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Sales Order Standard Terms and Conditions

ATTACHED AND MADE A PART OF SALES ORDER SUBMITTED TO XTELESIS CORPORATION BY REFERENCE

No Warranty.

ALL GOODS SOLD UNDER THE XTELESIS SALES ORDER ARE SOLD AND/OR DELIVERED WITHOUT WARRANTY OF ANY KIND, INCLUDING WITHOUT LIMITATION, ANY IMPLIED WARRANTY OF MERCHANTABILITY, FITNESS FOR PARTICULAR PURPOSE, TITLE AND NON-INFRINGEMENT. However, nothing herein shall permit Xtelesis to interfere in any way with the warranty of any manufacturer that rightfully passes to the Customer. Xtelesis shall take all reasonable steps to inform the customer of the manufacturer's warranty provisions and assist, where appropriate, in the validation of any such warrant.

Limitation of Liability.

IN NO EVENT WILL XTELESIS, ITS OFFICERS, DIRECTORS AND EMPLOYEES HAVE ANY LIABILITY TO CUSTOMER OR ANY OTHER PERSON FOR ANY CONSEQUENTIAL, COMPENSATORY, INCIDENTAL, EXEMPLARY, PUNITIVE, SPECIAL OR OTHER DAMAGES INCLUDING WITHOUT LIMITATION, DAMAGES FOR LOSS OF PROFITS, USE, DATA OR BUSINESS FOR ANY CLAIM OR LOSSES CAUSED BY ANY ACT, ERROR, DELAY OR OMISSION OF XTELESIS, REGARDLESS OF THE THEORY OF LIABILITY ALLEGED OR WHETHER THE CLAIM IS BASED UPON CONTRACT, TORT, BREACH OF STATUTORY DUTY, INDEMNITY, CONTRIBUTION OR OTHERWISE.

Compliance with Law.

Customer acknowledges and agrees that certain goods delivered under the Xtelesis Sales Order may be covered by copyrights, patents and export regulations and Customer agrees to abide by all applicable laws and regulations.

Credit Check.

Customer understands that this Xtelesis Sales Order is subject to normal credit approval checks by Xtelesis. In the event that the credit of Customer, in the sole judgment of Xtelesis, is unacceptable, the terms of the Xtelesis Sales Order may be revised or the Customer may cancel the order upon notification by Xtelesis within 5 business days of the date of the Xtelesis Sales Order that Customer's credit is not satisfactory. Xtelesis shall consider the order cancelled upon such notification, and Xtelesis shall have no further obligations hereunder, unless other terms satisfactory to Xtelesis, in its sole judgment, are agreed upon between Customer and Xtelesis.

Invoice, Payment Terms and Finance Charges.

Xtelesis will invoice Customer upon delivery for all goods purchased and semi-monthly for all services performed for the immediate preceding semi-monthly period under the Xtelesis Sales Order. Payment will be due Net/30. Any invoice not timely paid will accrue a FINANCE CHARGE of 1% per month of the unpaid balance at the first of each month that a past due invoice remains unpaid.

Security Interest.

Xtelesis shall retain a security interest in all goods delivered under the Xtelesis sales Order until all invoices with regard to the Xtelesis Sales Order are paid in full. Xtelesis shall be authorized to require a UCC1 filing from the Customer with respect to all delivered goods sold under the Xtelesis Sales Order. Any such UCC1 will be relinquished upon full payment of all invoices associated with the Xtelesis Sales Order.

Returns.

The return of any goods delivered under the Xtelesis Sales Order shall be subject to an approved Return Merchandise Authorization ("RMA") from Xtelesis. Xtelesis shall use its best efforts to enable Customer to return any goods that any Distributor or Manufacturer from whom the goods were obtained will allow.

Delivery.

Delivery of goods shall be made at the time and location specified in the Xtelesis Sales Order. Xtelesis does not guarantee such delivery dates, but will use its best efforts to obtain the goods from its suppliers for a timely delivery. In the event that a delivery will be delayed by more than five business days, Xtelesis will notify Customer as early as possible. Customer may not refuse delivery of goods ordered under the Xtelesis Sales Order unless such delivery date will be delayed by more than twenty business days, and Xtelesis has been advised of such refusal at least ten business days prior to the scheduled delivery date.

Engineering Services.

Unless otherwise contracted for in a signed agreement, all Engineering Services to be performed by Xtelesis shall be on a time and material basis including charges for travel time and travel cost reimbursement, such reimbursement to include charges for miles driven by Xtelesis engineers at $.40 per mile.

Miscellaneous travel and shipping charges:

Please note that Xtelesis quotes generally do not represent travel and shipping charges. These will be added to your final invoice.

Sales Taxes.

Customer shall remit to Xtelesis, when invoiced for such, all sales taxes due in the jurisdiction to which goods are delivered or services are performed. In the event that Customer is exempt from any such sales tax, a proper exemption certificate shall be supplied to Xtelesis with the signed Xtelesis Sales Order. In the event that any goods and/or services subject to the Xtelesis Sales Order are to be leased through a third party lessor, Customer or such third party lessor agrees to provide Xtelesis with the required information for exemption from any such sales tax. Unless proper exemption information is timely supplied to Xtelesis, such sales tax shall be remitted to Xtelesis upon invoice therefore.

Indemnity.

Customer agrees to indemnify, defend and hold harmless Xtelesis from any loss caused by Customer's breach of these Terms and Conditions.

Choice of Law.

These terms and conditions and the Xtelesis Sales Order shall be governed and construed in accordance with the laws of California, without regard to its conflicts of law provisions.