Supplier Terms and Conditions

As used in the Agreement, the following terms have the meanings set forth below.

“Agreement” means the applicable Purchase Order, these Terms and Conditions for the Purchase of Goods, and any addenda, exhibits, or attachments incorporated by reference therein.

“Buyer” means B.C. Systems Inc. and its affiliates.

“Buyer’s Authorized Representative” means the individual(s) designated in writing by Buyer with authority to act on Buyer’s behalf under the Agreement.

“Goods” means the products, parts, materials, and associated documentation ordered by Buyer under a Purchase Order.

“Purchase Order” or “PO” means Buyer’s written order for Goods issued to Seller, including any amendments thereto.

“Seller” means the entity identified as the seller, vendor, or supplier on the applicable Purchase Order.

These Terms and Conditions and the Purchase Order constitute the complete and exclusive statement of the terms and conditions of the Agreement and supersedes all prior offers, negotiations, and agreements concerning the subject matter hereof. Buyer expressly objects to and rejects any additional or different terms proposed by Seller in any quotation, acknowledgment, invoice, or other document; such terms have no force or effect. Seller’s commencement of performance, shipment of any Goods, or acceptance of any payment constitutes Seller’s unqualified acceptance of these Terms and Conditions without modification.

Delivery Date. Time is of the essence. Seller shall deliver conforming Goods by the delivery date specified in the PO (the “Delivery Date”). Seller shall immediately notify Buyer in writing of any anticipated delay, which notice or acknowledgement of notice will not excuse late delivery. If Goods are not delivered by the Delivery Date, Buyer may, without prejudice to any other remedies: (a) cancel the Purchase Order in whole or in part; (b) purchase substitute goods from another source and charge Seller for all excess costs; or (c) require Seller to expedite delivery at Seller's sole expense.

Location. Seller shall deliver Goods to the delivery location specified in the PO (the “Delivery Location”).

Shipping. Unless otherwise specified, Goods shall be shipped FOB Destination, freight prepaid. Seller shall comply with Buyer’s shipping instructions, properly package, mark, and ship all Goods to prevent damage or deterioration in transit and in compliance with all applicable laws and regulations, and include a packing list with each shipment identifying the PO number, part number, quantity, and any applicable certifications. Seller shall not make advance, partial, or excess deliveries without Buyer's prior written approval.

Title and Risk of Loss. Title and risk of loss pass to Buyer upon delivery of conforming Goods to the Delivery Location and Buyer’s acceptance of such Goods.

Shortages. If Seller anticipates or experiences a shortage of materials or capacity that may affect timely delivery of Goods under any PO, Seller shall promptly notify Buyer in writing. Seller shall use commercially reasonable efforts to mitigate the effects of any such shortage and shall allocate available inventory and production capacity to Buyer on a priority basis consistent with Seller’s commitments under the applicable PO.

The price for Goods shall be as stated in the PO and shall not be increased without prior written approval of Buyer’s Authorized Representative. Payment terms are NET 60 days from Buyer's receipt of conforming Goods and a conforming invoice. Payment shall be in U.S. dollars. Seller represents and warrants that prices charged to Buyer are no less favorable than those charged by Seller to any comparable customer for similar goods (whether in like or similar quantities) and are otherwise in accordance with all applicable price laws and regulations. If Seller offers lower prices to any customer, Seller shall promptly notify Buyer and apply such lower pricing to all open POs. Buyer shall have the right to terminate any affected PO if Seller fails to provide such timely notice. Buyer may offset against amounts owed to Seller any amounts owed by Seller to Buyer. Buyer's payment of an invoice shall not constitute acceptance of nonconforming Goods or waiver of any right or remedy.

Inspection Rights. Buyer shall have the right to inspect and test Goods at any time, including at Seller’s facilities, during and after production. Inspection or testing does not constitute acceptance of non-conforming Goods. Seller shall maintain a quality management system adequate to ensure the quality and conformity of Goods and shall provide access to its facilities, processes, and quality records upon request by Buyer or Buyer’s customer. Buyer may reject non-conforming Goods at Seller’s sole risk and expense; Seller shall promptly replace rejected Goods at no additional cost to Buyer.

Records Retention. Seller shall retain all records related to the performance of each PO, including but not limited to quality records, test data, certificates of conformance, and financial records, for a minimum of five (5) years following completion or cancellation of the applicable PO, or such longer period as may be required by applicable law or regulation. Buyer, Buyer’s customers, and applicable regulatory authorities shall have the right, upon reasonable notice, to audit and inspect such records and Seller’s facilities, equipment, and processes to verify compliance with the requirements of the PO and these Terms and Conditions.

Product and Process Changes. Seller shall not make any change to materials, manufacturing processes, manufacturing locations, or sub-tier suppliers used in the production of Goods without Buyer’s prior written approval. Seller shall provide Buyer with written notice of any proposed change at least thirty (30) days in advance and shall not implement any such change unless and until Buyer has provided written approval. Any unauthorized change shall be deemed a material breach of the applicable PO.

Seller warrants that all Goods delivered hereunder: (a) conform to all applicable drawings, specifications, and requirements of the PO; (b) be free from defects in material, workmanship, and design; (c) be free and clear of all liens, encumbrances, and third-party claims; (d) do not infringe any patent, copyright, trademark, trade secret, or other intellectual property right of any third-party; (e) comply with all applicable laws, regulations, and standards; and (f) be merchantable and fit for their intended purpose. These warranties are cumulative and in addition to any other warranty provided by law or equity and shall survive acceptance of and payment for the goods ordered or services provided hereunder. Any applicable statute of limitations runs from the date of Buyer’s discovery of the noncompliance of the goods or services with the foregoing warranties. The foregoing warranties shall survive inspection, test, acceptance and payment, and shall run to Buyers, its successors, assigns and customers. If Buyer gives Seller notice of noncompliance, Seller shall, at its own expense, promptly replace or repair the defective or nonconforming goods or services and pay for all related expenses, including, but not limited to, transportation charges for the return of the defective or nonconforming goods or services to Seller and the delivery of repaired or replacement goods or services to Buyer.

Buyer’s Authorized Representative may, at any time, direct changes within the general scope of any PO, including changes to drawings, specifications, quantity, delivery schedule, packaging, or Delivery Location. If any change causes an increase or decrease in cost or time required for performance, Seller shall notify Buyer within ten (10) days of receipt of the change directive and the parties shall negotiate an equitable adjustment to price or schedule. Seller’s failure to notify Buyer of right to an equitable adjustment within such ten (10) day period shall constitute a waiver of any such right. Seller shall proceed with the change pending resolution of any equitable adjustment. No change is binding unless directed in writing by Buyer’s

Buyer’s Authorized Representative may, by written notice, direct Seller to stop all or any part of work under any PO for up to ninety (90) days, or for such longer period of time as the parties may agree (a “Stop-Work Order”). Upon receipt, Seller shall immediately comply, minimize costs incurred during the stop period, and preserve all work in progress. If Buyer does not resume, modify, or terminate the work within the stop period, Seller may treat the stopped work as terminated for Buyer’s convenience under Section 9. No additional compensation is due solely as a result of a Stop-Work Order unless the cumulative stop period under any PO exceeds ninety (90) days, after which the change process in Section 7 hereto shall apply.

Buyer shall have the right to terminate this purchase order (without liability or cost to Buyer) if: (a) Seller breaches any provision of these terms and conditions or otherwise defaults on any requirement or obligation under this Agreement; (b) Seller becomes insolvent, or unable to meet its debts and obligations as they become due; (c) Seller files a voluntary petition in bankruptcy or an involuntary petition is filed and not dismissed within 30 days; (d) a receiver or trustee is appointed for Seller or its assets; or (e) Seller executes an assignment for the benefit of its creditors. In addition, Buyer may terminate any PO, in whole or in part, for Buyer’s convenience upon written notice. In the event of termination for the convenience of Buyer, Buyer’s sole obligation is to pay for conforming Goods accepted prior to termination plus Seller’s reasonable, documented, direct costs incurred as a direct result of the termination, excluding anticipated profits on undelivered Goods. Seller shall submit any termination cost claim within thirty (30) days of the termination notice.

Any tooling, equipment, materials, or other property furnished by Buyer to Seller (“Buyer Property”) remains the exclusive property of Buyer, shall be used solely in performance of Buyer’s POs, shall be clearly marked and segregated, and shall be returned to Buyer upon request. Seller assumes all risk of loss or damage to Buyer Property in Seller’s possession. All work product, deliverables, information, data, discoveries, concepts, ideas, inventions (whether or not patentable), developments, designs, know-how, trade secrets, improvements, works of authorship, reports, documents, computer programs, source and object code, mask works and any other materials solely or jointly conceived, written, created, prepared, made, reduced to practice, or learned by Seller in the course of any work performed for Buyer under this Agreement and all intellectual property rights related to and contained therein shall be the sole property of Buyer and shall be used by Seller solely in work for Buyer. To the extent that any of the deliverable items may not, by operation of law, be works made for hire, Seller hereby assigns to Buyer the ownership of any and all intellectual property rights in the deliverable items and Buyer shall have the right to obtain and hold in its own name copyrights, patents, registrations, and similar protections which may be available in and for the work. Seller agrees to give Buyer or its designees all assistance reasonably required to perfect such rights. To the extent that any pre-existing inventions, technology, designs, works of authorship, mask works, technical information, computer software, and other information or materials are used, included, or contained in the work or deliverable items and not owned by Buyer, Seller grants to Buyer an irrevocable, world-wide, royalty-free, perpetual license to: (a) make, have made, sell, offer for sale, use, execute, reproduce, display, perform, distribute (internally or externally) copies of, and prepare derivative works based upon, such pre-existing inventions, technology, designs, works of authorship, mask works, technical information, computer software, other information or materials, all intellectual property embodied therein, and derivative works thereof; and (b) authorize others to do any, some or all of the foregoing.

Seller shall not make or authorize any news release, advertisement or other disclosure regarding the existence of or substance of this Agreement without the prior written consent of Buyer. Seller shall keep confidential all information provided to Seller related to the performance of this Agreement, including, but not limited to, statement of work, specifications, drawings, designs, processes and other technical or business information, and shall use such information only in the performance of Buyer’s purchase orders. Seller shall implement and maintain physical, technical, and administrative safeguards to protect Buyer's confidential information against unauthorized access, disclosure, or loss, consistent with industry standards applicable to the type of information involved. Seller shall promptly notify Buyer of any actual or suspected unauthorized access to or disclosure of Buyer's confidential information. Upon completion, cancellation or termination of Buyer’s purchase orders, Seller shall, at Seller’s expense, return to Buyer or destroy all documents or other media containing or incorporating any of the information and, on request, provide a certificate confirming the return or destruction of all such material. Seller shall include a provision comparable to this section in all permitted subcontracts relating to the goods or services ordered. This Section survives termination or expiration of the Agreement indefinitely.

Seller shall comply with all applicable federal, state, and local laws, regulations, and ordinances in the performance of its obligations hereunder, including, without limitation, all applicable equal employment opportunities, environmental, health and safety, and labor laws. In addition, Seller shall comply with all applicable U.S. export control laws and regulations, including (a) Export Administration Regulations (EAR); (b) International Traffic in Arms Regulations (ITAR); (c) Foreign Assets Control Regulations and associated Executive Orders; and (iv) laws and regulations of other countries (collectively, “Export Control Laws”), and shall not export or transfer any technical data, commodity, or technology without first obtaining all required government authorizations under any Export Control Laws. Seller shall immediately notify a Buyer's Authorized Representative if Seller becomes the subject of any sanctions laws or if Seller's export privileges are restricted, suspended, or revoked, or if Seller or any principal is added to any government denied party list. Unless Seller is manufacturing Goods from Buyer-furnished designs to Buyer-specified drawings (i.e., build-to-print), Seller shall provide Buyer, with each delivery or upon Buyer’s request, the applicable Export Control Classification Number (ECCN) under the EAR or United States Munitions List (USML) category under the ITAR, and the Harmonized Tariff Schedule (HTS) number for each item of Goods. Seller represents and warrants that neither it nor any of its employees or agents has made or will make any payment, gift, or other benefit—directly or indirectly—to any government official for the purpose of influencing any governmental act in connection with this Agreement, in compliance with the Foreign Corrupt Practices Act (FCPA) and all applicable anti-bribery laws. Seller shall not provide any gratuity, gift, or other benefit to any employee or representative of Buyer in connection with the Agreement.

If the Purchase Order is issued under any U.S. Government agency contract or subcontract thereunder, then Seller shall comply with all of the applicable provisions of Title 48 of the Code of Federal Regulations relating to procurement by U.S. Governmental agencies, as the same may be amended, superseded or modified. Seller is charged with knowing and complying with any and all such provisions incorporated herein. Seller shall incorporate equivalent obligations in all applicable lower-tier subcontracts and purchase orders.

Seller shall defend, indemnify and hold harmless Buyer and Buyer’s parent company and their subsidiaries, affiliates, successors or assigns and their respective directors, officers and employees and Buyer’s customers (collectively, “Indemnitees”) against any and all loss, injury, death, damage, liability, claim, deficiency, action, judgment, interest, award, penalty, fine, cost or expense, including reasonable attorney and professional fees and costs, and the cost of enforcing any rights hereunder and the cost of pursuing any insurance providers (collectively, “Losses”) arising out of or occurring in connection with (a) any actual or alleged infringement or misappropriation of any third-party intellectual property right by the Goods; (b) any actual or alleged defect in the Goods; (c) any breach by Seller of any representation, warranty, obligation, or covenant under the Agreement (including Section 12 hereto); (d) any negligent or wrongful act or omission of Seller, its employees, agents, or subcontractors in connection with performance; or (e) any violation of applicable law or regulation by Seller. Seller shall not enter into any settlement without Buyer’s or Indemnitee’s prior written consent.

Seller shall procure and maintain, at its own expense, throughout the term of the Agreement and for two (2) years thereafter: (a) Commercial General Liability insurance with limits not less than $1,000,000 per occurrence and $2,000,000 in the aggregate; (b) Commercial Umbrella or Excess Liability insurance with combined limits not less than $2,000,000; and (c) Workers’ Compensation insurance as required by applicable law and Employer’s Liability insurance with limits not less than $1,000,000 per occurrence. All policies shall include a waiver of subrogation in favor of Buyer. Upon request, Seller shall furnish Buyer with certificates of insurance evidencing such coverage. The insurance requirements set forth herein are minimum requirements and shall not limit Seller's indemnification obligations under Section 14.

Unless otherwise expressly stated in the PO, all prices include all applicable taxes, duties, tariffs, and governmental charges. Seller is solely responsible for all taxes imposed on Seller’s income or assets. If Buyer is required by applicable law to withhold any taxes on payments to Seller, Buyer may deduct and remit such amounts to the applicable taxing authority and reduce the payment to Seller accordingly.

Seller is an independent contractor. Nothing in the Agreement creates a relationship of employment, agency, partnership, or joint venture between the parties. Seller has sole responsibility for all of its employees, including their supervision, compensation, benefits, and compliance with applicable employment laws. Seller’s employees are not eligible for any benefits provided by Buyer to its own employees.

Seller shall not directly or indirectly assign, transfer, delegate, or subcontract any of its rights or obligations under the Agreement, in whole or in part, without the prior written consent of Buyer’s Authorized Representative; any purported assignment without such consent is void. Buyer may assign the Agreement, in whole or in part, to any affiliate or successor in interest without Seller’s consent.

In the case of any dispute arising out of or relating to the Agreement, the parties shall attempt to resolve such dispute through good-faith negotiation between senior representatives within thirty (30) days of written notice of the dispute. If not resolved, any such dispute shall be submitted to final and binding arbitration administered by JAMS in Los Angeles County, California, pursuant to JAMS Expedited Arbitration Procedures for disputes involving amounts in controversy less than $250,000, and JAMS Comprehensive Arbitration Rules and Procedures for all other disputes. The arbitration shall be conducted by a single neutral arbitrator and the award may be entered as a judgment in any court of competent jurisdiction. Notwithstanding the foregoing, either party may seek emergency or provisional injunctive or other equitable relief from any court of competent jurisdiction without waiving the right to arbitrate the underlying dispute. The Agreement shall be governed by the laws of the State of California, excluding its conflicts of law rules. EACH PARTY HEREBY KNOWINGLY AND VOLUNTARILY WAIVES ANY RIGHT TO TRIAL BY JURY IN ANY ACTION, PROCEEDING, OR CLAIM ARISING OUT OF OR RELATING TO THIS AGREEMENT OR THE RELATIONSHIP OF THE PARTIES.

This Agreement constitutes the entire agreement of the parties with respect to its subject matter and supersedes all prior and contemporaneous agreements, negotiations, representations, and understandings. No amendment is binding unless made in writing and signed by authorized representatives of both parties, including Buyer’s Representative. Except as set forth herein, no waiver is effective unless in writing and no waiver of any breach constitutes a waiver of any other or future breach. If any provision of this Agreement is found invalid or unenforceable, such provision shall be modified to the minimum extent necessary to make it enforceable, and the remaining provisions shall continue in full force and effect. Buyer’s rights and remedies under this Agreement are cumulative and in addition to, and not in substitution for, any other rights and remedies available at law, in equity, or otherwise. Notices shall be in writing and delivered to the party’s address specified in the PO or as otherwise designated in writing. Notice by email is effective upon confirmed receipt. Electronic signatures and electronically transmitted execution copies are deemed original and binding to the same extent as wet-ink originals. This Agreement is for the sole benefit of the parties hereto and their permitted assigns. Nothing herein shall create any rights in any third party. Provisions of this Agreement which by their nature should apply beyond their terms will remain in force after any termination or expiration of this Agreement including, but not limited to, the following provisions: Sections 6, 10, 11, 12, 14, 15, 19, and 20.