Med-Hot Thermal Imaging, Inc.

Terms and Conditions of Sale

1. CONTRACT. The "Contract" is the legally binding agreement for Buyer's purchase of the goods and services ("Goods" and "Services") MED-HOT (Seller) in response to Buyer's purchase order (the "Purchase Order"). These Terms and Conditions, MED-HOT's Quotation (including "Customer Responsibilities" and "Customer Support"), if any, and Buyer's Purchase Order comprise the Contract. Conflicts between and among the terms and conditions of those documents shall be resolved according to the foregoing order of precedence. The Contract states the parties' entire agreement, superseding prior discussions, correspondence, negotiations and proposals. Buyer's preprinted terms, including those in Buyer's Purchase Order, shall not apply to the Contract, and MED-HOT objects to such terms. This Contract shall only be modified in writing and signed by the parties.

2. ACCEPTANCE OF CONTRACT. MED-HOT's Quotation offer, unless it expressly states otherwise, may be accepted within 30 days of the date of the Quotation, or until MED-HOT withdraws the Quotation, whichever is earlier. The Contract shall become binding when MED-HOT's authorized representative issues a written confirmation of the Purchase Order.

3. PRICE AND PAYMENT. Unless expressly stated otherwise in writing by MED-HOT, the Purchase Price excludes all charges and expenses connected to carriage of the Goods to Buyer, and all taxes and customs duties of any kind that either party is required to pay with respect to the sale of Goods and Services covered by this Contract, but includes packing costs. Buyer shall pay MED-HOT in accordance with MED-HOT's proposal, quotation, and/or order acknowledgement in U.S. funds prior to shipment to Buyer. Buyer's submission of its Purchase Order creates an express security agreement, granting MED-HOT a security interest in the Goods, until Buyer pays the entire Purchase Price. MED-HOT may issue its invoice for the purchase price for Goods, upon shipment, and for Services, upon completion. MED-HOT may be entitled to invoice for progress payments as delineated on the face of the proposal or order acknowledgement. If partial shipments are made, MED-HOT may submit its invoice upon each shipment for the portion of the Purchase Price allocated to that shipment. If Buyer is not located in the United States, Buyer shall provide payment in full before shipment. If Buyer does not pay MED-HOT on the agreed dates of payment, Buyer shall pay interest to MED-HOT on overdue amounts at a rate of 1% of the unpaid balance monthly. In addition to charging interest on the unpaid balance, MED-HOT may cancel or reschedule delivery of Goods if Buyer is in default of payments or any other material term of this Contract.

4. ACCEPTANCE AND INSPECTION. If Buyer requests in writing on its purchase order, MED-HOT shall provide Buyer at least seven days' notice of MED-HOT's final acceptance testing, to enable Buyer to attend such tests. Irrespective of whether Buyer attends acceptance testing, Buyer shall have accepted the Goods irrevocably when MED-HOT certifies that the Goods have passed MED-HOT's standard acceptance tests. Services shall be accepted upon completion. If tests are made by Buyer to demonstrate the ability of the Goods to operate as specified, Buyer is to make all preparations and incur all expenses incidental to such tests. Any defects in material or workmanship shall be repaired under the warranty in Section 7.

5. TITLE AND RISK OF LOSS. Delivery shall be EXW MED-HOT's office, (exworks Incoterms 2000). Title and full risk of loss (including transportation delays and losses) passes to Buyer upon delivery, as defined in Incoterms 2000, regardless of whether title has passed to Buyer, transport is arranged or supervised by MED-HOT, or start-up is carried out under the direction or supervision of MED-HOT. Loss or destruction of the Goods or injury or damage to the Goods that occurs while the risk of such loss or damage is borne by Buyer does not relieve Buyer of its obligation to pay MED-HOT for the Goods.

6. DELIVERY AND DELAYS. MED-HOT shall substantially meet quoted delivery dates, which are estimated based on conditions known at the time of quotation. MED-HOT shall not be liable for any nonperformance, loss, damage, or delay due to war, acts of terrorism, riots, fire, flood, strikes or other labor difficulty, governmental actions, including without limit delivery requirements of a US Government agency rated order, acts of God, acts of the Buyer or its customer, transportation delays, inability to obtain necessary labor or materials from usual sources, or other causes beyond the reasonable control of MED-HOT. In the event of delay in performance due to any such cause, the date of delivery or time for completion will be extended at least by the length of time lost due to such delay. MED-HOT shall not be liable for any damages resulting from any delay in delivery. MED-HOT, at its discretion, reserves the right to deliver early should it deem that the circumstances warrant it.

7. WARRANTY. MED-HOT warrants that the Goods will conform to published specifications and be free from defects in material for 365 days from the date of delivery. MED-HOT warrants repairs and spare or Manufacturer replacement parts for 180 days from the date of delivery or through the expiration of the initial 365-day warranty period, if applicable, whichever is longer. Buyer shall report any claimed defect in writing to MED-HOT immediately upon discovery and in any event, within the warranty period. MED-HOT, at its sole option, will repair the Goods or furnish replacement equipment, or parts thereof, at the appropriate MED-HOT service center nearest to Buyer. This warranty does not extend to installation of the Goods provided by third parties, and is void if the Goods have been repaired, altered or modified in any manner by persons other than MED-HOT or MED-HOT's designee without MED-HOT's prior written approval. No Goods furnished by MED-HOT shall be deemed to be defective by reason of normal wear and tear, or Buyer's failure to properly store, install, operate or maintain the Goods in accordance with good industry practices or specific recommendations or instructions of MED-HOT. The repair or replacement of the Goods by MED-HOT under this Section shall constitute MED-HOT's sole obligation and Buyer's sole and exclusive remedy for all claims of defects. All warranty repairs must be performed at an authorized MED-HOT service center using recommended replacement spare parts. Under this limited warranty, the Buyer is responsible for obtaining MED-HOT's advance authorization to return Goods and for the cost of shipping and any other charges incurred in sending the Goods to the authorized service center specified by MED-HOT. If MED-HOT determines that the subject problem with the Goods is within this warranty coverage, MED-HOT will pay for the return of the Goods to the Buyer. If MED-HOT determines that the problem with the returned Goods is not covered by this warranty, Buyer shall reimburse MED-HOT for time and materials at MED-HOT's standard commercial rates and Buyer shall pay the cost of returning the Goods to Buyer. The turnaround time on repairs will usually be five working days or less. However, MED-HOT accepts no added liability for additional days required for repair. SELLER MAKES NO OTHER WARRANTY OF ANY KIND WITH RESPECT TO THE GOODS OR SERVICES. ALL OTHER WARRANTIES, EXPRESS OR IMPLIED, INCLUDING BUT NOT LIMITED TO, IMPLIED WARRANTIES OF MERCHANTABILITY AND FITNESS FOR A PARTICULAR PURPOSE, ARE HEREBY DISCLAIMED.

8. CONFIDENTIALITY AND INTELLECTUAL PROPERTY. Buyer agrees that all computer and CD disks, bulletins, catalogs, price lists, order forms and other documents and information furnished by MED-HOT or through MED-HOT from its vendors (the "Confidential Information") are MED-HOT's confidential, proprietary business information, which Buyer shall safeguard in the same manner as it safeguards its own confidential business information, and Buyer agrees not to divulge or display any of the Confidential Information other than in connection with Buyer's transactions with MED-HOT. Neither party shall directly or indirectly communicate to any person or other entity any Confidential Information unless: (i) such information is already known by the receiving party, as evidenced by its business records at the time it was provided; (ii) such information is already in the public domain; or (iii) such information lawfully comes into the receiving party's possession from a third party without any obligation of confidentiality. Nothing herein shall prohibit the receiving party from disclosing Confidential Information if the receiving party is required to disclose such information pursuant to law or court order, but only after notifying the other party and allowing the other party an opportunity to obtain a protective or other order. Both parties agree to use Confidential Information only in its performance under this agreement and shall treat and protect such information in the same manner, as it treats its own information of like character, but with not less than reasonable care. All Confidential Information shall be returned by the receiving party upon demand, and, in any event, when no longer needed by Buyer in connection with MED-HOT's products. Buyer agrees to return Confidential Information at Buyer's expense. The obligations in this Section shall survive termination of this agreement.


9. NO REVERSE ENGINEERING. It is an express condition of this Contract that Buyer shall not reverse engineer, decompile, deconstruct, disassemble, synthesize, or extract any element of and/or otherwise discover any Confidential Information, request or accept any disclosure of Confidential Information from a third party who reverse engineers, decompiles, deconstructs, disassembles, synthesizes, or extracts any element of and/or otherwise discovers any Confidential Information, and shall not attempt to derive Confidential Information contained or embodied in MED-HOT's products. In the event that Buyer breaches any obligation set forth in this agreement, or otherwise misappropriates or makes unauthorized use of MED-HOT's Confidential Information, any intellectual property resulting or deriving from the breach(es) shall be for MED-HOT's benefit, and MED-HOT shall be the sole and exclusive owner of that intellectual property. Buyer will execute an assignment of invention(s) in the form approved by MED-HOT, for any intellectual property arising from a breach of this agreement. The aforementioned provisions shall in no way be considered to abridge, supplant or otherwise limit other legal or equitable remedies available to MED-HOT for such breaches, and MED-HOT may seek redress for such breaches to the fullest extent allowable by law. The obligations in this Section shall survive termination of this agreement.

10. PATENT INDEMNITY. If the Goods sold hereunder are to be prepared or manufactured according to Buyer's specifications, Buyer shall indemnify MED-HOT and hold it harmless from any claims or liability for patent or trademark infringement on account of the sale of such equipment. MED-HOT agrees at its expense to defend any suit alleging direct infringement instituted against Buyer (but not subsidiaries or customers of Buyer) and indemnify Buyer against any award of damages and costs for direct infringement made against Buyer by a court of last resort to the extent that the damages award is based on a final determination that the Goods as and when furnished by MED-HOT to Buyer directly infringed any U.S. patent, trademark or copyright. Indemnification of costs under this provision shall extend only to actual costs assessed. The indemnity obligations in this section do not apply to Goods made or modified to Buyer's specifications, and are expressly conditioned upon: (a) Buyer providing MED-HOT with written notice promptly, and in any event no later than ten days' from Buyer's receipt of notice, of such claim; (b) MED-HOT shall have the option of having sole control of the defense against such claims and the negotiation for their settlement; (c) Buyer cooperating with MED-HOT in the defense and negotiations relating to the claims; and, (d) if MED-HOT determines that the Goods are or are likely to be the subject of direct infringement claims, Buyer permitting MED-HOT to obtain the right for Buyer to keep using the Goods, or obtain substitute goods, or modify the Goods to be non-infringing, or refund the price. The indemnity obligations stated in this section shall not apply if the infringement claims result from: (a) Buyer or Buyer's customer altering the Goods; (b) use of the Goods in a manner neither intended nor contemplated at the time of the sale; or, (c) Buyer's failure to use a modified or substitute good provided by MED-HOT pursuant to this section. These warranties are in lieu of all other warranties, express or implied with regard to any claim of infringement. ANY WARRANTY AGAINST INFRINGEMENT THAT MAY BE PROVIDED UNDER THE UNIFORM COMMERCIAL CODE AND/OR ANY OTHER COMPARABLE STATE STATUTE IS EXPRESSLY DISCLAIMED.

11. LIMITATION OF LIABILITY. MED-HOT shall in no event be liable for any consequential, incidental, indirect, special or punitive damages arising out of the Contract, or out of any breach of any of its obligations hereunder, or out of any defect in, or failure of, or malfunction of the Goods or Services, including but not limited to, claims based upon loss of use, lost profits or revenue, interest, lost goodwill, work stoppage, impairment of other equipment, environmental damage, loss by reason of shutdown non-operation, increased expenses of operation, cost of purchase of replacement equipment, or claims of Buyer or customers of Buyer for service interruption whether or not such loss or damage is based on contract, tort (including negligence and strict liability) or otherwise. MED-HOT's maximum liability under or in any way relating to this Contract shall not exceed the Purchase Order price for the Goods or Services upon which such liability is based. All such liability shall terminate one year from the date of delivery of the Goods, if not sooner terminated.

12. APPLICABLE LAW. The Contract shall be governed by the law of the State of Florida, exclusive of its conflicts of law principles. Any disputes arising out of this Contract that cannot be informally resolved shall be adjudicated exclusively in Polk County, Florida, in any court of competent jurisdiction. This Contract is expressly conditioned on the exclusion of the application of the United Nations Convention on the International Sale of Goods.

13. TERMINATION. Buyer shall have the right to cancel the Contract prior to receipt of Goods & Services upon 15 days' prior written notice to MED-HOT, and MED-HOT shall stop performance upon the receipt of such notice. If the order canceled is for a standard commercial product, Buyer shall pay MED-HOT 25% of the Purchase Price. If the order canceled is for a custom product, Buyer shall pay: (a) the agreed unit price for equipment or components completed and delivered; (b) additional material and labor costs incurred; (c) engineering services for the canceled items, which shall not exceed the contract price for such items; and (d) such other costs and expenses, including cancellation charges under MED-HOT's subcontracts, if any.

14. EXPORT LAWS. The Goods are subject to U.S. Government export laws and regulations. Buyer shall not export, re-export, or transfer the Goods or Confidential Information received from MED-HOT without first obtaining the appropriate US Government approvals. MED-HOT will cooperate with Buyer to obtain any export licenses Buyer seeks, but obtaining such licensing shall be the exclusive responsibility of Buyer and MED-HOT makes no representation or warranty regarding the issuance of export licenses for the Goods.

15. SOFTWARE LICENSE. MED-HOT provides restricted software as an integral component of its product offerings, that restricted software is proprietary to MED-HOT or MED-HOT's suppliers. MED-HOT grants Buyer a nonexclusive license to use the software only on and in conjunction with MED-HOT products. Buyer agrees that title remains with MED-HOT (and its suppliers, if any) and Buyer shall not disassemble, decode, or translate the software, or copy or modify the software. Buyer will maintain all proprietary trademarks on software provided by MED-HOT. Buyer may transfer this license if the transferee agrees to comply with the restrictions of this license. If a breach occurs, Buyer's license terminates and Buyer shall return to the MED-HOT at the Buyer's expense all copies of the software and related documentation in Buyer's possession.

MED-HOT software is provided as a right-to-use password encrypted software license. Each software license is assigned to a specific hardware product serial number by MED-HOT

The obligations in this Section shall survive termination of this agreement.

16. ASSIGNMENT. Neither party shall assign its rights or delegate its duties under this sale agreement without the prior written consent of the other. Refusal to consent to assignment must be commercially reasonable, however.

17. TRADEMARKS. Buyer agrees that it will not use any name or trademarks of MED-HOT without prior express written permission.

18. U.S. TAXES. The prices stated are exclusive of any federal, state, municipal, or other government tax that may be imposed upon the production, storage, sale, transportation or use of the Goods and Services described herein. The U.S. Government is not taxable in any state. Buyer shall present MED-HOT with a valid and correct tax exemption or direct payment certificate applicable to Goods and Services purchased and the ship-to destination at the time of order placement as applicable. If tax exemption applies, the tax-exempt certificate and the MED-HOT bill-to must correspond. If a valid and correct tax exempt or direct payment certificate is not provided at the time of order placement, Buyer shall be responsible for payment of sales and/or use tax as charged on invoice when shipping to any State other than Florida.

End of Terms and Conditions of Sale