AEROFLEX COLORADO SPRINGS, INC.
Terms and Conditions of Sale
1.
INSPECTION/ACCEPTANCE. Aeroflex Colorado Springs shall only tender for acceptance those items
that conform to the requirements of this contract. Customer reserves the right to inspect or test any supplies
or services that have been tendered for acceptance. Customer may require repair or replacement of
nonconforming supplies or reperformance of nonconforming services at no increase in contract price.
Conformance of supplies is defined as successful completion of testing by Aeroflex Colorado Springs in
accordance with contractual testing requirements. Customer hereby approves Aeroflex Colorado Springs'
inspection system as acceptable for performance under this contract. Aeroflex Colorado Springs may
modify this system at anytime without securing Customer's approval provided that the inspection system
remains compliant with generally accepted industry practices. Customer shall provide Aeroflex Colorado
Springs’ written notice of rejection of supplies or services delivered hereunder within thirty (30) days of
receipt thereof. If Aeroflex Colorado Springs has not received written notice of rejection within the time
period stated above, such supplies or services shall be accepted. Acceptance shall not alter any warranties
provided under this contract.
Aeroflex Colorado Springs does not possess an internal wafer processing capability. Aeroflex Colorado
Springs has established relationships with foundries and is evaluating other foundry candidates. Customer
agrees that Aeroflex Colorado Springs will select the foundry that will process wafers for Customer’s
requirements and that Customer’s relationship with the selected foundry regarding, but not limited to,
inspections, review of the selected foundry’s operations, audits, and record keeping, will be in accordance
with Aeroflex Colorado Springs’ contract with such foundry.
2.
CHANGES. All changes shall be by written agreement between the Customer and Aeroflex Colorado
Springs.
3.
DISPUTES. Failure of the parties to this contract to reach agreement on any dispute arising under or
relating to this contract shall be resolved by arbitration in accordance with the rules of the American
Arbitration Association (“AAA”). The arbitration panel shall consist of three arbiters. One appointed by
each of the parties and the third, the chair of the panel, appointed by the two arbiters appointed by each
party. Failure to appoint an arbiter will be resolved in accordance with AAA rules. The place of arbitration
shall be Denver, Colorado. The panel shall use the commercial laws of the state of New York, except
choice of law rules. Each party shall bear its own expenses associated with arbitration. Aeroflex Colorado
Springs shall proceed diligently with performance of this contract, pending final resolution of any dispute
arising under the contract.
4.
EXCUSABLE DELAYS. Aeroflex Colorado Springs shall be liable for failure to timely deliver supplies
or performance services unless nonperformance is caused by an occurrence beyond the reasonable control
of Aeroflex Colorado Springs and without its fault or negligence such as, acts of God or the public enemy,
acts of the Government in either its sovereign or contractual capacity, fires, floods, epidemics, quarantine
restrictions, strikes, accidents, shortages of materials, supplies or labor, unusually severe weather, and
delays of common carriers. Aeroflex Colorado Springs shall notify Customer’s authorized representative in
writing as soon as it is reasonably possible after the commencement of any excusable delay, setting forth
the full particulars in connection therewith, shall remedy such occurrence with all reasonable dispatch, and
shall promptly give written notice to Customer of the cessation of such occurrence.
5.
PATENT INDEMNITY. Aeroflex Colorado Springs shall indemnify Customer and its officers, employees
and agents against liability and expenses, including legal costs (provided that Aeroflex Colorado Springs
shall reimburse only reasonable attorney fees), for actual direct infringement of any United States patent
trademark or copyright, arising out of the use of the supplies delivered hereunder. Customer agrees to
provide Aeroflex Colorado Springs prompt written notice of any claim of infringement for which Customer
intends to seek indemnification. Aeroflex Colorado Springs' obligation to indemnify and hold Customer
harmless for infringement is contingent upon timely receipt of this notice. Customer agrees to provide to
Aeroflex Colorado Springs absolute authority and reasonable assistance, at Aeroflex Colorado Springs'
expense, in the defense and/or settlement of any such claims. In the event that the supplies are found to be
infringing, Aeroflex Colorado Springs shall procure the right for Customer to use the supplies, or provide a
non-infringing substitute, or will refund to Customer the purchase price. Aeroflex Colorado Springs'
obligation shall not extend to claims that arise from compliance by Aeroflex Colorado Springs with
instructions issued by Customer, which arise from modification of the supplies by someone other than
Aeroflex Colorado Springs, or arise from combination of the supplies delivered hereunder with
materials/goods or products delivered by someone other than Aeroflex Colorado Springs. Customer hereby
agrees to indemnify and hold harmless Aeroflex Colorado Springs, to the same extent that Aeroflex
Colorado Springs is obligated to indemnify Customer, from any claims of infringement brought against
Aeroflex Colorado Springs from events described in the previous sentence. The above constitutes
Customer’s and Aeroflex Colorado Springs’ exclusive rights and remedies regarding infringement of
intellectual property rights.
6.
TERMINATION FOR CAUSE. Customer may terminate this contract for cause in the event Aeroflex
Colorado Springs fails to comply with any material contract term or condition, or fails to provide
Customer, upon request, with reasonable assurances of future performance. Customer shall provide
Aeroflex Colorado Springs written notice of breach of any material contract term or condition. Aeroflex
Colorado Springs shall have the opportunity to cure such breach within a reasonable period of time. In the
event of termination for cause, Customer shall not be liable to Aeroflex Colorado Springs for any amount
for non conforming supplies or services, and Aeroflex Colorado Springs shall be liable to Customer for the
direct costs of procuring a reasonable substitute, or at Customer’s election, a refund of the purchase price
upon return of non conforming supplies.
7.
WARRANTY. Aeroflex Colorado Springs warrants that the supplies delivered shall be free from defects
in material and workmanship and shall conform to any express contractual specifications. Aeroflex
Colorado Springs warrants that it will perform all services in careful and workmanlike manner and in
conformance with general industry standards. Customer agrees to provide Aeroflex Colorado Springs
written notice of breach of these warranties within one year of delivery of supplies or performance of
services. Aeroflex Colorado Springs' obligations and Customer's rights are contingent upon timely receipt
of this notice. Aeroflex Colorado Springs shall repair or replace, at Aeroflex Colorado Springs' discretion,
any supplies delivered hereunder that are not in compliance with this warranty. Aeroflex Colorado Springs
shall reperform services found to be not in conformance with this clause. Customer's rights provided
hereunder are Customer's exclusive rights for breach of warranties and are in lieu of all other rights
provided by law or in equity. EXCEPT FOR THE WARRANTIES PROVIDED ABOVE,
AEROFLEX COLORADO SPRINGS AND CUSTOMER AGREE THAT NO OTHER
WARRANTIES, EXPRESS, IMPLIED, OR STATUTORY, INCLUDING WARRANTIES OF
MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE, ARE GRANTED.
8.
LIMITATION OF LIABILITY. The specific rights and remedies described in this contract are the
exclusive rights and remedies of the respective parties and are in lieu of all other rights and remedies
available at law or in equity. Neither party will be liable to the other for any special, incidental or
consequential damages, notwithstanding notice of the possibility thereof and the maximum liability of
either party to the other whether arising in contract, tort or otherwise shall not exceed the purchase price of
this contract.
9.
OTHER COMPLIANCES. Aeroflex Colorado Springs shall comply with all applicable Federal, State and
local laws applicable to its performance under this contract.
AEROFLEX COLORADO SPRINGS, INC.
4350 Centennial Boulevard
Colorado Springs, CO 80907
TERMS AND CONDITIONS OF SALE
Page 2 of 3
TC-0700
Rev – 10/04
10.
ORDER OF PRECEDENCE. Any inconsistencies in this contract shall be resolved by giving precedence
in the following order: (1) the schedule of supplies/services; (2) the specification; (3) the Statement of
Work; (4) Aeroflex Colorado Springs’ proposal (5) addenda to this contract, including any license
agreements for computer software; (6) other clauses of these terms and conditions; (7) other documents,
exhibits, and attachments.
11.
INTELLECTUAL PROPERTY RIGHTS. Notwithstanding any other provision contained in this
contract, the parties agree that Customer shall not acquire rights in Aeroflex Colorado Springs’ intellectual
property, except deliverable technical data and deliverable computer software, provided both the
development cost of such intellectual property are borne fully by the Customer and line item prices for such
intellectual property are stated in the contract.
AEROFLEX COLORADO SPRINGS, INC.
4350 Centennial Boulevard
Colorado Springs, CO 80907
TERMS AND CONDITIONS OF SALE
Page 3 of 3
TC-0700
Rev – 10/04