DTS VENDOR POLICIES

VENDOR TERMS

VENDOR TERMS & CONDITIONS

1. General. The following terms and conditions, together with the terms set forth on the front of this Purchase shall constitute the entire contract (the “Purchase Order”) between Diversified Technical Systems Inc. (DTS) and the party accepting this offer (the “Supplier”). If other documents submitted by Supplier in connection with the Purchase Order, or Supplier’s proposal, have been incorporated by reference, these shall not be deemed to supersede any terms herein or contrary requirements of DTS. If this Purchase Order is construed as an offer, this offer expressly limits acceptance to the terms of this offer and notice of objection to any different or additional terms in any response to this offer is hereby given. If this Purchase Order is construed as an acceptance of an offer, this acceptance is expressly conditioned upon Supplier’s assent to any different or additional terms contained or referenced in this Purchase Order. This Purchase Order shall be deemed to have been accepted by the Supplier upon receipt by DTS of any writing, including a writing transmitted by fax or other means of electronic transmission, indicating acceptance, or by any of the following: (i) shipment of the goods or any portion thereof, (ii) commencement of any work on site or (iii) performance of any services hereunder.

2. Time. All shipments are FOB Destination. If delivery or completion dates cannot be met, Supplier shall inform DTS immediately. Such notice shall not, however, constitute a change to the delivery or completion terms of this Purchase Order unless DTS modifies this Purchase Order in writing. If any item is not received or if any element of the work is not completed by the date specified, DTS, at DTS’s option and without prior notice to Supplier, may either approve a revised date or may cancel this Purchase Order and may obtain such goods or work elsewhere and in either event the Supplier shall be liable to DTS for any resulting loss incurred by DTS. Supplier’s sole remedy for a delay caused by DTS shall be an extension in the time for Supplier’s performance equal to the duration of DTS’s delay. Supplier shall not be liable for damages resulting from Supplier’s failure to deliver or complete, or for delays in delivery or completion, caused solely by strikes not caused by or within the control of Supplier, lock-outs not caused by or within the control of Supplier, fires, war or acts of God. TIMING OF DELIVERY AND/OR PERFORMANCE OF THE WORK IS OF THE ESSENCE OF THIS PURCHASE ORDER.

3. Improper Performance and Disputes. In addition to other remedies provided by law, DTS reserves the right to reject any goods or to revoke any previous acceptance and to cancel all or any part of the Purchase Order if Supplier fails to deliver all or any part of the goods or perform any of the work in accordance with the terms and conditions of this Purchase Order. Acceptance of any part of the Purchase Order shall not bind DTS to accept any future shipments or work, nor deprive it of the right to return goods already accepted. Any dispute arising in connection with this Purchase Order shall be resolved in and only in a Federal or State Court located in Orange County, CA as the exclusive judicial forum. DTS AND SUPPLIER WAIVE THEIR RIGHT TO A JURY TRIAL WITH REGARD TO ANY DISPUTE ARISING IN CONNECTION WITH THIS PURCHASE ORDER. The prevailing party in any dispute with respect to this Purchase Order shall be entitled to reasonable attorney fees and costs.

4. Warranty. Supplier expressly warrants all (i) goods delivered under this Purchase Order to be free from defects in material and workmanship and to be of the quality, size and dimensions ordered and (ii) work performed under this Purchase Order to be in conformity with all plans, specifications and other data incorporated as part of this Purchase Order. These express warranties shall not be waived by reason of acceptance or payment by DTS. This Purchase Order incorporates by reference all terms of the Uniform Commercial Code as adopted in the State of California (the “UCC”) providing any protection to DTS for goods, including but not limited to all warranty protection (express or implied) and all of DTS’s remedies under the UCC. All goods and work shall also be subject to any stricter warranties specified in the Purchase Order or in other materials incorporated by reference.

5. Indemnity and Hold Harmless. From and after the date of this Purchase Order, the Supplier agrees to indemnify, defend and hold DTS harmless from any and all claims and liabilities, regardless of by whom such claim or liability may be asserted, for personal injury (including death), or loss or damage to property, or otherwise that may result directly or indirectly from the use, possession or ownership of the goods or from the services provided by Supplier pursuant to this Purchase Order. With regard to Supplier’s obligation to defend, DTS shall have the right to reasonably select the legal counsel whom Supplier shall use to defend DTS. If DTS elects to require that Supplier defend a Claim pursuant to this paragraph, and Supplier fails or declines to assume the defense of such Claim within thirty (30) days after notice thereof, DTS may assume the defense of such Claim for the account and at the risk of Supplier, and any liabilities related thereto shall be conclusively deemed a liability of Supplier. The indemnification rights of DTS contained herein are in addition to all other rights which DTS may have at law or in equity or otherwise.

6. Export and Import Compliance. Buyer and Seller (hereafter also known collectively as “Parties”) shall comply with the laws and regulations of the United States of America (USA) relating to exports and foreign transactions, including but not limited to, the International Traffic in Arms Regulations (ITAR) (22 C.F.R. Parts 120-130), the Arms Export Control Act (22 U.S.C. 2778), the Export Administration Regulation (EAR) (15 C.F.R. Parts 730-774) and the Export Administration Act of 1979, as amended (50 U.S.C. 2401 et. Seq.). In particular, the Parties shall not disclose any technical data nor deliver, export, re-export or re-transfer any Goods out of the USA, or to foreign persons or entities within or outside the USA, without the proper written authorization and/or licenses from the U.S. Government. Buyer hereby indemnifies and agrees to hold Seller harmless from any costs, damages, penalties, attorney’s fees and similar expenses of Seller due to Buyer’s breach (or threatened breach) of such obligation. The parties shall reasonably cooperate with each other in obtaining all required export and import licenses, approvals and/or notifications pursuant to such U.S. laws.

SUPPLIER CODE OF CONDUCT

SUPPLIER & VENDOR CODE OF CONDUCT

1. INTRODUCTION

Sound business relations with our supplier base are an essential piece in maintaining a dependable, competent supply source for the uninterrupted flow of quality goods and services. DTS’ Procurement team members are the primary source of contact and channel of communication with all vendors, suppliers and appointed representatives and agents. The following should be observed when dealing with suppliers, vendors and their representatives.

It is an expectation of the DTS procurement team to be courteous, honest and fair in dealing with supplier and vendor representatives and appointed agents. Courtesy shall include a prompt reception of business callers and a reasonable regard for their time. When appropriate, sales representatives shall be afforded a fair and equal opportunity to present legitimate and pertinent information concerning materials, equipment, methods or techniques that the supplier markets and that may have potential or immediate application.

Supplier and Vendor Representatives and Authorized Agents will be seen only by appointment, as unscheduled sales calls are of little or no benefit to either party. It is our expectation that DTS’ employees shall be given every opportunity to discuss with suppliers’ new developments, materials, methods or ideas that may result in cost reduction or production improvements. Contacts with vendors and suppliers are not limited to purchasing functions however, it is the responsibility of our suppliers to maintain an open communication with all appointed personnel.

DTS expects all its suppliers, vendors and their representative agents to share the principles which are expressed in this Supplier and Vendor Code of Conduct. In addition, we expect our suppliers, vendors and their authorized representatives and agents to replicate these standards further down the supply chain.

2. ETHICS AND INTEGRITY

Elements of our success is dependent upon the trust and confidence we earn from our supplier management. We expect suppliers adhere to commitments and conduct business displaying values of honesty, integrity and respect. Suppliers are expected not to practice or tolerate any form of corruption, extortion or embezzlement. Suppliers will not offer or accept bribes or other unlawful incentives to/from their business partners. Suppliers, Vendors, Authorized Representative and Agents are expected not to offer DTS employees any gifts or any other kind of personal benefit resulting from the relationships.

DTS is committed to complying with laws, rules and regulations and in turn expects our supplier base to do the same. All suppliers and vendors, their representatives and appointed contacts are obliged to comply with all applicable import, export, and antiboycott laws and regulations of the US and the countries where we do business. Under no circumstances may an export, re-export or import (whether a service, commodity, technical data or technology) or any other similar transaction be made contrary to the laws and regulations.

2.1 FAIR COMPETITION

Suppliers will conduct their business in line with fair competition and accordance with all applicable anti-trust laws.

2.2 PRIVACY AND INTELLECTUAL PROPERTY

Suppliers will safeguard and make only appropriate use of confidential information and ensure that all associated agents, employees and business partners privacy and valid intellectual property rights are protected.

2.3 QUALITY REQUIREMENTS

Suppliers will meet generally recognized or contractually agreed quality requirements in order to provide good and services that consistently meet DTS’ needs, perform as warranted and are safe for intended use.

2.4 ANTI-CORRUPTION

Suppliers are expected not to engage in any form or corruption, illegal payments or bribes with customers, suppliers or others. It is required that our suppliers make every effort to understand and comply with applicable anti-corruption laws that govern operations in countries in which they do business. A violation of anti-corruption laws will lead to severe civil and criminal penalties. It is required that suppliers remain compliant with all applicable corruption laws, including the federal, state and local laws of each country in which operations occur.

2.5 COUNTERFEIT PARTS

DTS expects suppliers and vendors to develop and maintain the necessary measures to limit the risk of introducing counterfeit components and material into their products or deliverables. Appropriate processes are required to detect and eliminate all counterfeit components and materials from their supply chain.

2.6 CONFLICT MINERALS

Suppliers and Vendors are expected to make reasonable efforts to determine if the products being supplied contain material derived from conflict minerals or, directly or indirectly finance or benefit armed groups. All reasonable efforts should be made to eliminate such materials from their supply chain.

3. LABOR AND HUMAN RIGHTS

3.1 HUMAN RIGHTS AND TRAFFICKING

DTS expects suppliers and vendors, their representatives and appointed agents respect the human rights of their employees, treat them with dignity and respect, encourage diversity and promote equal opportunity. We expect that no supplier, vendor, representative or agent shall engage in the use of forced or involuntary labor, and that all human trafficking and slavery laws are strictly adhered to.

Suppliers and vendors will provide their employees with a workplace free from harsh and inhumane treatment, without any sexual harassment, sexual abuse, corporate punishment or torture, physical or mental coercion or verbal abuse or threat of such.

3.2 CHILD LABOR

DTS expects suppliers and vendors, their representatives and appointed agents comply and follow international standards and local requirements to ensure child labor is not used under any circumstance. DTS does not tolerate child labor in any business operations consistent with the International Labor Organizations core labor stands and the United Nations Global Compact principles.

4. ENVIRONMENTAL

DTS expects suppliers and vendors, their representatives and appointed agents to comply with all environmental laws and regulations including but not limited to those applicable to hazardous materials, air and water emissions, and waste. All required permits, licenses and registrations will be obtained, maintained and kept up to date. Suppliers will fulfill their operational and reporting requirements. Material safety data sheets containing all necessary safety-relevant information will be made available by suppliers for all hazardous substances and will be provided to DTS and other parties in case of legitimate need. In addition, we encourage suppliers to actively manage their environmental impact through any and all reasonable efforts to reduce or eliminate waste.

5. EMERGENCY PREPAREDNESS AND RISK

Suppliers will identify and assess likely and potential emergency situations in the workplace and minimize their impact by implementing emergency plans and response procedures.

5. IDENTIFICATION OF CONCERNS

Suppliers will provide means for their employees to report concerns or potentially unlawful activities in the workplace. Any report should be treated in a confidential manner. Suppliers will investigate and take appropriate action.

DTS VENDOR POLICIES

VENDOR TERMS

VENDOR TERMS & CONDITIONS

SUPPLIER CODE OF CONDUCT

SUPPLIER & VENDOR CODE OF CONDUCT

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