Purchase Order Standard Terms and Conditions

1. ACCEPTANCE - This Purchase Order, together with the attached riders, if any, constitutes the entire agreement between the parties and supersedes all other agreements and understandings, whether written or oral, between Buyer and Seller with respect to the subject matter hereof. No change to or modification of this Purchase Order shall be binding upon Buyer unless signed by an authorized representative of Buyer. Acceptance of this Purchase Order is expressly limited to the terms and conditions contained herein and incorporated herein by reference, and Seller agrees that no other terms shall apply. This Purchase Order shall be deemed accepted upon the return of the acknowledgment copy of this Purchase Order or other written or oral acknowledgment of Seller's acceptance, or Seller's commencement of any performance called for by this Purchase Order. Buyer rejects and hereby gives notification of objection to any different or additional terms proposed by Seller, and if such terms are included in Seller's acceptance, Seller agrees that a contract of sale will nevertheless result upon only the terms stated herein.

2. PRICE AND DELIVERY - Seller shall furnish the items called for by this order in accordance with the prices and delivery stated on the face of this order. If prices and/or delivery dates are not stated, Seller shall offer its lowest prices or best delivery dates both of which shall be subject to written acceptance by Buyer. All prices include all applicable taxes, except sales tax which is separately shown where applicable. Seller warrants that the prices charged for the items covered by this order will be as low as the lowest prices charged by the Seller to any other customers purchasing similar items in the same or smaller quantities and under like circumstances. Buyer may return or store at Seller's expense any items delivered more than thirty days in advance of the delivery date specified for such items.

3. PACKING AND SHIPPING - No charge shall be made by Seller for packaging, transportation or storage. All items shall be packaged, marked and otherwise prepared in accordance with good commercial practices to obtain lowest transportation rates. Seller shall mark on containers handling and loading instructions, shipping information, order, item and account number, shipment date and names and addresses of Seller and Buyer. An itemized packing list must accompany each shipment.

4. RISK OF LOSS - Seller shall bear all risk of loss or damages to goods covered by this order until delivery of goods to the carrier, if transportation is F.O.B. origin, or acceptance by the Buyer, if transportation is F.O.B. destination.

5. INVOICING - After each shipment made under this order, Seller shall send a separate invoice including item numbers, in duplicate, accompanied by a bill of lading or express receipt. Payment of invoice shall not constitute acceptance of items ordered and shall be subject to appropriate adjustment for failure of Seller to meet the requirements of this order.

6. DELIVERY AND INSPECTION - Time is of the essence in the performance of this Purchase Order. Buyer may accept or return goods received after their required delivery date without waiving Buyer's right to return subsequent shipments delivered after the required delivery date. All goods shall be received subject to Buyer's right of inspection and rejection at any time after receipt. If goods are returned to Seller, they shall be returned at Seller's expense. Acknowledgment of receipt shall not constitute acceptance, and payment prior to inspection shall not constitute waiver of any rights hereunder. Buyer shall have 30 days from receipt to inspect goods; provided, however, that Buyer does not waive any rights it has to, at any time, reject or revoke acceptance of goods not conforming to the warranty provisions set forth in this Purchase Order.  Buyer reserves the right to perform verification at the seller's premises.  When this requirement is invoked, the Buyer will state the intended verification arrangement and method for product release in the purchasing information.  When necessary, the Buyer, the Buyer's customer, and/or applicable regulatory agencies reserve a right of entry at the suppliers premises for the purpose of verifying quality of work, records, and/or material.

7. WARRANTY - In addition to all warranties implied by law and any express warranties provided by Seller, Seller warrants that all goods and all services performed in connection with furnishing goods (i) shall conform to all drawings, samples or other descriptions furnished or specified by Buyer or Seller, (ii) shall conform to any specifications furnished or specified by Buyer, (iii) shall be merchantable, (iv) shall be of high quality, (v) shall be fit for Buyer's particular purposes of which the Seller is aware, and (vi) shall be of high quality and free from defects in design, material and workmanship. All warranties shall survive acceptance and payment, and shall run to Buyer, its successors, assigns, customers and the users of its products.

8. MATERIALS AND TOOLS - If Buyer furnished Seller material or equipment (such as special dies, molds, jigs, tools, test equipment, etc.), or pays for such material or equipment, title thereto shall remain or vest in Buyer, and Seller shall identify, maintain and preserve such material and equipment and shall dispose of it (including scrap) in accordance with Buyer's direction. Seller, at his own expense, assumes all risk of physical loss or damage to such material and equipment while in the Seller's care, custody, or control.

9. FACILITIES - By accepting this order, the Seller represents to the Buyer that Seller has now, or can readily procure without assistance from the Buyer, all facilities necessary for the performance of this order.

10. METHODS, PROCESSES, DESIGNS AND SPECIFICATIONS - Any unpatented knowledge or information concerning Seller's product methods or manufacturing processes which may be contained in Seller's drawings, designs, and specifications, or which Seller may disclose to Buyer, or which Buyer may discover incident to the materials or services furnished under this order, shall be deemed to have been disclosed to Buyer as part of the consideration for this order, and Buyer shall have full right to its use. Seller hereby agrees not to assert any claim against Buyer for its use or alleged use.

11. PROPRIETARY INFORMATION - All written information obtained by Seller from Buyer in connection with this order is received in confidence and shall remain the property of Buyer, and shall be used and disclosed by Seller only to the extent necessary for the performance of this order except that upon prior written notice to the Buyer, Seller may use such information in the manufacture of end items for direct sale to the U. S. Government to the extent the Government has the right to authorize such use by Seller, and provided that Seller to the extent practicable, prominently identifies each such end item as being manufactured by Seller for direct sale to the U. S. Government.

12. SUBCONTRACTS - Seller shall not subcontract for complete or substantially complete parts of work called for by this order without Buyer's prior written approval.

13. COMPLIANCE WITH LAWS - Seller represents and warrants that the goods and/or services covered by this Purchase Order were not manufactured or delivered and are not being sold, priced or performed in violation of any applicable law or regulation.

14. COMPLIANCE WITH GOVERNMENT REGULATIONS - By acceptance of the purchase order, purchase agreement, basic order agreement, or contract, seller represents compliance with, if required, to Executive Order 11246 (non-segregated facilities); Executive Order 11375 [equal opportunity]; 41 CFR~60-1.7 et. seq. [employer information report]; 41 CFR~60-1.40 et. seq. [Affirmative Action]; 41 CFR~60-250.4 et.seq. [Disabled Vietnam era veterans]; 41 CFR~60-741.4 et. seq. [Persons with a Disability]; such orders and regulations being incorporated by reference and made part of this order.

15. INDEMNIFICATION - Seller shall defend, indemnify and hold Buyer harmless with respect to all claims, liabilities, damages or expenses (including reasonable attorneys' fees) incurred which relate to or are caused by Seller's performance or nonperformance of its duties under this Purchase Order including, without limitation, any: (a) actual or alleged patent, copyright or trademark infringement arising out of the purchase, sale or use of the goods or provision of services covered by this order; (b) actual or alleged defects in such goods or services; (c) actual or alleged breach of warranty; or (d) failure of Seller to deliver the goods or services on a timely basis. This clause shall not be construed to preclude or limit any other rights or remedies available to Buyer.

16. ASSIGNMENT - Seller shall not assign this order or any rights under this order without the prior written consent of Buyer, and no purported assignment by Seller shall be binding on Buyer without such consent.

17. SET-OFF - Upon notice to Seller, Buyer may deduct damages for breach of warranty or any other provision of this Purchase Order from the amount shown due Seller on any invoice, whether or not the deduction and invoice are related to the same sale or series of sales.

18. NOTICE OF LABOR DISPUTES - Whenever an actual or potential labor dispute is delaying or threatens to delay the timely performance of this order, Seller shall immediately notify Buyer in writing of all relevant information with respect to such dispute.

19. CESSATION OF PRODUCTION - If production of items covered by this order is to be permanently discontinued at any time within one year after final delivery under this order, Seller shall give Buyer at least 180 days prior written notice of such discontinuance during which time Seller shall accept orders from Buyer for a reasonable quantity of such time.

20. CHANGES - Buyer may at any time make changes as to designs, specifications, method of shipment, or time or place of delivery. If any such change causes an increase or decrease in the cost of, or the time required for the performance of this Purchase Order, an equitable adjustment shall be made in the contract price, or delivery date or schedule, or both. No change order will be binding on Buyer unless issued by an authorized Buyer purchasing agent.

21. TERMINATION - Buyer may terminate this Purchase Order in whole or in part by written notice to Seller, if Seller defaults for any reason including, without limitation, the following events of default: (a) Seller's failure to timely deliver any installment or to otherwise perform within the time specified; (b) any material adverse change involving Seller which Buyer in good faith believes may impair the likelihood that Buyer will receive timely and full performance of this order where Seller does not provide adequate written assurances within ten (10) days of Buyer's written request for such assurances; or (c) Seller's insolvency, assignment for the benefit of creditors, or subjection to proceedings under any law relating to bankruptcy, insolvency, dissolution or the relief of debtors. Buyer's rights under this clause shall be in addition to all other rights and remedies available to Buyer at law or equity upon Seller's default.

22. WAIVER - A waiver by Buyer of any breach of the terms and conditions of this Purchase Order shall not constitute a waiver by Buyer of any similar or other breach.

23. GOVERNING LAW - This Purchase Order shall be exclusively governed by and interpreted in accordance with the substantive laws (and not the laws of conflicts) of the State of Minnesota.

24. EQUAL EMPLOYMENT OPPORTUNITY - Seller agrees to comply with the provisions of Executive Order 11246 as amended by Executive Order 11375.

25. SPECIAL U. S. GOVERNMENT PROVISIONS - The provisions set forth in this Paragraph 24 shall apply only if this order bears a U. S. Government contract number. In case of any conflict between the provisions of this Paragraph 24 and any of the other terms and conditions set forth in these General Terms and Conditions, the provisions of this Paragraph 24 shall control.
   (a) Audit - Seller agrees that its books and records and its plants, or such part thereof as may be engaged in the performance of this order, shall at all reasonable times be subject to inspection and audit by any person designated by the head of any executive department of Government.
   (b) Subcontractors - Seller agrees that no subcontract placed under this order shall provide for payment on a cost plus percentage of cost basis.
   (c) Quality Control - Except as otherwise provided in this order, Seller's system of Quality Control during the performance of this order shall be in accordance with the specifications incorporated herein by reference, or other Quality Control Specifications as are required by Buyer's prime contract or higher tier order.
   (d) Federal Acquisition Regulations (FAR) - The Federal Acquisition Regulations as in effect on the date of this order are incorporated herein by reference and made a part hereof including: Utilization of Minority Business Enterprises; Preference for Domestic Specialty Metals; Renegotiation; Inspection; Title and Risk of Loss; Default; Contract Work Hours and Safety Standards Act-Overtime Compensation; Walsh-Healey Public Contracts Act; Equal Opportunity; Notice and Assistance Regarding Patent and Copyright Infringement; Pricing of Adjustments; Listing of Employment Openings for Veterans; Buy American Act; Patent Indemnity; Notice to the Government of Labor Disputes; Filing of Patent Applications; Refund of Royalties; Rights in Technical Data; Technical Data-Withholding of Payment; Warranty of Technical Data; Excess Profit; Military Security Requirements; Utilization of Small Business Concerns; Examination of Records by Comptroller General; Priorities, Allocations, and Allotments; Convict Labor; Utilization of Labor Surplus Area Concerns; Required Sources for Jewel Bearings; Required Sources for Miniature and Instrument Ball Bearings; Audit by Department of Defense Competition in Subcontracting; Required Source of Precision of Components for Mechanical Time Devices; New Material; Patent Rights (License); Government Surplus; Royalty Information. If this Purchase Order requires a Certificate of Current Cost and Pricing Data; Subcontractor Cost and Pricing Data; Price Reduction for Defective Cost and Pricing Data; and Cost Accounting Standards; these requirements are incorporated herein by reference in all foregoing FAR clauses. The term "Contractor" shall mean "Seller," the term "Contract" shall mean this order, and the terms "Contracting Officer" shall mean the Contracting Officer for the U.S. Government or "Buyer," as appropriate. Any reference to a "Disputes" clause in the above FAR clauses shall be deemed deleted and reference to a "default" clause shall mean the "Termination" clause hereof.
   (e) Government Furnished Property - Title to any Government furnished property shall remain in the Government. Such property shall be used only for the performance of this order. Seller shall maintain and administer in accordance with sound industrial practices a program for the maintenance, repair, protection and preservation of Government furnished property. Seller shall comply with the provisions of the FAR as in effect on the date of this order. Seller assumes the risk of and shall be responsible for any loss or damage to government property except for reasonable wear and tear and except to the extent that such property is incorporated in items delivered under this order. Upon completion of this order or at such earlier times as Buyer may request, Seller shall submit in acceptable form, inventory schedules covering all items of Government furnished property pertaining to this order. To the extent that such use will not interfere with Seller's performance of this or other orders from Buyer, this clause shall not limit the use by the Seller of property to which the Government has title in the production of end items on direct Government orders.
   (f) NASA Regulations - Under any individual procurement which involves the performance of research, experimental, design, engineering, or developmental work and which references a NASA prime contract, ASPR paragraphs 9-107.5(b) "Patent Rights" and ASPR 9-203(b) "Rights in Technical Data" are deemed deleted and NASA clause 9-101.4, "New Technology," 9-202.1(e) "Data Requirements" and 9-203.1, "Rights in Data" are incorporated by reference. Under any supply type contract which references a NASA prime contract ASPR 9-203(b) "Rights in Technical Data" is deemed deleted and NASA clauses 9-203.1 and 9-203.2 "Rights in Data" are incorporated by reference. All NASA orders will be subject to NASAPR 7-104.42(a); Audit by NASA.

26. COMPLETE AGREEMENT - This order which includes Seller's EEO Agreement (not applicable unless this order exceeds $10,000) and any supplemental sheets and riders annexed by Buyer, contains the complete and entire agreement between the parties and supersedes any previous communications, representations or agreements, whether oral or written with respect to the subject matter of this order.

27. VALIDlTY - If any provision in this Purchase Order is found to be invalid or unenforceable in any respect, the validity and enforceability of the remaining provisions of this Purchase Order shall not be affected.

28. LIENS - All goods to be delivered by Seller hereunder shall be free and clear of any and all liens and encumbrances whatsoever.

29. DESIGN CHANGES - During performance of this Purchase Order, Seller shall not make any changes in the design or items to be furnished by Seller under this Purchase Order without advance notification to and approval of Buyer.

30. PRODUCT SUPPORT - Seller warrants that items of the type purchased under this Purchase Order, including the sub-assemblies and spare parts, shall be made available by Seller to Buyer and its customers during the operational life of the items purchased or for ten (10) years after the date of final shipment under this Purchase Order, whichever is later. Further, during said period, Seller shall continue to provide technical support and service at the same level as presently provided. In the event Seller discontinues the manufacture of the aforementioned items, sub-assemblies or spare parts therefor, or does not provide any of them in a timely manner for Buyer's requirements, Seller shall make available to Buyer all drawings, specifications, data and know-how which will enable and facilitate Buyer, its suppliers or its customers, to manufacture or procure and use and sell such items, sub-assemblies and spare parts under a royalty-free license which is hereby granted.

31. EXCUSABLE DELAYS - Neither party shall be in default for any delay or failure to perform under this Purchase Order due to causes beyond its control and without its fault or negligence, provided that (i) any delay or failure to perform caused by the default of a supplier of Seller is beyond the control of Seller only if the items to be furnished are not obtainable from other sources and provided further that (ii) Seller furnishes prompt written notice to Buyer of the occurrence of any such cause which will or may delay Seller's performance.

32. REMEDIES - Buyer shall be entitled to recover all damages of any sort, including but not limited to consequential and incidental damages, caused by Seller's breach of warranty or breach of any provision of the contract between the parties. Such damages shall be cumulative and in addition any other remedies provided by law. In case of any conflict between these General Terms and Conditions and the other portions of this order, such other portions shall control.

February 2000

33. GOVERNMENT SAFETY AND ENVIRONMENTAL REGULATIONS - All purchase materials used in part manufacture shall satisfy current governmental and safety constraints on restricted, toxic, and hazardous materials; as well as environmental, electrical, and electromagnetic considerations applicable to the country of manufacture and sale.