Terms and Conditions

American Power Systems, Inc. General Terms and Conditions of Sale

Unless otherwise agreed in writing and regardless of the language in any order acknowledgement, sales acceptance, sales order or other preprinted form, these Terms and Conditions constitute the only Terms and Conditions under which American Power Systems, Inc. (“Seller”) is willing to sell the products specified on the attached form (the “Products”) to its customer identified on the same form (“Buyer”). The attached form, together with these Terms and Conditions, is collectively referred to herein as the “Agreement”.

1. Proposal/Quotation. All proposal pricing shall be valid for a period of thirty (30) days from the date printed on such proposal. If not accepted by Buyer prior to the end of this thirty (30) day period, Seller reserves the right to cancel the proposal and reject any acceptance. Unless otherwise agreed, prices quoted are all FOB at Seller’s dock in Davenport, Iowa (the “FOB Point”).

2. Taxes. Any and all applicable sales, use or other taxes are not included in the proposal pricing and are the sole responsibility of the Buyer. Exclusion of any such taxes from Seller’s invoices shall only be made when Seller is provided with a valid document authorizing the Buyer to be exempt from the collection by Seller of such tax.

3. Delivery and Risk of Loss. Unless otherwise specified, delivery dates are thirty (30) days from the time an order is received by Seller. Such dates for delivery provided herein or with proposals are estimates only and may be revised at the time an order is placed based upon current business conditions. Reasonable efforts will be made to meet an estimated delivery date but such dates cannot be guaranteed. Title to and risk of loss on the Products shall pass to Buyer at the FOB Point.

Shipment Policy: All goods shall be shipped F.O.B. Davenport, IA USA by Buyer’s choice of carrier at Buyer’s expense. Title and all risk of loss shall pass to Buyer on delivery to said carrier subject to Buyer’s obligation to pay for the goods in accordance with the above payment terms.

Shipment damage, errors or shortages: Seller is not responsible for damage caused in transit. It is the responsibility of the Buyer to file damage claims directly with the freight company. If errors or shortages are detected in any shipment, Buyer must notify Seller of discrepancy within three (3) working days from date of receipt.

Non-Conforming Shipments: Buyer must notify Seller in writing within seven (7) days after receipt of shipments not conforming to Buyer’s order, stating specifically Buyer’s claim of non-conformity, otherwise Buyer is deemed to accept the shipment as is. If Seller is satisfied the shipment is non-conforming, Seller will (i) credit Buyer for the price of non-conforming goods or goods shipped but not ordered (including allocated outbound and return freight) upon return of goods; (ii) promptly ship omitted items waiving Seller’s new order charges. Buyer is required to make timely payment to Seller of any amount which is undisputed or not subject to such claims.

4. Terms of Payment. Payment terms are net thirty (30) days after invoice, unless other terms are agreed to in writing by the parties. After thirty (30) days from the date of invoice, all sums due shall accrue interest at the rate of one and one-half percent (1.5%) per month until fully paid. In the event any invoice is not paid in full when due, Seller shall be entitled to recover any and all costs of collection including, without limitation, reasonable attorney fees and costs.

5. Reservation of Rights and Security Agreement. Should Buyer be delinquent in the payment of any obligations due to Seller, Seller reserves the right to retain any materials, parts or accessories (as well as all finished goods and/or the proceeds from the sale thereof) described in and being purchased by Buyer (collectively, “Property”) until said account is paid in full. Buyer hereby grants Seller a security interest in said Property up to the full amount of the unpaid purchase price plus interest as set forth in Section 4 hereof. Buyer authorizes Seller to file a financing statement on behalf of Buyer to perfect a security interest in such Property. Notwithstanding anything to the contrary herein, title to such Property does not transfer until the earlier of (i) shipment of the Property per the terms of Section 3 above or (ii) Seller’s receipt of full payment from Buyer for such Property.

6. Warranty and Claims; Limitation of Liability

A. Warranty. Seller warrants that (i) the Products have been manufactured with workmanship consistent with industry standards; (ii) that all Products conform to Buyer’s specifications, and (iii) at the time of shipment are free from manufacturing defects (the “Warranty”).

B. Notice of Claim. (i) Buyer agrees that it must provide Seller with a written notice of a breach of Warranty claim(a “Warranty Claim”) in strict accordance with the terms of the Warranty that is delivered to the Buyer with the Products; otherwise the Buyer shall be deemed to have irrevocably waived its Warranty rights; (ii) Upon receipt of a Warranty Claim notice, Seller shall have a reasonable opportunity to investigate the Products and the claimed defect(s) and Buyer shall preserve all Products for a reasonable time to permit proper testing and investigation by Seller; (iii) Buyer agrees that the final determination as to whether or not a product is defective rests with Seller; and (iv) Seller is not responsible for any Warranty Claims related to defective materials or products that are not manufactured by Seller. To the extent permitted under Seller’s agreements with product manufacturers, Seller agrees to assign any warranties it may receive from the product manufacturers to Buyer.

C. Limitations of Liability. Seller is a contract manufacturer and as such takes no responsibility for the design of the Product, including selection of material. Seller may have some knowledge of the nature of the intended use but is producing all Products to Buyer’s specifications, and thus takes no responsibility for the fitness of the Product for the customer’s intended use. Seller’s sole responsibility is to make the Product to the design specifications furnished by the customer, and Seller shall not be responsible for the correct interpretation or errors in the design or missing or deficient information in the Buyer’s documentation. If a Product is defective, Seller’s sole liability is to repair, replace or refund the purchase price for any such defective Product, as determined by Seller in its sole discretion.

EXCEPT AS SET FORTH ABOVE, SELLER MAKES NO OTHER WARRANTIES, EXPRESS OR IMPLIED, INCLUDING WITHOUT LIMITATION ANY IMPLIED WARRANTY OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE. SELLER SPECIFICALLY DISCLAIMS, AND THE CUSTOMER SPECIFICALLY WAIVES, ANY LIABILITY FOR DIRECT, INDIRECT, SPECIAL, INCIDENTAL OR CONSEQUENTIAL DAMAGES, INCLUDING BUT NOT LIMITED TO, LOSS OF USE, LOSS OF PROFITS OR REVENUES, DAMAGE OR LOSS OF OTHER PROPERTY OR EQUIPMENT OR COST OF CAPITAL. SELLER’S LIABILITY TO BUYER AND/OR ANY END USER OF THE PRODUCTS, IF ANY, SHALL IN NO EVENT EXCEED THE TOTAL PURCHASE PRICE PAID FOR THE PRODUCT HEREUNDER TO SELLER. IN NO EVENT SHALL SELLER HAVE ANY RESPONSIBILITIES OR OBLIGATIONS WHATSOEVER WHERE THE PRODUCT HAS BEEN EITHER ALTERED OR MODIFIED IN ANY WAY, NOR SHALL SELLER HAVE ANY RESPONSIBILITIES OR OBLIGATIONS WHATSOEVER WHERE THE SELLER’S PRODUCT HAS BEEN MISUSED BY THE CUSTOMER OR OTHER END-USER. CUSTOMER IS AWARE OF THE NATURE AND INTENDED USE OF ANY PRODUCT IT ORDERS FROM SELLER, AND ASSUMES THE RISK OF USING SUCH PRODUCT.

ADDITIONAL NEGLIGENCE WAIVER. TO THE MAXIMUM EXTENT ALLOWABLE BY LAW, CUSTOMER WAIVES AND RELEASES THE SELLER FROM ANY CLAIMS OR LIABILITIES FOR DAMAGE OR LOSS TO ANY PERSON, PERSONS OR PROPERTY IN ANY WAY ARISING OUT OF OR DURING THE USE OF SUCH PRODUCT EXCEPT FOR THE SELLER’S LIMITED WARRANTY TO REPAIR, REPLACE OR REFUND THE PURCHASE PRICE FOR SUCH PROPERTY AS EXPLICITY SET FORTH IN, AND AS LIMITED BY, THE IMMEDIATELY PRECEDING PARAGRAPH.

7. Conflicting Language. Seller’s willingness to sell the Products is expressly limited to acceptance by Buyer of these Terms and Conditions. No additional terms or conditions contained in any acceptance, confirmation or other writing prepared or delivered by Buyer to Seller shall be deemed incorporated into or to alter any term or condition contained in this Agreement unless expressly agreed to by Seller in writing.

8. Force Majeure. Seller shall not be liable for its failure to perform hereunder, in whole or in part, due to contingencies beyond its reasonable control, including but not limited to strikes, riots, war, fire, acts of God, terrorist activities, injunctions, compliance with any law, regulation or order, whether valid or invalid, of the United States of America, or any other governmental body or any instrumentality thereof, whether now existing or hereafter created.

9. Indemnity. Buyer shall defend, indemnify and hold harmless Seller, its officers, directors, agents and employees from and against any and all losses, costs, liabilities, damages, expenses (including without limitation reasonable attorney’s fees and costs), claims, demands, actions and causes of action (collectively, “Claims”) arising from or relating to the Products relating to or arising out of any act or omission of Buyer or any of its officers, directors, agents, or employees, including but not limited to any misuse or alteration of any Product.

10. Severability. In the event that any court of competent jurisdiction shall finally determine that any provision, or any portion thereof, contained in this Agreement shall be void or unenforceable in any respect, then such provision or portion thereof shall be deemed limited to the extent that such court determines it enforceable, and as so limited shall remain in full force and effect. In the event that such court shall determine any such provision, or portion thereof, wholly unenforceable, the remaining provisions or portions of such provisions of this Agreement shall nevertheless remain in full force and effect.

11. Choice of Law; Arbitration. This Agreement shall be governed and construed in accordance with the laws of the State of Iowa without regard to any applicable principles of conflicts of law. All actions, disputes, claims and controversies under common law, statutory law or in equity of any type or nature whatsoever, whether arising before or after the date of this Agreement, and whether directly or indirectly relating to: (i) this Agreement and/or any amendments and addenda hereto, or the breach, invalidity or termination hereof; (ii) any previous or subsequent agreement between the parties; and/or (iii) any other relationship, transaction or dealing between the parties (collectively the “Disputes”), shall be subject to and resolved by binding arbitration pursuant to the rules of American Arbitration Association conducted in Davenport, Iowa. The arbitration shall be conducted by one (1) arbitrator. If the Parties are not able to agree upon the selection of an arbitrator, within twenty (20) days of commencement of an arbitration proceeding by service of a demand for arbitration, the arbitrator shall be selected by the American Arbitration Association in accordance with the terms of this Agreement. Any award or order rendered by the arbitrator may be confirmed as a judgment or order in any state or federal court of competent jurisdiction within the federal judicial district which includes the residence of the party against whom such award or order was entered. In the event a party fails to proceed with arbitration, unsuccessfully challenges the arbitrator’s award, or fails to comply with arbitrator’s award, the other party is entitled of costs of suit including a reasonable attorney’s fee for having to compel arbitration or defend or enforce the award.

12. Change Orders; Contract Cancellation; Return Policy. Change orders will only be accepted if production has not commenced on the order. Any order for products manufactured by Seller may be terminated by Buyer only by written notice and upon payment of termination charges including, but not limited to, all costs incurred for personnel, facility, equipment and materials identified in the order, up to the date of notice of termination. Seller will, upon receiving a written notice of cancellation, prepare and submit a cost-to-date invoice detailing all costs incurred to the date of such request. The invoice will include applicable credits for the return of any standard components to stock, if any, plus a fifteen percent (15%) cancellation fee that will be based on the total contract price. Buyer acknowledges that product returns which are not covered by Section 3 above shall only be allowed at the sole discretion of the Seller, and that Seller may deny such a product return for any reason or no reason at all. Should the Seller allow a product return, Seller shall have the right to charge a re-stocking fee of fifteen percent (15%) based on the total contract price. All termination charges, re-stocking fees, credits and the cancellation fees, less any other payments previously made by Buyer with respect to such order, shall be due and payable within thirty (30) days from date of invoice, and shall bear interest and be subject to collection fees in accordance with Section 4 above. In lieu of cancellation seller may agree to a change order.

13. Counterparts; Signatures. This Agreement may be executed in any number of counterparts, each of which shall be an original, but all of which together shall constitute one agreement. Facsimile signature shall have the same force and effect as an original signature. The parties
agree that this Agreement shall be legally binding upon the electronic transmission, including by facsimile or email of .pdf files, by each party of a signed signature page to this Agreement to the other party.

14. No Waiver. No failure to exercise and no delay in exercising, on the part of Seller, any right, remedy, power or privilege provided herein or by statute or at law or in equity shall operate as a waiver thereof; nor shall any single or partial exercise of any such right, remedy, power or privilege preclude any other or further exercise thereof or the exercise of any other right, remedy, power or privilege, unless such waiver is in writing and signed by an authorized representative of the Seller.

15. Assignment. This Agreement constitutes the entire agreement, and supersedes all prior agreements and understandings, both written and oral, among the parties with respect to the subject matter hereof. This Agreement and the rights and obligations hereunder shall not be assigned by operation of law or otherwise without the prior written consent of Seller.

THIS REPRESENTS THE TERMS AND CONDITIONS AGREED TO BY BUYER AND SELLER. NO OTHER TERMS SHALL APPLY UNLESS STIPULATED AND AGREED TO IN A SEPARATE WRITTEN AGREEMENT EXECUTED BY BOTH PARTIES. SELLER RESERVES THE RIGHT TO CHANGE THESE TERMS AND CONDITIONS FOR PROSPECTIVE APPLICATION SO LONG AS NOTICE IS PROVIDED TO THE CUSTOMER. THIS CONTRACT CONTAINS A BINDING ARBITRATION PROVISION WHICH MAY BE ENFORCED BY THE PARTIES.

SELLER DOES NOT AGREE TO THE RELEASE OF, OR AUTHORIZE ACCESS TO, ANY OF THE DESIGN RIGHTS TO SELLER’S SYSTEMS OR COMPONENTS PROVIDED. BUYER AGREES NOT TO COPY, REVERSE ENGINEER, OR RE-CREATE ANY OF THE INCLUDED COMPONENTS WITH THE KNOWLEDGE GAINED FROM INSTALLING AND UTILIZING SELLER’S PRODUCTS OR COMPONENTS. ALL SYSTEMS PROVIDED BY SELLER TO BUYER ARE TO BE CONSIDERED PROPRIETARY IN NATURE UNLESS A RELEASE STATING OTHERWISE HAS BEEN OBTAINED FROM SELLER.

Last Revised: 08/22/2017