Fonality Terms and Conditions — Effective June 1, 2007

Unless otherwise specified by prior written agreement of the parties, any orders entered into by Fonality, Inc. (“Fonality”), shall be (a) a purchase of the equipment, components or services, and (b) for any software not otherwise licensed under the GNU General Public License (GPL), as described in Section 10, a non-exclusive right to use the software provided or incorporated solely in connection with the product or service with which it was delivered (collectively, the “Product”). All purchases (or licenses) are subject to the following terms and conditions:

1. Orders.

   Orders are not binding until accepted by Fonality, in its sole discretion. Except in the case of a breach, as provided in Section 12, once an order is accepted by Fonality, it may be changed or cancelled only with the written consent of the parties.

2. Payments.

   All prices are F.O.B. Fonality’s facility, Los Angeles, California, payable 100% of the aggregate price before shipment unless otherwise agreed in writing by an authorized Fonality representative. Prices are exclusive of any freight, taxes (sales, use, personal property tax, etc.), duties or imposts, all of which are the responsibility of Buyer. Buyer agrees to pay all amounts due upon receipt of invoice as provided above; plus a service charge of 1-1/2% per month (or portion thereof), or such lesser maximum allowable by law, on all balances not paid within 10 days of the due date. Customer waives the right to process chargebacks on their credit card for Fonality purchases. Notwithstanding any partial payment by Buyer, title to goods shipped shall remain with Fonality until the entire price has been paid; and, if Buyer defaults in the payment of any charges hereunder when due, Fonality may remove and repossess any and all such goods delivered, and may terminate access to any remotely hosted services and cause expiration of any software licenses delivered in conjunction with such goods, in addition to any other legal remedies it may have.

3. Delivery.

   All shipments shall be F.O.B. Fonality, Los Angeles, California, and Buyer shall bear the cost of delivery and handling. Risk of loss shall transfer to Buyer upon delivery of goods to the carrier. Fonality will make every reasonable effort to complete shipment on or before the dates set forth in its written quotation or the face of this order, as applicable; however, Fonality shall not be liable for delay in performance or inability to perform occasioned by acts beyond its reasonable control, including acts of God, fire, flood, strike, war, embargo, government regulation or materials shortage. If performance is delayed by such an event, Fonality shall notify Buyer, and time of performance shall be extended for the period of such contingency.

4. Terms of Service.

   Certain elements of Fonality’s products are delivered as an ongoing service via an Internet connection. Maintenance of a working connection to the Internet is mandatory to have full access to the products and services provided by Fonality. This connection may be disconnected by you at any time, but such disconnection will significantly limit your ability to utilize the products.

5. 30-Day Acceptance Period; Return Policy; Limited Warranty;

   1. Acceptance Period: During the 30-day period following the transfer of title, or such other period specifically agreed in writing in advance by the parties (the “Acceptance Period”), Buyer shall inspect the Product, including the performance of such Product in their network environment, after which time all equipment, components and/or software, as applicable, are deemed accepted. All shipments shall be deemed accepted by Buyer, and Buyer waives the right of rejection, unless Fonality receives a written notice of rejection during the Acceptance Period.
   2. Return Policy: During the Acceptance Period, Buyer may return the Product for any reason. Notification of intent to return must be received by Fonality in writing during the Acceptance Period, and must be approved by an appropriate Fonality representative in writing. No returns will be accepted after the Acceptance Period.
   3. Complete Orders: This Return Policy applies only to complete orders. Returns of partial orders will be at Fonality’s discretion.
   4. Restocking Fee: All returns will be subject to a 15% “reconfiguration/restocking” fee.
   5. Shipping Charges: All Shipping and Handling fees are non-refundable. Buyer is responsible for the cost of return shipping to Fonality.
   6. Breakage / Damaged Goods: All items must be returned in “like new” condition and customer must ship back all materials including, but not limited to, boxes, wires, manuals, and packing materials. Items that are not returned in “like new” condition will not be refunded, and will be returned to the customer at the customer’s expense.
   7. Return Procedure: If, during the Acceptance Period, Buyer has notified Fonality in writing of intent to return the Product, a Return Material Authorization Number (RMA Number) will be issued. All returned goods must be shipped prepaid, clearly marked with an RMA number, and be accompanied by a complete description of the nature of the defect. No return of goods will be accepted by Fonality without an RMA Number obtained from Fonality.
   8. Limited Warranty: Unless provided through a separately purchased maintenance, support or warranty agreement, no warranty is provided by Fonality after the Acceptance Period. All other obligations of Fonality to maintain service or provide warranty repair shall terminate at the end of the Acceptance Period.

6. Manufacturer’s Warranties.

   1. Pass-Through Warranties: Fonality shall extend to Buyer, on a ‘pass through’ basis, any warranty provided by the manufacturer of the purchased equipment and components to the extent permissible. Fonality may assist Buyer with such pass-through warranty service at Fonality’s discretion. Fonality may require a security deposit, pre-payment or prior return of any products or components covered under such a pass-through warranty. Fonality reserves the right to reject any returned products or components which it determines not to be covered under a pass-through warranty, beyond the warranty period, not purchased from Fonality or with damage resulting from mis-use or other actions not covered under the manufacturer’s warranty. Such products or components will be returned to the Buyer at the Buyer’s expense.
   2. Separately Purchased Limited Warranty: Certain equipment provided by Fonality is not covered by a manufacturer’s warranty. For this equipment, a separately purchased Warranty may be available. For equipment covered under a separately purchased “Next-Business-Day Replacement” warranty, as specified in the original invoice (“Covered Equipment”), the following terms and conditions apply:
      1. Fonality warrants to the original purchaser or, for products purchased from a Reseller, to the original end-user that the Covered Equipment will be free from defects in materials and workmanship from the date of shipment for 1 year from the date of shipment or invoice or, if longer, the period stated on your invoice.
      2. During the warranty period, Fonality will, at its option: (1) provide replacement parts and instructions necessary to repair the product or (2) replace the product with a comparable product. To receive any benefits under this warranty, Buyer must assist Fonality in diagnosing issues with the Covered Equipment and follow Fonality’s warranty processes.
      3. If Fonality determines that a replacement part or product is needed, Fonality will ship the part and installation instructions to the Buyer within one business day of such determination. If Buyer is located in the United States or Canada, Fonality will pay the costs of shipping these parts or products to you via overnight air.
      4. Customers outside the United States and Canada are responsible for paying all freight charges incurred in shipping, importing/exporting and receiving replacement products and parts and for arranging and paying for the shipment of any defective part(s) back to the Fonality. All international customers are responsible for all customs duties, VAT and other associated taxes and charges.
      5. Purchasing additional products from Fonality does not extend your warranty period.
      6. If Fonality asks Buyer to return defective parts or products, Buyer must do so within 14 days after receipt of the replacement parts or products. Fonality will charge Buyer for replacement parts or products if Buyer fails to do so.
      7. THIS LIMITED WARRANTY COVERS NORMAL USE. FONALITY DOES NOT WARRANT AND IS NOT RESPONSIBLE FOR DAMAGES CAUSED BY MISUSE, ABUSE, ACCIDENTS, VIRUSES, UNAUTHORIZED SERVICE OR PARTS, OR THE COMBINATION OF COVERED PRODUCTS WITH OTHER PRODUCTS. ANY WARRANTY APPLICABLE TO THIRD-PARTY PRODUCTS IS PROVIDED BY THE ORIGINAL MANUFACTURER.

7. Disclaimer of Warranties; Limitation of Liability.

   1. Disclaimer of Warranties. except as expressly set forth ABOVE, FONALITY provideS the product “as is” and with all faults. FONALITY hereby disclaimS ALL OTHER WARRANTIES, EXPRESS, IMPLIED OR STATUTORY, ARISING BY LAW OR OTHERWISE, INCLUDING BUT NOT LIMITED TO ANY IMPLIED WARRANTies OF MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE OR USE, TITLE and NONINFRINGEMENT, with regard to the product. without limiting the foregoing, FONALITY does not warrant that the product will be free of bugs, errors, viruses or other defects.
   2. (Disclaimer of Certain Damages. IN NO EVENT WILL FONALITY BE LIABLE FOR THE COST OF COVER OR FOR ANY INCIDENTAL, INDIRECT, SPECIAL, PUNITIVE, CONSEQUENTIAL OR SIMILAR DAMAGES OR LIABILITIES WHATSOEVER (INCLUDING, BUT NOT LIMITED TO LOSS OF DATA, INFORMATION, REVENUE, PROFIT OR BUSINESS) ARISING OUT OF OR RELATING TO THE USE OR INABILITY TO USE THE PRODUCT OR OTHERWISE UNDER OR IN CONNECTION WITH THIS EULA OR THE PRODUCT, WHETHER BASED ON CONTRACT, TORT (INCLUDING NEGLIGENCE), STRICT LIABILITY OR OTHER THEORY EVEN IF FONALITY HAS BEEN ADVISED OF THE POSSIBILITY OF SUCH DAMAGES.
   4. Limitation of Liability. FONALITY’S LIABILITY ARISING OUT OF OR RELATING TO THE USE OR INABILITY TO USE THE PRODUCT OR OTHERWISE UNDER OR IN CONNECTION WITH THIS EULA OR THE PRODUCT IS LIMITED TO THE AMOUNT ACTUALLY PAID BY YOU FOR THE PRODUCT REGARDLESS OF THE AMOUNT OF DAMAGES YOU MAY INCUR AND WHETHER BASED ON CONTRACT, TORT (INCLUDING NEGLIGENCE), STRICT LIABILITY OR OTHER THEORY. The foregoing disclaimer of warranties, disclaimer of certain damages and limitation of liability will apply to the maximum extent permitted by applicable law. The laws of some states/jurisdictions do not allow the exclusion of implied warranties or the exclusion or limitation of certain damages. To the extent that those laws apply to this EULA, the exclusions and limitations set forth above may not apply to you. You may have other rights which vary from state to state or province to province. For further warranty information, you may contact Fonality at 200 Corporate Pointe, Suite 350, Culver City, California 90230.

8. Indemnification.

   You agree to hold harmless and defend Fonality, at your expense, from and against any and all third party claims, actions proceedings, and suits and all related liabilities, damages, settlements, penalties, fines, costs or expenses (including, without limitation, reasonable attorneys’ fees and other litigation expenses) incurred by Fonality arising out of or relating to your (a) violation or breach of any term of this license agreement, or (b) misuse of the Product.

9. Support

   During the Acceptance Period, Fonality will provide remote installation and configuration support to Buyer. This support is limited to telephone and email support necessary to remotely get the system performing to specification at the customer’s location, including the identification, but not resolution, of changes required in the customer’s network or communications services. Following successful installation, Fonality support is only available to customers who purchase such support under separate annual software maintenance and support agreements.

10. Open Source Software

    Some software distributed by Fonality is licensed under the GNU General Public License (GPL) (“Open Source Software”). The terms of this license can be found at http://www.gnu.org/licenses/gpl.html.

11. Intellectual Property.

    1. For the purpose of this Section (8), the term “Fonality Intellectual Property” shall mean all intellectual property (including software or programming) delivered hereunder, except for any Open Source software as described in section (7). Any software distributed by Fonality which is licensed under the GNU General Public License (GPL) is specifically excluded from this definition.
    2. All Fonality Intellectual Property is solely for use by Buyer or its customers as shipped, and may not be used as a replication master or otherwise copied without the expressed consent of Fonality. Use of software delivered as a separate item shall be subject to a separate license agreement that Buyer shall be required to accept prior to delivery. Buyer acknowledges that all Fonality Intellectual Property furnished by Fonality hereunder and the contents thereof are the proprietary property of Fonality, and Buyer has no right or interest therein except the nonexclusive right to use it in the product in which it was delivered or as otherwise provided in a written license agreement. Buyer agrees not to directly or indirectly reproduce, decompile or provide or otherwise make available to any third party any Fonality Intellectual Property. Buyer shall be liable for all damages, including loss of anticipatory profits, incurred by Fonality as a result of such unauthorized use, copy or replication. The rights granted hereunder or use of Fonality products does not convey any rights or ownership in Fonality patents, copyrights, trademarks, intellectual property or know-how.

12. Remedies for Breach.

    1. By Fonality: If Fonality shall be in material breach of this Agreement, Buyer may cancel the undelivered portion of purchase orders upon 30 days written notice unless Fonality cures such breach with such notice period. Any money paid in advance by Buyer to Fonality for goods not shipped will be promptly reimbursed. The foregoing shall be the exclusive remedy of Buyer for any Fonality breach of this Agreement.
    2. By Buyer: If Buyer shall be in material breach of this Agreement and fails to cure said breach within 30 days of written notice thereof from Fonality, Fonality shall thereupon have the right without further notice to (1) bill and declare due and payable the aggregate purchase price for all undelivered products under this Agreement, (2) defer shipment hereunder until such default, breach or repudiation is removed, and/or (3) cancel the undelivered portion of this Agreement in whole or in part, with Buyer remaining liable for damages. Further, if Buyer fails to pay any amount hereunder as it becomes due or wrongfully rejects goods hereunder, in addition to any other remedies it may have in law or equity or hereunder, Fonality shall have the right to recover, in addition to the purchase price of such goods, all costs incurred by Fonality to collect the same.
    3. Delayed Enforcement: No delay or omission to exercise any right, power, or remedy upon a breach or default under this Agreement shall impair any such right, power, or remedy of the non-defaulting party or be construed as a waiver of any such breach or default.

13. Ownership.

    The Product is valuable property of Fonality and is protected by copyright and other intellectual property laws and treaties. With the sole exception of software licensed un the the GPL, Fonality owns all right, title and interest in and to the Product and all copyright and other intellectual property rights in the Product.

14. Trademarks.

    These Terms and Conditions do not grant you any rights in connection with any trademarks or service marks of Fonality.

15. Audit.

    Fonality shall have the right to audit your compliance with the terms of this agreement. You agree to grant access to Fonality to facilities, equipment, books, records and documents and to otherwise reasonably cooperate with Fonality in order to facilitate any such audit.

16. Termination.

    Without prejudice to any other rights, Fonality may terminate this EULA if you do not abide by the terms and conditions contained herein. Upon termination of this EULA, you must cease use of the Product and destroy all copies of the Product and all of its component parts. In the event that Fonality terminates a “lifetime buyout” of the TrixboxPro EE or TrixboxPro CCE, as provided for in Section 3 above, Fonality will prorate your upfront payment towards a five-year agreement. No delay or omission to exercise any right, power, or remedy upon a breach or default under this Agreement shall impair any such right, power, or remedy of the non-defaulting party or be construed as a waiver of any such breach or default.

17. Export Restrictions.

    You acknowledge that the Product is subject to U.S. export restrictions. You agree to comply with all applicable laws and regulations that apply to the Product, including without limitation the U.S. Export Administration Regulations.

18. U.S. Government License Rights.

    All Product provided to the U.S. Government is provided with the commercial license rights and restrictions described in this agreement. By installing, copying or using the Product, the U.S. Government agrees that the Product is “commercial computer software” or “commercial computer software documentation” within the meaning of DFAR Section 227.7202 and FAR Section 12.212, as applicable. Any use, modification, reproduction release, performance, display or disclosure of the Product by the U.S. Government shall be governed solely by the term of this license agreement and shall be prohibited except to the extent expressly permitted by the terms of this License Agreement.

19. Governing Law; Jurisdiction.

    Unless expressly prohibited by local law, this agreement and all orders hereunder shall be governed by and construed under the laws of the State of California, U.S.A. without regard to any conflict of law principles to the contrary. The 1980 U.N. Convention on Contracts for the International Sale of Goods or any successor thereto does not apply. You hereby irrevocably submit to jurisdiction of the state and federal courts located in Los Angeles County, California with respect to any proceeding under this agreement or relating to the Product. You will not prosecute any action, suit, proceeding or claim arising under or by reason of this agreement except in such courts.

20. Attorneys’ Fees.

    In any action or proceeding to enforce rights under this Agreement, the prevailing party will be entitled to recover costs and reasonable attorneys’ fees.

21. English Language.

    It is the express wish of the parties that this Agreement and all related documents be drawn up in English.

22. Entire Agreement.

    This agreement sets forth the entire agreement of Fonality and you with respect to the Product and the subject matter hereof and supersedes all prior and contemporaneous understandings and agreements whether written or oral. No amendment, modification or waiver of any of the provisions of this agreement will be valid unless set forth in a written instrument signed by the party to be bound thereby.

23. Severability.

    If any provision of this agreement is held by a court of competent jurisdiction to be invalid, illegal, void, or unenforceable, the remainder of this EULA will remain in full force and effect and shall control.

24. Notices.

    Any notice required or permitted to be sent under this Agreement shall be delivered by first class mail, return receipt requested, or via an international courier service (e.g. FedEx, DHL, UPS, etc.) to the addresses of the parties set forth in this order. Notice so sent will be deemed effective three days following deposit in the mail, proper postage prepaid or one day following delivery to an international courier, prepaid for overnight delivery.

© 2007 Fonality, Inc. All rights reserved. Unauthorized duplication is a violation of applicable laws.