CERMETEK MICROELECTRONICS, INC. (CERMETEK) TERMS AND CONDITIONS OF SALE

Cermetek is vitally interested in handling orders in a prompt, efficient and businesslike manner to afford satisfaction to both Customer and Cermetek. In order to further this objective Cermetek has established the following standards and Terms and Conditions of Sales which it believes to be equitable and to conform to current business and legal requirements. By accepting any Cermetek products, Customer hereby agrees to these terms and conditions.
 
1. CUSTOMER TERMS AND CONDITIONS
Cermetek products are offered for sale under the terms and conditions contained herein. Notwithstanding any terms or conditions on Customers' order, Cermetek's acceptance of any order is expressly made conditional on Customer's agreement to Cermetek's Terms and Conditions of Sale unless otherwise specifically agreed in writing by an officer of Cermetek. In the absence of such agreement commencement of performance and/or delivery, shall be for Customer's convenience only and shall not be deemed or construed to be acceptance of any or all of Customer's terms and conditions.
 
2. ORDERS; GOVERNING LAW AND VENUE

All Customer orders are subject to acceptance at Cermetek's home office. These terms and conditions and accepted orders shall be construed and governed by the law of the State of California without giving effect to its "conflict of law" provisions. Jurisdiction and venue for any claim arising under these terms and conditions or otherwise related to any Cermetek product shall lie exclusively with the Federal or States courts serving Santa Clara County, California and Customer irrevocably consents to the jurisdiction and venue of such courts.

 
3. PRICES
Cermetek's published prices are subject to the following:
a) All published prices are subject to change without notice.
b) Shipments will be billed at prices in effect on the date of acceptance of Customer's order or at the prices in effect on the date of shipment, whichever is lower.
c) Stenographic and/or clerical errors are subject to correction.
d) Unless otherwise stated in writing by Cermetek, all published or quoted prices shall be exclusive of transportation, insurance, taxes, duties and other charges related thereto and Customer shall report and pay any and all taxes (including without limitation, any use tax, sales tax or similar tax), duties or other charges related thereto, and shall hold Cermetek harmless therefrom.
e) Published and quoted prices are for standard articles only and do not include technical data, proprietary rights of any kind, patent rights, qualification, environment or other than Cermetek's standard tests and normal commercial packaging unless expressly agreed to in writing by Cermetek.
 
4. TERMS OF PAYMENTS

Payment for Cermetek products released and shipped on an open account basis on which credit has been approved shall be due and payable within thirty (30) days from date of invoice; otherwise cash shall be due immediately upon delivery on accounts without credit approval. Cermetek and Customer acknowledge that late payment by Customer will cause Cermetek to incur costs not contemplated, the exact amount of such costs being extremely difficult and impractical to fix. Such costs include, without limitation, processing and accounting charges, and additional interest and late charges payable by Cermetek. Therefore, if payment is not made when due, Customer shall pay to Cermetek as liquidated damages, 1.5% per month of the overdue payment. Cermetek and Customer agree that said sum is a fair and reasonable estimate of the costs that Cermetek will incur by reason of late payment by Customer.

Unless open account status is established in advance in writing, payment is due upon delivery.

Partial shipments will be billed as made and payments therefore are subject to the above terms.

 
5. TRANSPORTATION
All sales are made Ex Works (Incoterms 2000) point of shipment, transportation charges at Customer's expense with title passing to Customer upon payment to Cermetek of the full purchase price. Notwithstanding the foregoing, all risk of loss or damage shall pass to Customer upon Cermetek's delivery of products to transportation company. Cermetek reserves the right to ship products freight charges collect and to select the means of transportation and routing. Further, if transportation by Parcel Post is specified by Customer, Cermetek reserves the right to select an alternate means of economical transportation. Unless otherwise directed, Cermetek will insure the product shipped to full value or declare full value thereof to the transportation company and any insurance cost shall be for Customer's account. If necessary, Cermetek will provide reasonable assistance in attempting to trace lost shipments. Any and all taxes levied on or with respect to the items after delivery to the transportation company shall be paid by the Customer, provided however, in the event Cermetek, it its sole discretion chooses to pay such taxes, then Customer shall reimburse Cermetek in full upon demand. As used in the clauses appearing herein or attached hereto, "delivery" shall occur when products shipped hereunder are delivered to the transportation company at Ex Works point. All Cermetek products must be inspected upon receipt from the carrier and claims should be filed with the carrier within twenty-four (24) hours of delivery if there is evidence of damage either concealed or external.
 
6. DELIVERY
Cermetek reserves the right to make deliveries in installments. Partial shipments will be billed as made and payments therefore are subject to the terms of payment noted above. The delivery of part of any order will not obligate Cermetek to make further deliveries. All delivery indications are approximate and are dependent in part upon prompt receipt of all necessary information to service. Cermetek's inventory and current production must be allocated so as to comply with applicable government regulations. In the absence of such regulations Cermetek reserves the right in its sole discretion to allocate inventories in current production when in its opinion such allocation is necessary.
 
7. PERFORMANCE CONTINGENCIES
Cermetek cannot accept any liability of any kind because of any delay in performance of any order accepted by it due to unforeseen circumstances or to causes beyond its control, including, without limitation, acts of God, acts of terrorism (actual or threatened), strikes, war, riots, fire, accident, freight embargoes, failure or lockout of suppliers necessary to the execution of the order, failure or breakdown of components necessary to completion of the order, subcontractor caused delays, or the compliance with any law, regulation or order, whether valid or invalid, of any cognizant government body or any instrumentality thereof, whether now existing or hereafter created. Performance of an order shall be deemed suspended as long as any such circumstances or causes delay its execution. Whenever such circumstances or causes have been remedied, Customer shall accept performance under said order. As used herein "performance" shall include, without limitation, fabrication, shipment, delivery, assembly, installation, testing and warranty repair or replacements.
 
8. ACCEPTANCE OF PRODUCT
Each Cermetek product shall be deemed to have been accepted by Customer if it meets specifications as set forth in Cermetek's sales order. Notwithstanding the foregoing use of said product by Customer, its agents employees, or licensees for any purpose shall constitute acceptance of product by the Customer.
 
9. WARRANTY
Cermetek warrants each item manufactured by it to be free from defects in material and workmanship for a period of twelve (12) months from date of shipment. This warranty is expressly in lieu of all other obligations or liabilities on the part of Cermetek unless such additional warranty is agreed on in writing by Cermetek. THE FOREGOING WARRANTY IS SPECIFICALLY IN LIEU OF ALL OTHER WARRANTIES EXPRESSED OR IMPLIED. NO IMPLIED WARRANTIES OF MERCHANTABILITY OR FITNESS FOR ANY PARTICULAR PURPOSE SHALL APPLY. IT IS EXPRESSLY AGREED THAT CERMETEK DOES NOT WARRANT ITS TITLE TO THE PRODUCTS AND THAT FULL RESPONSIBILITY FOR DEFENDING SUCH CLAIM OR INTEREST AS CONVEYED BY THIS AGREEMENT SHALL BE UPON CUSTOMER. IN ADDITION, WARRANTY DOES NOT COVER SOFTWARE AND FIRMWARE UPDATES.

If any Products delivered hereunder include software products (e.g. firmware, operating systems, application software and programming tools), such software products shall only be used in conjunction with the Products delivered hereunder and such software products are supplied "AS-IS". Customer hereby agrees to comply with the terms and conditions associated with such software products. Customer shall not be obligated to pay license or use fees unless otherwise agreed to by the parties. Cermetek makes NO WARRANTY as to software or items obtained from a third party supplier. For components not manufactured by Cermetek, Cermetek, to the extent permitted by Cermetek's contract with its supplier, shall assign to Customer any rights Cermetek may have under any warranty of the supplier.
 
10. WARRANTY REPLACEMENT AND ADJUSTMENT
Customer shall notify Cermetek of any warranty claim and obtain Cermetek's authorization prior to the shipment of products returned for warranty adjustment. Products returned to Cermetek shall be sent with shipping charges prepaid. When any item is returned for examination and inspection, Customer must assume responsibility for damage resulting from improper packing and damage or loss in transit. When any product is returned, Customer shall provide Cermetek with explicit information as to the nature of the claimed defects, operating conditions to which the product had been exposed and any other pertinent information which will enable Cermetek to determine the cause of claimed warranty defects. In all cases, Cermetek has sole responsibility for determining the validity of any warranty claim and sole discretion in determining the nature and extent of adjustment, if any, to which Customer will be entitled. In the event that Cermetek's product has been returned without cause and is still serviceable, or that the product was misused, mishandled or otherwise damaged subsequent to shipment by Cermetek, Customer will be notified and the product returned at Customer's expense. In addition, a charge for testing and examination may be made on certain products so returned.
 
11. RESCHEDULING AND CANCELLATION
No order accepted by Cermetek may be rescheduled or cancelled by Customer except by mutual agreement in writing and requires a minimum of sixty (60) days notification to Cermetek or Customer will be subject to billing of 15% rescheduling charges and 25% cancellation charges. Cermetek reserves the right to adjust the billing price applicable to quantities actually delivered.
 
12.INTELLECTUAL PROPERTY
All programs, estimates, diagrams, drawings, designs, specifications, manuals and other documents furnished by Cermetek to the Customer shall remain the property of Cermetek. All such information furnished in confidence to Customer, except as may be found in the public domain, shall be held in confidence by Customer and shall not be disclosed by Customer to any third parties. Copyright in all materials made available by Cermetek shall remain in Cermetek or its licensors at all times. Cermetek agrees to only make plans designated in writing as confidential by Customer accessible to third parties if the third parties render services for Cermetek on the basis of such plans and, in such case, shall do so subject to standard confidentiality restrictions.

Computer software (including, without limitation, source code, object code, application software, server and client software, operating system software, and software implemented as firmware) provided by Cermetek with any Cermetek products remains the property of Cermetek or Cermetek's licensors Cermetek grants Customer a personal, nonexclusive right to use such software only in machine readable form and only in combination with products with which such software is provided. Customer shall not copy, reproduce, download or reverse engineer any computer software provided by Cermetek, and Customer shall not provide, disclose or distribute any such software, or portion thereof, to any third party.If Customer discontinues use of the software or products with which software is provided, or transfers the same to any third party, this license shall terminate and Customer shall delete all copies of computer software in Customer's possession capable of being deleted and shall return all removable software media and materials to Cermetek.

Cermetek will hold Customer harmless, as set forth herein, in respect to any claims that the design or manufacture of any product in Cermetek's standard line of products constitutes an infringement of any valid patent of the United States. Cermetek will pay all damages and costs awarded in a final non-appealable suit or paid, in Cermetek's sole discretion, by way of settlement, which are based on such claim of infringement provided that Cermetek is notified promptly in writing of such claim of infringement and is given full authority, information and assistance regarding such claim. Cermetek will, at its sole discretion and at its expense, either procure for Customer the right to continue using said product, replace it with non-infringing products, or remove it and refund an equitable portion of the selling price and transportation costs thereof. This constitutes Cermetek's entire liability for any claim based upon or related to, any alleged infringement of any intellectual property rights. The Customer shall hold Cermetek harmless against any expense or loss resulting from claimed infringement of patents, trademarks, copyright, trade secrets, mask works or other industrial property rights arising out of compliance by Cermetek with Customer's designs, specifications or instructions.

 
13. DAMAGES AND LIABILITY
Under no circumstances will Cermetek be liable for incidental, consequential or resulting loss or damage of any kind, howsoever caused. In no event will Cermetek be liable for any sum greater than the purchase price received by Cermetek for the product or products which are the subject of any claims or dispute. The liability to third parties for bodily injury, including death, resulting from Cermetek's performance shall be determined in accordance with applicable law and the total liability limitation stated above shall not be construed as a limitation on Cermetek for damages for any such bodily injury, including death, nor shall such liability limitation be construed as a limitation on Cermetek for damages caused by Cermetek's fraud or willful injury to the person or property of another.
 
14. GOVERNMENT END USE
Cermetek will comply with all provisions which are mandatorily imposed upon Customer in accordance with the terms of any applicable federal statute, which are required to be inserted in the Customer's purchase order form.
 
15. WAIVERS OF TERMS AND CONDITION
A waiver by Cermetek of any default by Customer or of any of these Terms and Conditions of Sale shall not be deemed to be a continuing waiver or a waiver of any other default or of any other of these Terms and Conditions of Sale but shall apply solely to the instance to which the waiver is directed.
 
16.ATTORNEY'S FEESaa
In the event of any action or other proceeding taken by Cermetek to enforce its rights under these Terms and Conditions, promptly thereafter, Cermetek will be entitled to receive from Customer reasonable attorney's fees as well as other costs involved in such proceedings.
 
17. U.S. Government End Users
The Cermetek products each were developed by private financing and constitute a "commercial item," as that term is defined at 48 C.F.R. 2.101. The Cermetek software consist of "commercial computer software" and "commercial computer software documentation," as such terms are used in 48 C.F.R. 12.212. Consistent with 48 C.F.R. 12.212 and 48 C.F.R. 227.7202-1 through 227.7202-4, all U.S. Government End Users acquire only those rights in the software and the documentation that are specifically provided by this Agreement. Consistent with 48 C.F.R. 12.211, all U.S. Government End Users acquire only technical data and the rights in that data customarily as specifically provided in this Agreement.
 
18. EXPORT CONTROL
THE PRODUCTS COVERED BY THIS CONTRACT MAY FALL WITHIN THE CATEGORY OF ITEMS THAT ARE SUBJECT TO EXPORT LICENSE CONTROL BY THE U.S. GOVERNMENT. THEREFORE, PRIOR TO EXPORTATION, CUSTOMER IS REQUIRED TO OBTAIN ANY LICENSES WHICH MAY BE REQUIRED UNDER THE APPLICABLE LAWS OF THE U.S., INCLUDING THE EXPORT ADMINISTRATION ACT AND REGULATIONS.