Purchase Order Standard Terms & Conditions (“Terms”)

Release Date: October 7, 2025

1.     Seller Delivery and Performance.

1.1.   Purchase Order.  Clarity Innovations LLC (herein “Company”) may from time to time retain Seller to provide certain Products to the Company.  Seller agrees to deliver Products as set forth in a Purchase Order executed by both parties.  Company and Seller may develop and mutually agree upon additional written Purchase Orders defining additional Products to be provided by Seller.  Upon execution by both parties, each Purchase Order will form a part of these Terms and will be subject to all of the terms and conditions contained herein.

1.2.   Products: Seller Delivery of Goods.  Company will set forth, as applicable, in each Purchase Order the Products, as specific goods ordered by Company, to be sold and delivered by Seller in accordance with the terms and conditions of these Terms and the specific Purchase Order.  Time is of the essence. At Company’s request, Seller will provide Company with information regarding the status of the supply and delivery of Products ordered.

1.3.   Products: Seller Performance of Services.  Company will set forth, as applicable, in each Purchase Order, the Products as services to be performed by Seller in accordance with the terms and conditions of these Terms and the specific Purchase Order.  At Company’s request, Seller will provide Company with information regarding the performance of the Services, including, but not limited to, progress and other operational reports, and an opportunity to inspect and review work in progress.  If Seller performs any Products as a service to be performed at a Company or a Company customer facility, Seller will comply with all applicable Company or Company customer security, safety and health policies and procedures.

1.4.   Seller Employees.  Seller acknowledges and agrees that all employees assigned by Seller to perform services hereunder are subject to Company’s prior and continuing acceptance, and Company reserves the right, at any time, to reject or require the replacement of any Seller employee, for any reason.

1.5.   Third Parties: Relationship with Company’s Customers.  Seller acknowledges and agrees that, if and to the extent Seller is required to perform services under a Purchase Order on behalf of a Company customer, then Company will be the primary interface with such customer and will coordinate Seller’s performance of any services under a Purchase Order on behalf of such customer.  If any such Company customer initiates direct contact with Seller (with respect to the supply of Product that includes performance of services under a Purchase Order or otherwise), then Seller will coordinate and communicate with Company prior to responding to such customer.  At Company’s request, Seller will participate in meetings with Company and its customers regarding the performance of services that have been specified in a Purchase Order.

1.6.   Warranties for Products as Goods and Services.  For Seller warranties and representations, see Section 9 of these Terms.

2.     Compensation.

2.1.   Fees and Expenses. As full compensation for Seller’s supply of the Products, whether such Products are goods or services, Company will pay Seller the amounts specified in the applicable Purchase Order.  Pre-authorized in writing and qualifying travel-related expenses will also be eligible for reimbursement.

2.2.  Records and Audit.  During the term of these Terms and for a period of two (2) years thereafter, Seller will maintain complete and accurate books and records in accordance with generally accepted accounting practices of all amounts billable to and payments made by Company hereunder.  During such period, Company will have the right to audit (or to appoint an independent third party to audit) such books and records.  Company will provide Seller with reasonable prior notice of any such audit, which will be conducted during normal business hours.

2.3. Payment Term. Payment shall be due net 45 days following receipt and acceptance of conforming Products, except in the case that the Seller is a Small Business Administration recognized Small Business. Small Businesses qualify for net 30 payment terms following receipt and acceptance of conforming products. Company may withhold payment for any non-conforming Products.

3.     Independent Seller. Seller is an independent contractor, is not an agent or employee of Company, and has no authority to bind Company, by contract or otherwise.  Seller will perform any services under the general direction of Company, but Seller will determine, in Seller’s sole discretion, the manner and means by which the performance of any services are accomplished.  Company has no right or authority to control the manner or means by which the performance of any service is accomplished.
4.     Insurance. Seller will maintain adequate insurance to protect Seller from the following: (a) claims under workers’ compensation and state disability acts; (b) claims of bodily injury, sickness, disease or death that arise out of any negligent act or omission of Seller or its employees; and (c) claims of damage to or destruction of tangible or intangible property (including computer programs and data) or any loss of use resulting therefrom that arise out of or result from any negligent act or omission of Seller or its employees.
5.     employment benefits and taxes. Seller will report as income all compensation received by Seller pursuant to these Terms.  Seller will defend, indemnify and hold harmless Company from and against all claims, damages, losses, penalties, and expenses (including, without limitation, reasonable attorneys’ fees and court costs), arising out of or relating to: (a) any obligation imposed by law upon Company to pay any withholding taxes, social security, unemployment or disability insurance, or similar items in connection with compensation received by Seller pursuant to these Terms; and (b) any claim by an employee of Seller arising out of or resulting from any breach by Seller of the terms of this Section.  Neither Seller nor any of its employees will be entitled to participate in any plans, arrangements, or distributions by Company pertaining to any bonus, stock option, profit sharing, insurance or similar benefits for Company’s employees.
6.     Acceptance. Except as otherwise specified in a Purchase Order, Company will have thirty (30) days following receipt of any deliverable from Seller to review and evaluate the deliverable to determine whether the deliverable complies to Company’s reasonable satisfaction, with the descriptions, specifications or requirements for the deliverable as set forth or referenced in the applicable Purchase Order.  If Company does not accept a deliverable, then Company will provide Seller with a list or description of defects, deficiencies or other non-conformities identified by Company.  Seller will have fifteen (15) days following receipt of such a list or description to correct the defects, deficiencies or non-conformities, at no cost to Company, and to re-deliver the deliverable to Company for review and evaluation.  The foregoing process will repeat until Company finally accepts or rejects each deliverable.  Without limiting Company’s rights or remedies under these Terms or otherwise, if Company finally rejects a deliverable, Company may immediately terminate the Purchase Order or these Terms upon notice to Seller, without further opportunity to cure.
7.     Proprietary Information.

7.1.   Proprietary Information.  As used in these Terms, “Proprietary Information” means any business or technical information and materials regarding Company (or Company’s affiliates, licensors, suppliers, or customers) that is disclosed to Seller or to which Seller has access hereunder, including, without limitation, Work Product (defined in Section 8.1), and inventions, improvements, techniques, processes, research and development plans, data, formulas, products, technology; marketing and sales plans, financial forecasts, profits, costs, operations, names of personnel and compensation data.

7.2.  Restrictions.  Seller will use Proprietary Information only in the manner and for the purposes expressly set forth in these Terms.  Seller will not use Proprietary Information for its own benefit, or for the benefit of any third party, without Company’s express prior written consent.  Seller will maintain all Proprietary Information in trust and confidence and will protect such information from unauthorized use or disclosure using at least the same degree of care as it uses for its own information of a similar nature, but in all events at least a reasonable degree of care.  Seller will not disclose or otherwise make Proprietary Information available, directly or indirectly, to any third party without Company’s express prior written consent.  Seller may disclose Proprietary Information only to Seller’s employees who have a bona fide need to know such Proprietary Information for the purposes of these Terms, provided that each such employee is bound by a written agreement that contains confidentiality, use and nondisclosure restrictions at least as restrictive as those set forth herein.

7.3.  Exclusions.  The obligations in Section 7.2 will not apply to any Proprietary Information that Seller can prove: (a) is or has become generally known or available other than by any act or omission of Seller; (b) was rightfully known by Seller prior to the time of first disclosure to Seller; (c) is independently developed by Seller without access to Proprietary Information; or (d) is rightfully obtained without restriction from a third party who has the right to make such disclosure and without breach of any duty of confidentiality to Company.  Seller may disclose Proprietary Information pursuant to a government or court order, provided that Seller uses its reasonable efforts to give Company reasonable advance notice of any such required disclosure and cooperates with Company in connection with any efforts to prevent or limit the scope of such disclosure.

7.4.  Disclosure of Terms.  Except to the extent expressly required by applicable law, Seller will not disclose to any third party that it is performing or has performed any services for Company and will not disclose to any third party the terms and conditions of these Terms without Company’s express prior written consent. 

8.     Ownership.

8.1.   Work Product.  As used in these Terms, “Work Product” includes, without limitation, all discoveries, ideas, inventions, concepts, developments, improvements, know-how, trade secrets, works of authorship, products, software, databases, technology, writings, notes, drawings, designs, processes, techniques, formulas, information, data, specifications, documentation, algorithms, technical and business plans, hardware, and other materials of any kind that Seller may make, conceive, develop or reduce to practice, alone or jointly with others, in connection with supplying the Products, performing any service under the Purchase Order or that result from or that are related to such supply of Products, whether or not they are eligible for patent, copyright, trade secret or other legal protection.  Work Product excludes Seller Technology (defined in Section 8.3).

8.2.  Disclosure and Ownership.  Seller will promptly disclose all Work Product to Company in writing.  Seller further agrees that, except as expressly set forth in a Purchase Order, to the fullest extent legally possible, all Work Product will be deemed a work made for hire owned exclusively by Company.  Seller agrees that, regardless of whether the Work Product is legally a work made for hire, all Work Product will be the sole and exclusive property of Company, and Seller hereby irrevocably transfers and assigns to Company, and agrees to irrevocably transfer and assign to Company, all right, title and interest in and to the Work Product, including all worldwide patent rights (including patent applications and disclosures), copyright rights, trade secret rights, know-how, and any and all other intellectual property or proprietary rights (collectively, “Intellectual Property Rights”) therein.  At Company’s request and expense, during and after the term of these Terms, Seller will assist and cooperate with Company in all respects and will execute documents and take such further actions reasonably requested by Company to enable Company to acquire, transfer, maintain, perfect and enforce its Intellectual Property Rights and other legal protections for the Work Product.  Seller hereby appoints the officers of Company as Seller’s attorney-in-fact to execute documents on behalf of Seller for this limited purpose.

8.3.  Seller Technology.  Company acknowledges that, in connection with the performance of any service arising under or related to the Purchase Order, Seller may use certain tools, utilities, modules, techniques, processes, knowledge, data or other materials that Seller developed (or had developed) independent of any services or other work that Seller performed or is performing for Company (collectively, “Seller Technology”).  As between Seller and Company, Seller will retain sole and exclusive ownership of all Seller Technology, including all Intellectual Property Rights therein.  Seller will not incorporate any Seller Technology into the Work Product without Company’s prior written approval.  Unless otherwise specified in a Purchase Order, to the extent that Seller incorporates any Seller Technology into the Work Product, whether or not Seller has obtained Company’s prior written approval to do so, Seller hereby grants to Company a non-exclusive, irrevocable, perpetual, royalty-free, fully paid-up, worldwide license to make, have made, use, offer to sell, sell, import, copy, modify, create derivative works based upon, distribute, sublicense, display, perform and transmit such Seller Technology, in whole or in part, to the extent that such Seller Technology is incorporated into the Work Product, or into any product, application or system developed by or for Company that uses, is based upon, or otherwise incorporates the Work Product.

8.4.  Related Rights.  In addition to and without limiting Company’ rights under Section 8.3, to the extent that Seller owns or controls (presently or in the future) any Intellectual Property Rights that block or interfere with the rights granted or assigned to Company under these Terms (collectively, “Related Rights”), Seller hereby grants or will cause to be granted to Company a non-exclusive, irrevocable, perpetual, royalty-free, fully paid-up, worldwide license to make, have made, use, offer to sell, sell, import, copy, modify, create derivative works based upon, distribute, sublicense, display, perform and transmit any products, software, hardware, methods or materials of any kind that are covered by such Related Rights, to the extent necessary to enable Company to exercise all of the rights granted and assigned to Company under these Terms.

9.     Seller Representations and Warranties. Seller represents and warrants that: (a) Seller has the complete power and authority to enter into these Terms, to grant and assign the rights granted and assigned under these Terms, and to perform its obligations hereunder; (b) Seller has no pre-existing obligations or commitments (and will not assume or undertake any obligations or commitments) that would interfere with or restrict Seller’s performance of its obligations under these Terms; (c) all Seller employees assigned to perform any services under the Purchase Order hereunder will have the requisite training, background and experience and technical knowledge and skills to perform the service in a thorough and professional manner, consistent with applicable industry standards; (d)  Seller has obtained the necessary licenses or permits, if any, that are required for the performance of any services that Seller will provide to Company or Company’s customers; (e) All Seller furnished and delivered Products that are goods shall be new and shall meet or exceed the quality and specifications of the goods ordered, and any substitution requires written approval of the Company, except as the Purchase Order expressly allows. Seller warrants that all Products provided will be free from defects in design, materials and workmanship; of merchantable quality; and are warranted a fit for Company’s particular purposes.  If any failure to comply with this warranty appears in such Products, Company will notify Seller and Seller shall thereupon remedy such failure by repair or by replacement (including removal, transportation and installation) of such Products without Company expense.  In addition, Seller shall assign Company all warranties its manufacturers make available to Seller; (f) the services, including, without limitation, the Work Product, the Seller Technology, and any other information or materials that Seller provides or otherwise make available hereunder, will be free from material errors or other defects and will conform to the corresponding descriptions, specifications or requirements as set forth or referenced in the applicable Purchase Order; and (g) all Seller employees who perform services under the Purchase Order have executed (or prior to the performance of such services, provided under the Purchase Order, will execute) a written agreement with Seller that assigns to Seller all right, title, and interest in and to the Work Product, including, without limitation, all Intellectual Property Rights therein.
10.   Indemnification.

10.1. Indemnity.  Seller will defend, indemnify and hold harmless Company and its affiliates, and their respective officers, directors, employees, customers and agents (collectively, the “Indemnified Parties”) from and against any and all claims, damages, losses, liabilities, expenses and costs (including, without limitation, reasonable attorneys’ fees and court costs), and, at Company’s request, will defend or settle: (a) any action or suit brought by a third party against an Indemnified Party arising out of or relating to any claim that the services (including, without limitation, the Work Product, the Seller Technology, or any other information or materials that Seller provides or otherwise makes available hereunder, and/or any use by an Indemnified Party of any of the foregoing) infringe, misappropriate or violate a third party’s Intellectual Property Rights; (b) any action or suit that is based upon or arises out of any violation of any statute, ordinance, or regulation by Seller, its employees or agents; (c) any breach of these Terms; and (d) any defective or nonconforming Product.

10.2. Indemnity Procedure.  Company will promptly notify Seller of any action or suit for which Company seeks indemnification and defense pursuant to Section 10.1 and will provide Seller, at Seller’s expense, with information and cooperation, as reasonably required by Seller to defend or settle such action or suit.  Seller may not settle any such action or suit without Company’s prior written approval, which approval will not be unreasonably withheld or delayed.  Company reserves the right to retain counsel, at Company’s expense, to participate in the defense and settlement of any such action or suit.

11.   Term and Termination.

11.1. Term.  These Terms will commence as of the Effective Date and, unless terminated earlier in accordance with its terms, will remain in force and effect until the completion of performance of services under all Purchase Orders, at which time these Terms will automatically terminate except for those Terms intended by their nature to survive the termination of these Terms. 

11.2. Termination for Convenience.  Company has the right to terminate these Terms (including all Purchase Orders) or any individual Purchase Order, for its convenience, at any time, upon not less than five (5) days written notice to Seller. 

11.3. Termination for Cause.  Each party has the right to terminate these Terms (including all Purchase Orders) if the other party breaches any material term or condition of these Terms and fails to cure such breach within thirty (30) days after receipt of written notice thereof from the non-breaching party.

11.4. Termination based on Financial Condition.  Each party has the right to terminate these Terms (including all Purchase Orders) if: (a) the other party becomes the subject of a voluntary petition in bankruptcy or any voluntary proceeding relating to insolvency, receivership, liquidation, or composition for the benefit of creditors; or (b) the other party becomes the subject of an involuntary petition in bankruptcy or any involuntary proceeding relating to insolvency, receivership, liquidation, or composition for the benefit of creditors, if such petition or proceeding is not dismissed within sixty (60) days of filing.

11.5. Effect of Termination.

         (a)    Upon any termination of these Terms or termination of an individual Purchase Order, Seller will immediately cease supplying any Product under these Terms or under the terminated Purchase Order, as applicable.

         (b)    Except in the event Company terminates these Terms pursuant to Section 11.3, upon any termination of these Terms or an individual Purchase Order, Company will pay Seller any fees owed, based on the terms of the applicable Purchase Order(s), for any Products requiring performance under these Terms or under the terminated Purchase Order through the effective date of termination, or for any Work Product (or portion thereof) actually delivered to and accepted by Company pursuant to the terms of Section 6, as applicable.  Company will pay the foregoing amounts subject to and in accordance with the terms of Section 2, provided that Company will pay such amounts only to the extent Company has not already paid for such Products or Work Product, as the case may be.  The foregoing will not be deemed to waive, restrict or limit in any way Company’s rights to offset against any such amounts otherwise payable to Seller any and all damages incurred by Company arising out of or relating to any breach by Seller of these Terms.

         (c)    Upon any termination of these Terms, Company will have the right to retain all Work Product delivered by Seller as of the effective date of termination and Seller will promptly deliver to Company all work in progress on any other Work Product, in whole or in part, including, without limitation, all versions and portions of such Work Product.

(d)             Upon any termination of these Terms, Seller will promptly return to Company all product, property and equipment provided to Seller by Company.

(e)             Upon any termination of these Terms, Seller will promptly return to Company all Proprietary Information in Seller’s possession or control and will provide Company with a written certification, signed by an officer of Seller, certifying to the return of all such Proprietary Information.

11.6. No Damages for Termination.  Neither party will be liable to the other for any compensation or reimbursement resulting from termination of these Terms in accordance with its terms.

11.7. Survival.  The rights and obligation of the parties under Sections 2.2, 5, 7, 8, 9, 10, 11.5, 11.6, 11.7, 12, 13, and 14 will survive any termination or expiration of these Terms.

12.   Limitation of Liability.  IN NO EVENT WILL COMPANY BE LIABLE TO SELLER OR TO ANY THIRD PARTY FOR ANY SPECIAL, CONSEQUENTIAL, PUNITIVE, EXEMPLARY OR INCIDENTAL DAMAGES IN CONNECTION WITH THE PRODUCTS, EVEN IF ADVISED OF THE POSSIBILITY OF SUCH DAMAGES.  NOTHING HEREIN LIMITS COMPANY’S REMEDIES, INCLUDING RECOVERY OF CONSEQUENTIAL, INCIDENTIAL, AND SPECIAL DAMAGES ARISING FROM SELLER’S BREACH..
13.   Government Contract Flowdown Provisions.  In the event that the Products that Company requests Seller require performance of services hereunder, as specified in a Purchase Order, are in support of Company’s obligation to perform services under a U.S. government prime contract or subcontract to which Company is the contracting party, then Seller agrees that any contract provisions or clauses in such prime or subcontract that Company is required to include in lower-tier subcontracts will automatically be deemed incorporated by reference into these Terms.  Company will notify Seller of any such provisions or clauses.
14.   General Provisions.

14.1. Governing Law.  These Terms will be governed and construed in accordance with the laws of the State of Maryland, excluding its body of law controlling conflicts of law.  Any legal action or proceeding arising under these Terms will be brought exclusively in the federal or state courts having jurisdiction over Howard County, Maryland, and the parties hereby irrevocably consent to the personal jurisdiction and venue therein.

14.2. Severability.  If for any reason a court of competent jurisdiction finds any provision of these Terms invalid or unenforceable, that provision of the Terms will be enforced to the maximum extent permissible and the other provisions of these Terms will remain in full force and effect.

14.3. Assignment.  Seller may not assign or transfer these Terms, or subcontract or delegate any of its obligations, in whole or in part, by operation of law or otherwise, without Company’s prior written consent.  Any attempt to assign or transfer these Terms, or subcontract or delegate any obligations, without such consent, will be null and void.  Company may assign or transfer these Terms or any rights granted hereunder, at Company’s sole discretion.  Subject to the foregoing, these Terms will be binding upon and will inure to the benefit of the parties and their respective successors and permitted assigns.

14.5. Legal Fees.  In addition to any other damages or other relief awarded, the prevailing party in any action or legal proceeding arising out of these Terms will be entitled to recover from the other party all reasonable costs and expenses incurred by the prevailing party in connection with such action or legal proceeding, including reasonable attorneys’ fees and court costs.

14.6. Equitable Relief.  Seller acknowledges that the unauthorized use or disclosure of any of Proprietary Information will cause Company to incur irreparable harm and significant damages, the degree of which may be difficult to ascertain.  Accordingly, Seller acknowledges and agrees that Company will have the right to obtain immediate equitable relief to enjoin any unauthorized use or disclosure of any Proprietary Information, in addition to any other rights or remedies that it may have under these Terms, at law or otherwise.

14.7. Non-Exclusive Remedy.  Except as expressly set forth in these Terms, the exercise by either party of any of its remedies under these Terms will be without prejudice to its other remedies under these Terms or otherwise.

14.8. Dispute Resolution. Any dispute, controversy or Claim arising from or relating to these Terms or any breach or threatened breach thereof (hereinafter “Dispute”) shall be resolved according to the dispute resolution process set forth in this Section.  When a Dispute arises, Seller and the Company, (each a “Party” and together the “Parties”), will promptly bring the Dispute to the attention of the other Party and negotiate in good faith in an attempt to resolve the Dispute.  In the event that the Parties cannot resolve the Dispute in such manner, the Parties shall immediately refer the Dispute to each Party’s designated representatives.  If such representatives are not able to resolve the Dispute within a reasonable amount of time after referral of the Dispute to them (but in no event more than fifteen (15) days), then either Party may submit the Dispute to mediation to a mutually acceptable mediator. The mediator shall not have authority to impose a settlement upon the Parties, but will attempt to help them reach a satisfactory Dispute resolution.  If the mediation does not resolve the Dispute within ninety (90) days, the Parties may, by separate written agreement, submit the Dispute to binding arbitration.  Absent any mutual agreement to arbitrate, either Party can pursue any and all remedies to which such Party is entitled, including litigation.  Each Party shall bear its own costs of this Dispute resolution process.

14.9. Waiver; Amendment.  The waiver by either party of a breach of or a default under any provision of these Terms will not be construed as a waiver of any subsequent breach of or default under the same or any other provision of these Terms.  Any waiver, modification or amendment of any provision of these Terms or any Purchase Order will be effective only if in writing and signed by duly authorized representatives of each party.

14.10.   Counterparts.  These Terms may be executed in counterparts, each of which will be deemed an original, but all of which together will constitute one and the same instrument.

14.11.   Compliance with Laws.  Each party will comply with all applicable laws, rules and regulations applicable to its performance and activities hereunder. 

14.12.   Entire Agreement.  These Terms together with each Purchase Order, is the entire and exclusive agreement of the parties regarding its subject matter and supersedes and replaces all prior or contemporaneous understandings, communications and agreements between the parties, whether written or oral, regarding its subject matter.  To the extent there are any conflicts or inconsistencies between a Purchase Order and these Terms, the terms and conditions of the Purchase Order will govern and control.