1.1       “Customer” means and refers to the purchaser of the Products and/or Services being sold or licensed by Netaphor.

1.2       “Netaphor” means and refers to Netaphor Software, Inc.

1.3       “Products” means, collectively, Software and Third Party Products.

1.4       “Services” means all engineering services, Software Support and all similar services provided by Netaphor to Customer.

1.5       "Software" means one or more programs, developed by Netaphor, capable of operating on a controller, processor or other hardware device, as well as all related documentation and information.

1.6       “Software License Agreement” means the software license agreement which governs Customer’s use of the Software.

1.7       “Software Support” means all Software support services provided by Netaphor.

1.8       “Third Party Products” means all products (both hardware and software) which Netaphor acquires from third parties and then provides to Customer.

2.         ACCEPTANCE OF TERMS AND CONDITIONS; COMPONENTS OF FORMAL AGREEMENT.

2.1       These Terms And Conditions Of Sale and, if a Software license is being purchased, the Software License Agreement, apply to the sale or license by Netaphor of the Products and Services described in the applicable Order or Quotation.  The sale or license is based on Customer’s acceptance, without change or modification, of these Terms And Conditions and, if applicable, the  Software License Agreement.  Unless specifically accepted by Netaphor in writing, contrary or additional terms provided or submitted by Customer shall not bind Netaphor.

2.2       The applicable Order or Quotation, these Terms And Conditions Of Sale, and, if a Software license is being purchased, the Software License Agreement, together comprise the formal “Agreement” between Netaphor and Customer.

3.         ORDERS.     

            All Orders are subject to acceptance by Netaphor.  Unless otherwise agreed to by the parties, orders for Products must specify delivery within thirty (30) days from the order date.

4.         DELIVERY, SHIPMENT AND RISK OF LOSS.

4.1       Netaphor will use reasonable commercial efforts to meet the delivery or completion date set forth in the applicable Order or Quotation, but Netaphor shall not be responsible or liable for any loss or damage arising as a result of a delay in delivery or completion.  If delivery or completion is delayed for ninety (90) days or more, for reasons not attributable to Customer, Customer may cancel the delayed part of the Purchase Order or Quotation by giving written notice thereof.

4.2       Unless otherwise indicated on the Order or Quotation, all shipments are F.O.B. to the “Ship To” address via Federal Express or an equivalent delivery mechanism.  Netaphor will ship according to Netaphor’s standard commercial practice.  If special packing or shipping instructions are requested or necessary, charges will be billed separately to Customer.

4.3       Risk of loss and damage for all Products will pass from Netaphor to Customer when the Products are delivered to the “Ship To” address.

4.4       NETAPHOR will charge a $25 shipping and handling fee on all returns.

5.         PRICES AND PAYMENT.

5.1       Prices are valid only for thirty (30) days from the original order date.  If the delivery or completion date is extended beyond this thirty (30) day time period due to Customer’s action or inaction, Customer will be charged Netaphor’s then current price.

5.2       Prices are exclusive of, and Customer shall pay and be responsible for, all applicable (i) sales, use, value added and similar taxes, and (ii) tariffs, duties and other similar charges.

5.3        Payment shall be made in United States dollars.  Netaphor will accept payments may be made by Visa, Mastercard or American Express.

5.4       Payment terms are subject to Netaphor credit approval.  If approval is provided, then, unless otherwise agreed to in writing, payment is due within thirty (30) days from Netaphor’s invoice date.  Invoices for all Products will be issued by Netaphor upon delivery of each Product.  Invoices for Software Support will be issued in advance of the support service period if yearly support is purchased, or on a per incident basis if yearly support is not purchased.  Invoices for all other Services will be issued in accordance with the written payment schedule agreed upon by the parties (once agreed upon, such written schedule shall become a part of this Agreement).

5.5       Netaphor may change credit or payment terms at any time when, in Netaphor's sole but good faith opinion, Customer's financial condition, previous payment record, or the nature of Customer's relationship with Netaphor so warrants.

5.6       Interest at an annual rate of either (i) eighteen percent (18%), or (ii) the highest rate allowed by law, whichever is lower, shall be due and payable on all amounts not paid by Customer to Netaphor when such amounts are due.

6.         INSTALLATION AND ACCEPTANCE.

6.1       Installation of a Product by Netaphor, when included in the purchase price, is complete when the Product passes Netaphor’s installation and test procedures, as reasonably determined by Netaphor.

6.2       For Products with installation included in the purchase price, acceptance of the Product by Customer is deemed to occur upon completion of installation by Netaphor. 

6.3       For Products without installation included in the purchase price, and for all Services, acceptance shall be deemed to occur five (5) days after the Product is delivered or the Service is provided, unless within such five (5) day period, Customer provides written notice to Netaphor that it is rejecting such Product or Service.

7.         SOFTWARE LICENSE AGREEMENT.

In addition to these Terms And Conditions Of Sale, the Software License Agreement, in its entirety, applies to any Software licensed to Customer.  To the extent there is any conflict between the Software License Agreement and the applicable Order or Quotation or these Terms And Conditions Of Sale, the Software License Agreement shall prevail.

8.         SOFTWARE SUPPORT.

8.1       The following Software Support is provided with each purchased Software license (other than a beta/early access license) for a period of thirty (30) days after delivery of the Software (the “Initial 30 Day Period”):

(a)       Phone access during Netaphor’s regular business hours, via the Netaphor support line, at (949) 470-4969;

(b)        Automatic notification of new Software releases with free upgrades for “dot” releases (but not new versions of the Software); and

(c)       Automatic notification of “bug” fixes.

8.2       Customer may purchase extended Software support.  Terms and Conditions information can be obtained by contacting Netaphor.

8.3       Customer may make a support request to resolve a Software issue for $199 per incident.  No fee will be charged if Netaphor does not reasonably resolve the issue raised in the request.  Netaphor reserves the right to raise the $199 fee at any time.

8.4       To be eligible for Software Support, Software must be at the current specified revision level.  Netaphor does not provide support for prior revision levels.  Netaphor will not provide Software Support for products not supplied by Netaphor, and Netaphor will not provide Software Support for damage or failure to the Software caused by misuse or non-Netaphor products.

8.5       Software Support services are provided by Netaphor from its office in Irvine, California.  If Netaphor is requested (and agrees) to visit Customer’s site, separate charges will apply.

9.         NO WARRANTIES.

9.1             To the maximum extent permitted by law, NETAPHOR expressly disclaims any warranty for the PRODUCTS AND any services provided by NETAPHOR.  The ProductS and services are provided "as is" without warranty of any kind, either express or implied, including, without limitation, the implied warranties of Merchantability or fitness for a particular purpose.  The entire risk arising out of use or performance of the ProductS AND SERVICES remains solely with Licensee.

9.2             If Customer purchases Third Party Products, and if the manufacturer or supplier of the Third Party Products provides a warranty, Netaphor shall, if permitted, transfer Netaphor’s rights under any such warranty to Customer.  Thereafter, Customer’s sole recourse, if any, shall be against the manufacturer/supplier of the Third Party Products.

10.       LIMITATION OF LIABILITY. 

CUSTOMER AGREES AND ACKNOWLEDGES THAT NETAPHOR’S AND ITS’ SUPPLIER’S TOTAL LIABILITY, WHETHER IN CONTRACT, TORT (INCLUDING, WITHOUT LIMITATION, NEGLIGENCE OF ANY TYPE AND STRICT LIABILITY) OR OTHERWISE, ARISING OUT OF OR RELATED TO CUSTOMER’S OR ANY OTHER PARTY’S USE OF, OR INABILITY TO USE, ANY PRODUCT, OR NETAPHOR’S PROVISION OF OR FAILURE TO PROVIDE SERVICES, SHALL BE LIMITED TO THE GREATER OF THE AMOUNT ACTUALLY PAID BY CUSTOMER TO NETAPHOR FOR THE PRODUCT OR SERVICE OR U.S.$5.00.  CUSTOMER  ACKNOWLEDGES THE FEES FOR THE PRODUCTS AND SERVICES REFLECT THIS ALLOCATION OF RISK. 

MOREOVER, AND WITHOUT IN ANY WAY LIMITING THE PRIOR PARAGRAPH, IN NO EVENT SHALL NETAPHOR OR ITS SUPPLIERS BE LIABLE FOR ANY SPECIAL, INCIDENTAL, INDIRECT, CONSEQUENTIAL, PUNITIVE OR MULTIPLE DAMAGES WHATSOEVER, WHETHER IN CONTRACT, TORT (INCLUDING, WITHOUT LIMITATION, NEGLIGENCE OF ANY TYPE AND STRICT LIABILITY) OR OTHERWISE (INCLUDING, WITHOUT LIMITATION, DAMAGES FOR LOSS OF PROFITS, BUSINESS INTERRUPTION, OR LOSS OF INFORMATION) ARISING OUT OF OR RELATED TO CUSTOMER’S OR ANY OTHER PARTY’S USE OF, OR INABILITY TO USE, ANY PRODUCT, OR NETAPHOR’S PROVISION OF OR FAILURE TO PROVIDE SERVICES, EVEN IF NETAPHOR AND ITS SUPPLIERS HAVE BEEN ADVISED OF THE POSSIBILITY OF SUCH DAMAGES, OR IF THE DAMAGES ARE FORESEEABLE. 

11.       TERMINATION.

Netaphor may terminate the Agreement (and the Software License Agreement) if Customer fails to (i) pay any amount due or (ii) perform any material term under the Agreement or any other Netaphor agreement, and such failure is not cured within ten (10) days after written notice is provided to Customer. Termination by Netaphor shall automatically, and without further action by Netaphor, terminate and extinguish all licenses granted by Netaphor to Licensee under the Software License Agreement.

12.       FORCE MAJEURE.

NETAPHOR will not be liable for performance delays or for non-performance of its Products or Services due to causes beyond Netaphor’s reasonable control.

13.       ENTIRE AGREEMENT AND AMENDMENTS.

This Agreement (comprised of the applicable Order or Quotation, these Terms And Conditions Of Sale, and, if a Software license is being purchased, the Software License Agreement) constitutes the entire agreement between the parties concerning the subject matter hereof and supersedes all prior and contemplated agreements or representations, written or oral, of the parties pertaining to the subject matter.  The Agreement may not be modified except in a written amendment signed by authorized representatives of both parties.

14.       SEVERABILITY.

If any provision of the Agreement is declared to be illegal, unenforceable or void, the remainder of the Agreement shall be enforced to the extent permitted by law, and the illegal, unenforceable or void provision shall be replaced with a mutually acceptable provision which comes closest to the intention of the parties underlying the original provision.  

15.       APPLICABLE LAW.

The Agreement shall be interpreted, construed and governed by the laws of the State of California without regard to its conflict of law rules.  The parties hereby irrevocably submit to the exclusive jurisdiction and venue of the state and federal courts sitting in Orange County, California for the purpose of all legal proceedings arising out of or relating to this Agreement.

16.       WAIVER. 

No delay or omission by either party to exercise any right or remedy hereunder shall be construed as a waiver of such right or remedy.  Further, the waiver by either party of a particular breach of the Agreement by the other party shall not be construed as, or constitute, a continuing waiver of such breach, or of other breaches of the same or other provisions of the Agreement.

17.       PREVAILING PARTY.

In the event a dispute arising under the Agreement results in litigation, the non-prevailing party shall pay the prevailing party’s reasonable litigation costs, including, without limitation, reasonable attorneys' fees.

18.       COMPLIANCE WITH U.S. EXPORT LAWS.

CUSTOMER UNDERSTANDS, AGREES AND WARRANTS THAT IT SHALL NOT TRANSFER, DIVERT, EXPORT OR RE-EXPORT TO ANY THIRD PARTY ANY ITEM PROVIDED TO CUSTOMER UNDER OR IN CONNECTION WITH THE AGREEMENT, EXCEPT AS EXPRESSLY AUTHORIZED BY THE U.S. GOVERNMENT IN ACCORDANCE WITH U.S. EXPORT CONTROL LAWS.

1052858v.2  (Cam No. 62879.010)