SANYO Semiconductor (U.S.A.) Corporation

1. Delivery.
   Delivery or shipping dates are approximate only and merely represent SANYO’s best estimate of the time required to make delivery or shipment.
   Time is not of the essence with respect to the transaction(s) covered by this Agreement, except with respect to Buyer’s obligation to make all related payments.
   SANYO’s obligations hereunder will be dependent upon SANYO’s ability to obtain the necessary raw materials.
   SANYO will not be liable for any loss or expense (direct, incidental, indirect, economic, consequential or otherwise) incurred by Buyer as a result of any delay in delivery for any reason other than arbitrary refusal by SANYO to perform without cause.
   Lead time on orders and rescheduling are governed at SANYO’s discretion.
2. Title Passage for Sales.
   Except as otherwise expressly stated herein, all deliveries hereunder will be FOB Los Angeles, California via a carrier selected by Buyer at its option, or otherwise by SANYO, freight collect, to Buyer and will be packed in SANYO’s standard commercial shipping packages.
   In all such cases title and risk of loss or damage will pass to Buyer upon SANYO’s delivery of the Products to the carrier for shipment to Buyer and no loss or damage will relieve Buyer of any obligation hereunder, including payment for lost or damaged Products.
   Charges for shipping may not reflect net transportation costs paid by SANYO.
   Buyer shall reimburse SANYO for any and all costs of storage incurred by SANYO after the date that SANYO is prepared to make shipment.
3. Insurance.
   Buyer will pay, or reimburse SANYO for, all insurance on the products.
   Any insurance proceeds collected by Buyer for SANYO’s account will be promptly remitted to SANYO in U.S. Dollars.
   Any insurance policies purchased, whether by Buyer or SANYO, will be for the benefit of SANYO, whether or not SANYO is named as an insured in such policies, until title and risk of loss or damage to the Products pass to Buyer.
   Where possible, all insurance policies will provide that they are for the benefit of SANYO and Buyer “as their interests may appear.”

BUYER’S FINANCIAL CONDITION.

This Agreement and all shipments made hereunder shall at all times be subject to the approval by SANYO of Buyer’s financial condition.
If the financial condition of Buyer at any time becomes unsatisfactory to SANYO, in SANYO’s sole discretion, or if Buyer fails to make any payment when due, in addition to any other rights SANYO may have, SANYO may defer or decline to make any shipment or shipments hereunder or may condition any such shipment upon receipt of satisfactory security or cash payments in advance.

PAYMENT TERMS.

Except as otherwise expressly stated herein, SANYO shall invoice Buyer at the time of shipment of each installment on payment terms of cash in advance, except where open account credit is established and maintained to SANYO’s satisfaction, in which case payment terms shall be net thirty (30) calendar days from date of shipment.
All payments shall be in U.S. Dollars.
Buyer shall make all payments as provided herein without regard to whether Buyer has made or may make any inspection or use of any Products.
No discounts or setoffs shall be made by Buyer against any invoices unless approved in advance by SANYO.
Any invoiced amount which is not paid when due may bear interest at the rate of one and one-half percent (1 1/2 %) per month or the highest rate then permitted by law, whichever is less, until paid in full.
SANYO reserves the right to exercise any of its lawful remedies if Buyer does not make payments when due.
Buyer shall promptly reimburse SANYO for all costs and expenses, including attorneys’ fees, incurred by SANYO in collecting sums due it hereunder.

SECURITY INTEREST.

Buyer hereby grants to SANYO a security interest in all Products and all proceeds and products thereof until all amounts due or to become due hereunder have been paid.
Any repossession and removal of Products shall be without prejudice to any of SANYO’s other remedies at law or in equity.
Buyer agrees, at any time and without further consideration, to do or cause to be done, executed and delivered, all such further acts and instruments (including without limitation financing statements appropriate for filing) as SANYO may reasonably request in order to perfect SANYO’s security interest.

FORCE MAJEURE.

SANYO shall not be liable for delay in performance or nonperformance of any of its obligations hereunder, in whole or in part, if such performance is rendered impracticable by the occurrence of any contingency or condition beyond the control of either SANYO or SANYO’s suppliers, including without limitation war, sabotage, embargo, riot, terrorism, or other civil commotion, failure or delay in transportation, act of any government or any court or administrative agency thereof (whether or not such action proves to be invalid), labor dispute (whether or not involving SANYO’s employees), accident, fire, explosion, flood, earthquake or other casualty, shortage of labor, fuel, energy, raw materials or machinery or technical failure.
If any such contingency or condition occurs, SANYO may allocate production and deliveries in any reasonable manner and may include in such allocation any regular customers, whether or not then under contract, and SANYO’s own requirements.
If, as a result of any such contingency, SANYO’s performance is delayed by more than six (6) months, the prices set forth herein shall be subject to appropriate adjustment by SANYO.

LIMITED WARRANTY; SUSTAINABILITY.

1. Except as otherwise stated herein or in an order acknowledgment (if any) delivered to Buyer, SANYO warrants to Buyer that the Products (1) shall be free of defects in materials and workmanship for the warranty periods (“Warranty Period”) from date of shipment to Buyer; and (2) shall be free of liens and encumbrances when shipped to Buyer.
   If SANYO agrees in writing to provide and does provide system design, drawings, technical advice, or any other services to Buyer in connection with Products, then SANYO further warrants to Buyer during the applicable Warranty Period that such services shall be undertaken in accordance with SANYO’s reasonable technical judgment based on SANYO’s understanding of pertinent technical date as of the date of performance of such services.
   SANYO’s warranties will not apply to any Product with respect to which there has been (i) improper installation or testing, (ii) failure to provide a suitable operating environment, (iii) use of the Product for purposes other than that for which it was designed, (iv) failure to monitor or operate the Product in accordance with applicable SANYO specifications and good industry practice, (v) unauthorized attachment or removal or alteration of any part of the Product, (vi) unusual mechanical, physical or electrical stress, (vii) modifications or repairs done by other than SANYO, (viii) mishandling during shipment of the Product; or (ix) any other abuse, misuse, neglect or accident.
   In no circumstance shall SANYO have any liability or obligation with respect to expenses, liabilities or losses associated with the installation or removal of any Product or the installation or removal of any components for inspection, testing or redesign occasioned by any defect or by repair or replacement of a Product.
2. Buyer shall notify SANYO in writing promptly (and in no case later than thirty (30) calendar days after discovery) of the failure of any Product to conform to the warranty set forth above, shall describe in commercially reasonable detail in such notice the symptoms associated with such failure, and shall provide to SANYO the opportunity to inspect such Products as installed, if possible.
   The notice must be received by SANYO during the Warranty Period for such Product.
   Unless otherwise directed in writing by SANYO, within thirty (30) calendar days after submitting such notice, Buyer shall package the allegedly defective Product in its original shipping carton(s) or a functional equivalent and shall ship it to SANYO.
3. Within a reasonable time after receipt of the allegedly defective Products and verification by SANYO that the Products fail to meet the warranty set forth above, SANYO shall correct such failure by, at SANYO’s option, either (i) modifying or repairing the Products or (ii) replacing the Products.
   Such modification, repair or replacement and the return shipment of the Products with minimum insurance to Buyer shall be at SANYO’s expense.
   Buyer shall bear the risk of loss or damage in transit, and may insure the Products.
   Buyer shall reimburse SANYO for transportation costs incurred for Products returned but found by SANYO not to be defective.
   Modification or repair of Products may, at SANYO’s option, take place either at SANYO’s facilities or at Buyer’s premises.
   If SANYO is unable to modify, repair or replace Products to conform to the warranty set forth above, then SANYO shall, at SANYO’s option, either refund to Buyer or credit to Buyer’s account the purchase price of the Products less depreciation calculated on a straight-line basis over SANYO’s stated Warranty Period.
   THESE REMEDIES SHALL BE BUYER’S EXCLUSIVE REMEDIES FOR BREACH OF WARRANTY.
4. EXCEPT FOR THE EXPRESS WARRANTY SET FORTH ABOVE, SANYO MAKES NO OTHER REPRESENTATIONS, WARRANTIES OR CONDITIONS, EXPRESS OR IMPLIED, STATUTORY OR OTHERWISE, REGARDING THE PRODUCTS, THEIR FITNESS FOR ANY PURPOSE, THEIR QUALITY, THEIR MERCHANTABILITY, THEIR NONINFRINGEMENT, OR OTHERWISE.
   NO EMPLOYEE OF SANYO OR ANY OTHER PARTY IS AUTHORIZED TO MAKE ANY OTHER REPRESENTATIONS, WARRANTIES, OR CONDITIONS FOR THE GOODS OTHER THAN THE WARRANTY SET FORTH HEREIN.
   SANYO’S LIABILITY UNDER THE WARRANTY SHALL BE LIMITED TO A REFUND OF THE PURCHASE PRICE OF THE PRODUCT.
   IN NO EVENT SHALL SANYO BE LIABLE FOR THE COST OF PROCUREMENT OR INSTALLATION OF SUBSTITUTE GOODS BY BUYER OR FOR ANY SPECIAL, CONSEQUENTIAL, INDIRECT OR INCIDENTAL DAMAGES.
5. Buyer assumes the risk and agrees to indemnify SANYO against and hold SANYO harmless from all liability relating to (i) assessing the suitability for Buyer’s intended use of the Products and of any system design or drawing and (ii) determining the compliance of Buyer’s use of the Products with applicable laws, regulations, codes and standards.
   Buyer retains and accepts full responsibility for all warranty and other claims relating to, or arising from, Buyer’s products which include or incorporate Products or components manufactured or supplied by SANYO.
   Buyer is solely responsible for any and all representations and warranties regarding the products made or authorized by Buyer.
   Buyer will indemnify SANYO and hold SANYO harmless from any liability, claims, loss, cost or expenses (including legal fees) attributable to Buyer’s products or representations or warranties concerning same.

LIMITATION OF LIABILITY; INDEMNITY.

Notwithstanding any other provision herein or in any other document or communication, (a) SANYO’s liability and obligations with respect to any claim(s) resulting or arising from or relating to this Agreement, whether in contract, strict liability, tort or otherwise, and even if Buyer’s exclusive remedy fails of its essential purpose, shall in no event exceed in the aggregate the total purchase price received by SANYO for the Products (or, in the case of obligations arising from or relating to particular Products or services rendered in connection herewith, the purchase price of such Products or amount received by SANYO for such services, respectively), and (b) SANYO shall in no event be liable to Buyer or any other person or entity, whether in contract, strict liability, tort or otherwise, for special, indirect or consequential damages of any kind whatsoever, or claims of any third parties.
By accepting delivery of the Products ordered, Buyer agrees that it indemnifies and holds harmless SANYO from and against all claims, loss, damage and liability, including without limitation for personal injury, property damage or commercial loss of whatever kind, directly or indirectly arising from or relating to the hazards inherent in Buyer’s facilities or activities.

MEDICAL AND MILITARY APPLICATIONS.

In connection with any anticipated use of Products by Buyer in medical applications, except for SANYO’s Precision Interconnect Products, Buyer acknowledges and agrees that:

1. SANYO’s Products are manufactured under normal industrial conditions, which may not satisfy the requirements applicable to products manufactured for certain medical applications.
   It is the sole responsibility of persons contemplating medical uses of SANYO’s Products to comply with all applicable laws, regulations, codes and standards, including but not limited to the U.S. Federal Food, Drug and Cosmetic Act and regulations of the Food and Drug Administration.
   SANYO’s Products have not been designed, manufactured, tested or qualified for use in certain medical applications (including life support systems) and SANYO has not sought or received any rulings from the FDA or any other federal, state, or local government agency as to the safety, effectiveness or appropriateness of its Products for such applications.
   Persons intending to evaluate or to use SANYO’s Products for medical purposes must rely on their own medical and legal judgment without any representation on SANYO’s part.
2. Buyer shall not use the Products purchased from SANYO hereunder for military purposes, nor shall directly or indirectly use them in the development, production or handling of conventional weapons or weapons of mass destruction, including without limitation, nuclear weapons, chemical weapons or biological weapons and missiles.
   Moreover, Buyer shall not sell or transfer the Products to a third party or parties who, Buyer knows or there is a sufficient reason to suspect so, might use the Products for military purposes or might directly or indirectly use the Products in the development, production or handling of conventional weapons or weapons of mass destruction, including but not limited to, nuclear, chemical or biological weapons and missiles.
3. Buyer will indemnify, defend, and hold harmless SANYO and its officers, directors, employees, agents, and contractors from and against any and all losses, claims, damages, liabilities, and expenses (including attorneys’ fees) arising out of or based upon any bodily injury or property damage arising from Buyer’s incorporation of Products as part of any product made by Buyer for medical or military applications.
   SANYO shall give Buyer written notice of any such claim and shall cooperate in the defense of such claim at Buyer’s expense.

ACCEPTANCE; RETURNS.

Buyer shall inspect Products promptly upon their receipt.
Unless Buyer notifies SANYO in writing within thirty (30) calendar days after the receipt of Products or the rendering of services that the Products or services are nonconforming, describing the nonconformity in commercially reasonable detail, Buyer shall be deemed to have accepted the Products or services.
Acceptance as aforesaid shall constitute acknowledgment of full performance by SANYO of all its obligations hereunder.
No products delivered and accepted under this Agreement are subject to returns except upon (a) written approval of SANYO and (b) payment of a fair and equitable restocking charge as determined by SANYO’s restocking charge policy at the time of return.

PATENTS.

SANYO agrees to settle or defend any suit or proceeding brought against Buyer insofar as such suit or proceeding is based on a claim that any Product constitutes direct infringement of any issue United States patent.
SANYO shall pay all damages and costs finally awarded therein against Buyer, provided SANYO is informed by Buyer in writing within ten (10) calendar days after receipt by Buyer and furnished a copy of each communication, notice or other action relating to the alleged infringement and is given all authority (including the right to exclusive control of the defense of any suit or proceeding), information and assistance necessary to settle or defend such suit or proceeding.
In the event such Product or any part thereof is, in such suit, held to constitute infringement and the use of such Product or part thereof is enjoined, SANYO shall, by its own election and at its own expense, either (a) procure for Buyer the right to continue using such Product, or modify it so that it becomes non-infringing, or 9b) remove such Product, or part thereof, and grant Buyer a credit thereon and accept its return.
SANYO shall not be obligated to settle or defend any suit or proceeding, or be liable for any costs or damages, if the Buyer is in breach of any term herein or the alleged infringement arises out of compliance with Buyer’s specifications or any addition to or modification of the Product after delivery thereof or from use of the Product or any part thereof in conjunction with other goods or in the practice of a process.
SANYO’s obligations hereunder shall not apply to any alleged infringement occurring after Buyer has received notice of such alleged infringement unless SANYO thereafter gives Buyer express written consent for such continuing alleged infringement.
SANYO shall not be bound in any manner by any settlement hereunder made without its prior express written consent, NOR SHALL SANYO BY LIABLE FOR ANY INCIDENTAL OR CONSEQUENTIAL DAMAGES ARISING OUT OF PATENT INFRINGEMENT.
SANYO’s liability hereunder shall not exceed the purchase price paid by Buyer for the allegedly infringing Product.
If infringement is alleged prior to completion of delivery of a Product, SANYO may decline to make further shipments without being in breach of this Agreement.
THE FOREGOING STATES THE SOLE AND EXCLUSIVE LIABILITY OF SANYO FOR PATENT INFRINGEMENT AND IS IN LIEU OF ANY AND ALL REPRESENTATIONS, WARRANTIES, OR CONDITIONS EXPRESS OR IMPLIED, IN REGARD THERETO.
Buyer agrees, at its expense, to settle or defend and to pay costs and damages finally awarded in any suit or proceeding against SANYO based on an allegation that any Product furnished hereunder according to designs or specifications furnished by Buyer infringes any patent or other intellectual property right, provided Buyer is promptly notified in writing of such suit or proceeding and is given all authority (including the right to exclusive control of the defense of any suit or proceeding), information and assistance necessary to defend or settle any such suit or proceeding.

PROPERTY FURNISHED BY BUYER.

If Buyer furnishes any components, tools, dies, jigs or other property, equipment, material, or facilities to SANYO in connection with the performance of this Agreement, Buyer shall bear all risk of loss or damage with respect to such property, equipment, material, or facilities and shall indemnify and hold SANYO harmless from and against all loss, cost, expense or liability arising in connection with its use of any such property, equipment, material, or facilities.
SANYO shall not be responsible for any delay in performance or nonperformance hereunder or the failure of any product to conform to applicable specifications resulting, in whole or in part, from SANYO’s use of property, equipment, material, or facilities furnished by Buyer.

PROPRIETARY INFORMATION.

As used herein, the term “Proprietary Information” includes any information, material or apparatus, of a confidential or proprietary nature obtained from SANYO and any information obtained from SANYO which is not readily available to SANYO’s competitors and which, if known by a competitor of SANYO, might lessen any competitive advantage of SANYO or give such competitor a competitive advantage.
SANYO retains ownership of all Proprietary Information, whether written, oral, electronic, visual, graphic, photographic, observational or otherwise, and all documentation which contains Proprietary Information.
Buyer shall not disclose, duplicate or reproduce any Proprietary Information, in whole or in part, nor shall Buyer use any Proprietary Information other than in the course of performing its obligations hereunder.
Buyer shall take all reasonable steps to prevent the disclosure, duplication or reproduction of any Proprietary Information.
Buyer shall limit access to the Proprietary Information to those employees of Buyer with a valid need to know who are obligated under contract to maintain the confidentiality of such types of information.
Notwithstanding the foregoing, Buyer shall not be required to refrain from disclosing or using any Proprietary Information which has become rightfully known to Buyer if the original source of such Proprietary Information was not SANYO or any person or party affiliated with SANYO or having a relationship of confidentiality with or an obligation of confidentiality to SANYO.
Upon request of SANYO or termination of this Agreement, Buyer shall immediately return any Proprietary Information provided, including all copies made by Buyer.

CANCELLATION.

Neither this Agreement nor any release hereunder is subject to cancellation by Buyer except upon (a) written request of Buyer and (b) written approval of SANYO, which may be granted or withheld in SANYO’s sole and absolute discretion.
Because SANYO’s expenses related to canceling firm orders are dependent upon (i) SANYO’s inventory carrying costs, (ii) the likelihood of SANYO quickly selling the subject Products to other buyers, (iii) SANYO’s other related out-of-pocket costs, and (iv) administrative and other costs, SANYO may charge Buyer a cancellation fee.

CANCELLATION OF STANDARD PRODUCT.

If SANYO determines the Product being cancelled to be a ”standard” Product, the SANYO may charge a cancellation charge according to the (a) quantity being canceled, (b) time frame between Buyer’s request to SANYO to cancel and the order’s scheduled ship ate, and (c) dollar amount of order being cancelled.
The calculation of the exact cancellation charge will be at SANYO’s discretion.

CANCELLATION OF CUSTOM PRODUCT.

If SANYO determines the Product being cancelled to be a “custom” Product, as defined by SANYO (generally, a product manufactured in accordance with the Buyer’s specifications), SANYO may deny Buyer’s cancellation request.
If SANYO permits the cancellation of a custom Product, buyer agrees to pay SANYO for all of SANYO’s out-of-pocket costs associated with the cancellation of the order including, but not limited to: (i) raw materials, (ii) work in process, (iii) inventory carrying costs, (iv) scrapping and disposal fees, and (v) a reasonable and equitable profit for SANYO, which shall not be less than twenty-five percent (25%) of such costs.
In no case will the cancellation charge be less than SANYO’s actual costs (including overhead and other indirect costs).
The amount of cancellation charge to be charged to Buyer shall be determined at the sole discretion of SANYO and may equal one hundred percent (100%) of the amount of the order at the time of SANYO’s receipt of Buyer’s request for cancellation.
Buyer is entitled to receive a written notice from SANYO setting forth how the cancellation charge was calculated.
Upon payment of the cancellation charge, Buyer shall be entitled to receive all raw materials and work in process, and SANYO agrees to ship such goods to Buyer at Buyer’s expense.

SANYO reserves the right, by written notice of default, to cancel any order, without liability to Buyer, in the event of the happening of any of the following: insolvency of Buyer, the filing of a voluntary petition in bankruptcy by Buyer, the filing of an involuntary petition to have Buyer declared bankrupt, the appointment of a receive or trustee for Buyer, the execution by Buyer of an assignment for the benefit of creditors, the discontinuance of business by Buyer, or the sale by Buyer of the bulk of its assets other than in the usual course of business.

RESCHEDULES.

Buyer may only reschedule an order with SANYO’s written consent, which may be granted or withheld in SANYO’s sole and absolute discretion.
A reschedule should not extend further than an additional thirty (30) calendar days from original ship date requested.
Reschedules may be subject to a ten percent (10%) penalty, as determined by SANYO, based on total amount of the order or portion of the order rescheduled.

RESALE OF PRODUCTS.

Buyer agrees that it shall not resell any Products purchased from SANYO unless Buyer is an authorized distributor of SANYO’s products.
SANYO shall not be obligated to provide any warranty service or other technical support for any Products not purchased directly from SANYO or any authorized distributor of SANYO.

SPECIAL PACKAGING.

Buyer requests for special packaging will be considered on a case-by-case basis.

NO LICENSE.

Neither this Agreement nor purchase of any Products hereunder shall be construed to confer upon Buyer or its customers any license under any patent or other proprietary rights of SANYO, except the right to use such goods for the purposes for which they are sold.
Tooling, set-up, fitting-up, drawings, design information, non-recurring engineering, and partial preparation charges when invoiced cover only part of the cost thereof to SANYO.
Buyer does not acquire any right, title or interest in any tooling, set-up, fitting-up, drawings, design information, or invention or other intellectual property resulting therefrom, which remain the sole property of SANYO.

NON-WAIVER OF DEFAULT.

No failure by SANYO to insist on strict performance of any term or condition hereof shall constitute a waiver of such term or condition or any breach thereof, nor shall such failure in any way affect SANYO’s legal remedies with respect to any default by Buyer hereunder.

APPLICABLE LAW.

This Agreement and the sale of goods and services hereunder shall be governed by and construed in accordance with the laws of the State of New Jersey, excluding laws directing the application of the laws of another jurisdiction, and Buyer hereby attorns to such exclusive jurisdiction.
The United Nations Convention on Contracts for the International Sale of Goods will no, for any purpose, govern or apply to the sale of goods and services or any transactions, performance or disputes hereunder.

ASSIGNMENT.

Buyer may not transfer or assign this Agreement or any interest herein, by operation of law or otherwise, without the prior express written consent of SANYO, which may be granted or withheld in SANYO’s sole and absolute discretion.
Any attempted transfer or assignment without such consent shall be void.
SANYO may assign its rights and delegate its duties hereunder.

ENTIRE AGREEMENT; MODIFICATION.

This Agreement supersedes all prior written and oral agreements and understandings between SANYO and Buyer with respect to the Products and services specified herein.
No representation or statement not contained herein shall be binding upon SANYO as a representation, warranty or condition or otherwise. No addition to or waiver, modification or cancellation of any provision hereof shall be binding upon SANYO unless in writing and signed by a duly authorized representative of SANYO.

NOTICES.

All notices and other communications hereunder shall be in writing and shall be mailed by first-class, registered, express or certified mail, postage prepaid, to the parties hereto at their respective designated addresses, subject to the right of either party to change such address upon ten (10) calendar days prior written notice.

EXPORT CONTROL.

Buyer acknowledges that Products, software, and technical information provided under this Agreement are subject to U.S. and other export laws and regulations.
Buyer agrees not to export, re-export, transfer, or transmit the Products, software, or technical information except in compliance with all such laws and regulation.
This sale is subject to any applicable governmental approvals and, at SANYO’s request, Buyer agrees to sign written assurances and other export-related documents as may be required for SANYO to comply with export laws and regulations.