Aethercomm Customer Terms Quality Clauses

Except as otherwise agreed upon by Aethercomm Inc, or any of its subsidiaries identified as the seller on Aethercomm's invoice and sales proposal or quote for the applicable products (herein called "Aethercomm"), in writing, these General Terms and Conditions of Sale, together with any specified conditions of sale set forth in Aethercomm's quote, if applicable (the "specific Terms and Conditions") shall be the entire contract for sale (collectively, the "contract").

1. PRICE
Prices are in United States dollars and include only the cost of Aethercomm's usual factory quality tests and inspection and the cost of packaging in accordance with good commercial practice. Prices are FOB shipping point. For non-North American shipments, prices quoted do not include export/import duties, customs fees or brokerage fees, unless otherwise indicated on the quotation and shall be paid by Sight Draft.

2. PROPOSAL VALIDITY
Unless otherwise stated, all proposals and quotations will have a 30 day expiration from date of submittal.

3. DELIVERY
3.1 Delivery dates and times are approximate and based on (i) prompt receipt by Aethercomm of all information necessary to permit Aethercomm to proceed with work immediately and without interruption, (ii) Buyer's compliance with the payment terms, (iii) prompt receipt by Aethercomm of all evidence Aethercomm may request for any required Export or Import license.

3.2 Partial deliveries shall be permitted, but Aethercomm shall not ship excess quantities. Upon delivery to Buyer or a common carrier at Aethercomm's facility, Title in the products and all risk of loss shall pass to the buyer. Buyer grants Aethercomm a security interest in and the right to repossess all goods until all charges are paid in full; Buyer further will execute any document required to perfect this security interest.

3.3 If any part of the product cannot be delivered when ready due to any cause specified in Article 6 hereof, Aethercomm may make delivery by placing such products in storage. In such event, (i) all expenses incurred by Aethercomm such as for preparation and placement into storage, handling, storage, inspection, preservation and insurance, shall be payable by buyer upon submission of Aethercomm's invoices, and (ii) Aethercomm shall assist and cooperate with buyer in any reasonable manner with respect to the removal of any products which have been in storage after payment of all amounts by the buyer. Aethercomm shall notify buyer in writing concurrently with placing such products in storage.

3.4 Unless specified on the customer's purchase order, Aethercomm will determine the method and routing of all deliveries. Any specification by customer will be subject to Aethercomm's approval.

3.5 Product that is deliverable within 30 days cannot be cancelled or rescheduled. Cancellations or modifications to the schedule of product due outside of 30 days caused by buyer may result in pricing adjustments and/or additional fees.

4. PAYMENT
4.1 Aethercomm shall invoice buyer upon shipment and such invoices will be due and payable within thirty (30) days from date of invoice, unless otherwise agreed in writing. In the event that any invoice is not paid when due, Aethercomm may, with fifteen (15) days prior written notice to buyer, either suspend deliveries or terminate the contract. Late fees shall accrue on all past due payments at one and a half percent (1½ %) per month or the highest rate permitted by law, whichever is less.

4.2 Payments shall be made to the address of Aethercomm as shown on Aethercomm's invoice.

4.3 Non-recurring engineering charges ("NRE") and payment schedule shall be agreed upon prior to the acceptance of the purchase order or contract execution.

4.4 The balance of such NRE shall be due and payable within thirty (30) days after completion or the NRE work (the NRE Balance). In the event of a cancellation of the NRE contract or purchase order after commencement but prior to completion of NRE work, Aethercomm shall be entitled to payment of a percentage of the NRE balance equal to the percentage of NRE work completed prior to cancellation, as reasonably determined by Aethercomm. All NRE charges are nonrefundable.

5. INSPECTION AND TESTING

5.1 All quality control exercised in the manufacture of the products shall be in accordance with Aethercomm's normal quality control policies, procedures and practices unless otherwise agreed in writing.

6. PACKING, MARKING AND SHIPPING
6.1 Products shall be prepared, packed and shipped by/or on behalf of Aethercomm in accordance with good commercial practices unless otherwise directed by the buyer in the purchase order. A complete packing list shall be enclosed with all shipments. Buyer agrees to reimburse Aethercomm for the cost of any non-standard packing, marking or shipping directions contained in the purchase order.

7. DELAYS
7.1 Aethercomm shall not be liable for delays in performing its obligations, and Aethercomm's deadlines shall be extended, for any delay arising directly or indirectly from causes outside of Aethercomm's reasonable control, including but not limited to (i) acts of God, unforeseeable circumstances, acts (including delay or failure to act) of any governmental authority, war, riot, revolution, civil unrest, delay or defaults of common carriers, priorities, fires, strike, lockout, sabotage or epidemic, or (ii) failure or curtailment due to cause beyond Aethercomm's usual source of supply, labor, materials, components, facilities, or transportation, including any vendor's alleged infringement of third party intellectual property rights, or (iii) any other cause beyond Aethercomm's control.

7.2 Aethercomm will make reasonable efforts to shorten the period of any delay under this provision. If any delays resulting from any of the foregoing causes extends for more than ninety (90) days, either party, upon thirty (30) days written notice, may terminate the order in respect to the unexecuted portion of the work whereupon buyer shall pay Aethercomm charges, as applicable, in accordance with the terms of the contract.

8. TERMINATION FOR CONVENIENCE
8.1 This clause applies if the Buyer has entered into this contract with Aethercomm for the purpose of fulfilling a prime contract with the United States Government or a subcontract there under. In the event that the US Government terminates for its sole convenience the entire prime contract, or a task or subtask under which Aethercomm is performing, upon notification by buyer, Aethercomm shall immediately comply with the provisions of the Government's termination notice to the extent that it is applicable to Aethercomm's subcontract and any open purchase order or tasking there under. Buyer will not be entitled to terminate the subcontract for its own convenience.

8.2 Products completely manufactured as of the effective date of termination shall be delivered to the buyer. For each completed product delivered, buyer shall pay to Aethercomm the contract price plus any adjustments thereto resulting from reduced quantities by reason of the termination.

8.3 Raw materials, processed materials, items in process and purchased components acquired by Aethercomm in the performance of this contract shall at buyer's option be completely manufactured and delivered to buyer and buyer shall either accept them in their "as is" condition or direct that they be returned to the supplier, if possible, or else scrapped as of the date of termination. In the event buyer elects the option to scrap such materials and items, it shall pay the total costs incurred by Aethercomm including termination settlements paid Aethercomm's suppliers plus an amount equal to twenty five (25%) percent of the total incurred costs.

9. INTELLECTUAL PROPERTY
9.1 Any work, writing, idea, discovery, improvement, invention (whether patentable or not), trade secret or intellectual property of any kind first conceived by Aethercomm in the performance of this contract shall be the exclusive property of Aethercomm.

9.2 If the Buyer has entered into this contract with Aethercomm for the purpose of fulfilling a prime contract with the United States Government or a subcontract there under, Aethercomm will comply with the mandatory flow down of any US Government intellectual property provisions and hereby grants to the Buyer no rights to use and disclose the items described in paragraph 8.1 beyond the extent necessary to allow the Buyer to comply with its obligations to the United States Government under the prime contract or subcontract there under, provided such obligations are first disclosed by the Buyer to Aethercomm in writing prior to the execution of this contract. The Buyer shall have no further rights to the items described in paragraph 8.1 except those rights expressly granted by Aethercomm in a written document signed by Aethercomm, or rights granted pursuant to the sale of a Drawing Package as described in Section 9 of these Terms and Conditions.

10. DESIGN CHARGES
Design charges are for services only. The sale of a Drawing Package includes the engineering documentation prepared by Aethercomm; Aethercomm makes no representation or warranty concerning the protect ability of any intellectual property contained therein. While Aethercomm believes its designs do not infringe on the rights of any third party, Aethercomm does not undertake to indemnify the customer against any third party claim unless expressly provided in the sale documents. The exclusive sale of design materials must be expressly stated in the sale documents; such sale obligates Aethercomm to refrain from use of the particular design sold in accordance with the terms of the sale, but does not include a representation or warranty by Aethercomm that third parties cannot or will not produce a substantially identical design. Any modification of this T&C provision must be clear and in writing to be effective.

11. CONFIDENTIALITY
11.1 Each party agrees to comply with the terms of any nondisclosure or proprietary information agreement between Aethercomm and buyer and to comply with all valid proprietary information markings and restrictive legends applied to anything provided by one party to the other. Any other knowledge or information that buyer shall have disclosed or may hereafter disclose to Aethercomm incident to any order hereunder shall not, unless specifically agreed upon in writing by Aethercomm, be deemed to be confidential or proprietary information and accordingly shall be acquired free from any restrictions (other than a claim for patent infringement).

12. WARRANTY
12.1 Aethercomm warrants to buyer that the product sold hereunder will be free from defects in material and workmanship. This warranty extends for the period described in Section 12.3 from the date of original purchase. Aethercomm's liability and buyer's remedy under this warranty are limited to repair or replacement, at Aethercomm's election and at Aethercomm's cost, of product or parts there of returned to Aethercomm's place of manufacture which are shown to Aethercomm's reasonable satisfaction to have been defective; provided that written notice of the defect shall have been given by the buyer to Aethercomm prior to expiration of the warranty period. Buyer shall be responsible for the return freight and insurance charges (for the full product value) to Aethercomm. Aethercomm shall be responsible for freight and insurance on the return of products to the buyer. Transportation charges for the reshipment of products to the buyer and the risk of loss thereof will be borne by Aethercomm only if goods are returned in accordance with written shipping instructions from Aethercomm. This warranty shall not apply to repair or replacement necessitated by accident, disaster, improper or inadequate maintenance, unauthorized modifications or repairs, or electrical or physical misuse, misapplication or abuse.

12.2 Aethercomm's warranty as stated in section 12.1 shall be in lieu of all other warranties, whether oral, written, express, implied or statutory. Aethercomm's warranty obligations and buyer remedies hereunder are solely and exclusively as stated herein. ALL OTHER WARRANTIES EXPRESS OR IMPLIED ARE HEREBY DISCLAIMED, INCLUDING THE IMPLIED WARRANTIES OF MERCHANTABLITY OR FITNESS FOR A PARTICULAR PURPOSE. IN THE EVENT THAT AETHERCOMM IS UNABLE TO REPAIR OR REPLACE THE PRODUCT IN A TIMELY FASHION, OR THE WARRANTY PROVIDED HEREIN OTHERWISE FAILS, BUYER'S RECOVERY OF ANY DAMAGE OF LOSS SHALL BE LIMITED TO THE PRICE PAID FOR THE PRODUCT.

12.3 The warranty described in Section 12.1 shall extend from the date of original shipment in the case of any of Aethercomm's products for one (1) year.

12.4 Products repaired or replaced after the warranty period are warranted for ninety (90) days from date of shipment.

13. INDEMNITY
13.1 Buyer agrees to indemnify and hold Aethercomm harmless from any expenses, attorney fees, court costs and/or other associated expenses it incurs as a result of Buyer's breach of any obligation to Aethercomm, including but not limited to costs associated with compromises and judgments. In any action to enforce Buyer's obligations, Aethercomm shall be entitled to recover its reasonable attorney's fees.

14. APPLICABLE LAW & DISPUTE RESOLUTION
14.1 All agreements between Buyer and Aethercomm shall be interpreted with regard to California law, excluding Conflict of Laws provisions.

14.2 All disputes, controversies, or differences arising between the parties hereto, out of, or in relation to, or in connection with, this Agreement, or any breach thereof, which cannot be settled amicably by the parties shall be resolved by arbitration under the California Arbitration Act, codified at California Code of Civil Procedure sections 1280 et seq. (the "Act"). The hearing shall be held in San Diego, California before a single arbitrator who shall be a retired judge of the Superior Court. If the parties fail to agree and to appoint such single arbitrator within thirty (30) days after demand for arbitration, the arbitrator shall be chosen in accordance with the Act. The decision of the arbitrator shall be in writing, and shall be final and binding on the parties; any arbitral award may be entered in any court of competent jurisdiction. Notwithstanding the foregoing, the arbitrator shall not be authorized to award any punitive damages with respect to any such dispute, controversy or difference, nor may either party seek any such damages relating to any matter arising out of, or relating to, this Agreement or the parties' performance hereunder in any other forum. In an appropriate case, either party may seek injunctive relief in a court of competent jurisdiction, subject to determination of the merits of the case by arbitration under this provision.

15. LIMITATIONS OF LIABILITY
15.1 The total liability of Aethercomm, and any other agent, division, subsidiary, parent corporation, subcontractor or supplier of Aethercomm (collectively, Aethercomm Indemnified Party), on any claim, whether in contract, warranty, tort (including negligence or patent infringement) or otherwise, arising out of, connected with, or resulting from the performance or nonperformance of this contract or from the manufacture, sale delivery, resale, repair, replacement or use of any product or the furnishing of any service, shall not exceed the price allocable to the product or service which gives rise to the claim. Any such liability shall terminate upon the expiration of the warranty period specified in Article 9.

15.2 IN NO EVENT, WHETHER AS A RESULT OF BREACH OF CONTRACT, WARRANTY, TORT (INCLUDING NEGLIGENT OR PATENT INFRINGEMENT) OR OTHERWISE, SHALL AETHERCOMM OR ANY INDEMNIFIED PARTY UNDER PARAGRAPH 10.1 ABOVE BE LIABLE FOR ANY SPECIAL, CONSEQUENTIAL, INCIDENTAL, INDIRECT, PUNITIVE OR EXEMPLARY DAMAGES, INCLUDING BUT NOT LIMITED TO, LOSS OR DAMAGE TO ANY OTHER EQUIPMENT AT ANY INSTALLATION OR REPAIR SITE OR ABOARD ANY VESSEL, REGARDLESS OF THE ORIGIN, MANUFACTURE, OR OWNERSHIP OF THE LOST OR DAMAGED EQUIPMENT, LOSS OF PROFIT OR REVENUES, LOSS OF USE OF THE PRODUCTS OR ANY ASSOCIATED EQUIPMENT, COST OF CAPITAL, COST OF SUBSTITUTE GOODS, FACILITIES, SERVICES OR REPLACEMENT POWER, DOWNTIME COSTS OF CLAIMS OF BUYER'S CUSTOMERS FOR SUCH DAMAGES. If buyer transfers to, or leases the products sold hereunder to, or otherwise permits or suffers use by, any third party, buyer shall obtain from such third party a written agreement to limit Aethercomm's liability as provided in this section 12.

15.3 If Aethercomm furnishes buyer with advice or other assistance which concerns any products supplied hereunder or any system or equipment in which any such products may be installed and which is not required by the terms of this contract, the furnishing of such advice or assistance shall not subject an Aethercomm or an Indemnified Party under paragraph 10.1 to any liability, whether in contract, warranty, tort (including negligence or patent infringement) or otherwise.

16. EXPORT
Export of products produced under this Agreement may be subject to the export laws of the United States including, but limited to the U.S. International Traffic in Arms Regulations (ITAR) and the Export Administration Regulations (EAR). Buyer shall not export, disclose or transfer any Aethercomm products or data directly or indirectly without compliance with these and any other applicable laws and regulations.

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