1. Definitions

"Customer" means the person or entity, however constituted, whose Purchase Order is accepted by Telect and to whom Product is provided.

"Product" means any goods supplied or to be supplied to the Customer, including any equipment, part or item (including software, if any), whether complete or incomplete, or service which Telect may be in the business of supplying.

"Purchase Order" means Customer's document or online order submittal formalizing the acquisition of Product, exclusive of any printed terms and conditions thereon.

"Telect" means Telect, Inc. and/or its designated affiliates.

2. Orders

A. Acceptance of Purchase Orders
As used herein, "Acceptance of Customer's Purchase Order" shall mean Telect's agreement, as evidenced by the issuance of a Sales Order Acknowledgement, to supply the Product identified in Customer's Purchase Order under the terms and conditions herein. All Purchase Orders are subject to acceptance by Telect, in its sole discretion, at its general office in Liberty Lake, Washington, U.S.A., even if taken elsewhere by a salesman, selling agent, or representative. No Purchase Order will be binding upon Telect until Telect issues its written Sales Order Acknowledgement.

B. Purchase Order changes
After a Purchase Order is accepted, Customer may not change its Purchase Order without Telect's written consent. Any requested changes by Customer including revision to drawings, designs, specifications, or Purchase Order shipment dates, may result in additional cost to Customer. Such changes to a Purchase Order at Customer's request shall commence as mutually accepted in writing between the parties and/or the issuance of a new Purchase Order reflecting the applicable change(s).

C. Purchase Order cancellation by customer
Purchase Orders may not be cancelled by Customer for Products manufactured, tested, labeled, packaged or otherwise modified to meet unique specifications furnished by Customer or other third party at the request of Customer (including, but not limited to, cables cut to specific non-standard lengths) ("Custom Products"), and or Products quoted or otherwise indicated to be Non-cancelable, Non-returnable ("NCNR"). For non-Custom Products or non-NCNR Products, in the event of cancellation of a Purchase Order by Customer, Telect shall be reimbursed upon its review and determination for all work performed and/or material expenses incurred.

D. Purchase Order cancellation by Telect
Telect reserves the right to cancel an accepted Purchase Order, or any portion thereof, pursuant to Section 4B of these terms and conditions.

E. Minimum Purchase Order
Any Purchase Order, except for repair parts, amounting to fewer than One Hundred United States Dollars ($100.00) net, shall be billed at One Hundred United States Dollars ($100.00).

3. Price

4. Terms of Payment

A. Telect accepts payment by cash, check, wire transfer, Visa, MasterCard or American Express. Subject to approval by Telect's Credit Department, terms of payment shall be 2% discount if payment is received by Telect within 15 days of the invoice date, net payment due in full within 30 days from the invoice date. In addition, Customer shall be liable for all costs of collection, including attorney fees and court costs, if any. All payments must be made in United States currency unless otherwise authorized by Telect in writing on a Sales Order Acknowledgment.

B. Telect reserves the right to cancel a Purchase Order or any portion thereof if Customer's financial condition, in Telect's reasonable judgment, does not justify the terms of payment, unless at Telect's option Customer shall upon demand, immediately pay for all Products shipped and all Products not yet delivered

C. To secure Customer's obligation to make payment to Telect, Telect may (i) require that Customer establish with a financial institution acceptable to Telect, a stand-by letter of credit in favor of Telect, containing such terms as are acceptable to Telect or (ii) require payment in advance of shipments of Products.

5. Packaging and Shipment

A. All Product shall be packaged or packed for shipment in accordance with standard commercial practices for protection in shipment and storage. Telect reserves the right to impose a reasonable charge for packing and/or packaging to comply with Customer's specifications or instructions.

B. Unless otherwise specified, shipments of Products ordered shall be Free Carrier, Telect's designated point of supply ("FCA", Incoterms 2000), via Customer's preferred carrier. Unless otherwise provided for in a separate quotation by Telect, all freight charges shall be paid by Customer.

Shipment dates are estimated in good faith but are not guaranteed by Telect. Telect shall have no obligation to give Customer notice of shipment of Product. Product called for hereunder may be tendered in partial shipments.

C. North American Free Trade Agreement
Telect shall perform all administrative actions required to qualify the Products for preferential treatment under the rules of any applicable trade treaty between Canada, U.S.A. and Mexico including, without limitation, the North America Free Trade Agreement ("NAFTA"). If a Product qualifies under NAFTA, upon Customer's request, Telect will prepare and provide a NAFTA Certificate of Origin.

6. Title, Risk of Loss and Insurance

7. Testing and Inspection

8. Licenses and Permits

9. Intellectual Property Rights

10. Proprietary Rights Indemnification

11. Changes to Product

12. Subcontracting

13. Waiver

14. Compliance with Federal Law

15. Warranty

A. Telect standard warranty
Telect warrants to Customer that Product sold hereunder is free from defects in material and workmanship under normal use and service, subject to exceptions stated herein. Product purchased is warranted for the time period set forth in Section E below, commencing from the date of shipment to the original Customer. Notwithstanding the forgoing, Product Telect acquires from or through a third-party manufacturer or distributor and resells to Customer as the original customer will carry the manufacturer's pass-through warranty, if any, in accordance with Section D below.

B. Warranty claim procedure
If any Product purchased from Telect is defective under the above warranty, Customer must so notify a Telect inside sales representative and return Product pursuant to Telect's Return Authorization guidelines as stated in Section 16 below. Telect shall repair or replace the defective Product at its sole option and discretion, and return the repaired or replacement Product to Customer's site, freight prepaid. Since Telect's shipping responsibility ceases upon delivery of Product in good order to a carrier, any claims for damage or shortage in transit must be brought against the carrier.

C. Limitations of warranty
CORRECTION OF DEFECTS BY REPAIR OR REPLACEMENT SHALL CONSTITUTE THE EXCLUSIVE SOLE REMEDY FOR A BREACH OF THIS LIMITED WARRANTY, AND TELECT WILL NOT BE LIABLE FOR ANY CONSEQUENTIAL DAMAGES OR PERSONAL INJURY OR FOR LOSSES, DAMAGES, OR EXPENSES DIRECTLY OR INDIRECTLY RESULTING FROM THE USE OF PRODUCT.

Telect assumes no warranty liability with respect to defects in Product caused by:

Customer's modification of Product, except as described in Telect's instruction manual, if applicable.

Customer's attempt to repair Product beyond the removal of plug-in printed circuit boards, switch lamps, or fuses.

Customer's negligent, accidental, or other improper use of Product.

Customer's installation, operation, or maintenance of Product other than in a manner described in the instruction manual, if applicable.

Customer's combination of Telect Product with product(s) not supplied by Telect.

D. Additional warranty provisions
Telect makes no warranty with respect to lamps furnished as part of any test system. Telect's warranty for equipment purchased by Telect from a third-party manufacturer or its distributors and sold to Customer individually or as part of a Telect system shall be limited to those warranties, if any, offered by the equipment manufacturer on a pass-through basis to Customer. Telect does not assume any warranty liability for any items purchased by Customer from a third party which are drop shipped to Telect for factory installation and wiring. Any repairs made by Telect after the warranty period are warranted for ninety (90) days from the date of repair or date of return shipment to Customer, whichever is applicable.

E. Warranty period
Warranty periods for Telect Product are dependent upon the Product's general product classification. The general product classifications and related warranty periods are as follows:

• Fiber optic panels, frames and bays: Five (5) years
• Fiber optic cable products and components: Two (2) years
• DSX-1 passive interconnect products and panels, except USOC RJ products: Lifetime (lifetime being deemed to be twenty (20) years)
• DSX-3 passive interconnect products: Lifetime (lifetime being deemed to be twenty (20) years)
• USOC RJ interconnection jacks within DSX-1 Products: Five (5) years
• Terminal blocks: Five (5) years
• Multiplexers, media converters and other active products: One (1) year
• Copper cable telco products: Five (5) years
• Power protection panels and bays: Five (5) years
• Power systems: Five (5) years
• Cable management products: Five (5) years
• Relay racks, bays and frames, and equipment racks: Five (5) years
• Enclosures: Five (5) years
• Telect Media Gateway products, including modules, outlets, cables, switches, automation, security, audio: One (1) year
• Telect Media Gateway chassis: Five (5) years
• Hardware and accessories: One (1) year
• Network engineering services and systems integration services: One (1) year
• Refurbished products: One-half (1/2) the warranty period for new product of same type
• All other products (including custom-designed products and expendable items such as patch cords, LEDs, hole plugs, lamp caps, circuit guards and designated strip cords): One (1) year

THE ABOVE WARRANTY SUPERSEDES AND IS IN LIEU OF ALL OTHER WARRANTIES, EXPRESS OR IMPLIED, AND ALL OTHER OBLIGATIONS OR LIABILITIES OF TELECT, INCLUDING ANY IMPLIED WARRANTIES OF MERCHANTABILITY AND FITNESS FOR A PARTICULAR PURPOSE. No agent, distributor, or other party is authorized to make any warranties on behalf of Telect or to assume for Telect any other liability in connection with any Telect Product.

16. Return Authorization Guidelines

• Claims for non-conforming orders will not be considered unless made in writing to Telect within ten (10) days after Customer's receipt of Product.
• No Product may be returned without a Telect-assigned Return Authorization number ("RA number"), obtained by contacting a Telect inside sales representative regarding non-defective products or Telect's quality call center regarding defective products.
• All packages and correspondence MUST be marked with the RA number. Any packages received without a visible RA number may be rejected.
• Products are to be returned within thirty (30) days of issuance of an RA number unless otherwise agreed in writing between the parties.
• Products should be returned in original containers whenever possible. Customer is responsible for providing adequate packaging, including ESD protection where applicable.
• Product purchased through a reseller or distributor must be returned through that reseller or distributor, unless otherwise requested or approved by Telect by prior written notice.

17. Product Returns

A. Defective Product returns under warranty:

Defective Product shall be repaired or replaced at Telect's sole option and discretion.

Defective Product resulting in an out-of-service situation will be repaired or replaced at the discretion of Telect, as follows:

• If available in Telect's stock, replacement Product will be sent to Customer within two (2) business days. In the event that Telect does not receive the defective Product from Customer within fourteen (14) calendar days of shipment of the replacement Product, or Customer has not provided Telect with a valid reason for the delayed return, Telect shall invoice Customer for the replacement Product at the current list price. Such invoice shall be due and payable to Telect within thirty (30) days of the invoice date.



• In the event replacement product is unavailable, Telect will use best efforts to repair the returned defective Product and ship it back to Customer.

Freight charges to return defective Product to Telect will be either collect, FCA or credited back to Customer, at Telect's discretion and direction to Customer. Repaired or replaced Product shall be returned to the customer's site, freight prepaid by Telect.

For quality control purposes, Telect, or its authorized or designated representative, reserves the right to inspect the claimed defective Product to confirm the existence of a defect. Customer agrees to cooperate with Telect by providing additional and reasonable information regarding the defective Product, if requested by Telect.

B. Non-defective Product returns:

Non-defective Product may be eligible for return, at Telect's discretion, provided:

• it was purchased within the past six (6) months; and
• it is in new condition (has not been installed or used in any way).
• it is in unopened packaging if it is and active Product.

A minimum 25% restocking fee is applicable to all non-defective Product returns.

Freight charges to return non-defective, customer-damaged, or freight-damaged Product to Telect shall be prepaid by Customer.

Credit for returned non-defective Product, less the restocking fee, will be issued once the Product is received at the Telect designated facility and all conditions of these Return Authorization guidelines or contract terms, if any, are satisfied.

C. Defective Product returns out-of-warranty:

Out-of-warranty Product returned for repair are subject to Telect's repair service procedures and current rates, available from the Telect inside sales representative.

Freight charges for out-of-warranty Product returns to and from Telect shall be paid by Customer.

18. Software Licenses

19. Force Majeure

20. Confidential Information

21. Contract

22. Governing Law and Place of Jurisdiction

23. Governing Law

24. Governing Language

25. Dispute Resolution

A. The parties desire to resolve certain disputes, controversies and claims arising out of this international contract for sale without litigation in the courts. Accordingly, except in the case of (i) a dispute, controversy or claim relating to a breach or alleged breach on the part of either party of the intellectual property, trade secret or other proprietary rights of the other party or (ii) a suit, action or proceeding to compel either party to comply with the dispute resolution procedures set forth in this section, the parties agree to use the following alternative procedure as their sole remedy with respect to any dispute, controversy or claim arising out of or relating to this contract for sale or its breach. The term "Arbitrable Dispute" means any dispute, controversy or claim arising from, related to or in connection with these terms and conditions, except where court action has been reserved, as provided above. Where court action has been reserved, the parties irrevocably consent to the jurisdiction of the United States District Court for the Eastern District of Washington, USA, and hereby appoint their respective Chief Executive Officers as agent for service of process by mail and waive the provisions of all international conventions on service of process (or other applicable service of process laws).

B. At the written request of a party, each party shall appoint a knowledgeable, responsible business representative to meet and negotiate in good faith in English to resolve any Arbitrable Dispute arising under these terms and conditions of sale. If the negotiations do not resolve the Arbitrable Dispute within thirty (30) days of the initial written request, the Arbitrable Dispute shall be submitted to binding arbitration by a single arbitrator agreed upon by the parties or, in the event the parties cannot agree on a single arbitrator, by a panel of three (3) arbitrators, with each party designating an arbitrator of their choice and the two so chosen selecting the third arbitrator. The arbitration proceeding shall be conducted in English and in accordance with the Commercial Arbitration Rules of the American Arbitration Association ("AAA"). In addition to any rights or procedures provided for under said AAA Rules, the parties shall have all rights to and of discovery as permitted under the United States Federal Rules of Civil Procedure, as amended from time to time. The arbitration and/or any pre-trial hearings allowed by the arbitrator(s) shall commence within sixty (60) days of the demand for arbitration. The arbitration shall be held in Seattle, Washington, USA, if initiated by Customer, and Spokane, Washington, USA, if initiated by Telect. In no event shall the arbitrator(s) have the authority to make any award that provides for consequential, incidental, punitive or exemplary damages. The arbitrator(s) shall render a final opinion and award setting forth findings of fact and conclusions of law upon which such opinion and award are based, and the award shall be final on both parties. Judgment upon the award rendered by the arbitrator(s) may be entered in any court having jurisdiction over the property or person of the losing party. Each party shall bear its own cost of these procedures, but the prevailing party shall be entitled to an award of its attorney fees and costs, including the costs of expert witnesses and translators, in addition to any other award.

26. Export Restrictions

A. Telect shall obtain all licenses, permits and approvals required by any United States law or regulation with respect to the export of Product to Customer under this contract for sale. Telect and Customer shall comply with all applicable United States export control laws and regulations (including, without limitation, the Arms Export Control Act, the International Traffic in Arms Regulations, the Export Administration Act, the Export Administration Regulations, the Trading with the Enemy Act, and the International Emergency Economic Powers Act, any Executive Orders, regulations and licenses issued thereunder) with respect to the export of Products to Customer. Customer shall not transmit, directly or indirectly, Product or any Telect technical data (whether or not such technical data has been identified by Telect as Confidential Information), outside of the United States or to a person who is not a United States citizen or permanent resident of the United States, without prior written authorization by the United States Government if such authorization is required.

B. Customer expressly assumes responsibility for determining the need for and obtaining import licenses, currency exchange approvals and any other governmental approvals that may be necessary to permit the sale, purchase and payment for Product ordered by Customer and imported into any country pursuant to this contract for sale.

27. Questionable Payments