Computer Optics Inc. Terms of Sale

These terms and conditions govern the sale of optical, mechanical, and electronic design services and manufactured products by Computer Optics Inc.(COI). These terms and conditions take precedence over the Customer's additional terms and conditions. Acceptance by the Customer is limited to these COI terms and conditions. Neither COI's commencement of performance nor delivery shall be deemed or constituted as acceptance of Customer's additional or different terms and conditions.

1. Performance. Performance of any order received by COI is expressly conditioned upon acceptance by COI management.

2. Orders. a. All orders placed with COI must be in signed writing or upon verbal order confirmed in signed writing. All orders must reference COI's bid or proposal number and duplicate without changes or additions for work to be performed. If the work is an optical or opto-mechanical or mechanical design as proposed by COI, the Customer's order must include the statement that the Customer accepts COI's proposal in its entirety including the design costs proposed , quantities, tooling, any non-recurring engineering and/or setup charges, and delivery dates. For orders that are quoted by COI to the Customer's drawings, a complete description of the products ordered must be supplied by the Customer. b. Orders will be binding upon COI when received and accepted in writing by COI. c. Orders are not subject to cancellation except upon Customers payment of reasonable and proper cancellation charges. d. For all design orders in which COI has a proprietary design, and in particular those based on the COI/COX Lens Design Library, all rights, including but not limited to patents, trade secrets and intrinsic applications or other COI clients remain the sole property of COI. The Customer is granted the rights solely to modified design that results from the design work as proposed by COI in the "proposal". e. Customer's exclusivity to the COI design products specially designed for Customer is limited to Customer taking delivery and full payment of all special (custom design) products ordered under the purchase order or contract. Alternatively Customer shall pay for all custom designed products and not require they be delivered. Such products then become the property of COI for the sole disposition at COI's direction. Should special products be sold by COI, no financial compensation shall be due Customer. In the event Customer fails to take delivery of custom products and does not make payment per Par 5. within the terms of payment, Customer agrees that it loses its exclusivity to the special products and COI shall be allowed to sell these products to other customers without reimbursement to Customer for any design and/or manufacturing or supply costs previously paid by the Customer. f. All design orders require Customer to make a financial deposit of one third (1/3) of the total amount of the order or contract at the inception of the order or contract. This deposit shall not be construed by the Customer as an advance payment. In the event Customer cancels this order, the remaining deposit will be retained by COI to defray work in process costs. Any amount remaining after work in process costs are deducted will be returned to Customer.

3. Technical data. All, specifications, drawings, designs, know-how, trade secrets, technical data, inventions, or other information which are furnished, disclosed either orally or in written form by COI in connection with COI's proposal or Customer's purchase order or contract are the exclusive property of COI. Buyer agrees to keep all such information in confidence and not to disclose it to other parties without the specific written consent of COI. Customer agrees to disclose promptly to COI any breech of COI's proprietary information. Customer will notify COI in writing if COI proprietary data for the Products and/or services is required for US. Government contracts.

4.Prices a. The prices of COI design work, products and services are those specified on the COI invoice. If no price is specified for COI stock products, the price will those in the COI Price List current at the time of acceptance of the order by COI. All prices printed in this price list or quoted to Individual Customers are subject to change. b. The prices quoted do not include any federal, state or local taxes, or other government charges which, when applicable, will be invoiced in addition to the prices set forth herein.

5. Tools. In the event that tools and/or modifications to COI owned tools must be specially designed in order to manufacture Customer with the required products or services, a tool charge shall be added to the purchase order or contract and shall be invoiced in advance of the first shipment of the ordered products. Title to all specially designed tools shall remain with COI, and it is understood that COI may alter said tools or incorporate other manufacturing processes engaged by COI.

6. Payment. a. Payment shall be thirty (30) days after the date of the invoice unless otherwise specified on the front of the invoice. COI may invoice each shipment separately and each shipment shall be considered a separate and individual contract. b. Orders and contracts requiring a deposit will have the deposit funds appropriately prorated against each line item. The invoice will show the full list product unit cost and a second line item for the amount of the prorated portion of the deposit. The amount due will be the net of the two line items. c. All late payments shall be charged interest computer on a daily basis from the due date until paid in full at the rate of one and one-half (1 1/2%) interest per month or the maximum rate permitted by law, whichever is less. d. All shipments shall be freight collect ex works. The carrier will be selected by COI in the absence of specific instructions by Customer. In no event shall COI be liable for any delay in delivery, nor shall the carrier be an agent of COI. e. COI reserves the right to establish and/or charge credit and payment terms extended to Customer when, in COI's sole opinion, Customer's financial condition or previous payment record warrants that action. Further, on delinquent accounts, COI shall not be obligated to continue performance under any agreement with Customer, f. COI retains a security interest in the Products delivered to Customer, and their accessories, replacements, accessions, successors, proceeds and products, including accounts receivable(collectively, the Collateral) to secure payment of all amounts due under this Agreement. If Customer fails to pay any amount when due, COI shall have the right to repossess and remove all or any part of the Collateral from Customer, but not from Customer's customers. Any repossession or removal shall be without prejudice to any other remedy of COI hereunder, at law or in equity, Customer agrees, from time to time, to take any act and execute and deliver any document (including, without limitation. financial statements) reasonably requested by COI to transfer, create, perfect, preserve, protect and enforce this security interest. g. If customer fails to make payment when due COI may pursue any legal or equitable remedies, in which event COI will be entitled to reimbursement for costs of collection and reasonable attorney's fees.

7. Shipments. All prices quoted or printed in any COI Price Lists are FOB the COI shipping dock, Hudson NH 03051, or those of our suppliers. Delivery will be deemed complete and risk of loss or damage to the Products will pass to Customer upon delivery to the carrier.

8. Inspection and Acceptance. a. The Customer shall have the right to inspect the products at the time and place of delivery before paying for or accepting them. b. The Products shall be deemed accepted by the Customer unless notice of defect is received within ninety (90) days of shipping and the Product is returned to COI within one hundred and twenty days (120) of shipping. c. In the event that Customer claims that goods do not conform to contract or order specifications, and COI, after inspecting the products, determines that the Products do not conform to the contract or order, COI will either replace the nonconforming goods or accept a return of said products and credit Customer's account, COI's exclusive obligation with respect to a non-conforming Product shall be at COI's option, to repair or replace the Product, if it is determined to be defective, or to refund to Customer the purchase price for the Product. NOTWITHSTANDING ANYTHING HEREIN TO THE CONTRARY, THE FOREGOING IS Customers SOLE AND EXCLUSIVE REMEDY FOR BREACH OF WARRANTY BY COI WITH RESPECT TO THE PRODUCT.

9 Warranty. a. COI warrants to Customer that all Products will conform in accordance with the applicable current specifications issued by COI. In the case of design orders or contracts the all Products and services will conform in accordance with the applicable current specifications proposed in writing by COI. b. Replacement Products will be warranted as set forward above. c. This warranty shall not apply to any Product that shall have been subject to abuse, accident, or misuse, or which has been inspected or used contrary to current instructions. d. The foregoing warranties are the dole warranties, express or implies, given by COI in connection with products and services, and COI disclaims all other warranties including warranties of merchantability, fitness for a particular purpose and non-infringement of a third party rights. d. COI assumes no liability for consequential damages, anticipated or lost profits, incidental damages, loss of time, or other losses incurred by Customer or any third party in connection with the Products

10. Statute of Limitations. No action by Customer may be brought at any time more than twelve (12) months after the facts occurred upon which the cause of action arose.

11. Limitations of liability. The liability of a COI hereunder for all claims shall not exceed the sum of Customer's payments for the Products and services which are the subject of the dispute.

12. Non-waiver. No course of dealing or failure of either party to strictly enforce any term, right or condition of this Agreement shall be construed as a wavier of that term, right or condition.

13. Governing law. All purchase orders and/or contracts shall be governed by, and construed in accordance with the laws of the State of New Hampshire.

14. Entire Agreement. This Agreement shall constitute the entire Agreement between the parties with respect to the subject matter of this Agreement and shall not be modified or rescinded except by a written document signed by COI and the Customer. The provisions of this Agreement supercede all prior oral and written quotations, correspondence, communications, and understandings of the parties with respect to the subject matter of this Agreement.