1. GENERAL:
A. The term Seller as used herein shall mean Teltone Corporation. The term Buyer shall mean the party placing this order with Seller.
B. Seller shall not be deemed to have any commitment or liability to Buyer until such time as Buyer has placed a written order acknowledging these terms and conditions of sale and such order has been accepted by Seller at its principal office.
C. All orders and deliveries hereunder are subject to all of Seller’s terms and conditions printed herein unless modified in writing by a duly authorized officer or employee of Seller at its principal office.

2. SCOPE:
A. The terms and conditions of sale contained herein apply to all quotations, bids, offers, sales, and purchase orders entered into by Seller. To the extent any such terms may conflict with any other terms of Buyer or any other party, these terms and conditions of Seller shall take precedence and all others are specifically rejected unless Seller expressly agrees in writing. Seller’s failure to object to provisions contained in any communication from Buyer shall not be deemed an acceptance of such provisions or a waiver of any terms and conditions hereof in the absence of written acceptance, of those terms acceptance of and/or payment for the products, covered herein shall constitute an acceptance of these terms and conditions.
B. The terms and conditions herein provided, together with any and all other terms and conditions on the front page of this order, and any and all attachments thereto, constitute the entire agreement between the parties relating to the sale of products described on the face thereof and no addition or modification of any provision hereof shall be binding on the Seller unless made in writing by a duly authorized officer or employee of Seller at its principal office.
C. This contract and any rights hereunder may not be assigned or transferred without Seller’s written consent, and any attempt to do so without such consent shall be void ab initio.
D. Prices are subject to change without notice and are exclusive of applicable taxes, duty, export or special packing, insurance, etc. Invoiced prices will be those in effect at time of shipment.

3. PAYMENT TERMS:
All Invoices are due and payable thirty (30) days from date of invoice. Currency is US dollars. Invoices not paid within 30 days may be subject to a finance charge at the rate of 1 ½% per month or the maximum allowed by law, whichever is less. The terms of payment may be changed or credit withdrawn at any time and Seller may require full or partial payment in advance. In the event any proceeding is brought by or against Buyer under the bankruptcy or insolvency laws, Seller shall be entitled to ship any order C.O.D. or to cancel any order then outstanding and shall receive reimbursement for reasonable cancellation charges. Each shipment shall be considered a separate and independent transaction, and payment shall be made accordingly. If Seller’s performance is delayed by Buyer, Seller shall invoice and Buyer shall pay (i) for products ready for shipment at the purchase price set forth herein and (ii) for the work in process at the time of delay based upon the percentage of completion. Work in process will be held for a reasonable time at Buyer’s sole risk and expense and shall be completed only at Buyer’s request during such time and at Buyer’s cost.

4. TAXES:
All prices are exclusive of any present or future sales, revenue or excise tax, import duty (including brokerage fees), or other tax applicable to the products covered by this order or the manufacture or sale thereof. Such taxes when applicable shall be added to the invoice and shall be paid by Buyer unless Buyer provides Seller with a proper tax exemption certificate.

5. F.O.B POINT:
All sales are made F.O.B. point of shipment unless otherwise specified. Seller’s title passes to Buyer and Seller’s liability as to delivery ceases upon making delivery of products purchased hereunder to carrier at shipping point in good condition. In the absence of specific instructions from Buyer, Seller shall exercise its own discretion at to the method of shipment to be used.

6. DELIVERY:
All stipulated delivery or shipment dates are estimates only. Seller reserves the right to make deliveries of product types in installments and the contract shall be severable as each such installment. Delay in delivery or other default of any installment of any one or more product types shall not relieve Buyer of its obligation to accept and pay for the remaining deliveries. Except as provided in paragraph 13, Seller will not be liable for reprocurement costs or special, indirect, or consequential damages (i) in the event of a delay in shipment or delivery of products or (ii) in the event of nondelivery. If delivery of products hereunder is subject to release by Buyer, the prices set forth herein shall only apply if the quantity hereunder is released in accordance with the applicable release requirements of this order, or if no release requirements are specified herein within twelve (12) months and final shipment of such quantity is scheduled no more than eighteen (18) months from the date hereof. If a lesser amount is so released or so scheduled for shipment, Seller’s standard prices for the quantity actually shipped in effect at time of order shall apply.

7. ACCEPTANCE:
Buyer shall accept or reject products included in each shipment within ten (10) days from receipt. If Buyer fails to notify Seller in writing of its rejection and the reasons therefore within such time period, Buyer will be deemed to have accepted such shipment. In the event other acceptance procedures have been agreed to in writing, products rejected by Buyer on that basis will be returned only on Seller’s prior authorization.

8. WARRANTY:
Seller warrants that all of its products furnished hereunder will at the time of shipment be free from defects in material and workmanship under normal use and service and will conform to Seller’s applicable standard written specifications, or if appropriate, to specifications accepted in writing by Seller. In the event of any breach of this warranty, Seller’s sole obligation shall be limited to, at Seller’s option, either crediting Buyer the purchase price of, or replacing, any products for which (i) written notice of nonconformance hereunder is received within the warranty period specified in the appropriate user manual or less after shipment; and (ii) if authorized by Seller, are returned to Seller’s factory of origin, freight charges prepaid, and (iii) after examination or other evaluation by Seller, are determined to Seller’s satisfaction to be nonconforming. Any such replacement shall not extend the period within which such warranty may be asserted. This warranty shall not apply to products which Seller determines have, by Buyer or another, been subjected to operating and/or environmental conditions in excess of the maximum values therefore in the applicable specifications, or otherwise have been subjected to misuse, neglect, improper installation, repair, alteration other than as authorized or performed by Seller, or damage. THIS WARRANTY MAY BE ASSERTED BY BUYER ONLY AND NOT BY BUYER’S CUSTOMERS OR USERS OF BUYER’S PRODUCTS AND IS EXPRESSED IN LIEU OF ALL OTHER WARRANTIES, EXPRESSED, IMPLIED, OR STATUTORY, INCLUDING IMPLIED WARRANTY OF FITNESS FOR A PARTICULAR PURPOSE OR MERCHANTABILITY AND IN LIEU OF ALL OTHER OBLIGATIONS OR LIABILITIES ON THE SELLER'S PART.
SELLER NEITHER ASSUMES NOR AUTHORIZES ANY OTHER PERSON TO ASSUME FOR SELLER ANY OTHER LIABILITIES IN CONNECTION WITH THE SALE OF THE SAID PRODUCTS. IN NO EVENT WILL SELLER BE LIABLE FOR ANY SPECIAL, INCIDENTAL, OR CONSEQUENTIAL DAMAGES. Seller makes no warranty as to experimental, developmental, or nonstandard products sold hereunder and no warranty as to items not manufactured by Seller but included in a product sold hereunder. To the extent permitted by its contract with the supplier of such included item, Seller hereby assigns to Buyer any rights it may have under such supplier’s warranty.

9. TOOLING:
Unless separately stated herein, no right to any mask or any other tooling is included in the purchase price to Buyer. Seller shall not be liable for ordinary wear and tear to Buyer-furnished tools.

10. PATENTS:
Buyer shall defend and hold Seller harmless against any expense including attorneys’ fees or loss resulting from infringement of patents or trademarks arising from compliance with Buyer’s designs, specifications, or instructions. Except as provided in the preceding sentence, Seller shall settle or defend any suit or proceeding brought against Buyer so far as based on a claim that any product (or part thereof) manufactured by Seller, furnished under this contract, and not used in combination with other products (or part thereof) manufactured by Seller, furnished under this contract, constitutes an infringement of any patent of the United States, if notified promptly in writing and given authority, information, and assistance (at Seller’s expense) for the settlement or defense of same, and Seller shall pay the damages and costs awarded therein against Buyer or agreed upon in such settlement. Seller shall (at its own option and expense) either (i) procure for Buyer the right to continue using said product or part, or (ii) furnish a non-infringing product, or (iii) modify it so it becomes non-infringing, or (iv) refund the purchase prior, and transportation costs, upon return authorized by Seller. The foregoing states the entire liability of Seller for patent infringement by said product or any part thereof. The sale of products by Seller does not convey any license by implication, estoppel, or otherwise, under patent claims covering combinations of said product with other devices or elements, or the process or method of making such product.

11. CONFIDENTIAL INFORMATION:
No information shall be deemed to be given or received in confidence by Buyer unless and to the extent it is covered by a separate written agreement.

12. FORCE MAJURE:
Seller shall not be liable for nonperformance or delays due to causes beyond its control. These causes shall include but not be limited to acts of God, wars, riots, strikes, fires, storm, flood, earthquake, shortages of labor or materials, labor disputes, production difficulties, transportation embargoes, acts of any government or agency thereof, judicial action, or any or all other causes beyond its reasonable control. In the event of any such excused delay or failure of performance, the date of delivery shall, at the request of the Seller, be deferred for a period equal to the time lost for reason of the delay. Seller shall notify Buyer in writing of any such event or circumstance within a reasonable period after it learns of same.

In no event will Seller be liable for any claim for special, incidental, or consequential damages.

13. TERMINATION:
This order may be terminated in whole or in part on written notice by Buyer because of Seller’s failure to deliver products in accordance with the terms hereof, which failure is list excused pursuant to paragraph 12. In such event, Buyer as its sole remedy shall be compensated only as follows: Seller will be liable for the product of (a) the difference between the reprocurement unit price actually paid by Buyer less the unit price of this purchase order, but in no event to exceed ten percent (10%) of this purchase order, multiplied by (b) the lesser of (i) the number of units unconditionally released by Buyer but remaining unshipped or (ii) the number of units actually reprocured by Buyer during the thirty (30) day period following the effective date of termination. Seller shall not be liable for incidental or consequential damages, including but not limited to cost of labor, requalification, delay loss of profits, or good will. In any event Seller shall be entitled to payment for all products shipped up to the effective date of termination. Termination by Buyer for default, which may entitle Buyer to reprocurement costs hereunder, shall be effective only upon Seller’s failure to correct such default within a reasonable period of time but not less than forty-five (45) days after receipt by Seller of written notice specifying that default.

14. GOVERNMENT CONTRACT PROVISIONS:
If the goods to be furnished under this contract are to be used in the performance of a U.S. Government contract or subcontract and a U.S. Government contract number shall appear on Buyer’s purchase order, those clauses of the applicable U.S. Government Procurement Regulation which are mandatorily required by Federal Statute or Regulation to be included in the U.S. Government subcontracts shall be incorporated herein by reference, provided however that the products and documentation are provided with RESTRICTED RIGHTS. Use, duplication or disclosure by the Government is subject to restrictions as set forth in subparagraph (c)(1)(ii) of the Rights in Technical Data and computer Software clause at DFARS 252.227-7013 or subparagraphs (c)(1) and (2) of the Commercial Computer Software-Restricted Rights at 48 CFR 52.227-19, as applicable.

15. APPLICABLE LAW:
The validity, performance, and construction of this contract shall be governed by the laws of the State of Washington.

16. ATTORNEYS’ FEES:
In the event that it becomes necessary for Seller to institute legal action to collect any portion of the purchase price of goods or materials sold under this order, Buyer agrees to pay reasonable costs and attorneys’ fees incurred by Seller.

17. These commodities, software or technology may only be exported (including reexport, transit and transshipment) from the United States in accordance with the Export Administration Regulations (EAR) enforced by the U.S. Department of Commerce’s Bureau of Industry and Security (BIS).

18. WEEE:
The buyer, other than a private household, shall be responsible for disposal of equipment purchased on this sales order where the requirements on Waste Electrical and Electronic Equipment (WEEE) must be met. Any questions regarding the disposal of this equipment at end of life should be directed to Teltone Corporation.

Teltone Corporation
21312 30th Drive SE, Suite 102
Bothell, WA 98021
Ph: 425-487-1515
Fax: 425-487-2288

FORMTT 333-Rev O