Terms and Conditions of Sale

UNLESS OTHERWISE EXPRESSLY AGREED IN WRITING, ALL SALES ARE SUBJECT TO THE FOLLOWING TERMS AND CONDITIONS:

1. GENERAL. Photonwares Corp.(“Seller”) hereby offers for sale to the buyer named on the face hereof (“Buyer”) the products listed on the face hereof (the “Products”) on the express condition that Buyer agrees to accept and be bound by the terms and conditions set forth herein. Any provisions contained in any document issued by Buyer are expressly rejected and if the terms and conditions in this Agreement differ from the terms of Buyers offer, this document shall be construed as a counter offer and shall not be effective as an acceptance of Buyers document. Buyers receipt of Products or Sellers commencement of the services provided hereunder will constitute Buyers acceptance of this Agreement. This is the complete and exclusive statement of the contract between Seller and Buyer with respect to Buyer’s purchase of the Products. No waiver, consent, modification, amendment or change of the terms contained herein shall be binding unless in writing and signed by Seller and Buyer. Seller’s failure to object to terms contained in any subsequent communication from Buyer will not be a waiver or modification of the terms set forth herein. All orders are subject to acceptance in writing by an authorized representative of Seller.

2. PRICE. All prices published by Seller or quoted by Sellers representatives may be changed at any time without notice. All prices for the Products will be as specified by Seller or, if no price has been specified or quoted, will be Seller’s price in effect at the time of shipment. All prices are subject to adjustment as a result of specifications, quantities, shipment arrangements or other terms and conditions which are not part of Seller’s original price quotation.

3. TAXES AND OTHER CHARGES Prices for the Products exclude all sales, value added and other taxes and duties imposed with respect to the sale, delivery, or use of any Products covered hereby, all of which taxes and duties must be paid by Buyer. If Buyer claims any exemption, Buyer must provide a valid, signed certificate or letter of exemption for each respective jurisdiction.

4. TERMS OF PAYMENT. Seller may invoice Buyer upon shipment for the price and all other charges payable by Buyer in accordance with the terms hereof. Upon Seller approval of credit review on trade references provided by the Buyer, payment shall be net thirty (30) days from the date of invoice. If Buyer fails to pay any amounts when due, Buyer shall pay Seller interest thereon at a periodic rate of one and one‐half percent (1.5%) per month (or, if lower, the highest rate permitted by law), together with all costs and expenses (including without limitation reasonable attorneys’ fees and disbursements and court costs) incurred by Seller in collecting such overdue amounts or otherwise enforcing Seller’s rights hereunder. Seller reserves the right to require from Buyer full or partial payment in advance, or other security that is satisfactory to Seller, at any time that Seller believes in good faith that Buyer’s financial condition does not justify the terms of payment specified. All payments shall be made in U.S. Dollars (USD). For orders invoiced or shipped outside of the United States the Seller will require cash in advance via bank wire transfer, credit card, or irrevocable letter of credit payable at sight in USD and must be confirmed by a United States bank. All bank charges incurred either inside or outside applicant’s country must be applied to the applicant’s account.

5. DELIVERY; CANCELLATION OR CHANGES BY BUYER. The Products will be shipped to the destination specified by Buyer, F.O.B. Seller’s facility. Seller will have the right, at its election, to make partial shipments of the Products and to invoice each shipment separately. Unless otherwise agreed to in writing by the parties, the freight and handling is prepaid by the Seller and added to the invoice. Seller reserves the right to stop delivery of Products in transit and to withhold shipments in whole or in part if Buyer fails to make any payment to Seller when due or otherwise fails to perform its obligations hereunder. All shipping dates are approximate only, and Seller will not be liable for any loss or damage resulting from any delay in delivery or failure to deliver which is due to any cause beyond Seller’s reasonable control. In the event of a delay due to any cause beyond Seller’s reasonable control, Seller reserves the right to terminate the order or to reschedule the shipment within a reasonable period of time, and Buyer will not be entitled to refuse delivery or otherwise be relieved of any obligations as the result of such delay. Products as to which delivery is delayed due to any cause within Buyer’s control may be placed in storage by Seller at Buyer’s risk and expense and for Buyer’s account. Orders in process may be canceled only with Seller’s written consent and upon payment of Seller’s cancellation charges. Orders in process may not be changed except with Seller’s written consent and upon agreement by the parties as to an appropriate adjustment in the purchase price thereof. Credit will not be allowed for Products returned without the prior written consent of Seller.

6. RETURN OF PRODUCTS/RESTOCKING CHARGE. Buyer must obtain permission from Seller prior to returning Products. Old items, service parts, and discontinued items cannot be returned for credit. In order to obtain a RMA number, Buyer must contact Sellers customer support. Seller, in its discretion, may impose a twenty-five percent (25%) restocking charge of the price paid for any item authorized for return for credit.

7. TITLE AND RISK OF LOSS. Notwithstanding the trade terms indicated above and subject to the provisions of Section 8 below and to Seller’s right to stop delivery of Products in transit, title to and risk of loss of the Products will pass to Buyer upon delivery of possession of the Products by Seller to the carrier; provided, however, that title to any software incorporated within or forming a part of the Products shall at all times remain with Seller or the licensor(s) thereof, as the case may be.

8. SECURITY INTEREST. Seller reserves and Buyer grants to Seller a purchase money security interest in all Products until such time as Buyer fully pays for such Products. Buyer agrees to assist Seller in taking the necessary steps to perfect and protect such security interest.

9. WARRANTY. Seller warrants that the Products will operate substantially in conformance with Seller’s published specifications, when subjected to normal, proper and intended usage by properly trained personnel, for a period of one (1) year from the date of shipment to Buyer (the “Warranty Period”). Seller agrees during the Warranty Period, provided it is promptly notified in writing upon the discovery of any defect and further provided that all costs of returning the defective Products to Seller are pre‐paid by Buyer, to repair or replace, at Seller’s option, defective Products so as to cause the same to operate in substantial conformance with said specifications. Replacement parts may be new or refurbished, at the election of Seller. All replaced parts shall become the property of Seller. Shipment to Buyer of repaired or replacement Products shall be made in accordance with the provisions of Section 5 above. Lamps, fuses, bulbs and other expendable items are expressly excluded from the warranty under this Section 9. Seller’s sole liability with respect to equipment, materials, parts or software furnished to Seller by third party suppliers shall be limited to the assignment by Seller to Buyer of any such third-party supplier’s warranty, to the extent the same is assignable. In no event shall Seller have any obligation to make repairs, replacements or corrections required, in whole or in part, as the result of (i) normal wear and tear, (ii) accident, disaster or event of force majeure, (iii) misuse, fault or negligence of or by Buyer, (iv) use of the
Products in a manner for which they were not designed, (v) causes external to the Products such as, but not limited to, power failure or electrical power surges, (vi) improper storage of the Products or (vii) use of the Products in combination with equipment or software not supplied by Seller. If Seller determines that Products for which Buyer has requested warranty services are not covered by the warranty hereunder, Buyer shall pay or reimburse Seller for all costs of investigating and responding to such request at Seller’s then prevailing time and materials rates. If Seller provides repair services or replacement parts that are not covered by the warranty provided in this Section 9, Buyer shall pay Seller therefore at Seller’s then prevailing time and materials rates. With respect to spare parts, the above‐referenced warranty applies; however, such warranty is limited to ninety (90) days from the date of shipment.
ANY INSTALLATION, MAINTENANCE, REPAIR, SERVICE, RELOCATION OR ALTERATION TO OR OF, OR OTHER TAMPERING WITH, THE PRODUCTS PERFORMED BY ANY PERSON OR ENTITY OTHER THAN SELLER WITHOUT SELLER’S PRIOR WRITTEN APPROVAL, OR ANY USE OF REPLACEMENT PARTS NOT SUPPLIED BY SELLER, SHALL IMMEDIATELY VOID AND CANCEL ALL WARRANTIES WITH RESPECT TO THE AFFECTED PRODUCTS. THE OBLIGATIONS CREATED BY THIS SECTION TO REPAIR OR REPLACE A DEFECTIVE PRODUCT SHALL BE THE SOLE REMEDY OF BUYER IN THE EVENT OF A DEFECTIVE PRODUCT. EXCEPT AS EXPRESSLY PROVIDED IN THIS SECTION 9, SELLER DISCLAIMS ALL WARRANTIES, WHETHER EXPRESS OR IMPLIED, ORAL OR WRITTEN, WITH RESPECT TO THE PRODUCTS, INCLUDING WITHOUT LIMITATION ALL IMPLIED WARRANTIES OF MERCHANTABILITY OR FITNESS FOR ANY PARTICULAR PURPOSE. SELLER DOES NOT WARRANT THAT THE PRODUCTS ARE ERROR‐FREE OR WILL ACCOMPLISH ANY PARTICULAR RESULT.

10. INDEMNIFICATION.
10.1 By Seller. Seller agrees to indemnify, defend and save Buyer, its officer, directors, and employees from and against any and all damages, liabilities, actions, causes of action, suits, claims, demands, losses, costs and expenses (including without limitation reasonable attorney’s fees) ( Indemnified Items!) for (i) injury to or death of persons or damage to property to the extent caused by the negligence or willful misconduct of Seller, its employees, agents or representatives or contractors in connection with the performance of services at Buyers premises under this Agreement and (ii) claims that a Product infringes any valid United States patent, copyright or trade secret; provided, however, Seller shall have no liability under this Section to the extent any such Indemnified Items are caused by either (i) the negligence or willful misconduct of Buyer, its employees, agents or representatives or contractors, (ii) by any third party, (iii) use of a Product in combination with equipment or software not supplied by Seller where the Product would not itself be infringing, (iv) compliance with Buyer’s designs, specifications or instructions, (v) use of the Product in an application or environment for which it was not designed or (vi) modifications of the Product by anyone other than Seller without Seller’s prior written approval. Buyer shall provide Seller prompt written notice of any third-party claim covered by Sellers indemnification obligations hereunder. Seller shall have the right to assume exclusive control of the defense of such claim or, at the option of the Seller, to settle the same. Buyer agrees to cooperate reasonably with Seller in connection with the performance by Seller of its obligations in this Section. Notwithstanding the above, Sellers infringement related indemnification obligations shall be extinguished and relieved if Seller, at its discretion and at its own expense (a) procures for Buyer the right, at no additional expense to Buyer, to continue using the Product; (b) replaces or modifies the Product so that it becomes non‐infringing, provided the modification or replacement does not adversely affect the specifications of the Product; or (c) in the event (a) and (b) are not practical, refund to Buyer the amortized amounts paid by Buyer with respect thereto, based on a five (5) year amortization schedule. THE FOREGOING INDEMNIFICATION PROVISION STATES SELLER’S ENTIRE LIABILITY TO BUYER FOR THE CLAIMS DESCRIBED HEREIN.
10.2 By Buyer. Buyer shall indemnify, defend with competent and experienced counsel and hold harmless Seller, its parent, subsidiaries, affiliates and divisions, and their respective officers, directors, shareholders and employees, from and against any and all damages, liabilities, actions, causes of action, suits, claims, demands, losses, costs and expenses (including without limitation reasonable attorneys’ fees and disbursements and court costs) to the extent arising from or in connection with (i) the
negligence or willful misconduct of Buyer, its agents, employees, representatives or contractors; (ii) use of a Product in combination with equipment or software not supplied by Seller where the Product itself would not be infringing; (iii) Seller’s compliance with designs, specifications or instructions supplied to Seller by Buyer; (iv) use of a Product in an application or environment for which it was not designed; or (v) modifications of a Product by anyone other than Seller without Seller’s prior written approval.

11. SOFTWARE. With respect to any software products incorporated in or forming a part of the Products hereunder, Seller and Buyer intend and agree that such software products are being licensed and not sold, and that the words “purchase”, “sell” or similar or derivative words are understood and agreed to mean “license”, and that the word “Buyer” or similar or derivative words are understood and agreed to mean “licensee”. Notwithstanding anything to the contrary contained herein, Seller or its licensor, as the case may be, retains all rights and interest in software products provided hereunder.
Seller hereby grants to Buyer a royalty‐free, non‐exclusive, nontransferable license, without power to sublicense, to use software provided hereunder solely for Buyer’s own internal business purposes on the hardware products provided hereunder and to use the related documentation solely for Buyer’s own internal business purposes. This license terminates when Buyer’s lawful possession of the hardware products provided hereunder ceases, unless earlier terminated as provided herein. Buyer agrees to hold in confidence and not to sell, transfer, license, loan or otherwise make available in any form to third parties the software products and related documentation provided hereunder. Buyer may not disassemble, decompile or reverse engineer, copy, modify, enhance or otherwise change or supplement the software products provided hereunder without Seller’s prior written consent. Seller will be entitled to terminate this license if Buyer fails to comply with any term or condition herein. Buyer agrees, upon termination of this license, immediately to return to Seller all software products and related documentation provided hereunder and all copies and portions thereof. Certain of the software products provided by Seller may be owned by one or more third parties and licensed to Seller. Accordingly, Seller and Buyer agree that such third parties retain ownership of, and title to such software products. The warranty and indemnification provisions set forth herein shall not apply to software products owned by third parties and provided hereunder.

12. LIMITATION OF LIABILITY. NOTWITHSTANDING ANYTHING TO THE CONTRARY CONTAINED HEREIN, THE LIABILITY OF SELLER UNDER THESE TERMS AND CONDITIONS (WHETHER BY REASON OF BREACH OF CONTRACT, TORT, INDEMNIFICATION, OR OTHERWISE, BUT EXCLUDING LIABILITY OF SELLER FOR BREACH OF WARRANTY (THE SOLE REMEDY FOR WHICH SHALL BE AS PROVIDED UNDER SECTION 9 ABOVE)) SHALL
NOT EXCEED AN AMOUNT EQUAL TO THE TOTAL PURCHASE PRICE THERETOFORE PAID BY BUYER TO SELLER WITH RESPECT TO THE PRODUCT(s) GIVING RISE TO SUCH LIABILITY. NOTWITHSTANDING ANYTHING TO THE CONTRARY CONTAINED HEREIN, IN NO EVENT SHALL SELLER BE LIABLE FOR ANY INDIRECT, SPECIAL, CONSEQUENTIAL OR INCIDENTAL DAMAGES (INCLUDING WITHOUT LIMITATION DAMAGES FOR LOSS OF USE OF FACILITIES OR EQUIPMENT, LOSS OF REVENUE, LOSS OF DATA, LOSS OF PROFITS OR LOSS OF GOODWILL), REGARDLESS OF WHETHER SELLER (a) HAS BEEN INFORMED OF THE POSSIBILITY OF SUCH DAMAGES OR (b) IS NEGLIGENT.

13. INDUSTRIAL PROPERTY RIGHTS. All copyrights, patents, trademarks, designs and other intellectual property rights belonging to Seller, or used by the Seller under license from third parties in or in connection with the Product(s) that are the subject matter of the Contract (including drawings, specifications or instruction manuals supplied therewith) are reserved to the Seller. The Buyer, in purchasing the Product(s), obtains no rights to copy, reproduce or otherwise exploit the products (or such drawings, specifications or instruction manuals), the Buyer’s rights being limited to using the Products for the normal purpose for which they are intended.

14. PATENTS. Unless otherwise agreed in writing by both Seller and Buyer before placement of Buyer’s first order with Seller, Seller shall not be liable for the indemnification of Buyer for damages resulting from the infringement of any Domestic or foreign country patent rights arising out of or in connection with any of Seller’s products. In the event that any product supplied hereunder gives rise to any such patent infringement, or allegation thereof, Seller expressly retains the right to refer complaining parties to Buyer for settlement. Buyer shall indemnify and hold Seller harmless from any and all claims, loss, damage, liability and expense (including, without limitation, reasonable attorney’s fees and disbursements and other litigation and settlement costs, regardless of outcome) arising out of any claims that any product supplied infringes any third‐party patent rights.

15. EXPORT RESTRICTIONS. Buyer acknowledges that each Product and any related software and technology, including technical information supplied by Seller or contained in documents (collectively Items), is subject to export controls of the U.S. government. The export controls may include, but are not limited to, those of the Export Administration Regulations of the U.S. Department of Commerce (the EAR), which may restrict or require licenses for the export of Items from the United States and their re‐export from other countries. Buyer shall comply with the EAR and all other applicable laws, regulations, laws, treaties, and agreements relating to the export, re‐export, and import of any Item. Buyer shall not, without first obtaining the required license to do so from the appropriate U.S. government agency; (i) export or re‐export any Item, or (ii) export, re‐export, distribute or supply any Item to any restricted or embargoed country or to a person or entity whose privilege to participate in exports has been denied or restricted by the U.S. government. Buyer shall cooperate fully with Seller in any official or unofficial audit or inspection related to applicable export or import control laws or regulations, and shall indemnify and hold Seller harmless from, or in connection with, any violation of this Section by Buyer or its employees, consultants, agents, or customers.

16. FORCE MAJEURE. The Seller shall be entitled at any time, on notice to the Buyer, without prejudicing its rights in respect of deliveries already made and without incurring any liability whatsoever to the Buyer for any failure to perform hereunder where such failure shall be caused or occasioned by acts of God (including fire, flood, earthquake, storm, hurricane or other natural disaster), war, invasion, acts of foreign combatants, terrorists acts, government actions, labor disputes of third parties, failure in whole or in part of Seller’s suppliers or any subcontractor to deliver or schedule materials, equipment or machinery to Seller, interruption of transportation, shortage of fuel, energy or utilities, or by any other event or circumstance of a similar of different nature beyond the reasonable control of the Seller.

17. HAZARDOUS MATERIALS. Some Products may require special labeling and handling. Carriers may add additional freight charges for the handling or transporting of these materials. The consolidating of such material with other Products may be prohibited. Additional freight charges will be billed per Sellers shipping terms. Be sure to advise Seller of shipping instructions for these hazardous materials to reduce your freight costs.

18. LASER WARNING. Products contain Class IIIb lasers. It is safe to operate when users follow all safety instructions as noted in product documentation; (a) post warnings in the area around the spectrometer; (b) keep all unauthorized personnel out of the area where the laser is operated; (c) when the indicator light on the probe is “ON”; (d) DO NOT look into the path of the beam; (e) safety goggles provided with the system should be worn at ALL times; (f) NEVER LOOK DIRECTLY at the laser source.

19. MISCELLANEOUS. (a) Buyer may not delegate any duties nor assign any rights or claims hereunder without Seller’s prior written consent, and any such attempted delegation or assignment shall be void. (b) The rights and obligations of the parties hereunder shall be governed by and construed in accordance with the laws of the Commonwealth of Massachusetts, without reference to its choice of law provisions. Each party hereby irrevocably consents to the exclusive jurisdiction of the state and federal courts located in Middlesex County, Massachusetts, in any action arising out of or relating to this Agreement and waives any other venue to which it may be entitled by domicile or otherwise. (c) In the event of any legal proceeding between the Seller and Buyer relating to this Agreement, neither party may claim the right to a trial by jury, and both parties waive any right they may have under applicable law or otherwise to a right to a trial by jury. Any action arising under this Agreement must be brought within one (1) year from the date that the cause of action arose. (d) The application to this Agreement of the U.N. Convention on Contracts for the International Sale of Goods is hereby expressly excluded. (e) In the event that any one or more provisions contained herein shall be held by a court of competent jurisdiction to be invalid, illegal or unenforceable in any respect, the validity, legality and enforceability of the remaining provisions contained herein shall remain in full force and effect, unless the revision materially changes the bargain. (f) Seller’s failure to enforce, or Seller’s waiver of a breach of, any provision contained herein shall not constitute a waiver of any other breach or of such provision. (g) Any notice or communication required or permitted hereunder shall be in writing and shall be deemed received when personally delivered or three (3) business days after being sent by certified mail, postage prepaid, to a party at the address specified herein or at such other address as either party may from time to time designate to the other.

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