Terms and Conditions of Purchase

Acceptance and Governing Provisions

Each purchase order issued by Tecate Industries, Inc. dba Tecate Group ("Buyer") that incorporates or references these terms and conditions of purchase represents an offer by Buyer to buy the goods and/or services described on the purchase order (and in all specifications and data submitted with the purchase order) from the vendor to which this offer is addressed ("Vendor"), subject to these terms and conditions of purchase. This offer is not an acceptance of any offer by Vendor to sell, and it is expressly conditioned upon assent to these terms and conditions.  Buyer objects to any and all additional and different terms contained on any of Vendor's quotation, acknowledgement, invoice or other forms, or in any other communications from Vendor.  If not previously accepted, this offer expires 30 calendar days from its date or upon Buyer's prior notice of expiration to Vendor, unless goods conforming to this offer are subsequently shipped by Vendor and accepted by Buyer.  This offer, including Buyer's purchase order and these terms and conditions of purchase, when accepted by Vendor explicitly, by shipment of ordered goods or performance of ordered services or otherwise, shall constitute the entire agreement between the parties on the subject hereof (the "Contract"), superseding any and all prior and contemporaneous understandings, communications and negotiations, whether written or oral.  THIS OFFER AND ANY CONTRACT RESULTING FROM THE ACCEPTANCE OF THIS OFFER SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE INTERNAL LAWS OF THE STATE OF CALIFORNIA, U.S.A. THE RIGHTS AND OBLIGATIONS OF THE PARTIES UNDER THIS CONTRACT SHALL NOT BE GOVERNED BY THE PROVISIONS OF THE 1980 UNITED NATIONS CONVENTION ON CONTRACTS FOR THE INTERNATIONAL SALE OF GOODS.

Price; Security Interest

All prices are firm, and no additional charges will be allowed unless specifically provided for on Buyer's purchase order. All time periods for determining payment due dates and availability of discounts commence upon Buyer's receipt of the ordered items or receipt of an invoice, whichever is later. If Buyer is to make any payment before Buyer's receipt of the ordered goods, Vendor grants Buyer a security interest in those goods and all proceeds of those goods to secure performance of Vendor's obligations under this Contract, and agrees that Buyer may file such financing statements or other documents as Buyer may reasonably consider necessary or appropriate to perfect its security interest.

Delivery Schedule

Vendor shall deliver the goods, in the quantities, in accordance with the delivery schedule and the specifications (as well as the sample approved by Buyer, if any), and at the prices specified on Buyer's purchase order or in any document attached to or referenced in the purchase order. Failure of Vendor to comply with these requirements shall entitle Buyer, in addition to any other rights or remedies, to cancel the order for breach and be relieved of all liability for any undelivered portion. Time is of the essence with respect to Vendor's performance. Vendor shall not unreasonably anticipate delivery by purchasing materials or components or manufacturing quantities in excess of what is reasonably required to meet Buyer's delivery schedule. Goods received in advance of Buyer's delivery schedule may at Buyer's option be returned at Vendor's risk and expense or be accepted and payment withheld until after the scheduled delivery date.

Breach

In the event that Vendor breaches any of its obligations under this Contract, Buyer may, at its option, purchase substitute goods or services, and Vendor shall pay to Buyer the excess of the cost of such substitute goods or services over the purchase price provided in Buyer's purchase order, plus all damages, losses and expenses incurred by Buyer as a result of Vendor's breach. In the event Vendor is late in delivering goods or performing services, Buyer may deduct damages, losses and expenses resulting from the delay from the purchase price of the goods or services. Buyer shall not be required to accept replacements or substitutes, or to permit cure of defects in any goods or services rightfully rejected.  Vendor shall be liable for all direct, consequential, indirect and incidental damages arising from any breach of any of Vendor's obligations under this Contract or any defect in the goods or services furnished. The remedies set forth in this paragraph shall be in addition to, and not in lieu of, any other remedies that Buyer may have under the applicable purchase order or under applicable law.

Packing and Shipping

All goods shall be suitably packed, marked conspicuously with Buyer's purchase order number, and shipped in accordance with shipping instructions specified by Buyer and otherwise in accordance with the requirements of common carriers so as to obtain the lowest transportation cost. Buyer shall have the right to route all shipments. No charge shall be made to Buyer for packaging, boxing or cartage unless separately itemized on Buyer's purchase order. Vendor shall be liable to Buyer for all losses, expenses and damages resulting from Vendor's failure to act so as to provide adequate protection during shipment. Additional expenses, charges or claims incurred as a result of deviation from the specified route, non-compliance with other shipping instructions or improper description of the shipment in shipping documents shall be Vendor's responsibility. Immediately upon shipment Vendor is to notify Buyer, advising of complete shipping and routing information.

Inspection

Vendor agrees to permit Buyer to have access to Vendor's facilities at all reasonable times for the purpose of inspecting any goods set forth in Buyer's order or work in progress for production of such goods. All goods are subject to final inspection and approval at Buyer's plant or other place designated by Buyer. Such inspection shall be made within a reasonable time after delivery, but not less than 90 days, irrespective of the date of payment. Notwithstanding any payment that may be made, no goods are to be deemed accepted until Buyer has had a reasonable opportunity to inspect them.

Rejected Items

Buyer may return rejected items at Vendor's risk and expense. Vendor shall not replace items returned as defective unless so directed by Buyer in writing.

Changes

Buyer may make changes in datasheets, drawings, specifications, quantities, delivery schedules, and/or methods of shipment or packaging on any item at any time. If such changes result in an increase or decrease in the cost or in the time required for performance, an equitable adjustment of price and/or delivery schedules may be made, or Buyer may, at its option, terminate its order pursuant to the "Cancellation By Buyer" paragraph below if agreement on an equitable adjustment cannot be reached. Claims for equitable adjustment must be asserted by Vendor within 10 calendar days of the issuance of the change order. Change orders issued by Buyer shall be deemed to amend the Contract.

Risk of Loss

Notwithstanding any applicable terms of shipment, the risk that the ordered goods may be lost, damaged or delayed in transit shall be borne by Vendor until actual receipt of them by Buyer in conformity with the terms of this Contract.

Warranty

In addition to its standard warranty and/or service guaranty, Vendor warrants that all goods supplied shall:  be free and clear of all liens, security interests and encumbrances, with good and merchantable title to such goods being in the Vendor; be new and unused; be free from any defects in design, material or workmanship and of good and merchantable quality; conform to Buyer's specifications or the sample approved by Buyer, as the case may be, and be fit for the known purposes for which purchased; and comply and have been produced, processed, packaged, labeled, delivered and sold in conformity with all applicable national, federal, state, local and other laws, rules, regulations and orders; and Vendor also warrants that all services will be performed timely, properly and in a good and workmanlike manner. The foregoing warranties shall survive inspection, delivery, performance and payment and shall run in favor of Buyer and its customers, whether direct or indirect.

Non-assignability; Amendments

Vendor shall not assign or sublet the work to be done without the prior written consent of Buyer; but this provision shall not restrict Vendor in the procurement of component parts or materials. If this order is terminated by Buyer for its convenience, Buyer's liability to Vendor with respect to such parts or materials shall not exceed the amount for which Vendor would be liable to its supplier or suppliers if such liability were determined on the basis of the "Cancellation By Buyer" paragraph below.  No modifications or amendments to this Contract shall be valid or binding unless made in writing and signed by an authorized representative of Buyer or contained in a change order issued by Buyer.

Taxes

Buyer shall not be liable for any national, federal, state or local taxes, duties, fees, customs, tariffs, charges or assessments in connection with the sale, purchase, performance, transportation, use or possession of the goods or services ordered under this Contract, except those that may be expressly set forth on Buyer's purchase order.

Infringement; Indemnity

Vendor warrants that neither the goods or services furnished under this Contract, nor the purchase, sale, resale, performance or use of such goods or services, shall infringe or contribute to the infringement of any patent, copyright, trademark, trade dress or trade secret in the United States or elsewhere, and Vendor shall indemnify, defend and hold harmless Buyer, its successors and assigns and Buyer's customers, whether direct or indirect, against any and all losses, liabilities, damages and expenses (including without limitation attorneys' fees and other costs of defending any infringement action) which they, or any of them, may sustain or incur as a result of any breach of this warranty. Vendor shall also indemnify, defend and hold harmless Buyer, its successors and assigns and Buyer's customers, whether direct or indirect, against any and all losses, liabilities, damages and expenses (including without limitation attorneys' fees and other costs of defending any action) which they, or any of them, may sustain or incur as a result of any claim of negligence, breach of warranty or contract, defect, or strict liability in tort in connection with the goods or services furnished under this Contract or any breach of this Contract by Vendor, except any such as may be caused solely by the negligence of Buyer, its successors and assigns, and/or its customers.

Cancellation By Buyer

Buyer shall have the right to cancel and terminate purchase orders without cause for its convenience, and in such event Buyer's liability shall be limited to Vendor's actual and substantiated cost of work and material, applicable solely to the canceled order, which shall have been expended before notice of cancellation has been received by Vendor.

Drawings, Specifications and Technical Information

Drawings, specifications, datasheets, photographs and other engineering and manufacturing information supplied by Buyer shall remain Buyer's property, and shall be treated by Vendor as Buyer's confidential information and shall be returned to Buyer upon completion of this Contract or upon demand. Any information that Vendor may disclose to Buyer with respect to the design, manufacture, sale or use of the items covered by Buyer's orders shall be deemed to have been disclosed as part of the consideration for Buyer's orders, and Vendor shall not assert any claim (other than a claim for patent infringement, if applicable) against Buyer by reason of Buyer's use of such information.

Buyer's Property; Tools

Vendor shall insure, and bear the risk of loss of or damage to, any property of Buyer in Vendor's possession or under Vendor's control for performance of the Contract. Tool or equipment charges convey ownership of the tools or equipment to Buyer, and Vendor shall deliver such tools and equipment (and all other property of Buyer) to Buyer on demand.

Components Disclosure; Special Warnings

If requested by Buyer from time to time, Vendor shall promptly furnish to Buyer in English and in such form and detail as Buyer may direct:  (a) a bill of materials for or list of all ingredients, components or constituents in the goods purchased under this Contract, (b) the amount of any one or more of such ingredients, components or constituents, and (c) information concerning any changes in, additions to or deletions from any such ingredients, components or constituents.  Prior to and with the shipment of goods purchased under this Contract, Vendor agrees to furnish to Buyer in English sufficient written warning and written notice, including appropriate labels on goods, containers and packaging, of any hazardous material that is an ingredient or a part of any of the goods, together with such special handling instructions in English as may be necessary to advise carriers, Buyer and their respective employees as to how to exercise that measure of care and precaution that will best prevent bodily injury and property damage in the handling, transportation, processing, use, resale and/or disposal of the goods, containers and packaging shipped to Buyer.

Compliance with Laws

Vendor shall comply with all applicable local, state, federal and national laws, regulations, rules and orders in connection with performance of Buyer's orders, including without limitation the U.S. Foreign Corrupt Practices Act, as amended, the Occupational Safety and Health Act, as amended, and all laws and regulations governing protection of the environment and the compensation and working conditions of the workers who perform Buyer's orders.  Vendor certifies that all goods furnished under this Contract shall have been produced in compliance with all applicable requirements of the Fair Labor Standards Act of 1938, as amended.

Waiver

No waiver by Buyer of any of the provisions of this Contract shall be effective unless explicitly set forth in writing and executed by an authorized officer of Buyer.  Except as set forth in the preceding sentence, no action taken pursuant to this Contract or omission shall be deemed to constitute a waiver by Buyer of compliance with any warranties or covenants made by Vendor in the Contract.  The waiver by Buyer of a breach of this Contract shall not operate or be construed as a waiver of any prior or subsequent breach.

Dispute Resolution

Any and all disputes arising out of this Contract or its performance or breach, or out of goods sold or services rendered by Vendor, that are not resolved through good-faith negotiations of the parties shall be resolved through binding arbitration in San Diego, California, U.S.A. under the rules of the American Arbitration Association.  The arbitration proceedings shall be conducted in the English language by a single neutral arbitrator who is fluent in English.  This provision shall not impair the right of either party to seek injunctive relief from any court of competent jurisdiction, pending and/or in aid of arbitration, in the event that party is confronted with a genuine risk that it will suffer irreparable injury before relief can reasonably be anticipated in the arbitral forum.

Revision: November 15, 2016