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Conditions of Sale,
Phoenix Repair and Overhaul
1944 E. Sky Harbor Circle, Phoenix, AZ 85034
FAA Repair Station License No. ZN3R030M
JAR-145 Ref. JAA.4136

APPLICABILITY Except for the application of overriding general terms agreements previously executed between Buyer and Seller, any Repair Order covering the sale of Honeywell International Inc. ("Seller") products and services ("Repair Order") shall be governed solely by these Terms and Conditions and such other provisions agreed upon in writing by duly authorized representatives of Seller. Buyer and Seller are hereinafter referred to individually as "Party" or collectively as "Parties". Any oral understandings are expressly excluded. Seller shall not be deemed to have waived these Terms and Conditions if it fails to object to provisions appearing on, incorporated by reference in, or attached to Buyer’s Repair Order Form, which provisions are hereby expressly rejected. Buyer’s silence or acceptance or use of products constitutes its acceptance of these Terms and Conditions. No modification or addition to these Terms and Conditions shall be effective unless agreed to in writing and signed by an authorized representative of Buyer and Seller. These Terms and Conditions shall apply to any Repair Order for products whether or not they are referenced in such Repair Order. Seller reserves the right to reject any Repair Order submitted for its acceptance.

DELIVERY Delivery shall be made within the time specified on Buyer's Repair Order or within normal published lead-time, whichever is later. If transportation charges are prepaid by Seller, Buyer shall reimburse Seller upon receipt of an invoice for such charges.

BUYERS PROPERTY Property of the Buyer in possession of Seller shall be held without liability to Seller except where loss or damage thereto is due to the sole negligence of Seller.

ACCEPTANCE Buyer shall inspect and accept or reject products delivered pursuant to a Repair Order immediately after Buyer takes custody of such products. In the event the products do not comply with the applicable Seller drawings, Buyer shall promptly notify Seller, providing an explanation of the basis for rejection. Seller shall be afforded a reasonable opportunity to correct any such alleged noncompliance, after which Seller shall replace any remaining non-compliant products with complying products. Buyer shall be deemed to have accepted any products delivered hereunder and to have waived any right to reject such products in the event Seller does not receive notification of rejection prior to the expiration of thirty (30) calendar days following delivery. If it is later determined by Seller that the products originally shipped were in compliance, all expenses related to the improper rejection are the responsibility of Buyer.

CHANGES Seller at all times reserves the right, and is entitled in its sole discretion without consent of Buyer, to make changes, additions or improvements to the products being delivered under aRepair Order without liability or obligation to incorporate such changes, additions or improvements in any item manufactured, sold or delivered prior to incorporation of the change, addition or improvement.

PRICES AND PAYMENTS Prices are F.O.B. (or FCA, Incoterms 2000, for export) Seller's dock unless otherwise specified. Purchase prices are stated in United States dollars, and payment shall be made in United States currency. Invoice terms are net 30 days from date of invoice unless otherwise specified. Seller reserves the right to modify or withdraw credit terms at any time without notice and to require guarantees, security or payment in advance of the amount of sale involved. In the event payments are not made in a timely manner, Seller may, singularly or in combination: (1) declare Buyer's performance in breach and terminate this Repair Order for default; (2) repossess the goods for which payment has not been made; (3) withhold future shipments under this Repair Order until delinquent payments are made; (4) deliver future shipments under this Repair Order on a cash with Repair Order or cash in advance basis even after the delinquency is cured; (5) charge interest on the delinquency at a rate of 1-1/2% per month or the maximum rate permitted by law, if lower, for each month or part thereof of delinquency in payment plus applicable storage charges, or inventory carrying charges; (6) recover all costs of collection including reasonable attorneys fees; and/or (7) avail itself of any other rights and remedies as provided by law. Title and risk of loss, damage, or destruction of goods, shall pass to Buyer upon delivery of the products at the FOB point.

SETOFF All amounts that Buyer owes Seller under a Repair Order shall be due and payable according to the terms of such Repair Order. Buyer is prohibited from and shall not set off such amounts or any portion thereof, whether or not liquidated, against sums which Buyer asserts are due it, its parent affiliates, subsidiaries or other divisions or units under other transactions with Seller, its parents, affiliates, subsidiaries or other divisions or units.

WARRANTY Definitions Nonconformance -- Failure to comply with, or failure to operate due to noncompliance with, applicable Seller drawings or having defects in workmanship or material. Normal wear and tear and the need for regular overhaul and periodic maintenance shall not constitute Nonconformance. Product - End items, line replaceable units and components thereof, including those returned for exchange. Terms Seller warrants that at time of delivery to Buyer, its Products will comply with applicable Seller drawings and will be free from defects in workmanship and material. These warranties shall run to the Buyer, its successors, assigns, and customers. This warranty is valid for Six (6) months after delivery of the Products or three (3) months after date of first use, whichever first occurs., unless otherwise specified in a quotation or other documentation from Honeywell attached hereto. Buyer must notify Seller in writing of the Nonconformance of any Product within the warranty period and return the Product to Seller within thirty (30) days after such discovery. Seller's obligation and Buyer's remedy under this warranty is limited to either repair or replacement, by Seller's election, of any Product Nonconformance. All items repaired or replaced hereunder shall be warranted only for the unexpired portion of the original warranty period. Seller agrees to assume round trip transportation costs for a Nonconforming Product in an amount not to exceed normal surface shipping charges to the nearest facility designated herein for warranty repair of Products delivered under a Repair Order. The risk of loss or damage to all Products in transit shall be borne by the Party initiating the transportation of such Products. Seller shall not be liable under this warranty if the Product has been exposed or subjected to:

		Any maintenance, repair, installation, handling, transportation, storage, operation or use which is improper or otherwise not in compliance with Seller's instruction; or
		Any alteration, modification or repair by anyone other than Seller or those specifically authorized by Seller; or
		Any accident, contamination, foreign object damage, abuse, neglect or negligence after delivery to Buyer; or
		Any damage caused by failure of a Seller supplied Product not under warranty or by any hardware or software not supplied by Seller.

Seller's obligations under this warranty are conditional on Buyer's obligation to maintain records which will accurately reflect operating time and maintenance performed on Seller's Product and establish the nature of any unsatisfactory condition of Seller's Product. Seller, at its request, shall be given access to such records for substantiating warranty claims. THIS WARRANTY IS EXCLUSIVE AND IN LIEU OF ALL OTHER WARRANTIES, WHETHER WRITTEN OR ORAL, EXPRESS, IMPLIED OR STATUTORY, INCLUDING, BUT NOT LIMITED TO, ANY IMPLIED WARRANTIES OF MERCHANTABILITY OR FITNESS FOR PARTICULAR PURPOSE OR USE AND WARRANTIES ARISING FROM COURSE OF PERFORMANCE, DEALING, USAGE OR TRADE, WHICH ARE HEREBY EXPRESSLY DISCLAIMED. IN NO EVENT SHALL SELLER BE LIABLE FOR INCIDENTAL OR CONSEQUENTIAL DAMAGES. THE EXCLUSION OF INCIDENTAL AND CONSEQUENTIAL DAMAGES AS SET FORTH IN THESE CONDITIONS SHALL BE DEEMED INDEPENDENT OF, AND SHALL SURVIVE, ANY FAILURE OF THE ESSENTIAL PURPOSE OF ANY LIMITED REMEDY UNDER THE TERMS OF THESE CONDITIONS. NO EXTENSION OR EXPANSION OF THIS WARRANTY SHALL BE BINDING UPON SELLER UNLESS SET FORTH IN WRITING AND SIGNED BY SELLER'S AUTHORIZED REPRESENTATIVE.

EXCUSABLE DELAY Seller shall be excused from delays in delivery and performance of other contractual obligations under this Repair Order caused by acts or omissions that are beyond the reasonable control and without the fault or negligence of Seller including but not limited to Government embargoes, blockades, seizure or freeze of assets, delays or refusals to grant an export license or the suspension or revocation thereof, or any other acts of any Government, fires, floods, severe weather conditions, or any other acts of God, quarantines, labor strikes or lockouts, riots, strife, insurrection, civil disobedience, war, material shortages or delays in deliveries to Seller by third parties. If the excusable delay circumstances extend for six months, either Party may, at its option, terminate this Repair Order without penalty or liability and without being deemed in default or in breach thereof.

CANCELLATION Buyer reserves the right to cancel any portion of this Repair Order affected by a default of Seller or any insolvency or suspension of Seller's operations or any petition filed or proceeding commenced by or against Seller under any state or federal law relating to bankruptcy, arrangement, reorganization, receivership or assignment for the benefit of creditors. Any such cancellation by Buyer for default by Seller must be made by written notice to Seller specifying the details and Seller shall be given ninety (90) days to correct such default. Any claim by Buyer for loss or damages are governed by the provisions of "Limitation of Liability" as set forth below. If a Repair Order is cancelled in whole or part prior to its delivery, it may be subject to a cancellation charge.

DISPUTES Except as otherwise explicitly agreed in writing by Buyer and Seller, Seller reserves the right to have any dispute relating to intellectual property not resolved by the Parties adjudicated by any court of competent jurisdiction, including the right to seek injunctive relief. When Buyer is incorporated within the United States Except as otherwise specifically agreed in writing by Buyer and Seller, any dispute arising out of or relating to a Repair Order placed by Buyer (if Buyer is incorporated in the United States) which is not resolved by the Parties shall be determined and settled by neutral binding arbitration in accordance with the AAA Rules as in force at the commencement of the arbitration. The place of arbitration shall be in the State of Arizona USA. Any decision rendered by the arbitrator shall be final, conclusive and binding upon the Parties to the arbitration and may be enforced by the judgment and order of any court of competent jurisdiction. When Buyer is incorporated outside the United States Except as otherwise specifically agreed in writing by Buyer and Seller, any dispute arising out of or relating to a Repair Order placed by Buyer (if Buyer is incorporated outside the United States) which is not resolved by the Parties shall be determined and settled by neutral binding arbitration in accordance with the AAA International Rules as in force at the commencement of the arbitration. The place of arbitration shall be in the State of Arizona, USA. Any decision rendered by the arbitrator shall be final, conclusive and binding upon the Parties to the arbitration and may be enforced by the judgment and order of any court of competent jurisdiction.

APPLICABLE LAW This Agreement shall be interpreted in accordance with the State of Arizona law, exclusive of any choice of law provisions. Seller and Buyer expressly agree to exclude from this Repair Order the United Nations Convention on Contracts for the International Sale of Goods, 1980, and any successor thereto.

LIMITATION OF LIABILITY Any claim by Buyer for loss or damages as a result of an alleged material failure to perform by Seller must be by written notice to Seller specifying the details and providing reasonable evidence of such failure. Seller's liability on any claim for loss or damage arising out of, connected with, or resulting from aRepair Order, or from the performance or breach thereof, or from the manufacture, sale, delivery, resale, repair or use of any products covered by or furnished under a Repair Order shall in no case exceed the price allocable to the products or part thereof which gives rise to the claim, except as provided in the paragraph entitled "Patent Indemnity". IN NO EVENT SHALL SELLER BE LIABLE FOR ANY SPECIAL DAMAGES, INDIRECT DAMAGES, EXEMPLARY DAMAGES, PUNITIVE DAMAGES, INCIDENTAL DAMAGES, CONSEQUENTIAL DAMAGES, LOSS OF REVENUE, LOSS OF PROFITS, OR LOSS OF USE OF ANY PROPERTY OR CAPITAL, EVEN IF THE POSSIBILITY OF SUCH DAMAGES HAS BEEN DISCLOSED TO SELLER IN ADVANCE OR COULD HAVE BEEN REASONABLY FORESEEN BY SELLER. THE EXCLUSION OF INCIDENTAL AND CONSEQUENTIAL DAMAGES AS SET FORTH IN THESE CONDITIONS SHALL BE DEEMED INDEPENDENT OF, AND SHALL SURVIVE, ANY FAILURE OF THE ESSENTIAL PURPOSE OF ANY LIMITED REMEDY UNDER THE TERMS OF THESE CONDITIONS. Except as herein expressly provided to the contrary, the provisions of this Repair Order are for the benefit of the Parties to the Repair Order and not for the benefit of any other person.

NONDISCLOSURE AND NON-USE OF SELLER’S DATA AND INFORMATION Buyer agrees that it will not use Seller's data and information for the manufacture or procurement of products which are the subject of this Repair Order or any similar products, or to cause said products to be manufactured by or procured from any other source, or to reproduce said data and information or otherwise appropriate them without the written authorization of the Seller. Buyer agrees that it will not disclose or make available to any third party any of Seller's data or other information pertaining to this Repair Order which is proprietary to Seller without obtaining Seller's prior written consent.

INDEMNITIES AGAINST PATENT AND COPYRIGHT INFRIGEMENT Indemnity against Patent and Copyright Infringement. Seller shall undertake the defense of any suit arising out of any actual or alleged infringement through Buyer's use or resale of any Products purchased by Buyer from Seller pursuant to an Order, and pay the amount of any final judgment against Buyer resulting from such suit. Exceptions, Limitations, and Conditions Seller's obligation to indemnify Buyer for patent infringement shall extend only to infringements in countries which, at the time of the infringement, were party to and fully bound by either: (i) Article 27 of the Chicago Convention on International Civil Aviation of December 7, 1944, or (ii) the International Convention for the Protection of Industrial Property (Paris Convention). Seller's obligation to indemnify Buyer for copyright infringement is limited to infringements in countries which, at the time of the infringement, are members of The Berne Union and recognize computer software as a "work" under The Berne Convention. Seller's indemnities shall not apply to any (i) Products provided pursuant to Buyer's designs, drawings or manufacturing specifications, (ii) Products used other than for their intended purpose, or (iii) claims of infringement resulting from Buyer combining any Product furnished hereunder with any article not furnished by Seller. Further, Buyer agrees to indemnify and defend Seller to the same extent and subject to the same restrictions set forth in Seller's obligations to Buyer as set forth in this Paragraph for any suit or proceeding against Seller based upon a claim of infringement resulting from (i), (ii) and (iii) of the preceding sentence. Buyer shall deliver written notice to Seller: (i) within 10 days after Buyer first receives notice of any suit or other formal action against Buyer and (ii) within 20 days after Buyer first receives any other allegation or written claim of infringement. Buyer shall give Seller full and exclusive control to conduct the defense or settlement of any suit. At Seller's request and expense, Buyer shall provide reasonable assistance including promptly furnishing to Seller all information and records within Buyer's possession or control which Seller considers relevant or material to any alleged infringement. Because Seller has exclusive control of resolving infringement claims hereunder, in no event shall Seller be liable for Buyer's attorney fees or costs. In the event of any claim that any Product furnished hereunder infringes any indemnified copyright or patent, Seller may, at its option and expense: (i) procure for Buyer the right to continue using the Product, (ii) replace or modify the Product so that it becomes non-infringing, or (iii) grant Buyer a credit for such product, less a reasonable depreciation for use, damage, and obsolescence. Each Party's liability in the aggregate for damages under this Paragraph is limited to the annual value of any Products sold to Buyer hereunder. Except as required by a final judgment entered against Buyer by a court of competent jurisdiction from which no appeals can be or have been filed, Buyer shall obtain Seller's written approval prior to paying, committing to pay, assuming any obligation, or making any concession relative to any infringement covered by these indemnities. SELLER SHALL NOT BE LIABLE TO BUYER FOR INDIRECT DAMAGES, INCLUDING ANY LOST PROFITS OR OTHER INCIDENTAL OR CONSEQUENTIAL, EXEMPLARY OR SPECIAL DAMAGES, HOWEVER CAUSED AND ON ANY THEORY OF LIABILITY ARISING OUT OF THIS AGREEMENT. THE OBLIGATIONS OF SELLER AND REMEDIES OF BUYER HEREUNDER ARE EXCLUSIVE AND IN SUBSTITUTION FOR, AND BUYER HEREBY WAIVES, RELEASES, AND RENOUNCES, ALL OTHER INDEMNITIES, OBLIGATIONS, AND LIABILITIES OF SELLER AND ALL OTHER RIGHTS, CLAIMS AND REMEDIES OF BUYER AGAINST SELLER, EXPRESS OR IMPLIED, ARISING BY LAW OR OTHERWISE, WITH RESPECT TO ANY ACTUAL OR ALLEGED PATENT, COPYRIGHT OR OTHER INTELLECTUAL PROPERTY INFRINGEMENT BY ANY PRODUCTS, MATERIALS, TRAINING, SERVICES, OR OTHER THING PROVIDED HEREUNDER. SELLER MAKES NO REPRESENTATIONS OR WARRANTIES AGAINST INFRINGEMENT OF ANY INTELLECTUAL PROPERTY RIGHTS, EVEN IF SELLER HAS BEEN MADE AWARE OF SUCH INFRINGEMENT.

SOFTWARE LICENSE In the event that any software (including firmware) or software documentation is provided to Buyer by Seller in any form whatsoever under a Repair Order and no software license agreement governing this sale has been signed between Buyer and Seller, Buyer agrees to accept the terms and conditions stated below effective the date of the first delivery hereunder:    Subject to the terms and conditions herein, the Seller grants to Buyer a nonexclusive, nontransferable license to use the software or software documentation provided herein: (i) in the course of the normal operation in or with Seller products which are installed, or are intended to be installed, on aircraft, (ii) in the analysis or the formatting of reports using data from such Seller products or, (iii) on Seller or non-Seller products that are used to test, maintain, download, or process information compiled by Seller products.    Making copies of software or documentation except for one copy for archive purposes is prohibited unless specifically authorized by Seller in writing. Should such copying be authorized, Buyer will reproduce and include all Seller proprietary and copyright notices and other legends in the same manner that Seller provides such notices and legends, both in and on every copy of licensed software and documentation and in any form. Buyer shall indemnify Seller for any claims or causes of action arising from the usage of such copies.    The software license and rights granted by Seller to Buyer hereunder are personal to Buyer. The licensed software and documentation may not be sub-licensed, transferred, or loaned to any other party without Seller's prior express written consent, except that Buyer may transfer the licensed software and documentation in conjunction with the resale of any flight equipment or Seller supplied test equipment in which the licensed software and documentation is installed or with which it is used. Such permission to transfer is contingent upon the resale or transfer of Buyer's agreement to use and protect the confidentiality of the licensed software and documentation under the same or similar terms as those set forth in this software license. Buyer will, however, notify Seller in writing of the transfer of the licensed software and documentation.    Buyer agrees to utilize all licensed software and documentation only as authorized herein. Buyer may not either itself or with the assistance of others, make modifications to the licensed software and documentation, including, but not limited to, translating, decompiling, disassembling or reverse assembling, reverse engineering, creating derivative or merged works, or performing any other operation on licensed software and documentation to recover any portion of the program listing, object code or source code or any information contained therein. Seller retains all rights, title and interest in any such modifications.    Buyer agrees to accept and retain licensed software and documentation in confidence. Buyer agrees to take appropriate action by instruction, agreement or otherwise with Buyer's employees, or agents or other persons who are permitted access to licensed software and documentation as follows to inform said employees, agents or other persons who may come into contact with it of the confidential nature of licensed software and documentation; and to satisfy its obligations under this software license with respect to use, copying, and protection and security of licensed software and documentation.    This software license is effective as of the date of first delivery hereunder and shall continue until terminated by Buyer for any reason whatsoever upon thirty (30) days prior written notice to Seller, provided Buyer ceases using and either returns or destroys Seller software and documentation; or by Seller, if Buyer does not comply with any of the terms and conditions of this software license and Buyer fails to remedy such failure within thirty (30) days after having received notice from Seller of such failure.    Notwithstanding the warranties provided elsewhere herein, Buyer acknowledges that licensed software and documentation may be aircraft or sensor specific and, as such, may require reasonable adjustment or refinement to suit Buyer's specific requirements. Buyer shall provide reasonable aid to Seller in accomplishing such adjustments and refinements. Such reasonable adjustments or refinements shall commence on the date of delivery and be provided by Seller to Buyer for a period not to exceed ninety (90) days unless otherwise provided for in writing.    Buyer agrees that it will not use the license software and documentation in the performance of a contract, or subcontract, with any Government in a manner so as to affect Seller rights to licensed software and documentation. If Buyer desires to use the licensed software or documentation in the performance of a contract or subcontract with a Government, prior to such use, Buyer shall consult with Seller as to the procedures and use of restrictive markings required to protect the ownership interest of Seller.    This license and sale is subject to the laws and regulations, and other administrative acts, now or hereinafter in effect, of the United States and other governments and their departments and agencies relative to the exportation and/or re-exportation of licensed software and documentation. Buyer acknowledges that it will be responsible for compliance as necessary with such laws, regulations and administrative acts. SPECIAL TOOLING AND DATA Unless otherwise agreed in writing, all material, software, data, processes, equipment, facilities and special tooling, which term includes but is not limited to jigs, dies, fixtures, molds, patterns, special taps, special gages, special test equipment, other special equipment and manufacturing aids and replacements thereof, used in the manufacture of products covered by a Repair Order shall be and remain the property of Seller. Seller retains all rights, title and interest in drawings, engineering instructions, specifications, and all other written data, if any furnished with the products. EXPORT Unless otherwise agreed, Buyer and Seller shall be responsible for compliance with the export control laws and regulations of the U.S. Government, and when required by such laws and regulations shall obtain validated export and re-export licenses required for goods, services and technical data delivered under this Repair Order. Seller shall not be liable to Buyer for any failure to provide goods, services or technical data as a result of any following U.S. Government actions: (1) refusal to grant export or re-export license; (2) cancellation of export or re-export license; or (3) any subsequent interpretation of U.S. export laws and regulations, after the date of this Repair Order, that limits or has a material adverse effect on the cost of Seller's performance on this Repair Order. TAXES The prices quoted herein do not include sums necessary to cover any taxes or duties including but not limited to Federal, State, Municipal excise, sales or use taxes or import duties upon the production, sales, distribution, or delivery of goods or furnishing of services hereunder. Any taxes or duties that are due and owing hereunder, including interest and penalties assessed by the applicable jurisdiction, shall be paid by the Buyer. Accordingly, Seller reserves the right to revise its price after the execution of this Repair Order between the Parties to include any and all taxes or duties that may become due hereunder and Seller may invoice Buyer for said additional amount. This clause shall survive the acceptance and complete performance of this Repair Order by the Parties herein. ASSIGNMENT Buyer shall not assign this Repair Order or any portion thereof without the advance, written consent of Seller. WAIVER Failure by Seller to assert all or any of its rights upon any breach of this Repair Order shall not be deemed a waiver of such rights either with respect to such breach or any subsequent breach, nor shall any waiver be implied from the acceptance of any payment or service. No waiver of any right shall extend to or affect any other right Seller may possess, nor shall such waiver extend to any subsequent similar or dissimilar breach. SEVERABILITY If any provision of these Terms and Conditions is determined to be illegal, invalid, or unenforceable, for any reason, then such provision shall be revised to the extent necessary for it to be legal, valid and/or enforceable, and all other provisions shall remain in full force and effect. COMMERCIAL USE Buyer represents and warrants that all product purchases hereunder will not be used in the performance of a contract, or subcontract, with any government in a manner so as to affect Seller rights to data, technology, or other intellectual property supplied by Seller.. ENTIRE AGREEMENT The provisions contained in these Terms and Conditions, constitute the entire agreement between the Parties with respect to a Repair Order and supersede all previous forms, agreements, communications, representations, either verbal or written between Buyer and Seller. 8-28-01 I Agree

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