STANDARD TERMS AND CONDITIONS OF SALE FOR RF-FIBEROPTIC TECHNOLOGIES PRODUCTS

The following terms and conditions (the "Terms and Conditions") apply to all sales of fiber optic products and services (collectively, the "Products") distributed by RF-FiberOptic Technologies ("RFFO") to its customers (each a "CUSTOMER"). References to a "Party" or to the "Parties" herein shall mean either RFFO or CUSTOMER or each of them together. By ordering or accepting any Products or services from RFFO, CUSTOMER agrees to be legally bound as follows:

SECTION 1. FORMATION OF THE CONTRACT An agreement between the Parties, if made and entered into by way of a purchase order and an acceptance thereof, shall be deemed to have been made and entered into when the CUSTOMER has issued a written purchase order, signed by a duly authorized representative of the CUSTOMER, denoting compliance with a valid RFFO quotation and agreement with the "Terms and Conditions", and RFFO has issued a written acceptance of said purchase order. Any alteration and/or supplement to any purchase order shall be valid only if such alteration and/or supplement is confirmed in writing by RFFO.

SECTION 2. QUOTATIONS Unless otherwise specified in a written statement signed byway, no price quote by RFFO, including, without limitation, a budgetary quote rendered in connection with any preliminary request for information, shall be binding. Any binding price quote given by RFFO shall be effective for thirty (30) days, unless otherwise specified in a written quotation statement signed by RFFO. The quotation price, unless specifically indicated, of the Products does not include transportation taxes and sales, use, excise, import or any similar tax or other governmental charge arising pursuant to or in connection with the sale, purchase, processing, delivery, storage, use, consumption, performance or transportation of the Products. CUSTOMER is responsible for payment of any transportation taxes, and any present or future sales, use, excise, import or any similar tax or other governmental charge applicable to the resultant purchase order agreement and to the sale and/or furnishing of the Products.

SECTION 3. TERMS OF PAYMENT. RFFO will invoice CUSTOMER for Products upon shipment. All payments owed by CUSTOMER to RFFO including, without limitation, payment for the purchase price of Products purchased, applicable taxes, inventory charges, cancellation charges and price adjustments for failure to purchase forecasted quantities of Products are payable in US Dollars and will be due thirty (30) days after receipt of the Products by CUSTOMER or as specified by a valid RFFO quotation, unless otherwise agreed by a duly authorized RFFO representative. CUSTOMER is responsible for all taxes related to any purchase of Products covered hereby, except for taxes based on RFFO's net income (such as corporate income tax). Payments owed by CUSTOMER to RFFO are not subject to any right of set off by CUSTOMER. RFFO shall be entitled to charge interest on payments not received within thirty (30) days after the due date. Interest shall accrue at the rate of one and one half percent (1.5%) per month (calculated from the date such amount becomes due and owing) on the amount due; provided that in the event that such interest rate violates applicable usury laws, then such rate shall be reduced to the highest rate (if any) allowed by such laws. Until Customer has fully and finally paid all amounts owed to RFFO for any Products, CUSTOMER shall hold such Products in trust for RFFO, and RFFO may repossess if CUSTOMER fails to pay within the terms of the purchase agreement. In the event that CUSTOMER is more than sixty days in arrears on its payment obligations, then RFFO shall not be obligated to make future deliveries to CUSTOMER hereunder until CUSTOMER wire transfers the funds to RFFO or establishes with RFFO an irrevocable letter of credit in form and substance acceptable to RFFO up to the amount of the aggegate price of the then remaining Products to be sold pursuant to any purchase of Products covered hereby. Such letter of credit shall be established with a bank reasonably acceptable to RFFO. Unless otherwise agreed in writing, payment on export orders shall be made by wire transfer in U.S. dollars from CUSTOMER to RFFO prior to delivery. If CUSTOMER defaults in payment, CUSTOMER shall be liable for all collection costs incurred by RFFO including, but not limited to, attorneys’ and collection agency fees, and all related disbursements.

SECTION 4. DELIVERY OF PRODUCTS; CANCELLATION, RESCHEDULING AND DELAYED ORDERS

A. SHIPPING SCHEDULE: RFFO and CUSTOMER shall agree on a mutually convenient delivery schedule for Products. All Products shall be shipped F.O.B. from the original equipment manufacturers (each and collectively, "OEM") or as otherwise specified by RFFO in RFFO’s purchase order acceptance or related correspondence. RFFO reserves the right to ship Products or partial orders prior to the agreed shipment date unless otherwise specified in writing with mutual agreement between RFFO and the CUSTOMER. CUSTOMER shall bear the risk of loss and damage to Products after delivery to the point of shipment.

B. CANCELLATION, RESCHEDULING, DELAYED OR RETURNED ORDERS: CUSTOMER shall have no right to cancel any purchase order or to reschedule any scheduled delivery of Products covered by a purhase order, except with RFFO’s written permission. In the event that CUSTOMER shall be unable to receive, delay or reschedule any delivery of Products or portion thereof without RFFO’s written permission, CUSTOMER shall pay an additional charge (a "Delay Charge") to RFFO based on a percentage of the aggregate price of the order or the portion of the order so delayed or rescheduled, which amount shall accrue during the period beginning on the original shipment date and ending on the date that the Products are shipped to CUSTOMER. Any CUSTOMER returning parts or equipment preapproved by RFFO for return shall incur a 15% restocking fee. No returns will be accepted unless previously approved in writing by RFFO with proper return authorization identification and shipping instructions.

C. INSPECTION: Upon receipt of Products, CUSTOMER shall immediately inspect all Products for shortages, discrepancies, or damage. Upon receipt of Products CUSTOMER shall be deemed to accept the Products. Any claims for shortages, discrepancies, or damage will be waived by CUSTOMER unless made in writing to RFFO within five days of receipt of the Products. CUSTOMER shall promptly provide RFFO with written notification of such condition, and to the carrier where applicable. In no event shall the inspection and/or acceptance of any Product by CUSTOMER, or the payment for such Product by CUSTOMER, impair CUSTOMER’s rights under the original equipment manufacturer (OEM) warranty provisions.

SECTION 5. PROPRIETARY INFORMATION

A. OWNERSHIP OF PROPRIETARY MATERIAL IN PRODUCTS; USE OF PRODUCTS: CUSTOMER acknowledges that the Products contain proprietary technical information of the OEM (collectively "Proprietary Materials") and that as between the OEM and CUSTOMER ownership of all patents, copyrights, mask work rights, trademarks, trade names, know-how and other intellectual property rights relating to or residing in the Products, the Proprietary Materials and the services rendered by the OEM shall remain with OEM. CUSTOMER understands and agrees that these Terms and Conditions do not constitute a sale of any Proprietary Materials or any such intellectual property rights; except that CUSTOMER shall have the limited right to use Proprietary Materials to the extent required for the use of the Products. CUSTOMER agrees to assign to the OEM any and all intellectual property rights, including, without limitation, rights based on patent, know-how, and copyright, without regard to inventorship or authorship, where those rights are in any way based upon the Products, the Proprietary Materials, or any services rendered by the OEM. CUSTOMER shall promptly notify RFFO and the OEM of any actual or threatened misappropriation or infringement of proprietary rights which comes to CUSTOMER’s attention.

B. TRADEMARKS: CUSTOMER shall not remove from the Products (or their packaging or documentation), or alter, any of the OEM’s trademarks, trade names, logos, patent or copyright notices, or other notices or markings, or add any other notices or markings to the Products without the prior express written consent of the OEM.

SECTION 6. CONFIDENTIAL INFORMATION All documentation, drawings, samples, designs, specifications, engineering details and related information pertaining to the Products, as well as the Proprietary Materials and any services provided by RFFO to CUSTOMER, whether in oral, written, graphic or electronic form, are and shall remain the confidential and proprietary information of the OEM ("Confidential Information"). CUSTOMER agrees to (a) disclose Confidential Information to only those directors, officers and employees of CUSTOMER (collectively "Affiliates") whose duties justify their need to know such information and who have been clearly informed of their obligation to maintain the confidential, proprietary and/or trade secret status of such Confidential Information; and (b) use Confidential Information only for the purposes set forth in these Terms and Conditions and not for any purpose detrimental to RFFO and the OEM. In any event, CUSTOMER shall treat all Confidential Information as strictly confidential and shall use at least the same care to prevent dislosure of such information as CUSTOMER uses with respect to its own confidential and/or proprietary information, which shall not be less than the care a reasonable person would use under similar circumstances. CUSTOMER agrees to not copy any Confidential Information without the express prior written consent of the OEM, and all Confidential Information (and copies thereof) shall be returned promptly to the OEM upon request. Notwithstanding the foregoing, information disclosed to CUSTOMER shall not be deemed to be Confidential Information if (i) CUSTOMER establishes that the information was already known to CUSTOMER, without obligation to keep it confidential, at the time of its receipt from RFFO or the OEM as evidenced by documents in the possession of CUSTOMER prepared or received prior to disclosure; (ii) CUSTOMER establishes that the information was received by CUSTOMER in good faith from a third -party lawfully in possession thereof and having no obligation to keep such information confidential; or (iii) CUSTOMER establishes that the information was publicly known at the time of its receipt by CUSTOMER or has become publicly known other than by a breach of these Terms and Conditions or other agreement or action by CUSTOMER. To the extent that, CUSTOMER and the OEM have entered into a separate confidentiality agreement applicable to the matters specified in this Section 6 such agreement shall supersede this Section 6, for as long as it survives, but only to the extent that (i) this Section 6 and such agreement conflict or (ii) such agreement states that it supersedes all other agreements between the parties with respect to confidentiality. Notwithstanding the previous sentence, to the extent that such other agreement supersedes this Section 6, CUSTOMER’s agreement in Section 11.H hereof shall apply to such agreement.

SECTION 7. PATENT, COPYRIGHT AND TRADEMARK INDEMNITY

A. INDEMNITY. If any Product becomes, or in OEM’s opinion is likely to become, the subject of a claim of infringement, then CUSTOMER shall permit the OEM, at its option and expense, either to (1) procure the right to continue using such Product, (2) replace or modify such Product so that it becomes non-infringing, (3) accept return of such Product and give CUSTOMER a credit therefore, or (4) substitute an equivalent non-infringing version of the Product. RFFO SHALL HAVE NO LIABILITY TO CUSTOMER FOR INFRINGEMENT CLAIMS AND ACTIONS.

RFFO shall have no liability to CUSTOMER under this Section 7 or otherwise for any action or claim alleging infringement based upon any conduct involving (1) the use of any Product in a manner other than as permitted herein, (2) the use of any Product in combination with other third party products, equipment, devices or software, (3) the alteration, modification, reconfiguration or customization of any Product by any person, or (4) CUSTOMER’s specifications or other designs or plans provided by CUSTOMER. In the event of any action or claim, including an infringement action or claim, which is based on any conduct described in the preceding sentence, CUSTOMER shall at its own expense defend against such action or claim, and CUSTOMER shall pay any and all damages and costs finally awarded in connection with such action or claim.

B. INDEMNIFICATION: CUSTOMER will indemnify, defend and hold harmless RFFO, its stakeholders, officers, directors, employees, agents and representatives from and against all losses, damages, liabilities, costs, and expenses including, but not limited to, property damage, loss of profits or revenue, loss of use of any property, cost of capital, cost of purchased or replacement power or temporary equipment, personal or bodily injury, or death ("Losses"), that may arise pursuant to or in connection with the purchase order, the Products, or the Services (including, without limitation, Losses arising in connection with the performance of Services on CUSTOMER's premises by RFFO’s employees, representatives, agents, or subcontractors), regardless of whether such Losses are suffered directly by CUSTOMER or arise pursuant to or in connection with a third-party suit, claim, counterclaim, demand, judgment or other action (each a "Claim"), and regardless of whether or not RFFO or any third-party is proportionately negligent with respect to such Losses and/or Claim. For the avoidance of doubt and without limitation, this indemnification obligation requires CUSTOMER to pay any judgments against CUSTOMER or any other indemnified party resulting from any Claim, any court costs of RFFO or any other indemnified party in connection with any Claim, and any reasonable attorneys’ fees and disbursements incurred by RFFO or any other indemnified party in RFFO’s defense of any Claim. RFFO will have the sole and exclusive right to conduct the defense of any Claim at CUSTOMER’s sole and exclusive cost and expense. CUSTOMER’s indemnification obligation does not depend on the truth or accuracy of any allegations made against RFFO, CUSTOMER or any third party.

SECTION 8. LIMITED WARRANTY

A. WARRANTY TERMS. RFFO does not provide, either expressed or implied, warranties of any kind for Products sold on behalf of OEM's. If, during the applicable Warranty Period for a Product of an OEM hereunder, it is determined that any component of such Product does not conform to the limited warranty set forth in the OEM's stated warranty provisions, then CUSTOMER may, after obtaining a return authorization number and shipping instructions from OEM, return such Product to OEM. RFFO's sole responsibility is to abitrate disputes, if any, between the CUSTOMER and OEM concerning the applicable Warranty Period and the interpretation, responsibility and application of the OEM's Warranty Provisions.

B. OTHER LIMITATIONS. THE EXPRESS LIMITED WARRANTIES OF OEM's DO NOT APPLY TO (1) PRODUCTS NOT MANUFACTURED BY THE OEM, SPARE PARTS OR SERVICES, (2) PRODUCTS, OR COMPONENTS THEREOF WHICH HAVE BEEN IMPROPERLY TRANSPORTED, INSTALLED OR USED, ALTERED, MODIFIED, RECONFIGURED, CUSTOMIZED, REPAIRED OR SERVICED IN ANY RESPECT, EXCEPT BY THE OEM OR ITS REPRESENTATIVES, (3) PRODUCTS WHERE SERIAL NUMBERS, WARRANTY DATA OR QUALITY ASSURANCE DECALS HAVE BEEN REMOVED OR ALTERED, (4) PRODUCTS USED BY ANY PERSON OR ENTITY OTHER THAN CUSTOMER, (5) PRODUCTS THE INVOICE FOR WHICH HAS NOT BEEN PAID IN FULL IN ACCORDANCE WITH THE PAYMENT TERMS AND (6) PRODUCTS THAT ARE DEFECTIVE AS A RESULT OF OEM’S ADHERENCE TO PRODUCT SPECIFICATIONS PROVIDED BY CUSTOMER. NO ACTION BY CUSTOMER IN CONNECTION WITH THE SALE OF THE PRODUCTS MAY BE BROUGHT MORE THAN ONE (1) YEAR AFTER THE CAUSE OF ACTION FIRST ARISES.

C. DISCLAIMER. RFFO HEREBY EXPRESSLY DISCLAIMS AND EXCLUDES ANY AND ALL REPRESENTATIONS AND WARRANTIES, WHETHER WRITTEN OR ORAL, WHETHER EXPRESS OR IMPLIED, WHETHER ARISING BY CONTRACT, AT LAW, IN EQUITY, BY STRICT LIABILITY OR OTHERWISE, WITH RESPECT TO THE PRODUCTS, INCLUDING, BUT NOT LIMITED TO, ANY WARRANTY OF MERCHANTABILITY, ANY WARRANTY AGAINST DEFECTS IN DESIGN, MATERIALS AND WORKMANSHIP, ANY WARRANTY OF FITNESS FOR A PARTICULAR PURPOSE, ANY WARRANTY AGAINST REDHIBITORY DEFECTS, ANY WARRANTY OF GOOD TITLE, AND ANY WARRANTY AGAINST INFRINGEMENT OF THIRD PARTY INTELLECTUAL PROPERTY, INCLUDING, WITHOUT LIMITATION, ANY PATENTS, TRADEMARKS, OR COPYRIGHTS.

SECTION 9. DEMONSTRATION/LOANER EQUIPMENT. CUSTOMER shall bear the entire risk of loss of requested demonstration/loaner equipment until CUSTOMER returns said demonstration/loaner equipment in good order and condition, reasonable wear and tear only excepted, freight prepaid, to the OEM, in accordance with the instructions CUSTOMER has received for such return from OEM. It is the CUSTOMER'S responsibility to contact the OEM for such instructions. Returned equipment will be promptly evaluated by OEM. OEM shall invoice CUSTOMER at the then-current prices for any demonstration/loaner equipment, or parts thereof, that are missing, damaged, or excessively worn. CUSTOMER will not remove, obliterate, or deface OEM'S name tag and may not in any way modify or alter any demonstration/loaner equipment furnished hereunder without the prior written consent of the OEM. Further, CUSTOMER may not misuse or abuse the demonstration/loaner equipment.

In the event of CUSTOMER'S breach of this provision, or if reasonable grounds for insecurity arise with respect to CUSTOMER'S continued adherence to the requirements of this proviion, OEM shall have the right to immediately recover possession of all demonstration/loaned equipment then in CUSTOMER'S possession. OEM shall also have the right to charge a weekly rental rate for any and all equipment not returned by the established due date back to the OEM.

SECTION 10. LIMITATION OF LIABILITY. NOTWITHSTANDING ANYTHING TO THE CONTRARY CONTAINED IN THESE TERMS AND CONDITIONS: RFFO SHALL NOT BE LIABLE FOR ANY EXEMPLARY, SPECIAL, INDIRECT, CONSEQUENTIAL OR INCIDENTAL DAMAGES OF ANY KIND (INCLUDING WITHOUT LIMITATION LOST PROFITS, REPROCUREMENT COSTS OR ANY DAMAGES RESULTING FROM LOSS OF USE OR DATA ARISING OUT OF OR IN CONNECTION WITH THE USE OR PERFORMACE OF THE PRODUCTS), EVEN IF RFFO HAS BEEN ADVISED OF THE POSSIBILITY OF SUCH DAMAGES.

THE FOREGOING STATES THE ENTIRE LIABILITY OF RFFO WITH REGARD TO THESE TERMS AND CONDITIONS AND THE PRODUCTS. THE LIMITATIONS OF LIABILITY CONTAINED IN SECTIONS 7 AND 8 ABOVE AND THIS SECTION 10 ARE A FUNDAMENTAL PART OF THE BASIS OF RFFO’S BARGAIN HEREUNDER, AND RFFO WOULD NOT SELL THE PRODUCTS ABSENT SUCH LIMITATIONS.

SECTION 11. GENERAL

A. ENTIRE AGREEMENT. These Terms and Conditions constitute the final, complete and exclusive agreement between the Parties relating to the subject matter hereof, and supersede all prior or contemporaneous proposals, understandings, representations, warranties, promises and other communications, whether oral or written, relating to such subject matter (including without limitation any prior "Standard Terms and Conditions" ). Except for agreements of the Parties set forth in writing and signed by an authorized representative of RFFO relating to the type, quantity, quality/specifications, delivery, forecasting schedule and pricing of any Product, any term or condition in any purchase order, confirmation or other document furnished by CUSTOMER at any time which is in any way inconsistent with or in addition to the terms and conditions set forth herein is hereby expressly rejected, and RFFO’s acceptance of any purchase order of CUSTOMER is expressly made in reliance on CUSTOMER’s assent to all terms and conditions hereof. No deviation from these Terms and Conditions shall be valid unless confirmed in writing by an authorized representative of RFFO.

B. GOVERNING LAW. These Terms and Conditions shall for all purposes be governed by and interpreted in accordance with the laws of the State of TEXAS without regard to any choice of law provision that would result in the application of the laws of any jurisdiction other than the internal laws of the State of TEXAS to these Terms and Conditions. The Parties expressly exclude application of the United Nations Convention on Contracts for the International Sale of Goods.

C. ARBITRATION. If a dispute arises related to the purchase and sale of the Products and the Parties have not resolved such dispute through negotiation, the Parties agree to submit the dispute to arbitration. Any arbitration proceeding relating to the Agreement shall be presided over by one arbitrator who shall be agreed to by the Parties, provided that if the Parties are unable to agree on an arbitrator, then each Party shall name one arbitrator and the two arbitrators will together designate a third arbitrator, and the three arbitrators so chosen shall preside over the arbitration proceeding. The arbitration shall be held in McKinney, Texas in accordance with the rules of the American Arbitration Association. Arbitration proceedings shall be conducted in the English language. Each Party agrees that the final determination/decision of the arbitrators presiding over the proceeding shall be binding on it. Notwithstanding the foregoing, the Parties may apply to any court of competent jurisdiction for preliminary or interim equitable relief, including, but not limited to, relief for breach of confidentiality restrictions or to compel arbitration in accordance with this paragraph, without breach of this arbitration provision. The prevailing Party in any dispute related hereto, whether in a court of law or in arbitration, shall have its reasonable costs and expenses related to such dispute reimbursed by the non-prevailing Party.

D. SEVERABILITY. If any provision of these Terms and Conditions is held by a court of competent jurisdiction to be unenforceable for any reason the remaining provisions hereof shall be unaffected and remain in full force and effect.

E. MODIFICATIONS. Neither Party may modify, amend, supplement or otherwise change these Terms and Conditions without the prior written consent of the other Party. Any such future modification, amendment, supplement or other change (a "Change") shall apply only with respect to orders accepted after the effective date of such Change.

F. ASSIGNMENTS. No right of either Party under these Terms and Conditions shall be assigned or otherwise transferred, whether by agreement, operation of law or otherwise, without the prior express written consent of the other Party, and any attempt to assign or otherwise transfer any rights hereunder, without such consent, shall be void. Subject to the preceding sentence, these Terms and Conditions shall bind the Parties hereto and therein permitted successors and assigns.

G. WAIVERS. All waivers must be in writing. The failure of either Party to insist upon strict performance of any provision of these Terms and Conditions, or to exercise any right provided for herein, shall not be deemed to be a waiver for the future of such provision or right, and no waiver of any provision or right shall affect the right of the waiving party to enforce any other provision or right herein.

H. EQUITABLE REMEDIES. CUSTOMER agrees that any breach by CUSTOMER of Sections 5, 6 or 7 above would cause irreparable injury to RFFO for which no adequate remedy at law exists; therefore, CUSTOMER agrees that equitable remedies, including without limitation injunctive relief and specific performance, without the necessity of proving actual damages or posting any bond, are appropriate remedies to redress any breach or threatened breach of Sections 5, 6 or 7, above, in addition to all other remedies available to RFFO.

I. MISCELLANEOUS. These Terms and Conditions are not intended to provide any rights or remedies to any person or entity other than RFFO and CUSTOMER and their respective permitted successors and assigns (if any).

J. FORCE MAJEURE. RFFO shall not be responsible for any failure of an OEM to fulfill its obligations hereunder due to causes beyond its reasonable control including, without limitation, as a result of fire, explosion, earthquake, storm, flood or other weather, unavailability of necessary utilities or raw materials, strike, lockout, unavailability of components, activities of a combination of workmen or other labor difficulties, war, insurrection, riot, act of God or the public enemy, law, acts, orders, omissions, export control regulation, proclamation, decree, regulation, ordinance, or instructions of Government or other public authorities, or judgment or decree of a court of competent jurisdiction. If any such contingency occurs, RFFO may elect to either (ai suspend its obligations for the duration of the delaying cause, or (b) extend the time period to complete its obligations by the length of time the contingency endures. In the event of OEM’s inability to supply any or all of the Products due to any of the above circumstances, the OEM will have the right to allocate its available supply among its CUSTOMERS, or any of them, as OEM, in its sole discretion, elects without liability to CUSTOMER for any failure of performance that may result therefrom. To the extent that no allocation is made to CUSTOMER, either CUSTOMER or RFFO will have the right to terminate any affected purchase orders by prompt written notice to the other.

K. CONSTRUCTION AND SURVIVAL. Notwithstanding anything to the contrary contained in herein, these Terms and Conditions shall survive the purchase and sale of the Products hereunder.