1. GENERAL:

The sale of products and or the provision of services (collectively “Products”) by NDT SYSTEMS, INC. (“NDT SYSTEMS”) shall be governed by these terms and conditions and shall supersede any terms or conditions in any purchase order, confirmation or other document furnished by the buyer (“Buyer”) that is in any way inconsistent with these terms and conditions, and any additional terms not consistent with these terms and conditions shall not be enforceable. Trade custom, trade usage and past performance are hereby superseded and shall not be used to interpret these terms and conditions.

2. OFFER AND ACCEPTANCE:

(a) NDT SYSTEMS’ offer to sell Products to Buyer is expressly limited by Buyer’s acceptance of these terms and conditions, as evidenced by Buyer’s issuance of a purchase order for Products, or Buyer’s acceptance or use of, or payment for, any Product under the purchase order. Additional or different terms or conditions proposed by Buyer (including those that may be contained in Buyer’s purchase order) shall be void and of no effect unless a prior written agreement to the contrary is provided by NDT SYSTEMS.

(b) Buyer’s order for Products is binding only when accepted by an authorized representative of NDT SYSTEMS, and is accepted subject to the terms and conditions contained herein, which constitute the complete agreement between the parties hereto. Except as set forth herein, there are no other agreements between the parties hereto, oral or written, with respect to the Products sold by NDT SYSTEMS (including any made or implied from past dealings).

3. PRODUCT SPECIFICATIONS:

NDT SYSTEMS reserves the right to make technical changes to Products at any time during the period between the acceptance of Buyer’s order and NDT SYSTEMS’ delivery of such order; provided that such changes will not reduce the performance of the Products sold in any material respect. The technical documentation that may be included with NDT SYSTEMS’ offer and/or delivery, such as illustrations, drawings or indications of weight, is provided for informational purposes only and will only be binding upon NDT SYSTEMS where expressly stated.

4. CONFIDENTIALITY:

(a) “Confidential Information” means, subject to the exceptions set forth in the following sentence, any information, materials or data disclosed by NDT SYSTEMS including without limitation information or data related to or regarding cost estimates, technical literature, drawings and other Product details provided to Buyer by NDT SYSTEMS. Information and data will not be deemed Confidential Information hereunder if such information or data becomes or is publicly known or otherwise ceases to be secret or confidential, except through a breach of these terms and conditions by Buyer.

(b) Buyer acknowledges that it will have access to NDT SYSTEMS’ Confidential Information. Buyer agrees that it will not (i) use any such Confidential Information in any way, for its own account or the account of any third party, except for the exercise of its rights and performance of its obligations under these terms and conditions; or (ii) disclose any such Confidential Information to any other party. Buyer agrees that it will not allow any unauthorized person access to Confidential Information, and that Buyer will take all action reasonably necessary to protect the confidentiality of such Confidential Information.

5. PRICE:

(a) Any published prices are subject to change without notice. Products shall be sold and invoiced at prices established by written contract between the parties hereto, and, in the absence of a written contract signed by both parties hereto, as quoted by NDT SYSTEMS to Buyer; provided that Buyer has issued a purchase order that has been accepted by NDT SYSTEMS prior to the expiration date of the quotation. Thereafter, proposed prices and anticipated delivery times are subject to change by NDT SYSTEMS without notice. All quotations of proposed prices and anticipated delivery times are valid for thirty (30) days from the date that NDT SYSTEMS issues such valid written quotation to Buyer, unless otherwise noted in such quotation or other communication from NDT SYSTEMS; provided, however, that proposed prices and anticipated delivery times may change if the Buyer desires to amend the order.

(b) In the event of cost increases pertaining to material and/or manufacturing of Products during the period between acceptance of an order and delivery, NDT SYSTEMS reserves the right to increase the sales price accordingly.

6. PRODUCT SHIPMENT TERMS:

All Products are sold EXW (Incoterms 2010) NDT SYSTEMS’ facility unless, otherwise specified in writing by NDT SYSTEMS. All charges, expenses, fees, duties, taxes (including VAT), expedite fee(s), and insurance related to the packing or transporting of Products to Buyer’s designated site are charged to Buyer. In addition to the forgoing fees, Buyer will also pay any bank charges and other charges related to the purchase and delivery of the Products including, without limitation, third party inspection charges whether inspected at point of origin or point of delivery. Risk of loss and title shall pass to Buyer as soon as the Products have been placed with a transport agent. The Products will be insured for transit only at Buyer’s specific request, with corresponding costs being charged to Buyer. Unless specified by Buyer, NDT SYSTEMS will select the means of shipping and routing which it deems appropriate. NDT SYSTEMS reserves the right to make partial shipments where circumstances beyond its reasonable control may delay a portion of the order. NDT SYSTEMS does not represent that it will select the most reliable or economical method of transportation, and expressly disclaims responsibility therefore.

7. LIMITED WARRANTY; RETURN AND CREDIT POLICIES:

(a) Subject to Paragraph 10(b) below or as otherwise set forth herein, NDT SYSTEMS warrants that the Products will be free from material defects in material and workmanship and will conform, in all material respects, to the Product specifications stated in such user documentation accompanying the Product.  Any third party components of Products or accessories supplied along with Products are not within the scope of the foregoing warranty and may subject to their respective manufacturer’s warranties. The warranties stated herein do not apply to causes other than normal use, such as accident, fault or negligence by Buyer, operator error or misuse, or causes external to the Products, including, but not limited to, electrical failure, fire or water damage, or exposure to intense heat or cold. This warranty shall extend for a period of one (1) year from the date of shipment of the Products from NDT SYSTEMS to Buyer and shall in no event extend beyond such term.

(b) Buyer shall not, for any reason, ship goods back to NDT SYSTEMS without NDT SYSTEMS’ prior written consent, granted at its sole discretion, and any returned goods must include a copy of such written consent. Buyer must receive prior approval, evidenced by a valid return material authorization (a “RMA”), from NDT SYSTEMS to return any Product, with such approval at NDT SYSTEMS’ sole discretion. The Buyer shall request such prior approval by notifying NDT SYSTEMS by registered or certified mail, return receipt requested, of any claim of defect attributable to failure to use reasonable care in the manufacture of the instrument within twenty-one (21) days of the discovery of such defect. Defects that are not reasonably detected through visible inspection must be reported to NDT SYSTEMS in writing within ten (10) days after discovery of such defect. Failure to notify NDT SYSTEMS within the time and in the manner specified herein shall constitute a waiver of any such claim of defect or breach of warranty. The final determination of the existence of a defect or breach of this warranty shall be made by NDT SYSTEMS at its sole discretion. This warranty shall extend to the Buyer only, and shall not be assignable or transferable to any other person. If NDT SYSTEMS consents to such request, it will issue Buyer a RMA. No returns will be permitted without a valid RMA or following the foregoing twenty-one (21) day period, unless otherwise authorized in writing by NDT SYSTEMS. Any such returned goods must be new (in-the-box) and received by NDT SYSTEMS within ten (10) days of Buyer’s receipt of an RMA. NDT SYSTEMS reserves the right to inspect the goods at its factory and to refuse at its discretion to accept the return of any item. Within thirty (30) days of NDT SYSTEMS’ acceptance of the return, NDT SYSTEMS will credit the Buyer account. Such credit will be the original price of the Product returned; provided that any item returned for credit as a result of an incorrect purchase without a corrected reorder will be subject to a twenty five percent (25%) restocking charge based on the original domestic or international price of the Product returned. Older items, service parts and discontinued items cannot be returned.

(c) NDT SYSTEMS assumes no responsibility or liability for any item or billing discrepancies (such discrepancy, a “Short Shipment”) discovered or reported by Buyer later than thirty (30) days after Buyer’s receipt of invoice. In the event that Buyer reports a substantiated claim of a Short Shipment within the foregoing time period, NDT SYSTEMS will issue a credit memo to Buyer and place a new order for the missing Products to which such credit will be applied.

8. DISCLAIMER OF WARRANTIES:

(a) THE FOREGOING EXPRESS WARRANTIES ARE THE EXCLUSIVE TERMS AVAILABLE TO BUYER AND ARE NOT TRANSFERRABLE TO ANY OTHER PERSON OR ENTITY. THERE ARE NO WARRANTIES, EXPRESS OR IMPLIED, INCLUDING ANY WARRANTY ARISING FROM A COURSE OF DEALING OR USAGE OF TRADE, NON-INFRINGEMENT OR ANY IMPLIED WARRANTY OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE OR USE, OTHER THAN THOSE WARRANTIES SET FORTH IN PARAGRAPH 9 ABOVE. THE CORRECTION OF ANY DEFECT IN OR FAILURE OF PRODUCTS BY REPAIR OR REPLACEMENT OR RE-PERFORMANCE OF SERVICES IN ACCORDANCE WITH NDT SYSTEMS’ POLICIES SHALL BE NDT SYSTEMS’ SOLE AND EXCLUSIVE OBLIGATION AND THE SOLE AND EXCLUSIVE REMEDY OF BUYER FOR ANY AND ALL LOSSES, DELAYS OR DAMAGES RESULTING FROM THE PURCHASE OR USE OF NDT SYSTEMS PRODUCTS.

(b) The warranty provided herein shall not apply to digital panel meters and Products with a limited life, including without limitation batteries, probes, delays, wedges, or cables, nor to any Products that have been subjected to misuse, improper installation or repair, alteration, or use beyond the published maximum ratings of the Product.

9. BUYER’S REMEDIES:

(a) The Buyer’s sole and exclusive remedy for breach of the above warranty shall be the repair or replacement of the Product by NDT SYSTEMS free of charge. The Buyer shall return the Product to NDT SYSTEMS, transportation prepaid. NDT SYSTEMS shall promptly repair or replace the Product and return same to Buyer, EXW (Incoterms 2010) NDT SYSTEMS’ facility.

(b) If, for any reason, NDT SYSTEMS is unable to repair the Product or, because of circumstances, the exclusive remedy provided herein fails of its essential purpose, or operates to deprive either party hereto of the substantial value of its bargain, then the Buyer’s exclusive remedy will be the return of the Product for replacement. The liability of NDT SYSTEMS shall in no event be greater than the full amount of the replacement for the Product.

(c) Any attempt by NDT SYSTEMS to repair or replace any Product sold hereunder shall not constitute an admission that the Product, or any part thereof, is defective within the meaning of the warranty described herein, nor that NDT SYSTEMS has any legal responsibility to make such repair or effect such replacement.

(d) In the case of software bugs or shortcomings, the customer may notify NDT SYSTEMS of the opinion of the bug or shortcoming and, if in the opinion of NDT SYSTEMS, the bug or shortcoming is verified and bona fide, NDT SYSTEMS shall commit a reasonable amount of time to correct an embedded firmware bug or shortcoming as well as a reasonable amount of time to correct the shortcoming or bug of PC based application software.

(e) Any such attempts, if unsuccessful, shall not create any liability on the part of NDT SYSTEMS, and the Buyer is limited to the remedy set forth herein.

10. LIMITATIONS ON LIABILITY:

(a) IN NO EVENT SHALL THE LIABILITY OF NDT SYSTEMS WITH RESPECT TO ANY PRODUCTS SOLD HEREUNDER EXCEED THE TOTAL AMOUNT PAID BY BUYER FOR SUCH NDT SYSTEMS PRODUCTS, AND IN NO EVENT SHALL NDT SYSTEMS UNDER ANY CIRCUMSTANCES BE LIABLE FOR DIRECT, INDIRECT, INCIDENTAL, CONSEQUENTIAL, EXEMPLARY OR SPECIAL DAMAGES OF ANY KIND, FOR ANY BREACH OF CONTRACT, BREACH OF WARRANTY OR MISREPRESENTATIONS, INCLUDING THE NEGLIGENCE OF NDT SYSTEMS, INCLUDING, BUT NOT LIMITED TO, DAMAGES RESULTING DIRECTLY OR INDIRECTLY FROM THE INSTALLATION, TRAINING, ADJUSTMENT, USE OR LOSS OF USE, OF THE PRODUCTS SOLD HEREUNDER, OR THE BUSINESS OF THE BUYER OR THIRD PERSONS WHEREIN THE PRODUCTS ARE UTILIZED OR ARISING FROM LOSS OF PROFIT, PROMOTIONAL OR MANUFACTURING EXPENSES, BUSINESS INTERRUPTION COSTS, LOSS OF DATA, INJURY TO REPUTATION, LOSS OF CUSTOMERS OR LIABILITIES WHICH MAY ARISE IN CONNECTION WITH ANY PRODUCTS PROVIDED TO BUYER, EVEN IF NDT SYSTEMS HAS BEEN ADVISED OF THE POSSIBILITY OF SUCH DAMAGES, AND IRRESPECTIVE OF THE NATURE OF THE CLAIM WHETHER IN CONTRACT, TORT, WARRANTY, OR OTHERWISE.

(b) THE ABOVE WARRANTY, AND THE OBLIGATIONS OF NDT SYSTEMS HEREUNDER, ARE EXPRESSLY IN LIEU OF, AND THE BUYER EXPRESSLY WAIVERS, ANY OTHER LIABILITY OF NDT SYSTEMS BASED UPON WARRANTY, EXPRESS OR IMPLIED, CONTRACT OR THE NEGLIGENCE OF NDT SYSTEMS, INCLUDING, BUT NOT LIMITED TO, NEGLIGENCE IN THE DESIGN OF THE PRODUCT OR IN THE CHOICE OF THE MATERIALS THEREFOR, OR NEGLIGENCE IN THE REPAIR OR REPLACEMENT OF THE PRODUCT, WHETHER SUCH REPAIR OR REPLACEMENT IS REQUIRED BY THE TERMS HEREOF OR IS VOLUNTARY, UPON THE PART OF NDT SYSTEMS.

(c) BUYER ACKNOWLEDGES THAT NDT SYSTEMS HAS SET ITS PRICES AND ENTERED INTO THESE TERMS AND CONDITIONS IN RELIANCE UPON THE LIMITATIONS OF LIABILITY AND THE DISCLAIMERS OF WARRANTIES AND DAMAGES SET FORTH HEREIN, AND THAT THE SAME FORM AN ESSENTIAL BASIS OF THE BARGAIN BETWEEN BUYER AND NDT SYSTEMS. BUYER AND NDT SYSTEMS AGREE THAT THE LIMITATIONS AND EXCLUSIONS OF LIABILITY AND DISCLAIMERS SPECIFIED HEREIN WILL SURVIVE AND APPLY EVEN IF FOUND TO HAVE FAILED OF THEIR ESSENTIAL PURPOSE.

(d) When sold through distribution, it shall be the distributor’s sole responsibility to assure the “system” (meaning Product, accessories etc.) functions per the Buyer’s desires. NDT SYSTEMS shall not be held responsible for the intended use or assumptions of the equipment or capabilities.

(e) Except as provided herein, no person is authorized to assume on behalf of NDT SYSTEMS any other or additional liability or responsibility in connection with the Product. These terms and conditions, including the warranty described herein are applicable to and part of all quotations, sales and transactions with the Buyer, and by placement of a purchase order, Buyer signifies complete acceptance of such a binding legal agreement.

11. PRODUCT USE:

THE BUYER UNDERSTANDS THAT IN ORDER TO FULLY BENEIFT FROM THE UNIQUE FEATURES OF THIS ADVANCED TECHNOLOGY INSTRUMENT, THE OPERATOR OF SUCH INSTRUMENT MUST BE EXPERIENCED AND WELL-FOUNDED IN THE FUNDAMENTALS OF ULTRASONIC TESTING. OPERATORS SHOULD FULLY POSSESS THE QUALIFICATIONS OF ULTRASONIC TESTING PERSONNEL AS DEFINED IN RECOMMENDED PRACTICE NO. SNT-TC-1A, PERSONNEL QUALIFICATIONS AND CERTIFICATION IN NONDESTRUCTIVE TESTING AVAILABLE FROM THE AMERICAN SOCIETY FOR NONDESTRUCTIVE TESTING (ASNT), 1711 ARLINGATE LANE, P.O. BOX 38518, COLUMBUS, OH 43228-0518

12. SOFTWARE:

(a) With respect to any software incorporated in or forming a part of the Products sold hereunder, NDT SYSTEMS and Buyer intend and agree that such software is being licensed and not sold, and that the words “purchase”, “sell”, or similar or derivative words are understood and agreed to mean “license,” and that the word “Buyer” or similar or derivative words are understood and agreed to mean “licensee.” Notwithstanding anything to the contrary contained herein, NDT SYSTEMS or its licensor, as the case may be, retains all rights and interest in software products provided hereunder.

(b) NDT SYSTEMS hereby grants to Buyer a royalty-free, non-exclusive, non-transferable license, without power to sublicense, to use software provided hereunder solely for Buyer’s own internal business purposes on the hardware Products provided hereunder and to use the related documentation solely for Buyer’s own internal business purposes. This license terminates when Buyer’s lawful possession of the hardware Products provided hereunder (and with respect to which such software is intended to be used) ceases, unless terminated earlier as provided herein or in any agreement ancillary to these terms and conditions. Buyer agrees to hold in confidence and not to sell, transfer, license, loan or otherwise make available in any form to third parties the software products and related documentation provided hereunder, other than in connection with a transfer of the applicable Products containing such software. Buyer may not disassemble, decompile, reverse engineer, copy, modify, enhance or otherwise change or supplement the software products provided hereunder without NDT SYSTEMS’ prior written consent. NDT SYSTEMS will be entitled to immediately terminate this license if Buyer fails to comply with any terms or conditions herein. Buyer agrees, upon termination of this license, immediately to return to NDT SYSTEMS all software products and related documentation provided hereunder and all copies and portions thereof.

(c) Certain of the software products provided by NDT SYSTEMS may be owned by one or more third parties and licensed to NDT SYSTEMS. Accordingly, NDT SYSTEMS and Buyer agree that such third partied retain ownership of and title to such software products. The warranty provisions set forth herein shall not apply to software products owned by third parties and provided hereunder.

13. EXPORT RESTRICTIONS:

Buyer acknowledges that each of NDT SYSTEMS’ Products and any related software and technology, including technical information supplied by NDT SYSTEMS or contained in documents (collectively “Items”), are subject to export controls of the U.S. government. The export controls may include, but are not limited to, those of the Export Administration Regulations of the U.S. Department of Commerce (the “EAR”), which may restrict or require licenses for the export of Items from the U.S. and their re-export from other countries. Buyer shall comply with the EAR and all other applicable laws, regulations, treaties, and agreements relating to the export, re-export, and import of any Item. Buyer shall not, without first obtaining the required license to do so from the appropriate U.S. government agency: (i) export or re-export any Item, or (ii) export, re-export, distribute or supply any Item to any restricted or embargoed country or to a person or entity whose privilege to participate in exports had been denied or restricted by the U.S. government. Buyer shall cooperate fully with NDT SYSTEMS in any official or unofficial audit or inspection related to applicable export or import control. Any commodities, technology or software will be transferred or exported in accordance with the U.S. Export Administration Regulations and the Foreign Assets Control Regulations. Diversion contrary to U.S. law is prohibited.

14. FORCE MAJEURE:

NDT SYSTEMS shall not be liable for failure to perform or for delay in performance due to fire, flood, strike, or other labor difficulty, act of God, act of any governmental authority, riot, embargo, fuel or energy shortage, wrecks or delays in transportation, inability to obtain necessary labor, materials, or manufacturing facilities from usual sources, or due to any cause beyond NDT SYSTEMS’ reasonable control. In the event of a delay in performance due to any such cause, the date of delivery or time for completion of performance will be extended by a period of time reasonably necessary to overcome the effect of such delay.

15. INTELLECTUAL PROPERTY:

Notwithstanding that title to a Product may pass to the Buyer, NDT SYSTEMS shall remain the exclusive owner of all intellectual property rights of whatever nature including, without limitation, copyrights, patents and patentable inventions, know-how, trade secrets, trademarks and design rights (whether registered, registrable or otherwise) embodied in or otherwise relating to the Products. Other than as permitted by applicable law, Buyer shall neither reverse engineer the Products or any part thereof. Buyer shall not remove any proprietary notices and/or branding contained in or otherwise affixed to the Products.

16. GOVERNING LAW:

The quotation, these terms and conditions, and the purchase of Products by Buyer shall be governed and construed in accordance with the laws of the State of California, U.S.A., without regard to its principles of conflicts of laws principles. The parties hereto hereby irrevocably agree that the state and federal courts of the State of California, U.S.A. shall have exclusive jurisdiction to settle any dispute or claim that arises out of or in connection with the quotation, these terms and conditions, the purchase of Products by Buyer, or their subject matter and the parties hereby submit to the non-exclusive jurisdiction of the California courts.

17. VALIDITY OF PROVISIONS:

In the event any provision or portion of any provision of these terms and conditions shall be held invalid, void or otherwise unenforceable, such holding shall not affect the remaining part or portions of that provision, or any other provision hereof.