SALES ORDER ACKNOWLEDGEMENT TERMS AND CONDITIONS

1. Definitions. The term “CTI” means Chromatic Technologies, Inc. The term “Buyer” means the individual, corporation, or other legal entity that has submitted an Order to CTI. The term “Order” means the Buyer’s expressed desire, whether oral or written, to procure Goods from CTI. The term “Goods” means all of the products, materials and related services that Buyer desires to purchase from CTI. The sale of the Goods that are the subject of this Order will be governed by the terms of this sales order acknowledgement (“Acknowledgement”).

2. Acceptance. All Orders are subject to acceptance by CTI. Acceptance is conditioned on Buyer’s agreement to all of the terms and conditions on the face and reverse side of this Acknowledgement. This Acknowledgement contains the sole terms and conditions that will govern the Order. Buyer’s agreement will be conclusively established; (i) when Buyer has received and retained this Acknowledgement for three (3) days without objection, or (ii) by Buyer’s acceptance of all or any part of the Goods. CTI objects to any terms or conditions which differ from, or are additional to, those stated on the face and reverse side of this Acknowledgement. After acceptance of an Order by CTI, the Order and this Acknowledgement may only be modified by a writing signed by CTI.

3. Price. Unless specified otherwise in a writing signed by CTI, the prices and charges stated on the face of this Acknowledgment will be adjusted to, and the Goods covered by this Acknowledgement will be invoiced at, the prices and charges fixed by CTI at the time of shipment, in effect at the time of shipment. The prices and charges stated on the face of this Acknowledgement do not include state or federal excise, sales or use taxes (if any).

4. Payment. Unless set forth to the contrary on the face of this Acknowledgement, payment terms are net 30 days from the date of CTI’s invoice, subject to credit approval. All payments shall be in US dollars. Whenever reasonable grounds for insecurity arise with respect to due payment by Buyer, CTI may demand different terms of payment and assurance of Buyer’s due payment. Any such demand may be oral or written and CTI may, upon the mailing of such demand, stop production and suspend shipments under this Acknowledgement. If, within the period stated in such demand, Buyer fails or refuses to agree to such different terms of payment or fails or refuses to give adequate assurance of due payment, CTI may, at its option, treat such failure or refusal as a repudiation of the portion of the Order which has not been fully performed, or CTI may resume production and may make shipment under reservation of possession or of a security interest and may demand payment against tender of documents of title.

5. Delays. Unless a shipping date is specified as firm on the face of this Acknowledgement or in a writing signed by CTI, CTI will use reasonable efforts to fill this Order in accordance with the estimated shipping date. CTI will not be responsible for any delays in filling this Order nor be liable for any losses or damages resulting from such delays, and this Order will not be subject to cancellation for such delays.

6. Force Majeure. CTI will not be liable for such delays in filling this Order or failure in the performance of any of its obligations caused by accidents, labor disputes, shortages of labor, materials, fuel or power, fires, floods or other acts of God, acts or omissions of Buyer, priorities required, requested, or granted for the benefit of the Federal or any state government, restrictions imposed by Federal or state legislature or regulations, or any cause, whether similar or dissimilar to those enumerated in this section, which is beyond the control of CTI.

7. Warranty. CTI warrants to Buyer that the Goods will, at the time of shipment, conform to the description on the face of this Acknowledgement, which will convey good title to the Goods; that such Goods will be delivered free from any lawful security interest or other lien or encumbrances unknown to Buyer, and that such Goods will be free from defects. CTI MAKES NO WARRANTY THAT THE GOODS WILL BE FIT FOR ANY PARTICULAR PURPOSE. CTI MAKES NO WARRANTY EXPRESSED OR IMPLIED EXCEPT SUCH AS IS EXPRESSLY SET FORTH HEREIN.

8. Inspection, Acceptance or Rejection. Inspection, acceptance or rightful rejection of the Goods must be made within thirty (30) days after Buyer’s receipt of the Goods. Buyer must notify CTI within such thirty (30) days if it believes that any Goods delivered under this Acknowledgment are properly rejectable, and hold such Goods pending CTI’s inspection.

9. Shipments; Shipping Weights.

   1. Unless set forth to the contrary on the face of this Acknowledgement, CTI may make partial shipments and may invoice for each such partial shipment separately. Each partial shipment will be deemed to be a separate sale, however, delay in delivery of any partial shipment will not relieve Buyer of its obligation to accept delivery of remaining shipments under this Acknowledgement.

   2. Absent manifest error, CTI’s shipping weights will govern for each shipment or partial shipment under this Acknowledgement. Should Buyer dispute the shipping weight of any shipment or partial shipment under this Acknowledgement, Buyer will promptly notify CTI in writing of the reasons for such dispute and provide to CTI all necessary documents to substantiate the difference.

10. Limitation of Liability.

    1. CTI’s sole liability and Buyer’s exclusive remedy for any tender of nonconforming Goods, is expressly limited to CTI’s choice of (i) the replacement of the nonconforming Goods with conforming Goods at FOB Shipping Point, or (ii)the refund of that portion of the purchase price represented by the nonconforming Goods. Any such replacement or refund will be made only upon return of the nonconforming Goods, which may be returned at CTI’s cost only after Buyer’s receipt of CTI’s shipping instructions and CTI’s inspection.

    2. CTI will not be liable for any incidental, consequential, indirect, special, contingent, or punitive damages for (i) any breach of warranty, whether based on theories of breach of warranty, breach of contract, tort, strict liability or otherwise; (ii) the tender of defective or nonconforming Goods; or (iii) breach of any other provision of this Acknowledgement. In any event, CTI’s liability to Buyer will not exceed the purchase price of the Goods on which such liability is based.

11. Intellectual Property.

    1. The Buyer acknowledges that any and all intellectual property rights used in connection with the provision of Goods shall remain the sole property of CTI. In the event of any advancement of the existing intellectual property rights or any new know-how being generated or arising from the performance of or as a result of the provision of Goods, the Buyer acknowledges that the same and all intellectual property rights therein shall belong to CTI exclusively.

    2. CTI grants to Buyer a non-exclusive, non-transferable, limited license to use CTI’s proprietary information solely as provided as part of and in conjunction with the use of the Goods provided hereunder. All title, ownership rights, and intellectual property rights in and to such proprietary information shall remain with CTI, and Buyer shall not (i) modify, translate, reverse engineer, decompile, disassemble, or otherwise copy such proprietary information or create derivative works based upon such intellectual property; (ii) distribute, rent, lease, sell, transfer, sublicense, assign or otherwise transfer or allow others to use rights in or to such proprietary information; or (iii) remove, obscure or alter any notices or labels identifying or indicating CTI’s ownership of such proprietary information.

    3. “Confidential Information” means information, whether of a technical, business or other nature, disclosed by or on behalf of CTI to Buyer which (i) is not generally known to the public; (ii) is identified by CTI as proprietary or confidential; or (iii) by the nature of the circumstances surrounding the disclosure ought to be treated as proprietary or confidential. Buyer shall hold all Confidential Information of CTI, whether disclosed by CTI to Buyer in connection with CTI’s provision of Goods hereunder or otherwise, in confidence and shall not reproduce, use, or disclose such Confidential Information in whole or in part to any third party without the prior written consent of CTI and shall take reasonable precautions to safeguard the secrecy thereof. Upon request by CTI, Buyer agrees to sign a non-disclosure agreement with CTI.

12. Infringement Indemnity.

    1. CTI agrees to indemnify Buyer against all court assessed damages (excluding consequential damages) and costs resulting from infringement of any United States Letters Patent held by a third party covering (i) standard commercial composition offered for sale generally by CTI at the time of acceptance by it of this Order, (ii) standard commercial forms, shapes or constructions offered for sale generally by CTI at the time of acceptance by it of this Order, to the extent that such compositions, forms, shapes or constructions are supplied under this Acknowledgement.

    2. Buyer agrees for the Goods delivered under this Acknowledgement to indemnify CTI against all court assessed damaged (excluding consequential damages) and costs resulting from infringement of any United States Letters Patent held by a third party to the extent that the infringement arises from specifications or instructions furnished or explicitly or implicitly required by Buyer and different from matters embraced by section 11(a) above.

    3. The parties agree to provide information and reasonable assistance to each other upon request to the extent such information and assistance are required by such party to defend against any infringement claim arising under this section. Neither party will be entitled to indemnification under this section as to any claim of infringement concerning which it does not give the other party prompt notice in writing upon learning any such claim of infringement and full opportunity, at the expense of such other party, to defend and dispose of such claim of infringement.

13. Termination. Buyer may not terminate this Order or this Acknowledgement without the written consent of CTI. If CTI consents to such termination, reasonable termination charges, computed by CTI, will be assessed in connection with such termination.

14. Delivery and Transportation. The shipping terms on the face of this Acknowledgement are FOB Shipping Point, and the cost of transportation and risk of loss or damage will be borne by Buyer.

15. Licensed products. For licensed solutions, such as BlindSpotz™ HPP, Freeze, Thaw, Warming and Tamper Indicators, the following terms and conditions apply:

    1. Chromatic Technologies (CTI) of Colorado Springs, CO, grants a license to use BlindSpotz technology for the customer listed on order acknowledgements for the application and quantity specified.

    2. CTI grants licensee the right to use any and all patents, trademarks and intellectual property related to the commercialization of BlindSpotz™ technology.

    3. Licensee may only use this license for the product(s) and time period listed. Licensee may NOT at any time use the technology or ink on other products without first gaining approval to do so.

    4. Licensee agrees to not to share the technology or license with any third parties without CTI’s express written consent.

    5. Licensee is granted the right to purchase technology based on submitting a purchase order for the quantity and specifications (artwork, print method and size) of finished units or pieces.  CTI will provide the appropriate amount of ink technology based on the specifications of the P.O.  Any unused ink will be returned to CTI unless there is an agreement for ongoing production. Unused ink shall NOT be used on any other products or applications without first submitting a purchase order.  

    6. CTI reserves the right to audit the usage of CTI ink by the licensee.

    7. Using CTI’s technology not covered by a purchase order will immediately terminate the license and the customer is liable for commercial price plus triple damages.