of this Order. No such inspection or test shall in any way relieve Seller if its obligations to furnish all articles in strict compliance with the terms and conditions of this Order. If inspection and test is made on the premises of Seller or any of its Suppliers, Seller shall furnish, or cause to be furnished, without additional charge, all reasonable facilities and assistance for the safety and convince of the Inspectors in the performance of their duties. All inspections and tests shall be performed in such a manner as to not unduly delay the work. All articles, materials or services are subject to final inspection and acceptance, notwithstanding any payments or prior inspections and acceptance, and shall extend to EODT and / or EODT’s Client.

9.                  REJECTIONS – If any of the articles provided hereunder are found to be defective in material or workmanship or otherwise not in conformity with the requirements of this Order at any time within (24) months after delivery, EODT, in addition to any other legal rights which it may have under warranties or otherwise, shall have the right to reject and return such articles at Seller’s expense and require that such articles be corrected or replaced promptly with satisfactory materials or workmanship, all at Seller’s expense. If EODT so rejects articles or if Seller when requested by EODT fails to proceed promptly with the replacement or correction thereof, EODT may terminate this Order for default or may replace or correct such articles and, in either event, may charge Seller the cost or damages occasioned EODT thereby. The two-year period does not apply to latent defects, fraud, or such gross mistakes as amount to fraud.

10.              INDEPENDENT CONTRACTOR – Seller hereby declares that it is an independent business, that similar articles are provided for other buyers, and EODT is not Sellers sole and only client. Seller shall provide that it is an independent business, that similar items are provided for other buyers, and control over its employees, agents, and all of it’s suppliers and subcontractors.

11.              INDEMNIFICTION – Seller shall indemnify, defend and save harmless EODT, its affiliates and subsidiaries, their officers, directors, and employees and their successors, heirs and representatives from any responsibility or liability in any way for claims, losses, damages, or expenses arising out of the death of injuries to, or any damages to any persons or damage or destruction of any property, including loss of use, arising out of incident to, or in connection with Seller performance hereunder.

12.              GOVERNMENT REGULATIONS – Seller agrees to comply with all applicable Federal, State or Local laws, rules, regulations or ordinances of the United States in providing articles hereunder.

13.              TERMINATION

A.    Termination for convenience – EODT may, at any time, terminate this Order, either in whole or in part, for its connivance, upon written notice to Seller. Seller shall be paid in accordance with the terms of this Order for all articles delivered and accepted by EODT through the date of termination. EODT shall not be obligated to pay Seller any other costs related to manufacturing, re-stocking, cancellation with lower-tier vendors, any losses, damages, including prospective profits for articles not provided, arising out of or related to such termination.

B.     Termination for Default – If Seller defaults in the performance or breaches any of its obligations set forth on the Order: and Seller fails to remedy such default or breach, or there is any nonconformity in the articles, or any part thereof, purchased hereunder, or if Seller becomes insolvent or a Trustee or Receiver of Seller’s business or assets is appointed, or any Petition in Bankruptcy is filed on behalf of Seller, any of these shall constitute default under the terms of this Order. In any such event, EODT may terminate this Order, in whole or in part, by written notice to Seller and EODT shall have no further liability or obligation whatsoever to Seller by reason of or resulting from such termination.

14.              DISPUTES - Any disputes arising under this Order, including disputes under                termination, not settled by agreement of the Parties shall be decided by litigation in a court of jurisdiction specified within these Terms and Conditions. Pending any decision, appeal, suit, or claim pursuant to this article. Seller shall proceed diligently with the performance of the work under this Order. The rights of EODT and the obligations of Seller shall survive completion of performance in accordance with the provisions of this Order and final payment hereunder.

15.              CHANGES OR REQUESTS FOR ADJUSTMENT – EODT may, at any time by written notice to Seller, make changes to this Order. Any claim for additional compensation or extension of time (adjustments) under this article shall be made in writing within ten (10) days of issuance of a change notice from EODT. Failure to provide such written claim shall constitute a waiver of such claim for adjustment. Failure to reach mutual agreement regarding such adjustments hereunder shall constitute a dispute to be resolved under these Terms and Conditions.

16.              PATENTS – Seller agrees to defend, protect, and save harmless EODT, its successors, assigns, customers, and users of its products and services against all demands for actual or alleged infringement of any United States or foreign patent or copyright by reason of any use or sale of the articles provided hereunder.

17.              CONFIDENTIALITY – Confidential or proprietary information of EODT or EODT’s Client may be disclosed to Seller during the term of this Order. Seller agrees not to disclose, either in whole or in part, any such information to any person for any purpose whatsoever, unless requested to do so in writing by EODT, and to bind its employees, officers, agents, and all subcontractors or material men to this same obligation.

18.              RECORDS RETENTION – Seller shall retain in legible form all records related to this Order including records related to Seller’s services hereunder for a period of three (3) years from date of final payment under this Order. Seller authorizes EODT to inspect and audit these records, during business hours, for a period of three (3) years after the acceptance of the articles provided by Seller hereunder.

19.              NOTICE OF DELAYS – In the event that the timely performance under the Order is delayed, or threatened to be delayed by any occurrence, including, but not limited to labor disputes and work stoppages, Seller shall immediately notify EODT in writing of all relevant information with respect to such occurrence(s). Failure to so notify EODT constitutes 1) a waiver of delay occasioned by such cause and 2) Seller’s agreement to reimburse EODT, and otherwise make EODT whole for any and all increased costs and expenses EODT may suffer as a result of such delay. Seller shall insert the substance of this article in all purchase orders issued by Seller to lower-tier vendors.

20.              PROCUREMENT INTEGRITY AND ETHICS – Subcontractor, in its dealing with EODT and any other lower-tier subcontractor, agrees to abide by all Federal Acquisition Regulation (FAR) provisions regarding Procurement Integrity, the Procurement Integrity Act, Truth in Negotiations Act, and the Foreign Corrupt Practices Act of 1977 (Public Law 95-213), as amended.  Prohibited actions under this section include but are not limited to bribery; kick-backs; gratuities; personal relationships and other conflicts of interests with contracting officials that provide the Subcontractor a knowing advantage; and fraudulent cost and pricing data.

21.               NON-DISCRIMINATION IN EMPLOYMENT – seller agrees and hereby certifies that in providing the articles hereunder, it shall not discriminate against any employee or applicant because of race, color, religion, age, sex, or national origin. Seller shall abide by provisions of all applicable governmental laws and regulations pertaining to non-discrimination, including, but not limited to, Executive Orders 11246 and 11141 (Equal Employment Opportunity); 41 CFR 60 – 741.4 (Employment of the Handicapped); 41 CFR 60-250.4 (Employment of Disabled Veterans and Veterans of the Vietnam Era); regulation regarding Utilization of Small Business Concerns and Small Disadvantaged Business Concerns; regulations regarding Utilization of Labor Surplus Area Concerns; and regulations regarding Women – Owned Small Business Concerns.

22.              SOCIAL SECURITY AND WAGE TAX LIABILITY – With respect to all persons at any time employed by, or on the payroll of Seller in providing any articles directly or indirectly under this Order, Seller accepts full and exclusive liability for the payment of all contributions or taxes for unemployment insurance and old age retirement and other benefits , pensions or annuities, and wage or income taxes for unemployment insurance and old age retirement and other benefits, pensions or annuities, and wage or income taxes for unemployment insurance and old age retirement  and other benefits, pensions and annuities, and wage or income taxes, now or hereafter imposed by the United States, and any State or political subdivision thereof, however the same be measured. Seller shall furnish EODT such payroll and employment information as EODT may require to demonstrate compliance with the above obligation. If EODT shall be required by law to pay any contribution, tax or penalty because of Seller’s failure to furnish the aforesaid information, Seller shall forthwith reimburse EODT for the entire amount so paid.

23.              FAIR LABOR STANDARDS ACT AND SERVICE CONTRACT ACT – Seller warrants, in connection with the articles provided hereunder, its compliance with all applicable requirements of the Fair Labor Standards Act, as amended, and of regulations and orders of the United States Department of Labor issued there under.

24.              TRAFFICKING IN PERSONS – seller agrees to comply with the “Prohibition against Human Trafficking, Inhumane Living Conditions, and Withholding Of Employee Passports” (Dec 2007): Title 18 United States Code Chapter 77 (Section 1581 et seq.).

25.              ASSIGNMENT – This Order may not be assigned by the Seller, either in whole or in part, without the prior written consent of EODT.

26.              SET-OFF – Any indebtedness of EODT to Seller arising out of other Orders or other activity with EODT may at EODT’s option be credited against amounts owing by EODT to the Seller hereunder

27.              FORCE MAJEURE – EODT may delay delivery or acceptance of articles hereunder occasioned by cases beyond its reasonable control. Seller shall hold such articles at the direction of EODT, and shall deliver them when the cause affecting the delay has been removed. Causes beyond EODT’s control shall include without limitation; fire, flood, unusually severe weather, acts of God, war, riots, civil insurrection, or the acts of the common enemy, strikes or other labor difficulty or governmental acts or omissions.

28.              SALES AND USE TAX – Seller is required to pay all Sales and Use Taxes to the extent such taxes are applicable to articles provided hereunder, and further agrees to hold EODT harmless from any and all claims related to Sales and Use Tax as applicable to articles provided hereunder. Seller may be requested to provide certification that all Sales and Use Taxes due have been or will be remitted to the appropriate taxing authority.

29.              REMEDIES – The remedies herein reserved shall be cumulative and additional to any other or futher remedies provided in law or equity. No waiver of a breach of any provisions of this Order shall constitute a waiver of any other breach or of such provision.

30.              RELEASE OF ALL CLAIMS – Upon completion of the delivery of the articles and after final inspection and approval thereof by EODT’s representative, Seller shall, submit a Release of all Claims in a form satisfactory to EODT showing that all charges for labor and material have been fully paid. Seller shall furnish EODT such documentation as EODT may require (including Release of all Claims from any subcontractor, vendor or supplier of seller) to show compliance with the above obligation. EODT may require proof of Seller’s payment of charges for labor and material during the process of the work and before any interim payments are made to Seller by EODT.

Approval by EODT of Seller’s work shall not relieve Seller of its obligations to EODT. Seller agrees that no mechanic’s lien whatsoever shall be filed against EODT, its Client or EODT’s Client’s premises by Seller or any other subcontractor, vendor or supplier of Seller for the supply of any labor, material, or both, in the performance of the work under this Order, and the right to file such lien is hereby waived. Seller agrees to indemnify and hold EODT and its Client harmless from any and all such costs (including reasonable attorney’s fees) arising out of any lien by Seller and any subcontractor, vendor or supplier of Seller.

If notice is given of any claim or intention to file a lien by any subcontractor, vendor or supplier of Seller, or if any liens or claims arising from the work are filed by any subcontractor, vendor or supplier of Seller against EODT, its Client or the Plant, site, material, work, or any of them, Seller shall, on being informed thereof, immediately proceed to use its best efforts to have such liens or claims paid or stricken from the records, and shall, insofar as it is reasonable, protect EODT and its Client and such buildings, structures, and Site there from. If such liens or claims are not released of record within one month from the time Seller is notified thereof, EODT shall have the right to take such action as necessary to have the same done. Should there be any liens or claims arising after all payments due Seller have been made, Seller, upon demand, shall reimburse EODT or its Client for all monies that EODT or its Client be compelled to pay, including fees and expenses, in discharging and satisfying such liens or claims.

31.              ADVERTISING – Seller is hereby restricted, without first obtaining the written consent of EODT, from advertising or publishing in any manner whatsoever, the fact that EODT has contracted with Seller to furnish articles covered herein. Failure to observe this restriction represents a breach of Seller’s obligations hereunder, and may be cause for termination of this Order under these Terms and Conditions.

32.              SEVERABILITY – Any provision or part thereof of this Order held to be void or unenforceable under any law or by any court shall be deemed stricken and all remaining provisions shall continue to be valid and binding upon the parties. Subsequently, the Parties may reform or replace such stricken provision or part thereof with a valid and enforceable provision which expresses the intent of the stricken provision.

33.              PERMITS – Seller shall obtain all permits and licenses and pay all fees and charges required to perform the requirements of the Order.

34.              SITE INSPECTIONS – Seller may at their own expense make prior inspections of the premises for which articles hereunder are to be provided to become familiar with all conditions thereof, and shall be deemed to have made such inspections.

35.              LIMITATION OF LIABILITY AND ACTIONS – In addition to other limitations of remedies set forth in these Terms and Conditions in no event shall EODT be liable for any incidental, consequential, special; indirect or punitive damages. Further, the Parties agree any action or cause of action resulting from any alleged breach on the part of EODT as to the articles delivered hereunder must be commenced within one (1) year after the delivery of such articles.

36.              GOVERNING LAW AND VENUE – Interpretation of the Order and these Terms and Conditions are to be governed by and construed in accordance with the laws of the State of Tennessee with the Seller agreeing to submit to venue in either Knox or Loudon County, Tennessee.

37.              ENTIRE AGREEMENT – This order contains the entire understanding of the parties with the respect to the subject matter hereof and there are no verbal understandings, statements, or stipulations bearing upon the meaning or effect of this Order.