TERMS and CONDITIONS of SALE
 

RF IDENTICS, A SUBSIDIARY OF AVERYDENNISON, COMPANY STANDARD TERMS AND CONDITIONS OF SALE

PRICE AND PAYMENT TERMS: All sales are F.O.B. the AVERY DENNISON plant from which the products are shipped. PURCHASER shall be responsible for freight costs. All prices are subject to change without prior notice; however, prices shall be those in effect on the date of shipment, or as noted on an accepted purchase order. Shipments which are more or less than the actual quantity ordered shall constitute filling the order if such variance does not exceed 10%. AVERY DENNISON may ship a quantity of Products greater than PURCHASER's order amount, to compensate for expected non-functioning products present in a roll. PURCHASER shall not be required to pay for any such additional Products; however, such additional amount shall not constitute a variance.

The net amount of invoice shall be payable in full within 30 days following the date of invoice. Invoices paid within 10 days of invoice are subject to a 1% discount. Invoices not paid within 30 days of due date shall thereafter bear monthly service charges at the rate of 1% per month on the unpaid balance until paid. If, in AVERY DENNISON's opinion, PURCHASER's financial condition does not justify continuance of production or shipment on the terms of payment specified, AVERY DENNISON may require payments in advance. PURCHASER shall pay for any attorneys fees or collections costs incurred by AVERY DENNISON in connection with collecting any unpaid amounts.

The amount of any present or future federal, state, local or other taxes applicable to the sale of products listed herein shall be added to the price and paid by the PURCHASER unless PURCHASER provides AVERY DENNISON with a valid exemption certificate acceptable to AVERY DENNISON and the appropriate taxing authority.

PURCHASER hereby grants AVERY DENNISON a security interest in each product sold hereunder and the proceeds and products thereof, until payment of all funds owing to AVERY DENNISON including, without limitation, the purchase price. PURCHASER agrees to execute any documents as AVERY DENNISON requests to perfect such security interest.

SHIPMENT AND TRANSPORTATION TERMS: AVERY DENNISON reserves the right to specify routing of shipments. AVERY DENNISON shall attempt to ship within the time specified on AVERY DENNISON's Sales Order, if indicated, and if not, then within a reasonable time. PURCHASER acknowledges that no claim may be made for delays in shipment. Unless specified in AVERY DENNISON's Sales Order, freight charges shall be prepaid and billed. If PURCHASER specifies a carrier that is not an AVERY DENNISON approved carrier, the shipment will be made on a "Freight Collect" basis.

TITLE AND RISK OF LOSS: Title and risk of loss for all products shall pass to PURCHASER upon delivery by AVERY DENNISON to a common carrier, regardless of the freight terms or method of payment for transportation charges. PURCHASER is responsible for filing all loss or damage claims with the carrier.

TRANSIT DAMAGE CLAIM PROCEDURE:
1. It is the responsibility of PURCHASER to receive the entire shipment as tendered and enter a claim with the carrier if any portion is missing or damaged upon delivery.

2. If there is any loss or damage at the time of delivery, it is essential to note such loss or damage on the delivery receipt. Within 15 days of receipt of the shipment any concealed damage should be reported to the delivering carrier. Retaining the entire package is necessary until after a concealed damage inspection report is issued by the carrier.

3. Speed is of utmost importance! Prompt inspection, as well as prompt filing, of the claim with all necessary documents will facilitate fast settlement. All claims must be accompanied by the following documents:
A. Original paid freight bill.
B. Certified copy or original bill of lading.
C. Duplicate of invoice covering shipment.
D. Duplicate of destination inspection report if available, or duplicate of delivery receipt noting shortage or damage.

Items A and B, if needed, can be obtained by calling __________________. Retain copies for your files.

4. Contact your Sales Representative or our Customer Claims Department if PURCHASER, for any reason, encounters difficulty obtaining payment of a valid claim from a carrier.

INSPECTION: It is the obligation of PURCHASER to inspect all RFID-enabled products (including, without limitation, non pressure-sensitive roll inlays, pressure-sensitive inlays, and RFID-enabled labels).

CONVERTING: In the event AVERY DENNISON issues guidelines for converting any RFID products, PURCHASER agrees to convert all AVERY DENNISON RFID products pursuant to such guidelines. AVERY DENNISON is not responsible for the failure of any RFID product caused by the converting process.

ACCEPTANCE: All orders are subject to acceptance by AVERY DENNISON.

CANCELLATION: Orders cannot be cancelled except upon terms that will fully compensate AVERY DENNISON against loss, or as otherwise specifically agreed by the parties in writing.

RETURNS: All products sold by AVERY DENNISON are returnable only in accordance with the warranty provision hereof. Before returning any product, PURCHASER must obtain AVERY DENNISON's prior written approval and instructions.

FORCE MAJEURE: AVERY DENNISON shall not be liable for any loss, damage, delays, changes in shipment schedules or failure to deliver caused by accident, fires, floods, labor disputes or shortages, riots, civil commotion, insurrection, war, terrorism, sabotage (including, but not limited to computer viruses), the elements, embargo, failure of carriers, extended mechanical failure, shortages of utilities, raw materials, equipment or transportation, government action, the effect of any laws, ordinances, rules and regulations, whether valid or invalid, acts of God, or public enemy, prior orders from customers or limitations on AVERY DENNISON's or its suppliers' production or marketing activities or any other causes or contingencies beyond AVERY DENNISON's control.

LIMITATION OF LIABILITY: In no event shall AVERY DENNISON be liable for any incidental or consequential damages, including but not limited to, loss of profit, loss of use or production or loss of capital, even if it has been advised of the possibility of such damages. The remedies of PURCHASER set forth below under "Limited Warranty" are the sole and exclusive remedies of PURCHASER relating to the products purchased from AVERY DENNISON hereunder. The total liability of AVERY DENNISON with respect to any contract, or anything done in connection therewith such as the performance or breach hereof, or from the manufacture, sale, delivery, resale, installation or use of any products, whether arising out of contract, negligence, strict tort, or under any warranty, or otherwise shall not exceed the purchase price of the products upon which liability is based.

COMPLIANCE: All AVERY DENNISON products are manufactured in compliance with all applicable requirements of the Fair Labor Standards Act, as amended, and all other applicable laws.

INTELLECTUAL PROPERTY RIGHTS GRANTED TO PURCHASER: AVERY DENNISON is a licensee under Intermec's patent portfolio for RFID tags and labels and RFID printers. Solely for PURCHASER's use of the AVERY DENNISON products purchased hereunder ("Products"), AVERY DENNISON hereby designates PURCHASER as a third-party beneficiary of any patent license or copyright license: i) under which AVERY DENNISON is a licensee with the power to confer such rights, and ii) which covers any Product or component thereof sold to PURCHASER by AVERY DENNISON hereunder. Solely for PURCHASER's use of the AVERY DENNISON Products, AVERY DENNISON hereby designates PURCHASER as a third-party beneficiary of any contractual indemnification provision of which AVERY DENNISON is a beneficiary, which relates to any Product or component thereof sold to PURCHASER by AVERY DENNISON hereunder, and under which AVERY DENNISON has the power to confer such rights.

SEVERABILITY: Each paragraph and provision hereof is severable and if any provision is held invalid or unenforceable the remainder shall nevertheless remain in full force and effect.

CHOICE OF LAW: All contracts shall be governed by and construed in accordance with the laws of the State of South Carolina and the United States of America with venue for such disputes in the courts located in South Carolina.

LIMITED WARRANTY

All statements, technical information and recommendations about AVERY DENNISON products are based upon tests believed to be reliable but do not constitute a guarantee or warranty. All AVERY DENNISON products are sold with the understanding that PURCHASER has independently determined the suitability of such products for its purposes. AVERY DENNISON products are warranted to be in material compliance with the specifications set forth on the Product Data Bulletin applicable to the product, as measured by AVERY DENNISON testing methods, for six (6) months, or such period as may otherwise be specified in such Product Data Bulletin. Any product shown, using AVERY DENNISON testing methods, to be not in material compliance with such specifications shall be replaced without charge or AVERY DENNISON may issue a credit in such amount as it deems reasonable; however, in no event shall AVERY DENNISON be responsible for claims beyond the purchase price paid for the defective product or in any way liable or responsible for consequential or incidental damages as described above under "Limitation of Liability". This limited warranty shall not apply to any products designated by AVERY DENNISON to be defective at shipping (such as non-pressure-sensitive roll inlay products designated by AVERY DENNISON to be defective), provided that PURCHASER has not been charged for such products.

THE REMEDIES SET FORTH ABOVE ARE EXCLUSIVE AND IN LIEU OF ANY OTHER REMEDIES, WHETHER IN LAW OR EQUITY. NO EXPRESS WARRANTIES AND NO IMPLIED WARRANTIES, WHETHER OF MERCHANTABILITY, FITNESS FOR ANY PARTICULAR USE, NON-INFRINGEMENT OF ANY STATUTORY OR COMMON LAW INTELLECTUAL PROPERTY INTEREST, INCLUDING ANY PATENT, TRADEMARK, COPYRIGHT, TRADE DRESS, TRADENAME, OR TRADE SECRET INTEREST, OR OTHERWISE, EXCEPT AS SET FORTH ABOVE (WHICH IS MADE EXPRESSLY IN LIEU OF ALL OTHER WARRANTIES) SHALL APPLY TO PRODUCTS SOLD BY AVERY DENNISON. AVERY DENNISON MAKES NO REPRESENTATIONS OR WARRANTIES AGAINST INFRINGEMENT OF ANY INTELLECTUAL PROPERTY RIGHTS, EVEN IF AVERY DENNISON HAS BEEN MADE AWARE OF SUCH RIGHTS OR INFRINGEMENT. AVERY DENNISON SPECIFICALLY DISCLAIMS AND EXCLUDES ALL OTHER SUCH WARRANTIES. AVERY DENNISON SHALL NOT BE LIABLE TO PURCHASER FOR INDIRECT DAMAGES, INCLUDING ANY LOST PROFITS OR OTHER INCIDENTAL OR CONSEQUENTIAL, EXEMPLARY OR SPECIAL DAMAGES, HOWEVER CAUSED AND ON ANY THEORY OF LIABILITY ARISING OUT OF THIS AGREEMENT. NO WAIVER, ALTERATION, ADDITION OR MODIFICATION OF THE FOREGOING CONDITIONS (INCLUDING, WITHOUT LIMITATION, ANY TERMS CONTAINED ON ANY PURCHASE ORDER WHICH CONFLICT WITH THE TERMS CONTAINED HEREIN) SHALL BE VALID UNLESS MADE IN WRITING AND SIGNED BY AN OFFICER OF AVERY DENNISON.

No salesman, representative, or agent of AVERY DENNISON is authorized to give any guarantee, warranty or make any representation contrary to the above.