Chip 1 Exchange USA, Inc. Purchase Order Terms and Conditions

1.) All parts must be in factory-sealed packaging, new and unused.

2.) SUPPLIER acknowledges that all orders are placed with the understanding that time is of the essence.

3.) Any late or short shipments are cause for cancellation by Chip 1 Exchange USA, Inc. (“Chip One”) without Chip One incurring any additional costs or obligations.

4.) SUPPLIER agrees that fraudulent/counterfeit parts have no value and any contract documents establishing a transaction involving fraudulent/counterfeit parts shall be declared “null and void.”

5.) SUPPLIER and Chip One hereby agree that if Chip One or a testing laboratory chosen by Chip One determines that the electronic parts supplied are suspect/fraudulent/counterfeit, then SUPPLIER has the right to: 1) agree with Chip One’s findings and the transaction will be cancelled; or 2) verify Chip One’s findings by contracting with a Chip One approved and SUPPLIER-recognized test laboratory (hereafter referred to as “lab”) for further verification.

6.) Since any dispute between Chip One and SUPPLIER may be resolved in a civil proceeding whether in a court of law or in an arbitration, the appropriate burden of proof required for Chip One to establish that the suspect parts are fraudulent/counterfeit shall be preponderance of the evidence, which means that Chip One must establish that it is more likely than not that the suspect parts are fraudulent/counterfeit unless Chip One is trying to establish fraud, which would then raise Chip One burden of proof to a clear and convincing evidence standard. However, if for whatever reason, the issue of the authenticity of the suspect parts is raised during a criminal proceeding, then the burden of proof that the suspect parts are fraudulent/counterfeit shall be that the suspect parts are fraudulent/counterfeit beyond a reasonable doubt.

7.) If SUPPLIER accepts Chip One’s findings and chooses to immediately void the transaction, the suspect electronic parts will not be returned to SUPPLIER unless and/or until an independent lab agreed to by both SUPPLIER and Chip One determines that the electronic parts are not suspect fraudulent/counterfeit or fraudulent/counterfeit. Under these circumstances, Chip One shall retain possession of the suspect electronic parts for a time period at least as long as the applicable statute of limitations under the appropriate authority(ies) having jurisdiction following the date upon which SUPPLIER received notification from Chip One that it was choosing to immediately void the transaction between them. Once this period has expired, then Chip One shall have the absolute right to destroy the suspect electronic parts. If SUPPLIER exercises its right to have an independent lab determine whether the suspect electronic parts are fraudulent/counterfeit and the lab verifies the findings that the subject electronic parts are either suspect fraudulent/counterfeit or fraudulent/counterfeit, then SUPPLIER must issue an immediate refund of all monies paid by Chip One. Chip One and SUPPLIER agree that whether or not SUPPLIER refunds all monies paid by Chip One, Chip One shall have the absolute right to reacquire possession of the subject electronic parts from the lab in order to prevent the subject electronic parts from being offered for sale through any channels of distribution. In the event that SUPPLIER pursues its supplier, either in civil or criminal proceedings, SUPPLIER shall have the right, upon request, to receive and use a mutually agreeable sample quantity of the parts sold for the purpose of pursuing its remedies.

Upon completion of testing, samples will be returned to SUPPLIER who will then return them to Chip One. Chip One and SUPPLIER agree that Chip One shall have the right to destroy the suspect electronic parts after expiration of the applicable statute of limitations under the appropriate authority(ies) having jurisdiction. Notwithstanding the above, if Chip One and SUPPLIER agree, in writing, that the parts can be immediately destroyed, the parts will be destroyed per their agreement so long as all civil or criminal actions, in which the suspect electronic parts are the subject of the action, have been completed.

8.) Notice must be provided within ten days after receipt of this purchase order that SUPPLIER is unable to supply the complete order by the date specified. Failure to provide notice within that time will cause SUPPLIER to be subject to any and all damages suffered by Chip One due to its failure to receive the ordered parts in a timely fashion.

9.) Chip One Exchange requires all suppliers to retain documented information on all transactions for a period of ten years after the date of shipping the product to Chip One Exchange. After the period expires, supplier must dispose of the documentation in a highly secure manner.

10.) Chip One Exchange, our customer and any pertinent regulatory authority reserves the right of access to facilities and any applicable documentation throughout the entire supply chain to research and identify any and all areas that do not meet our approval based on our terms and conditions.

11.) Any dispute, controversy or claim arising out of or relating to this contract, including the validity, invalidity, breach, or termination thereof, shall be finally settled by binding arbitration [administered by the American Arbitration and judgment upon the award rendered by the arbitrator may be entered in any court having jurisdiction. The arbitration shall be conducted in English in Los Angeles, CA United States in accordance with United States Arbitration Act and the substantive law of the state of California.

There shall be one arbitrator named in accordance with such rules.

12.) Before any legal action is filed concerning this purchase order, SUPPLIER and Chip One agree to participate in mediation before a neutral mediator that will last a minimum of four hours unless the matter is resolved in less than that amount of time.

13.) If any dispute arises between SUPPLIER and Chip One and a lawsuit is filed, the prevailing party will be entitled to recover their reasonable attorneys’ fees and costs.

14.) Any terms and conditions submitted and/or offered by SUPPLIER shall be deemed additional terms and shall be considered null and void and unenforceable under this Agreement.

15.) External provider ensures, with the acceptance of this purchase order, that persons are aware of their contribution to product or service conformity including their contribution to product safety and the importance of ethical behavior.

16.) Supplier Quality Requirements; the need to implement a quality management system; use customer-designated or approved external providers, including process sources (e.g., special processes); notify the organization of nonconforming processes, products, or services and obtain approval for their disposition; prevent the use of suspected unapproved, unapproved, and counterfeit parts; notify the organization of changes to processes, products, or services, including changes of their external providers or location of manufacture; flow down to external providers applicable requirements including customer requirements; provide a certificate of conformity, test reports, or authorized release certificate, as applicable; retain documented information, including retention periods and disposition requirements for a period of 10 years.