Terms and Conditions
Products and Systems Agreement Rev. A

1. Entire Agreement - These Terms and Conditions and Seller's invoice (if any) constitute the entire agreement between the parties (the "Agreement") and supersede all prior or contemporaneous proposals, agreements or communications, oral or written, with respect to the same subject matter. The terms of this Agreement may not be added to, modified, superseded or otherwise altered nor may the terms thereof be waived except by a writing signed by Seller's authorized representative at its Telford PA office. Each shipment is made solely upon the terms and conditions of this Agreement, notwithstanding terms and conditions contained in any acknowledgment, or other form used by Buyer.

2. Warranty - Seller warrants that the products and/or System of which they are a part, sold to Buyer hereunder, including, without limitation, Hardware, Software, scanners and components are free from defects in material and workmanship and will be in good operating condition under normal usage when delivered. This warranty does not extend to service requests resulting from abuse, neglect, changes in the original specifications, or unrelated to the Accu-sort products sold hereunder. Such service requests will be charged at current service rates, plus all travel related expenses. In the event of a breach of warranty:

A. For Accu-Sort manufactured equipment not installed by Seller, the term of the warranty is one (1) year from the date of shipment. During said term, Seller shall repair or replace the defect free of charge at Seller's plant (shipping charges to be borne by Buyer). Seller shall also provide on-site warranty service in the continental United States during the warranty term at a price equal to 75% of the standard service charge in effect at the time of the service request, plus travel related expenses.
B. For Accu-Sort manufactured equipment installed by Seller, the term of the warranty is one (1) year from the date of shipment. During said term, Seller shall repair or replace the defect free of charge at the installation location.

C. Seller warrants that its software will be free from defects for the term of the software warranty. For new software applications, the term of the warranty shall be (1) year. Software enhancements (changes to existing software applications), whether provided free of charge or purchased by the Buyer, are warranted as indicated in the sales documents relating thereto, or if none, for ninety (90) days from delivery, and covers only those functions modified to perform the enhancement. During the term of the software warranty, Seller shall provide corrections for software defects free of charge by modem or by shipment of diskette, CD-ROM, EPROM or other media as appropriate. During the warranty period, the Seller may, at its discretion, correct software defects by providing on-site service free of charge at the installation location.
D. Unless otherwise stated, warranty for hardware not manufactured by Accu-Sort and software not developed by Accu-Sort is limited to manufacturer's warranty. During said term, Seller shall repair or replace the defect in accordance with the manufacture's warranty (shipping charges to be borne by Buyer). Unless otherwise provided by the manufacturer's warranty, Seller shall also provide on-site service in the continental United States during the warranty term at a price equal to 75% of the standard service charge in effect at the time of the service request, plus travel related expenses.

E. Except as specifically provided in this section ("Warranty"), Seller makes no warranties with respect to the Hardware, Software or other products to which this Agreement relates, including without limitation, any implied warranties of merchantability or fitness for a particular purpose. If a device or part is replaced under the above Seller's warranty, the term of the warranty is not renewed or extended, but such device or part is warranted for the remainder of the one (1) year term or for a minimum of ninety (90) days. In the case of lasers or other major components purchased by Seller, Seller will pass on to Buyer such warranties as Seller received from the laser or component manufacturer. Upgrades and modifications during the warranty period are warranted for the remainder of the one (1) year term or for a minimum of ninety (90) days. Upgrades and modifications subsequent to the warranty period are warranted as indicated in the sales documents relating thereto, or if none, for ninety (90) days from delivery.

F. Blue Ribbon Extended Service Plan. Seller also offers the Blue Ribbon Extended Service Plan ("BRES') in addition to the warranties set forth above in this Section. Through this plan, equipment maintenance and repair are offered with fixed cost and fast turn-around for unexpected repairs. Service on a per call basis is also available at prices and subject to terms provided in Seller's proposal. Seller insures its service personnel for $1,000,000 per occurrence for bodily injury, property damage, and advertising offense, or combination thereof. If additional coverage is required, the cost will be borne by the Buyer.

3. Governing Law - This Agreement shall be governed by the laws of Pennsylvania excluding its rules of conflicts of laws. The exclusive jurisdiction for all Court proceedings arising out of this Agreement shall be in the United States District Court for the Eastern District of Pennsylvania or in the Court of Common Pleas of Bucks County, Pennsylvania and the parties hereto expressly submit to the jurisdiction of said Courts and both parties waive trial by jury in any such action. At Seller's sole option, any claim or dispute pertaining to this Agreement, whether in law or in equity, may be submitted to final binding common law arbitration conducted by the American Arbitration Association in Philadelphia, Pennsylvania; provided, however, Seller may, in addition to arbitration, seek provisional remedies including, without limitation, injunctive relief. Within sixty (60) days of the service of the arbitration demand, either party may obtain discovery in accordance with Rules 26 to 37 inclusive of the Federal Rules of Civil Procedure including, without limitation, the right to subpoena third party witnesses for
pre-arbitration discovery.

4. Changes in Job Specifications - The prices stated herein are based upon the Hardware, Software, System Specifications and Delivery Schedule ("Specifications") set forth herein or in the Exhibits attached hereto. Acceptance of this order is based on the Specifications. Requests for changes in the Specifications (including without limitation depth of field, bar code design, conveyor speed, throughput requirements, data handling and host interface) after acceptance of order must be in writing. Seller shall evaluate their impact on price and delivery, and shall notify Buyer thereof within a reasonable period of time. Thereafter, Buyer may effect such change on the terms stated by written notice to Seller within 15 days of receipt of such information. The prices stated herein are based upon the Hardware, Software, System Specifications and Delivery Schedule ("Specifications") set forth herein or in the Exhibits attached hereto. Acceptance of this order is based on the Specifications. Requests for changes in the Specifications (including without limitation depth of field, bar code design, conveyor speed, throughput requirements, data handling and host interface) after acceptance of order must be in writing. Seller shall evaluate their impact on price and delivery, and shall notify Buyer thereof within a reasonable period of time. Thereafter, Buyer may effect such change on the terms stated by written notice to Seller within 15 days of receipt of such information. Determination of the suitability of the goods described on the document to which these Terms and Conditions relate is the sole responsibility of the Buyer, and Seller shall have no responsibility therefor.

5. Confidentiality - Buyer agrees not to reproduce in whole or in essential part, Hardware, software and other goods or distinctive features thereof included in this Agreement. Buyer further agrees to hold as confidential materials, instruction books and manuals supplied by Seller. Buyer further agrees that no proprietary rights shall accrue to it in any Hardware design or any software programs, specifications, and other materials provided by Seller and that such items are and shall remain Seller's confidential and proprietary property. Buyer further agrees to inform its employees and agents of the confidential and proprietary nature of such items and to adopt measures for the protection of Seller's confidential and proprietary rights therein.

6. Infringement - The Seller shall indemnify and save Buyer harmless from loss or damage arising from actions brought against Buyer in a United States court based upon a claim that the Hardware, Software or System as manufactured or developed by Seller infringes a United States patent. Notwithstanding the foregoing, however, Seller shall not be obligated to pay damages and costs finally awarded against Buyer for infringement in excess of the purchase price for the System. Further, Seller shall have no obligation under the provisions of this Section with respect to components and goods supplied to Buyer's specifications or for goods purchased from Seller in connection with any other equipment, method or process except where such goods are supplied by Seller for use only in such other equipment or method or process. In no event shall Seller be liable for incidental or consequential damages awarded against Buyer. Seller's duties are conditioned upon Buyer giving Seller: written notice of any claim of infringement within ten (10) calendar days of receipt thereof; a copy of each communication relating to the claimed infringement; and, if it so elects, all authority (including the right to exclusive control of the defense of any such claim), information and assistance necessary to defend or settle such claim. Seller shall not be bound by any settlement made without Seller's prior written consent. Should the Hardware, Software, or System manufactured or developed by Seller (or any component thereof) become, or in Seller's opinion be likely to become, subject to a claim of infringement of a United States patent (including software), Seller shall have an option either to procure for Buyer the right to continue its use, or to modify the Hardware, Software or System to make it non-fringing, provided such modification shall not adversely affect performance. If this option is not reasonably available to Seller, then Seller will grant Buyer a refund for the depreciated value of the Hardware, Software or System. If a suit alleging infringement is filed prior to delivery, Seller may decline to deliver the accused goods without being in breach of this Agreement and may provide, if possible, compatible, functionally equivalent, non-infringing substitutes.

7. Cancellation - Buyer may cancel this Agreement prior to delivery, by written notice to Seller. As soon as reasonably possible after receipt of such notice, Seller shall stop all work on the project and Buyer shall pay to Seller as liquidated damages and Seller shall accept as full compensation, Seller's actual direct costs to the date work is stopped, including Seller's reasonable expense in connection with termination of any subcontractors, plus an amount equal to twenty (20%) per cent of the total of such costs and expenses, less the reasonable salvage value.

8. Adverse Financial Change - If in Seller's opinion there shall be any material adverse change in Buyer's financial condition or in the conduct of Buyer's business, Seller, in its sole discretion, may treat this Agreement as thought it had been canceled by Buyer pursuant to the preceding
Section (Cancellation).

9. Force Majeure; Termination - If Seller is unable to perform its obligation herein or otherwise because of any cause beyond Seller's control, including, but not limited to, labor disputes, strikes, acts of God, natural disasters, shortages of materials, rationing, utility and communication failures, casualty, war, riot, insurrection, embargoes, restrictions, rules, regulations or orders of any governmental agency or subdivision thereof, or what is commonly known as the Year 2000 Problem, then Seller shall not be liable for any delay or failure to perform. If the subject products fail to perform in accordance with the above warranty due to the Year 2000 Problem, Seller's obligation shall be limited to the exercise of reasonable efforts to correct same, but Seller shall not be liable for any delay or such failure.

10. LIMITATIONS OF LIABILITY - Seller's sole and exclusive liability and Buyer's sole and exclusive remedy for breach of this agreement is the repair or replacement of defect Hardware or software. If Seller is unable to make the necessary repairs within a reasonable period of time, at Seller's option, it shall either refund the monies paid or provide a replacement. In no event shall Seller be liable for special, incidental or consequential damages arising from breach of warranty or contract, negligence, strict liability or any other theory, even if Seller is notified of the possibility of such claims.

11. UCC Applicability - Services rendered under this Agreement shall be deemed "goods" within the meaning of the Pennsylvania Uniform Commercial Code.

12. Acceleration - If Buyer defaults hereunder, as its election, Seller may declare Buyer's entire obligation immediately due and payable together with accrued interest, with or without notice. Buyer waives all notices and demands to which it might be entitled under applicable law. Seller may exercise all rights available to it and Buyer agrees that such rights shall be cumulative.

13. Waiver of Default - Seller shall have the absolute unconditional right to enforce any agreement, present or future, between Seller and Buyer in strict accordance with written terms thereof, notwithstanding any prior conduct or custom of Seller in refraining from doing so. Seller may refrain from or postpone enforcement of any agreements without being deemed to have altered any written agreement between the Parties.

14. Legal Fees - If Buyer defaults in one or more payments hereunder, in addition to any other relief, Seller shall be entitled to recover its reasonable attorneys fees (whether or not suit or arbitration is instituted) and court costs and other litigation costs, if any, incurred to collect said payments.

15. Security Agreement - This Agreement constitutes a Security Agreement under the UCC, and as security for the unpaid portion of the purchase price and all other costs and charges hereunder. Buyer grants to Seller a security interest in all the Hardware, software and other goods sold hereunder. To perfect, continue or assign said interest, Buyer agrees to execute and deliver to Seller, financing statements and other documents requested by Seller.

16. Payment Terms and Taxes - Payment is due upon receipt of invoice on domestic sales; by irrevocable letter of credit (U.S. dollars) on foreign sales. Late charge of one (1%) percent per month will be added to balance due after 30 days. Buyer agrees to pay all applicable federal, state or local taxes resulting from this transaction other than taxes on Seller's income and prices are subject to adjustment to reflect such taxes. Prices are f.o.b. Seller's plant, Telford, PA. One copy of each operating manual (two for resellers) will be supplied at no charge; additional copies at
$50.00 each.

17. Assignment - Buyer may not assign or transfer its rights or obligations hereunder without the prior written consent
of Seller.

18. Binding Effect - This Agreement shall not be binding upon Seller until executed by a duly authorized officer at Seller's office in Telford, PA.

19. Title and Risk of Loss - Upon delivery of the Hardware and Software to the f.o.b. point ( Seller's plant at Telford, PA), title and risk of loss shall pass to Buyer who shall procure and maintain adequate insurance designating Seller as a co-insured, for the full replacement value thereof, against damage or loss by fire or other casualty until the purchase price has been paid in full, with companies, in amounts, and in form, reasonably satisfactory to Seller. Upon request of Seller, Buyer shall deliver a certificate of such insurance indicating that the coverage cannot be canceled unless Seller shall have first been given twenty (20) days prior written notice.

20. Software License - Solely in connection with Buyer's use of the products sold or the System developed, under this Agreement, Seller grants to Buyer a personal, nontransferable, nonexclusive license to use the Software, subject to the following conditions:

A. Trade Secret Restrictions. Buyer acknowledges and agrees that the products or System contains trade secrets and proprietary data of Seller including, without limitation, specifications, drawings, instruction books and manuals supplied by Seller. As an express condition of Seller's entering into this Agreement, Buyer agrees: (i) not to reverse engineer, disassemble, decompile, decrypt, modify, alter, translate, make additions to, derive works from, copy, transfer, sublicense, or lease the Software; (ii) to take all reasonable steps to ensure that such trade secrets and proprietary data are not disclosed, duplicated, misappropriated or used in any manner not expressly permitted by the terms of this Agreement by or to any employee, consultant or agent of Buyer or by or to any third party; and (iii) not to remove, or allow to be removed, any copyright, trade secret or other proprietary protection legends or notices from the Software or any portion thereof. Buyer agrees to disclose such trade secret and proprietary data only to employees, consultants and agents of customer with a need to know.

B. Copyright. Copyright in and title to the Software at all times remains vested exclusively in Seller or, as applicable, a third party licensor.

C. Termination. Without prejudice to any other remedy which may be available, Seller may terminate the license to use the Software summarily in writing: i) if Buyer commits any breach of the terms of this license. Buyer acknowledges that its breach of any of the provisions of this Part will cause irreparable harm and significant injury to Seller to an extent that will be extremely difficult to ascertain. Accordingly, Buyer agrees that Seller shall have, in addition to any other rights and remedies available to it, the right to seek an immediate injunction enjoining any breach of any of the provisions of this Part. ii) if Buyer makes an assignment for the benefit of its creditors or files, or there is filed against Buyer, a petition for relief under the Bankruptcy Code, or if a receiver or like person is appointed over the whole or any part of the business.

D. Rights Upon Termination. Upon termination of this license, Seller may demand that Buyer forthwith (i) return to Seller all Software, including all copies and related documentation, in its possession or control, and (ii) erase, delete or otherwise destroy all copies thereof in any equipment or on any computer media. Buyer shall remove any parts of the Software from any derivative software whether or not such derivation was authorized by Seller. Seller may enter upon all premises where such Software is located and take immediate possession of and remove the same, all without any liability to Seller.

E. Survival Upon Termination. The obligations specified in this Section shall survive the expiration and termination of this Agreement.

21. Federal Regulation of Products - While all products and Systems are designed to meet current interpretations of applicable federal laws and regulations, Seller accepts no responsibility with regard thereto.

22. Delivery Dates - Delivery dates are approximate only and are based upon Seller's receipt of all details, Specifications, product/label samples which it requires in order to design, manufacture, integrate and test the Hardware, Software and the System. Seller assumes no responsibility for work of other parties or delays resulting from such work, including without limitation, site preparation, installation, and cabling.

23. Training Sessions - Unless otherwise specifically provided in this Agreement, the Seller is not obliged to perform operational, maintenance or other training for the Buyer. In the case that training sessions are itemized as part of the Seller's services, the Seller is obliged to provide a reasonable number of training sessions at the Buyer's site at the time of installation or at the Seller's plant at some other time reasonably agreeable to the parties. Upon receipt of the Hardware, Software or System, or upon completion of commissioning and training sessions, the Buyer will assume the responsibility for normal operation and maintenance of the System and all included components. Operation of the System during and after the specified warranty period is the full responsibility of the Buyer.

24. Severability - If any portion of this Agreement is held invalid, the parties agree that such invalidity shall not affect the validity of the remaining portions of this Agreement, and the parties further agree to substitute for the invalid provision a valid provision that most closely approximates the economic effect and intent of the invalid provision.

25. Notices - All notices and other communications pertaining to this Agreement shall be in writing and shall be deemed to have been given by a party hereto if personally delivered to the other party or if sent by certified mail, return receipt requested, postage prepaid to the address indicated herein. A notice sent by certified mail shall be deemed to be given on the third business day after the mailing date.

ADDENDUM FOR SYSTEMS AGREEMENT

26. Progress Payments - Payment shall be due in accordance with the following schedule as the
project progresses:

Seller reserves the right to suspend System development at any stage until Buyer's payment obligations hereunder have been met. All payments shall be due at the Stage indicated except that Buyer may withhold the payment due at the System Acceptance Stage pending resolution of outstanding issues concerning System completion, System acceptance, or System functionality, as specified herein.

27. Definitions - As used in this Agreement, the following terms shall have the following meanings:"Hardware" shall mean the System Hardware components as detailed in the deliverables portion of the proposal, including any replacements and upgrades, as well as documentation related thereto. "Hardware" may be manufactured by Accu-Sort or by others. "Software" shall mean the application software developed by Accu-Sort and the third party software developed by others, including all modifications, replacements, updates and enhancements of the foregoing, as well as documentation related thereto. The Deliverables portion of the proposal indicates the software components of the System, and the developer of the software. "System" shall mean the Hardware and Software.