Article 1. Scope

These terms and conditions apply to all bids, quotations and orders for the sale of Products by Zvetco, Inc. (hereinafter referred to as "Seller"), except as otherwise set forth in a written document or agreement signed by a duly authorized officer of Seller. These terms and conditions represent the sole understanding between Seller and customer (hereinafter referred to as "Buyer"), with respect to the purchase and sale of Seller's products. Any provision of Buyer's Purchase Order that is in any way inconsistent with, or in addition to these terms and conditions of sale, shall not be binding on Seller. Any Order Acknowledgment containing these terms and conditions constitutes a counter offer to Buyer. Buyer taking delivery of all or any part of Product shall constitute acceptance of these terms and conditions. Seller's failure to object to provisions contained in any communication from Buyer shall not be a waiver of these terms and conditions.

Article 2. Definitions

The following terms used herein are defined as follows:

(A) "Products" include Application Specific Standard Products, Custom or Semicustom Products, Prototype or Pre-production Units and Development Kits and Evaluation Units.

(B) "Application Specific Standard Products" (hereinafter referred to as "Standard Products") are those Products manufactured to Seller's specifications and intended for use in a specific application but available for sale to all customers. Seller's fingerprint sensor chips fall within this category of Product.

(C) "Custom" or "Semicustom Products" are those Products manufactured in whole or in part to a specific customer's specifications and identified by a distinctive custom part number.

(D) "Prototype or Pre-Production Units" are sample sensor chips provided as engineering evaluation units which have not been fully qualified and/or manufactured in production quantities, have not been commercially introduced/released, and do not come with a Product warranty.

(E) "Development Kits and Engineering Evaluation Units" are those Products sold for the purpose of customer application software and hardware development and engineering evaluation.

(F) "Order Acknowledgement" is the form and procedure that the Seller uses to officially accept contractual commitments from Buyers.

Article 3. Prices

(A) Purchase Order - Buyer is required to provide a Purchase Order or contract, in either written or electronic form, to include as a minimum, Product part number or technical description/specification, quantity, price, requested delivery date, billing and shipping information. Seller shall accept verbal orders (at Seller's discretion) but Seller must receive Buyer's confirming order prior to order shipment and in no case later than thirty (30) days after placement of a verbal order. The Seller's Order Acknowledgement completes the written agreement between the parties.

(B) Billing - Subject to the provisions of sub-paragraph (C) below, all billings for Products will be at Seller's established prices and/or as negotiated with Buyer and set forth in Buyer's Purchase Order and Seller's Order Acknowledgement.

(C) Order Scheduling and Pricing - Orders may be placed for shipment over a period of up to 12 months from the date of order receipt. Prices are set and agreed to between Buyer and Seller based on Buyer's commitment to accept the full delivery quantity purchased within this 12- month time period. In the event Buyer's Purchase Order is cancelled, or if for any reason, Buyer fails to accept complete delivery, Seller reserves the right to "bill back to Buyer" for the price difference between the original Purchase Order agreed-to volume and the actual volume.

(D) Seller reserves the right to reject any revision to an existing open Purchase Order when, in its opinion, any such revision substantially alters the scope of the original order.

(E) Taxes - Unless otherwise specified or required by law, all prices will be quoted and billed exclusive of federal, state and local excise, sales and similar taxes. Such taxes, when applicable, will be billed as separate, additional items on Seller's invoices, unless the Buyer provides Seller with a properly executed tax exemption certificate.

Article 4. Minimum Order Release

Minimum order and shipping release quantities are defined by product-specific minimum line quantities (MLQs) as stated in the Seller's quote. Orders for less than MLQ (or multiple thereof) will be automatically increased to meet minimum/multiple requirements. Exceptions to the MLQ requirement must be specifically negotiated between Buyer and Seller.

Article 5. Delivery, Title and Risks

(A) All sales are Ex Works (EXW) Seller's designated shipping point.

(B) Seller reserves the right to make deliveries in installments. Partial shipments will be billed as made and payments therefore are subject to the terms of payment noted below. All delivery indications are estimated and are dependent in part upon prompt receipt of all necessary information from the Buyer to service an order.

(C) Seller reserves the right to allocate inventories and production when such allocation becomes necessary.

(D) Title and risk of loss or damage to the Products shall pass to Buyer at the time Seller delivers possession thereof to the carrier.

(E) Any Products (whether finished or partially completed) held by Seller at Buyer's request beyond scheduled delivery date shall be at Buyer's risk.

Article 6. Payment

(A) Subject to prior approval and extension of credit by Seller, Buyer shall pay the net invoiced amount in United States currency within thirty (30) days from date of Seller's invoice. Any payments or part thereof remaining unpaid after thirty (30) days shall carry interest thereon at the rate of one and one-half (1.5) percent per month (18% per annum). Payment due dates and other related payment discounts if specified on the Seller’s written formal estimate will supersede the aforementioned payment due date. Where not in disagreement with Seller estimate, all other payment terms in this Article will remain in effect.

(B) On Purchase Orders for shipment to countries other than the U.S.A., Seller may require payment be made either through direct wire transfer prior to shipment of goods, or, through the medium of a Letter of Credit (LOC) to be established by Buyer at its expense (including any bank confirmation charges). All LOCs will be in favor of and acceptable to Seller, will be maintained in sufficient amounts and for the period necessary to meet all payment obligations, will be irrevocable and issued, or confirmed, by a bank in the U.S.A. satisfactory to Seller, will permit partial deliveries and will provide for pro rata payments upon presentation of Seller's invoices and Seller's certificates of delivery Ex Works (EXW) Seller's shipping point, or of delivery into storage with certification of cause therefore, and for the payment of any termination charges.

(C) At any time and from the period prior to the Delivery Date, Seller reserves the right to change any terms of credit extended to Buyer in the event Seller believes, in good faith, that there has been an adverse change in credit worthiness of Buyer and Seller requires partial or full payment in advance. In such event, if Buyer refuses to accept such change in credit terms the orders shall be canceled without liability arising there from to either party. In the event of bankruptcy or insolvency of Buyer, or in the event any proceeding is brought by or against Buyer under any bankruptcy or insolvency laws or their equivalent, Seller may cancel any outstanding order, without liability to Seller, and Seller shall receive reimbursement from Buyer for costs incurred and lost profit for product so cancelled.

(D) Buyer shall make payment without regard to prior inspection of the Products, but Buyer's right of inspection pursuant to this contract shall not be impaired thereby.

Article 7. Purchase Order Cancellation and Return Policy

(A) Purchase Orders with a value less than $10,000.

(i) Standard Product Order – Buyer may terminate or cancel its standard Product Purchase Order (or line item thereof) upon written notification to the Seller no less than 30 days prior to the original scheduled ship date. Within 30 days of original ship date, the Product Order is Non-Cancellable and Non-Returnable.

(ii) Standard Product Order Reschedule - Orders for Standard Products may be changed (rescheduled) once by Buyer, with no penalty to the Buyer, provided that Buyer provides Seller written notification at least 30 days prior to the original scheduled ship date. The reschedule date cannot extend further than 45 days from the original delivery date requested or the maximum 12 month delivery window as defined in Article 3, Section (C) herein.

(iii) Custom or Semicustom Product Order - All Purchase Orders for any Product are Non-Cancellable and Non-Returnable.

(iv) Custom or Semicustom Product Order Reschedule - Orders for custom or semicustom Products may be changed (rescheduled) once by Buyer, with no penalty to the Buyer, provided that Buyer provides Seller written notification at least 30 days prior to the original scheduled ship date. The reschedule date cannot extend further than 45 days from the original delivery date requested or the maximum 12 month delivery window as defined in Article 3, Section (C) herein.

(v) Engineering Evaluation Product Order – Buyer may terminate at any time prior to shipping and the product is returnable within 30 days of receipt and use by Buyer. For returns, Buyer is only responsible for shipping charges. To qualify as an Engineering Evaluation Product the Seller must clearly state in the Seller's Formal Estimate or Order Acknowledgement that the purchase is for Engineering Evaluation.

(vi) Scheduled ship date is defined as the delivery date specified in Seller's Order Acknowledgement. Orders rescheduled with less than the above-specified notice may, at Seller's option, are treated as terminated and are subject to cancellation charges.

(vii) Neither party shall cancel this contract for breach of any of its provisions by the other party without giving such other party advance written notice thereof and a reasonable time in which to cure the alleged breach, except in the event of (i) insolvency of such other party, or (ii) failure of Buyer to make timely payment. Upon cancellation the parties shall be entitled to rights and remedies available at law or under this contract, except to the extent excluded or limited by this contract.

(viii) Scheduled ship date is defined as the delivery date specified in Seller's Order Acknowledgement. Orders rescheduled with less than the above-specified notice may, at Seller's option, are treated as terminated and

(B) Purchase Orders with a value greater than $10,000.

All Purchase Orders for any Product are Non-Cancellable and Non-Returnable.

Article 8. Limited Warranties

Seller warrants this computer hardware product ("Product") against defects in materials or workmanship for the time periods and subject to the terms and conditions set forth below. In the event of a defect, these are your exclusive remedies.

Labor: For a period of twelve (12) calendar months from the original date of purchase, Seller will repair defects in the Product at no charge. After the applicable period you must pay for all labor charges.

Parts: For a period of twelve (12) calendar months from the original date of purchase from a Seller authorized dealer, Seller will supply, at no charge, new or rebuilt, at Seller's option, replacement parts in exchange for parts. Any replacement parts will be warranted for the remainder of the original warranty period or ninety (90) calendar days from installation by Seller's authorized personal computer service facility, whichever is longer. All parts replaced under this Limited Warranty will become the property of Seller.

This product may have possibility (of less than 0.1% according to our measurements) of granting access to persons other than those who have registered their fingerprints. In no event shall Seller or our representatives be liable for any incidental, consequential, or special loss arising from granting an access to persons from other than those who have registered their fingerprints. In no event shall our corporation or our representatives be liable for any incidental, consequential or special loss arising from any use, defect, malfunction, or fault of this product.

When sending the fingerprint data via communication line or storing such data in a computer, sufficient security control is required to avoid abuse of the data.

This Limited Warranty covers only the hardware components packaged with the Product. It does not cover technical assistance for hardware or software usage and it does not cover any software products whether or not contained in the Product; any such software is provided "AS IS" unless expressly provided for in any enclosed software Limited Warranty. Please refer to End User License Agreements included with the Product for your rights and obligations with respect to the software.

There may be a parts exchange program for this product. Proof of purchase in the form of a bill of sale (which is evidence that the Product is within the warranty period) may be required to obtain warranty service.

In addition, if replacement parts are required and you wish to receive the most expedient service available, you will be required to provide Seller with a credit card authorization to bill your credit card in the event that you fail to return the original parts to the address we provide. The credit card will only be charged for Seller's list price for the part if the part has not been returned within thirty days.

This Limited Warranty does not cover any consumable items supplied with this Product; cosmetic damages; damage or loss of any software programs, data or removable storage media or damage due to (1) acts of God, accident, misuse, abuse, negligence, commercial use or modifications of this Product; (2) improper operation or maintenance of this product; (3) connection to improper voltage supply; (4) attempted repair by any party other than a Seller authorized personal computer service facility; (5) tampering with internal components; or (6) direct damage to the fingerprint sensor.

This Limited Warranty is invalid if the factory applied serial number has been altered or removed from the product.

Repair or replacement of parts or hardware as provided under this Limited Warranty is the exclusive remedy of the consumer. SELLER SHALL NOT BE LIABLE FOR ANY INCIDENTAL OR CONSEQUENTIAL DAMAGES FOR BREACH OF CONTRACT, NEGLIGENCE, STRICT LIABILITY OR ANY OTHER LEGAL THEORY RELATED TO THIS PRODUCT. SUCH DAMAGES INCLUDE BUT ARE NOT LIMITED TO, LOSS OF PROFITS, LOSS OF REVENUE, LOSS OF DATA, LOSS OF USE OF THE PRODUCT OR ANY ASSOCIATED EQUIPMENT, DOWN TIME AND PURCHASER'S TIME. EXCEPT TO THE EXTENT PROHIBITED BY APPLICABLE LAW, ANY IMPLIED WARRANTY OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE ON THIS PRODUCT IS LIMITED IN DURATION TO THE DURATION OF THIS WARRANTY.

Some states do not allow the exclusion or limitation of incidental or consequential damages, or allow limitations on how long an implied warranty lasts, so the above limitations or exclusions may not apply to you. This Limited Warranty gives you specific legal rights, and you may have other rights which vary from state to state.

Technical Support: For a limited time technical support may be provided free of charge under this Limited Warranty, Zvetco has established a telephone number for technical support. Prior to placing your call, please have available the model and serial number of your Product, date of purchase, a list of all options installed in your Product and a detailed description of the problem. For Product information, service assistance, resolution of a service problem, or technical assistance, call: (407) 681-0112.

Article 9. Warranty Returns and Other Disposition

(A) In order to avoid administrative difficulties that result from unauthorized returns, Buyer shall request a formal Return Material Authorization (RMA) from Seller through Seller's Sales Representative office for warranty returns. Seller shall not be responsible for packing, inspection or labor costs in connection with the return of Products, nor shall Seller be responsible for return of any Product without authorization.

(B) The RMA number must be prominently displayed on the outside packing. Returned items should be packaged to prevent damage in transit and in original containers, if possible.

(C) Buyer shall give Seller a detailed statement of alleged deficiencies and shall otherwise comply with Seller's instructions contained in the RMA.

(D) Seller shall have no liability for Products returned or otherwise disposed of by Buyer, where Seller is unable to verify the alleged deficiency as provided in this Article.

(E) Such returned Product shall be returned to Buyer at Buyer's expense.

Article 10. Limitation of Buyer's Remedies and Damages

(A) In no event shall Seller be liable to Buyer or to any party claiming under Buyer whether as a result of breach of contract, warranty, tort (including negligence or otherwise), failure of a remedy to accomplish its purpose or otherwise, for special, incidental or consequential or indirect damages including but not limited to, loss of profits or revenue, loss of use of the Product, loss of goodwill, work stoppage, damage to associated equipment, downtime of plant or equipment, cost of substitute equipment or Products or claims of Buyer's customers for such damages.

IN NO EVENT SHALL SELLER'S TOTAL LIABILITY IN DAMAGES OR OTHERWISE TO BUYER AND ITS AFFILIATES EXCEED PAYMENTS RECEIVED BY SELLER FOR THE UNIT OF PRODUCT GIVING RISE TO BUYER’'S CLAIM.

(B) In no event shall Seller be liable to Buyer or to any party claiming through the use of Products by Buyer (the "end user") for any claims, either in contract, warranty, tort, statute or otherwise for damages resulting from Buyer's or end user's misuse of Product or use of Products in contravention of law.

(C) The liability of Seller on any claim of any kind, whether based upon breach of contract, warranty, tort (including negligence or otherwise), for any loss or damage arising out of, or resulting from this agreement, or from its performance or breach, or from any Product furnished hereunder, shall in no event exceed the price of the Product which gives rise to the claim. Except as to title, all such liability shall terminate upon the expiration of the applicable warranty Period set forth in Article 8 above.

Article 11. Patent Indemnity

(A) Subject to the following provisions Seller shall defend any suit or proceeding brought against Buyer insofar as such suit or proceeding is based on a claim that Products manufactured and supplied by Seller to Buyer constitutes direct infringement of any duly issued United States patent and Seller shall pay all damages and costs finally awarded therein against Buyer, provided that Seller (1) is promptly informed and furnished a copy of each communication or notice in connection with such suit or proceeding and the alleged infringement, and (2) is given authority, information and assistance (at Seller's expense) necessary to defend or settle such suit or proceeding. Seller shall not be obligated to defend or be liable for costs and damages for any infringement arising out of

i) compliance with Buyer's specifications;
ii) any additions to or modifications of the Products by the Buyer;
iii) use of the Products in combination with other goods or with each other after delivery by Seller; or
iv) use of the Products in a patented process.

(B) Seller shall not be obligated to defend or be liable for costs and damages for any suit claiming that the Products infringe a patent in which the Buyer, or any subsidiary or affiliate thereof, has a direct or indirect ownership interest in such patent.

(C) If any Products manufactured and supplied by Seller to Buyer are held to infringe a United States patent and Buyer is enjoined from using such Products, Seller at its option and expense will either

i) procure for Buyer the right to continue using such Products free of any liability for patent infringement; or
ii) replace such Products with non-infringing but otherwise conforming products; or
iii) refund the purchase price for any such Products returned by Buyer to Seller.

(D) If a claim of alleged infringement is made prior to completion of delivery by Seller under this contract, Seller may decline to make further shipments without being in breach of this contract, and provided Seller has not been enjoined from selling such Products to Buyer, Seller agrees to supply same to Buyer at Buyer's option whereupon Buyer shall defend and indemnify Seller (on the same basis as would otherwise have been required of Seller to Buyer hereunder) for any continuing infringement arising therefrom subsequent to Buyer's exercise of such option.

(E) If any suit or proceeding is brought against Seller based on a claim that Products manufactured and/or supplied hereunder by Seller constitute direct infringement of any duly issued United States patent, and such claim arises from any of the reasons in Paragraph A(i) through A(iv) above then Buyer shall defend and indemnify Seller on the same basis as would otherwise have been required of Seller to Buyer hereunder.

(F) The foregoing indemnity extends to Buyer only and states the sole and exclusive liability and remedy of the parties hereto for patent infringement, and is in lieu of all warranties, express, implied, or statutory, in regard thereto.

Article 12. Software Product License

The Seller's software shipped with Products (or independent and standalone of Products) is protected by copyright laws and international copyright treaties, as well as other intellectual property laws and treaties. The SOFTWARE PRODUCT is licensed, not sold, as set forth in the Installation Software screen "License Agreement". By installing, copying, or otherwise using the Seller's software, Buyer agrees to be bound by the Product End-User License Agreement (EULA).

Article 13. Indemnification

(A) Buyer shall indemnify and hold Seller harmless from any and all suits, damages, and expenses for the personal injury (including death) or loss or damage to property of Buyer's employees or agents during or in connection with any visit to Seller's plant regarding this contract.

(B) Buyer shall indemnify and hold Seller harmless for any and all demands, claims or suits and for all damages and expenses related thereto resulting from Buyer's use or misuse of Products found to be in contravention of any law or statute.

Article 14. U.S. Export Laws

Seller's obligations are subject to the export administration and control laws and regulations of the U.S. Government. The Buyer shall comply fully with such laws and regulations in the export, resale or disposition of products.

You agree that you will not directly or indirectly export the SYSTEM and related technical data in violation of Export Administration regulations of the U.S. Department of Commerce and other applicable laws. You further agree that you will not export, re-export, divert or transfer the SYSTEM:

(A) into, or to a national or resident of any country to which the United States has embargoed goods,

(B) or to anyone included in the U.S. government List of Specially Designated Nationals, the Table of Denial Orders, the Entity List,

(C) or to anyone involved in the manufacturing and proliferation of weapons in violation of U.S. applicable laws. By using the SYSTEM you are representing and warranting that you are not located in, or under the control of, or a national resident of any such country or on any such lists, or involved in any such activity.

Article 15. Hazardous Use

The SYSTEM is not designed, made, or intended for use in an application where failure, malfunction or inaccuracy of the SYSTEM may cause death, serious bodily injury, including, without limitation, medical equipment, nuclear facilities, aircraft operation, air traffic control, life support. Any such use is prohibited without the prior written consent of Zvetco Biometrics. You agree that neither Zvetco Biometrics nor its suppliers, distributors or resellers will be liable, in whole or in part, for any claims, losses, costs or damages arising out of or in connection with the use and performance of the SYSTEM in such applications. If you use the SYSTEM for such applications without Zvetco Biometric's consent, you agree to indemnify, defend and hold Zvetco Biometrics harmless from all claims, actions, losses, liabilities, damages, costs and expenses (including attorney fees) arising out of or relating to such prohibited uses.

Article 16. Reverse Engineering.

You may not reverse engineer, decompile, or disassemble the SYSTEM in whole or in part; nor shall you attempt to recreate the source code from the object code of the SOFTWARE PRODUCT. Any other activity regarding the form or substance of the SYSTEM will be allowed only to the extent such activity is expressly permitted by applicable law.

Article 17. Force Majeure.

Neither Buyer nor Seller shall be liable to the other for delays in performing any obligations under this Agreement except the obligation to make payment, due to circumstances beyond its reasonable control, including but not limited to, revolutions, insurrections, riots, wars, acts of enemies, national emergency, strikes, floods, embargo, inability to secure materials or transportation and acts of God or governmental authorities.

Article 18. Miscellaneous Terms

(A) Buyer shall not assign this contract or any right or interest therein without the prior written consent of Seller.

(B) This contract supersedes all previous communications, transactions, and understandings, whether oral or written, and constitutes the sole and entire agreement between the parties pertaining to the subject matter hereof. No modification or deletion of, or addition to these terms shall be binding on Seller unless made in writing and signed by a duly authorized representative of Seller at Seller's Corporate Headquarters.

(C) This contract shall be in all respects governed by the laws of the State of Florida.

(D) The invalidity, in whole or in part of any provision, shall not affect the validity or enforceability of any other provision herein

(E) All orders are subject to acceptance of these Terms and Conditions of Sale at Seller's Corporate Headquarters. Seller's Terms and Conditions of Sale shall take precedence over any conflict or material difference between Buyer's Purchase Order terms and conditions and the terms and conditions herein established.

(F) All Seller Products offered for sale or provided as samples to Buyer contain important and valuable intellectual property/confidential information of the Seller's. Buyer shall not reverse engineer Seller's hardware and/or Software. Additionally, Seller sells Buyer its Products for the specific use in its manufactured product and subsequent resale. Buyer may not provide or resell any of Seller's Products to Seller's competitors without prior written consent of Seller.

(G) Seller's policy is one of ongoing update and revision. Seller may revise and discontinue Product at any time without notice to Buyer.