STANDARD TERMS and CONDITIONS of SALE
(SimpleChips Technology Inc. designated below as “Seller”)

1 Scope

The terms and conditions of sale contained herein will apply to all Purchase Orders (Orders) from Buyer accepted by Seller. Such acceptance by Seller is conditional upon Buyer’s acceptance of these terms and conditions irrespective of whether Buyer accepts by written acknowledgement, by implication or by acceptance of product(s) (“Product(s)”) and/or Services (as defined in Section 9 below) ordered herewith.

These terms and conditions and Seller’s Sales Acknowledgement will comprise the entire agreement of the parties relating to Buyer’s Order and will replace and supersede any provisions on Buyer’s Order which are in addition or inconsistent with these terms and conditions.

Provisions, terms and conditions within any Order or other document submitted by Buyer to Seller are hereby expressly rejected and will not be binding upon Seller without its specific written consent. Buyer agrees that Seller’s failure to object to any such provisions, terms or conditions will not constitute Seller’s acceptance of them nor of any waiver of nor modification to provisions in these terms and conditions.

No modification to these terms and conditions will be valid unless in writing and duly signed by a person authorized by Seller. These provisions will not be supplemented by any usage of trade or any course of prior dealings or acquiescence in any course of performance.

2 Orders

All Orders are subject to acceptance by Seller. Seller reserves the right to accept or reject any Order in whole or in part and, without prejudice to any other remedy, to cancel any unfulfilled Order or to suspend Services under or shipment of any unfulfilled Order in the event of any act or omission of Buyer in breach of its obligations or which delays Seller’s performance hereunder.

3 Taxes

All taxes, levies and duties of any nature whatsoever applicable to Products and Services supplied hereunder will be paid by the Buyer unless  Buyer provides Seller with an exemption certificate acceptable to the relevant taxing authority. Unless otherwise specified, the prices shown do not include any taxes.

4 Prices and Payments

All prices are subject to change without notice except prices in a then current written quotation from Seller which will be honored as stated therein. All Orders are also subject to credit approval before shipment. Where Buyer has established credit, payment will be due thirty (30) calendar days from date of invoice. Overdue accounts will bear interest at a rate equal to the lesser of one and one half (1½) percent per month (eighteen (18) percent per annum) or the highest rate permitted by applicable law.

Payments are to be paid in the currency as agreed by the parties in writing. Each shipment will be considered a separate and independent transaction and payment thereof will be made accordingly. If, in the Seller’s judgment, Buyer’s financial condition does not at any time justify payment terms as specified, Seller may cancel or suspend Services under or shipment of any unfulfilled Order unless Buyer shall, upon written notice, immediately pay for any Products to be shipped or Services to be provided or pay in advance for all Products and Services ordered but not shipped or provided, as applicable, or both, at Seller’s option. If, despite of any default by Buyer, Seller elects to continue to make shipments or provide Services, Seller’s action will not constitute a waiver of any default by Buyer or in any way prejudice Seller’s legal remedies for such default.

5 Title and Delivery

Delivery dates are approximate. Seller shall use reasonable efforts to fill all Orders according to the shipment schedule provided by Seller at time of acceptance of the applicable Order; but in no event shall Seller guarantee shipment according to such schedule or be liable for consequential damages due to delays in the delivery. In the case of Orders for wafer prototype Products, despite the number of prototypes for which production is commenced, the number to be delivered by Seller will be subject to Sellers then current production survival rates.

Buyer shall attach to all Orders the necessary information to permit Seller to commence its work, together with any import license and/or permits and related certificates which may be necessary and which will be supplied by Buyer at Buyers expense.

Seller shall make all shipments Free Carrier (or FCA) as defined in the ICC Incoterms 2010, Seller’s production and/or distribution facilities as may be specified by Seller from time to time unless otherwise specified in Sellers Sales Acknowledgment. Title to the Products will pass to Buyer upon delivery thereof by Seller to the carrier. Liability for loss or damage in transit or thereafter will pass to Buyer upon Seller’s delivery of the Products to the carrier for shipment to Buyer. In the absence of specific instructions, Seller shall select the carrier. Any Products held or stored for Buyer shall be at Buyer’s risk and expense if, at Buyer’s request, a shipment is postponed more than thirty (30) days after the date the Products are ready for shipment. Claims against Seller for shortages of Products delivered must be made within thirty (30) days after arrival of shipment to the destination specified in the Order.  Claims against Seller relating to shipping or the carrier must be made within seven (7) days after such arrival date.

Unless otherwise agreed in writing, Seller may make partial shipments and terms and conditions herein contained will apply separately for each shipment.

6 Cancellation and Rescheduling

Unless agreed otherwise in writing by Seller, the following cancellation and rescheduling terms will apply to all Orders:

i) Orders for Products (other than Custom Products) may not be cancelled or requested to be rescheduled by Buyer within thirty (30) days of their original scheduled shipment date(s) (“OSS Date(s)”) except that Orders for such Products subject to a Seller last time buy notice may not be cancelled or requested to be rescheduled by Buyer at any time;
ii) Orders for Custom Products may not be cancelled or requested to be rescheduled by Buyer within ninety (90) days of their OSS Date(s);
iii) Orders for Services, including tooling, may be cancelled or requested to be rescheduled by Buyer at any time subject however in the case of cancellation, to payment by Buyer to Seller of that portion of the purchase price for the Services equal to the portion of the Services performed by the date of receipt of written notice of cancellation by Seller with the amount payable by Buyer being deemed to represent a reasonable estimate of Seller’s liquidated damages and not a penalty; and
iv) Seller shall determine its scheduled shipment date(s) for each Order requested to be rescheduled, as permitted, by Buyer, which date(s) will be used to compute Buyer’s cancellation and rescheduling rights in accordance with the above terms for such rescheduled Order. Cancellation charges will be due and payable within thirty (30) days of receipt of Seller’s invoice for same.

7 Warranty and Limitation of Liability

Subject to the limitations and exclusions below, Seller warrants that the Products will substantially conform with Seller’s published specifications relating to the Products for a period of twelve (12) months from date of shipment for integrated circuits, opto-electronic components and hybrids, and for a period of ninety (90) days from date of shipment for board level products, and the physical media on which the Software is furnished to Buyer. Seller provides no warranty for Software which may be part of or comprise the Products or for prototypes of the Products or for Products subject to development or experimental work which may be supplied to Buyer, all of which being sold AS IS, WITH ALL DEFECTS.

Seller shall incur no liability under this warranty unless:

i) Seller is, within the applicable warranty period, promptly notified in writing by Buyer of discovery of any such non-conforming Products;
ii) Buyer immediately returns upon written authorization from Seller to do so, transportation charges prepaid, such alleged non-conforming Products in the form in which originally shipped, with the Return Material Authorization (RMA) number provided by Seller clearly displayed; and
iii) Seller’s test procedures disclose that the Products do not substantially conform with Seller’s applicable specifications.

In no event, however, shall Seller be responsible for any non-conformance or other defects in the Products due to physical damage to the Products as a result of improper handling during or after shipment, misuse, neglect, improper installation or operation, repair, alteration, accident or for any other cause not attributable to defective workmanship on the part of Seller.

Seller’s liability under this warranty will be limited, at Seller’s option, to either repair or replace such non-conforming Products at its own expense or reimburse Buyer the purchase price paid by Buyer to Seller for such Products; in no event will the damages for which Seller may be liable to Buyer for breach of this warranty exceed the purchase price paid by Buyer for such Products. Any Products which are replaced or repaired hereunder will carry only the unexpired term of the warranty applicable to such replaced or repaired Products. Any amounts payable by Seller hereunder are based on the purchase price of the Products supplied and the scope of liability as set out in this Paragraph and are unrelated to the value of Buyers products or business generally.

THE LIMITED WARRANTY STATED ABOVE IS THE EXCLUSIVE WARRANTY PROVIDED BY SELLER AND IS MADE IN LIEU OF ANY OTHER REPRESENTATION, GUARANTEE, CONDITION OR WARRANTY, EXPRESSED, IMPLIED OR STATUTORY, RELATED TO THE SALE OR SUPPLY OF THE PRODUCTS OR THEIR USE BY BUYER OR OTHERS, INCLUDING WITHOUT LIMITATION ANY IMPLIED CONDITIONS AND WARRANTIES OF MERCHANTABILITY AND FITNESS FOR A PARTICULAR PURPOSE, WHICH ARE SPECIFICALLY DISCLAIMED. SHOULD SELLER BE FOUND LIABLE FOR LOSS, DAMAGE OR INJURY OF BUYER DUE TO A FAILURE OF THE PRODUCTS TO COMPLY WITH THE LIMITED WARRANTY STATED ABOVE, THE EXCLUSIVE REMEDY OF BUYER AND THE SOLE OBLIGATION AND ENTIRE LIABILITY OF SELLER WILL BE LIMITED TO THAT STATED IN THE LIMITED WARRANTY AS THE AGREED UPON LIQUIDATED DAMAGES AND NOT AS A PENALTY AND IS IN LIEU OF ALL OTHER OBLIGATIONS OR LIABILITIES OF SELLER TO BUYER WHATSOEVER AND HOWSOEVER ARISING IN ANY WAY RELATED TO THE SALE OR SUPPLY OF THE PRODUCTS OR THEIR USE OR OTHERWISE WHETHER ARISING IN CONTRACT, TORT OR OTHERWISE. THE PROVISIONS OF THIS PARAGRAPH WILL APPLY IF LOSS, DAMAGE OR INJURY (IRRESPECTIVE OF CAUSE OR ORIGIN) RESULTS DIRECTLY OR INDIRECTLY TO ANY PERSON OR PROPERTY FROM PERFORMANCE OR NON-PERFORMANCE OF ANY OBLIGATIONS HEREUNDER OR FROM NEGLIGENCE OF SELLER, ITS EMPLOYEES OR AGENTS. IN NO EVENT SHALL SELLER BE LIABLE TO PAY ANY INDIRECT, INCIDENTAL, SPECIAL, EXEMPLARY OR CONSEQUENTIAL DAMAGES IN RESPECT OF ANY LOSS, DAMAGE OR INJURY ARISING
HEREUNDER OR IN ANY WAY RELATED TO THE ACCEPTANCE BY SELLER OF ANY ORDER, THE SALE OR SUPPLY OF THE PRODUCTS OR SERVICES, THEIR USE OR OTHERWISE WHETHER FOR LOSS OF PROFITS, BUSINESS REVENUES OR OTHERWISE.

The limited warranty set out above will not be enlarged, diminished or affected by and no obligation or liability will arise out of Sellers rendering of technical or other advice in connection with the Products or Services covered by an Order accepted by Seller.

Buyer shall indemnify, defend and hold Seller harmless from any expense and loss resulting from claims of personal injury and property damage from any third parties, whether founded in tort or otherwise, where such claims are based upon or arise out of Buyers use or resale of any of the Products and Services.

8 Seller’s Ownership of Cells, Photomasks, etc.

Unless agreed otherwise in writing by Seller, Seller shall retain title to and possession of all its proprietary technology, including but not limited to any integrated circuits, cells, designs, design elements, photomasks, tools, models, patterns, dies, molds, jigs, fixtures, manufacturing processes and know-how, developed, made or obtained by or for Seller or used by Seller for furnishing Products, Custom Products (as defined in Section 9 below) and Services under any Order accepted by Seller. Seller may use this technology, in whole or in part, even if developed expressly for use in Custom Products, in any Products.

9 Custom Products and Services

For products manufactured in whole or in part to Buyer’s designs, specifications or instructions such as semi-custom Application Specific Integrated Circuits (ASICs) and full custom products (Custom Products), Seller warrants only that the Custom Products will substantially conform at the date of shipment to such designs, specifications and instructions accepted in writing by Seller. This warranty is subject to the limitations and exclusions set out in Section 7 Warranty and Limitation of Liability above (except for the first paragraph thereof which does not apply to Custom Products).

Seller provides no representation, guarantee, condition or warranty, expressed or implied, with respect to:

i) the correctness or applicability of Buyers designs, specifications or instructions for the Custom Products,
ii) the functionality or performance of the Custom Products or any products derived from or using any of the Custom Products supplied hereunder,
iii) the yield that Buyer may experience with the wafer Custom Products supplied by Seller which have not been required to be fully tested by Seller, or
iv) any Software which may be part of or comprise the Custom Products or any prototypes of Custom Products which may be supplied to Buyer, both being sold AS IS, WITH ALL DEFECTS.

Buyer shall retain title to the photomasks which it provides to Seller under license free of charge to enable Seller to furnish the Custom Products hereunder.

Development and engineering design services, including but not limited to those with associated non-recurring engineering charges, as well as other than normal product testing and wafer fabrication process services on externally sourced wafers that are provided by Seller (Services) are provided by Seller on a reasonable efforts basis. Seller retains sole discretion to assign and control its staff in the performance of Services. Development times and milestones provided by Seller for Services are estimates only. No guarantee, condition, warranty or representation is made by Seller with regard to the success, timeliness, or successful result of the Services. Design changes may be necessary to correct unanticipated deficiencies resulting from manufacturing process, functional/operational or other anomalies. Revisions, modifications or testing requested by Buyer that are beyond the original scope of any Order accepted by Seller may result in additional charges to Buyer.

10 Software License

Unless agreed otherwise in writing such as in a separate license agreement between Seller and Buyer, Buyer is hereby granted a non-exclusive, paid-up license only to use any Software delivered as part of or comprising the Products supplied hereunder. The term “Software” as used herein means computer programs in machine readable code, provided on magnetic tape, disk, semiconductor device or other storage media and includes all documentation used to describe, maintain and use such programs as well as any improvements, revisions updates and enhancements provided at the option of Seller from time to time. No title or ownership right in or to such Software is hereby granted to Buyer; such rights will remain with Seller or Seller’s suppliers, as appropriate.

Buyer shall hold such Software in confidence and protect it from disclosure to other than Buyer’s authorized employees to whom disclosure is required on a “need to know” basis. Buyer shall not copy or modify such Software either in whole or in part and shall promptly return to Seller any Software which has been replaced, modified or updated by Seller.

Buyer shall have the right to assign or sublicense, as required, this license to any party who acquires the Products from Buyer provided that Seller must first consent to such assignment or sublicense in writing and any such assignee or sublicensee shall agree in writing with Seller to abide by the terms and conditions of this license and the other terms set out herein as may be applicable.

Any Software provided to Buyer which requires installation or loading of data by Buyer for its operation and/or is capable of modification by Buyer may be subject to additional terms and conditions as prescribed by Seller.

Buyer’s obligations under this license will survive its termination regardless of the cause of termination.

11 Substitutions and Modifications

Seller reserves the right to modify the specifications of Products designed by or for Seller without notice provided that the modification will not materially affect the performance, form, or fit of the affected Products.

12 Force Majeure

Neither Buyer nor Seller shall be liable for failures in performance, including delay or nonshipment, resulting from acts or events beyond its reasonable control. Such acts or events will include, but not be limited to, acts of God, civil or military authority, civil disturbance, fire, strikes, lockouts or slowdowns, factory or labor conditions, errors in manufacture, inability to obtain necessary labor, materials or manufacturing facilities, delayed issuance of export control licenses, or other “force majeure” events beyond the reasonable control of the non-performing party. In the event of such delay, the date of shipment will, at the request of Seller, be deferred for a period equal to the time lost by reason of the delay and
otherwise for a reasonable time.

13 Intellectual Property Rights Indemnity

Buyer shall indemnify, defend and hold Seller harmless against any expense and loss resulting from:

i) any claim of actual or alleged infringement or contributory infringement of any patent, copyright, mask work, or other industrial or intellectual property rights of any other person granted or used at the time of acceptance of the applicable Order (collectively Specified IPRs) arising from compliance by Seller with Buyer’s designs, specifications or instructions; and
ii) any claim of actual or alleged infringement or contributory infringement of any Specified IPRs which relates to the use or sale of any of the Products or the provision of any of the Services in a manner or for a purpose not specified by Seller or to any modification of the Products or Services unauthorized by Seller or to the use or sale of any product, equipment, device, machine or process which includes any of the Products or the combination of Products with other Products so supplied.

The sale or supply of Products and Services by Seller will neither convey nor grant, except as otherwise provided in Section 10 above, any right, title, interest or license, by implication, estoppel, or otherwise, under any patent, copyright, mask work, or other industrial or intellectual property rights covering combinations of the Products with other products, equipment, devices or machines or processes in which any of the Products may be used.

Subject to the foregoing and the limitations set forth below, Seller shall indemnify, defend and hold Buyer harmless against any expense and loss resulting from a claim against Buyer that any of the Products made to Seller’s design by or for Seller infringe any Specified IPRs provided:

i) Seller is notified promptly in writing by Buyer of any notice of such claim;
ii) Seller is given full authority and control of the defense of such claim and all negotiations for its settlement or compromise; and
iii) Buyer has not made and will not make any admission in respect to such alleged infringement.

In the event any of the Products become, or in Seller’s opinion, are likely to become the subject of a claim of infringement of any Specified IPRs, or if the use of any of the Products is enjoined in any such infringement suit, Seller shall at its option and expense either procure for Buyer the right to continue use of such Products, replace such Products with noninfringing products, modify such Products so that they become non-infringing, or accept the return of the affected Products and refund Buyer the depreciated purchase price thereof. In no event will Seller’s total liability to Buyer under the foregoing indemnity exceed the purchase price of the allegedly infringing Products paid by Buyer.

Seller makes no express or implied condition, representation or warranty that the Products or Services will not infringe any patent, copyright, mask work or other industrial or intellectual property rights. The foregoing states the entire liability of Seller with respect to infringement of patents, copyrights, mask works and other industrial or intellectual property rights by the Products and Services.

14 Assignment

Buyer may neither assign nor transfer its rights to any Order accepted by Seller, by operation of law or otherwise, without the prior written consent of Seller. Seller’s affiliated companies may participate in Seller’s performance hereunder.

15 Governing Law and Dispute Resolution

The laws of the State of California applicable therein, excluding conflict of law rules, will govern any Order accepted by Seller. The United Nations Convention on Contracts for the International Sale of Goods (Vienna Convention) will not apply to any such Order.

If Buyer fails to perform any of its obligations under any Order accepted by Seller, Buyer shall pay Seller all costs and expenses incurred by Seller in enforcing Sellers rights relating to such Order, whether by formal proceedings or otherwise, including all attorney’s fees, in addition to any other remedy available to Seller.

16 Waiver

No waiver by either party of any breach of any of these terms and conditions by the other party will be deemed to constitute a waiver of any other breach nor will any delay or omission on the part of either party to exercise or avail itself of any right or remedy hereunder operate as a waiver thereof. A waiver given by a party hereunder will be binding upon such party only if in writing and signed by such party.

17 Export Controls

Buyer agrees that any export or re-export by it of Products or Services purchased hereunder shall be in strict compliance with all applicable export control laws and regulations. Buyer agrees to promptly inform Seller if information provided by Buyer to Seller or the resulting Products or Services are subject to export control laws or regulations.