Drylet, Inc. Standard Terms and Conditions of Sale

GOVERNING TERMS: The sale of any products ordered from DryLet, Inc. (herein called “SELLER”) by a buyer (herein called “BUYER”) is subject to the terms and conditions contained in these Standard Terms and Conditions of Sale (“Standard Terms”) which are incorporated into and form a binding and enforceable part of any purchase order of products received by SELLER. BUYER’s placement of a purchase order, or taking delivery, of any product of SELLER shall constitute acceptance of these Standard Terms.

LIMITATION ON USE: BUYER shall only use the products for their commercial end use as provided by SELLER. None of the products, in each case whether alone or in combination with any other item or process, shall be used for any other purposes. Any use of the products not specifically permitted under this Agreement, including but not limited to reverse engineering, disassembling, modification, improvement, testing and development, is prohibited.

PAYMENT TERMS: Unless otherwise agreed in writing, the following payment terms apply: payment of each invoice shall be due from BUYER 30 days from the date thereof. Amounts past due (i.e. amounts not paid within 30 days of the invoice date) shall bear late charges of 1.5% for each calendar month or fraction thereof during which such amounts remain unpaid. If SELLER takes legal action to collect any amount due hereunder, BUYER shall pay all dispute resolution costs, including court costs plus reasonable legal fees incurred by SELLER in bringing such action.

SELLER shall retain a security interest in and right of possession to any products for which full payment has not been received, and BUYER will assist in perfecting any security interest requested by SELLER. If at any time SELLER determines, in its sole discretion, that BUYER’s financial condition is impaired or unsatisfactory, SELLER may unilaterally and at its sole discretion (a) suspend or terminate its agreement with BUYER, (b) suspend or cancel shipment of any orders previously approved, or (c) require BUYER to pay in full outstanding balances and pay all or part of future orders in advance.

In any transaction in which BUYER is not domiciled in the United States of America, SELLER shall have the right to request BUYER to establish an irrevocable, unconditional, sight letter of credit allowing for pro- rata payments for partial deliveries and/or performance, storage, export shipment, price adjustments, cancellation or termination, and all other amounts due from BUYER to SELLER. The letter of credit shall be (a) confirmed by a bank that is acceptable to SELLER, (b) payable at the counters of the confirming bank, (c) opened sixty (60) days prior to the earliest scheduled performance or shipment, (d) remain in effect until ninety (90) days after the latest scheduled performance or shipment and (e) otherwise be in form and substance satisfactory to SELLER. BUYER shall pay all charges in connection with such letter of credit. SELLER will not begin performance until the letter of credit becomes operative. BUYER will increase the amounts and/or extend the validity period(s) and make appropriate modifications to any letter of credit within five (5) business days of SELLER’s notification to BUYER that such increase or extension is necessary to provide for payments to become due to SELLER.

All of the foregoing is in addition to and does not limit any other rights or remedies SELLER may have under contract or law.

TAXES: Prices quoted do not include applicable sales, use, VAT, excise or similar taxes (“Taxes”), which SELLER may be required to collect. BUYER represents to SELLER that the sale of products by SELLER to BUYER, as contemplated herein, is not subject to Taxes by reason of an applicable exemption (and BUYER shall provide to SELLER such exemption certificates or other documentation that SELLER may request to confirm the existence of such exemption). Any applicable Taxes which are not collected by SELLER from BUYER shall be paid by BUYER directly to the appropriate taxing authority.

DELIVERY AND RISK OF LOSS: Any delivery or availability dates quoted by SELLER are estimates only and may not be relied on as contractual conditions or covenants. SELLER shall not be liable for unavailability or delay in delivery of products for reasons outside its reasonable control, or caused by Force Majeure. SELLER will notify BUYER promptly of any delay excused by this paragraph and will specify the revised delivery date as soon as practicable. In the event of any such delay, the date of delivery shall be extended for a period equal to the time lost by reason of the delay. However, the obligation of BUYER to pay for products delivered will never be delayed. As herein used, the term “Force Majeure” means war, mobilization, revolution, civil commotion, riots, strikes, lockouts, floods, hurricanes, similar storms or other actions of the elements, acts of God or the public enemy, restrictions or restraints imposed by law or by rule, acts or regulations or orders of governmental authorities, whether national, state or local, and whether civil or military, interruption of transportation facilities, and any other cause which is beyond the reasonable control of SELLER and which, by the exercise of reasonable diligence, SELLER is unable to prevent or relieve.

All delivery of products will be made F.O.B. SELLER’s facility in Prosper, Texas. Title, risk of loss, and any obligation to insure the products supplied to BUYER shall pass to BUYER when the products are placed in the hands of a carrier at the point of shipment. SELLER shall not be responsible for loss of, or damage to, products in transit. Products held or stored by SELLER for BUYER shall be insured by and be at the risk and expense of BUYER. SELLER shall in no event have any liability for delays in delivery, damage or loss to products incurred in storage or during transit. Such loss or damage to the products shall not relieve BUYER of its obligation to pay SELLER for the products.

WARRANTY DISCLAIMER: Any instructions or technical advice provided by SELLER’s employees or agents with respect to the products shall be for informational purposes only, and SELLER makes no representation or warranty nor assumes any obligation or liability for any such instructions or advice. Products sold by SELLER may carry original manufacturer’s warranties against defects or nonconformity, but SELLER gives no warranty on behalf of the manufacturer of the products and makes no independent warranty or representation whatsoever with respect to the products sold. SELLER DISCLAIMS ANY AND ALL WARRANTIES, WHETHER EXPRESS OR IMPLIED, INCLUDING ANY IMPLIED WARRANTY OF MERCHANTABILITY, OR FITNESS FOR A PARTICULAR PURPOSE, WITH RESPECT TO ANY PRODUCTS SOLD BY SELLER TO BUYER.

NON-SOLICITATION AND CONFIDENTIALITY: During the period of provision of products by SELLER to BUYER and for a period of two (2) years after the completion of such provision, BUYER shall not hire or accept the services of any SELLER personnel or agents or encourage or induce any SELLER’s personnel to accept employment with or perform services for another contractor or other party. In addition, BUYER shall not use or communicate to any other person or entity any Confidential Information of SELLER that the BUYER may have acquired from SELLER’s personnel or agents. As herein used, the term “Confidential Information” shall mean any and all tangible and intangible information, whether oral or in writing or in any other medium, relating to the finances, management, operations or products of SELLER.

or any of its subsidiaries or affiliates including, without limitation, any and all trade secrets, know-how designs, concepts, formulations, processes, processing and control information, product performance information, data, manuals, supplier lists, the names, addresses, phone numbers, requirements, business needs and any and all other information regarding clients or customers of the SELLER or any of its subsidiaries or affiliates, purchasing and sales records, marketing information, computer programs and computer databases, all information which relates to BUYER’s or SELLER’s analysis of Confidential Information and all derivatives of Confidential Information. Confidential Information includes all or any portion thereof. In the event of a breach of these provisions, SELLER has the right to pursue any or all of the legal and equitable remedies available for the loss of services of its personnel and for any breach of confidentiality (and SELLER shall not be required to post a bond or other security in connection with any such legal proceeding).

LIMITATION OF REMEDIES AND LIABILITY: Provided that BUYER gives written notice of nonconforming products within thirty (30) days of delivery, and furnishes reasonable documentary evidence of the nonconforming products (i.e. product packaging or product sample) to make a determination as to the non-conformity of those products, SELLER shall replace with conforming products, at its expense, any products that are confirmed by SELLER to be nonconforming. BUYER shall set aside, protect, and hold the nonconforming products without further processing until SELLER has had an opportunity to inspect the products and/or make a determination as to the nonconformity of the products. SELLER may elect in its sole discretion either to (a) make the necessary arrangements for the disposal of the nonconforming products or (b) have the BUYER return the nonconforming products to SELLER at SELLER’s expense. In no event shall any products be returned, disposed of, or reworked by BUYER without the express written authorization of SELLER.

These remedies are conditioned upon (a) BUYER’s proper storage and handling of the products and (b) BUYER providing SELLER prompt access to the alleged nonconforming products for purposes of inspection. Any reverse engineering, disassembling, modification, improvement, or other prohibited use of any product shall render this warranty null and void. The foregoing warranties provide the exclusive remedies for all claims with respect to the products and shall be subject to the “Limitations on Liability” set forth below.

SELLER’s liability with respect to any claim of any kind, whether under contract or warranty, in tort (including negligence), by strict liability, by statute, or otherwise, is limited to the amount equal to the gross compensation received by SELLER for the sale of products to BUYER. Further, SELLER SHALL NOT BE LIABLE TO BUYER FOR ANY LOSS OF PROFIT OR REVENUES, INTERRUPTION OF BUSINESS, COST OF CAPITAL, COST OF COVER, DOWNTIME COSTS, INCREASED OPERATING COSTS, CLAIMS OF BUYER’S CUSTOMERS FOR SUCH DAMAGES, OR FOR ANY SPECIAL, CONSEQUENTIAL, INCIDENTAL, INDIRECT, PUNITIVE OR EXEMPLARY DAMAGES.

CANCELLATION: BUYER cannot cancel any order for products after SELLER has ordered materials or after manufacture has commenced, except with SELLER's written consent. If BUYER’s order (or any portion thereof) is cancelled by BUYER for any reason, BUYER shall pay SELLER for all products purchased or completed or partially completed before the effective date of cancellation, plus a cancellation charge equal to 15% of SELLER’s gross compensation with respect to the sale of the undelivered products.

PATENTS: In the event of any suit, claim or proceeding (a “Claim” or “Claims”) alleging that any products provided by SELLER to BUYER hereunder infringe upon a patent, copyright or other intellectual property right of a third party and provided that (1) BUYER promptly notifies SELLER of the Claim within thirty (30) days of becoming aware of the Claim and (2) BUYER makes no admission of liability with respect to the Claim, SELLER shall arrange, at its own expense, for the return of the alleged infringing products. Notwithstanding the foregoing, SELLER shall have no obligation or liability with respect to any Claim in whole or in part based upon or attributable to (i) any products that have been reverse engineered, improved, altered or modified after delivery thereof to BUYER, (ii) the combination, operation or use of any products with other products when such combination is part of any allegedly infringing process, (iii) the unauthorized use by BUYER of products including, without limitation, a breach by BUYER of the terms and conditions of these Standard Terms. Except as specifically set forth above in this paragraph, SELLER shall not have any liability or responsibility whatsoever to BUYER with respect to Claims. SELLER SHALL IN NO EVENT BE LIABLE TO BUYER FOR LOST PROFITS OR OTHER CONSEQUENTIAL OR INDIRECT DAMAGES SUSTAINED BY BUYER AS A RESULT OF ANY CLAIMS.

APPLICABLE LAW AND DISPUTE RESOLUTION: These Standard Terms shall be construed, interpreted, applied and governed in all respects by the internal laws of the State of Texas, exclusive of its conflicts of laws principles and of any principles that would require the application of the United Nations Convention on Contracts for the International Sale of Goods or any other international norms, conventions and treaties. Any disputes between SELLER and BUYER related to or arising from these Standard Terms, or order or sales that are subject to them, shall be adjudicated in Dallas County, Texas, which state or federal courts having appropriate jurisdiction shall have exclusive jurisdiction over such disputes.

ENTIRE AGREEMENT: These Standard Terms constitute the entire agreement between the parties hereto with respect to the subject matter hereof. No terms or conditions in any way adding to, modifying or otherwise changing the provisions stated herein or therein, including by custom, usage of trade, or course of dealing or performance, shall be binding upon SELLER or BUYER unless made in writing and signed by an authorized representative of each party. These Standard Terms will not be modified by SELLER’s delivery of products following receipt of BUYER’s purchase order, shipping request or similar form containing terms and conditions consistent, conflicting or inconsistent with the terms and conditions stated in these Standard Terms.

SEVERABLE PROVISIONS: If any term, covenant or provision of these Standard Terms or the application thereof to any person or circumstance shall be held to be invalid or unenforceable, the remaining provisions or portions of these Standard Terms or the application of such term, covenant or provision to persons or circumstances other than those as to which it is held invalid or unenforceable shall not be affected thereby and each term, covenant and provision set forth in these Standard Terms shall be valid and be enforced to the fullest extent permitted by law.