Terms and Conditions

Terms and Conditions of Sale

Efficient Power Conversion Corporation

Standard Terms and Conditions of Sale

January 16, 2015

1. SCOPE

These Standard Terms and Conditions of Sale (“Terms”) shall apply to all quotations and offers made by, and purchase orders accepted by, (each, an “Order”) Efficient Power Conversion Corporation (“EPC”). These Terms apply to all sales of EPC products, parts and components (“Products”) by EPC to the entity identified in the applicable Order (“Buyer”), except to the extent these Terms conflict with a written “Sales Agreement” signed by EPC and Buyer, in which case, the terms of such Sales Agreement shall control. These Terms shall prevail notwithstanding any different, conflicting or additional terms and conditions that may appear on any purchase order, other procurement document issued by Buyer or other writing not expressly incorporated herein including, but not limited to, data sheets, application notes and purchase order acknowledgements and EPC’s acceptance of an Order is conditioned upon Buyer’s acceptance of these Terms. These Terms apply in lieu of any course of dealing between the parties or usage of trade in the industry. EPC’s failure to object to provisions contained in any communication from Buyer shall not be deemed a waiver of any of the provisions herein. Any changes in these Terms shall not be binding on EPC, unless they are specifically agreed to in writing signed by an officer of EPC.

2. PRICE, TAXES AND QUOTATIONS

Prices are subject to modification or withdrawal by EPC without notice, unless otherwise stated in a written quotation provided by EPC. Prices stated in any Order cancelled or rescheduled pursuant to paragraph 6(a) below are subject to change to reflect prices in effect at the time of cancellation or rescheduling. Unless otherwise specified by EPC, or required by law, all prices are exclusive of any present or future sales, revenue or excise tax, value added tax, turnover tax, import duty (including brokerage fees) or other tax applicable to the manufacture or sale of any product. Such taxes, when applicable, shall be added to the price of Products that are subject to an Order and shall be paid by Buyer, unless Buyer delivers to EPC with the Order a proper tax exemption certificate acceptable to EPC and the applicable taxing authority. Unless otherwise agreed to in writing by EPC, all prices quoted by EPC are effective for the period specified in EPC’s quotation and shall be subject to change by EPC.

3. DELIVERY AND RISK OF LOSS

Unless otherwise agreed to by EPC in advance and in writing, all shipments inside the U.S. shall be delivered F.O.B. EPC’s shipping point. Shipments outside the U.S. shall be delivered FCA Buyer’s designated carrier (Incoterms 2000). Title and liability for loss or damage shall pass to Buyer upon delivery. Any loss or damage to any Products after delivery shall not relieve Buyer of its obligations under these Terms. All delivery dates and quantities are approximate. Unless otherwise agreed in writing, time is not of the essence with respect to EPC’s delivery of the Products subject to an Order. EPC will use commercially reasonable efforts to fill all Orders according to the shipping dates and quantities specified in Orders accepted by EPC. EPC reserves the right to deliver Products in multiple deliveries and invoice each such delivery separately, in which case the Order shall be severable and these Terms shall apply with respect to each such delivery. Any default by EPC in the delivery of any Products shall not relieve Buyer of its payment obligations with respect to any other Products. EPC reserves the right to ship Products in advance of the shipping date specified in the Order.

4. PAYMENT TERMS

Unless otherwise agreed in writing, payment terms shall be net thirty (30) days from the date of invoice, subject to the approval by EPC’s credit department at the time of shipment. Buyer shall pay each invoice in full. Unless otherwise agreed in writing, all payments shall be made in United States dollars. EPC reserves the right to require payment in advance, C.O.D. or guarantee by letter of credit, and otherwise modify credit terms at its sole discretion based upon the Buyer’s financial condition. Where payment is made by letter of credit, all costs of collection shall be for Buyer’s account. In the event that EPC is required to bring legal action to collect delinquent accounts, Buyer shall pay all reasonable costs of collection incurred by EPC (including, but not limited to, court costs and reasonable attorneys’ fees). EPC shall retain a security interest in the Products in the amount of the full purchase price plus all other amounts due hereunder and EPC shall retain all rights and remedies of a secured party under Uniform Commercial Code as in effect at the time of delivery of such Products. A copy of EPC’s invoice may be filed with the appropriate authorities at any time as a financing statement or chattel mortgage in order to perfect EPC’s security interest. Upon EPC’s request, Buyer will execute any financing statements and other documents or instruments necessary or appropriate in order for EPC to perfect its security interest. Buyer shall have no right of set-off with respect to any amounts payable by Buyer hereunder.

5. NON-CONFORMING DELIVERY

Buyer shall notify EPC in writing of any visible defects, quantity shortages or incorrect Product shipments within seven (7) days of receipt of a shipment. Buyer’s failure to so notify EPC shall be deemed Buyer’s acceptance of the delivered Products.

6. ORDER CANCELLATION

(a) Cancellation for Convenience: Buyer or EPC may cancel any Order for convenience on the following terms: (i) An Order of Products identified in the Order as “standard products” may be canceled or rescheduled (a) by providing notice more than ninety (90) days prior to the Confirmed Shipping Date (specified in EPC’s Order Acknowledgement or other document) or (b) by Buyer less than ninety (90) days prior to the Confirmed Shipping Date, subject to written approval by an EPC sales manager and such cancellation may be subject to charges; and (ii) an Order of Products identified in the Order as “nonstandard parts,” “custom products,” or “standard parts with minimum usage” may be canceled or rescheduled by providing notice more than one hundred twenty (120) days prior to the Confirmed Shipping Date; provided, however, that Buyer shall accept delivery of all such “nonstandard products,” which have been completed at the time of receipt of notice of cancellation or rescheduling. In the event of such cancellation or rescheduling of “nonstandard products,” the price of such Products payable by Buyer shall be calculated as the percentage of the total quantity of “nonstandard products” specified in the Order that are completed multiplied by the total price of such “nonstandard products” specified in the Order. Buyer may not cancel or reschedule any Order of Products that non-standard, custom, or standard parts with minimum usage without EPC’s prior written consent with respect to each such Product and any such cancellation shall be subject to charges. Buyer’s cancellation of any Order of “standard products” may be subject to cancellation charges as determined by EPC in its sole discretion. In such event, Buyer shall pay EPC all such charges, which may include, but are not limited to, the costs incurred by EPC in connection with the termination of work under subcontracts or EPC’s cancellation of orders of materials or supplies and related, accounting, legal, and administrative costs.

(b) Buyer’s Cancellation: Buyer may cancel any Order, in whole or in part, upon written notice to EPC in the event of EPC fails to deliver Products by the Confirmed Shipping Date specified in EPC’s Order Acknowledgement, except for any failure excused pursuant to Paragraph 12, and EPC fails to deliver such Products within a reasonable period of time following receipt Buyer’s notice. Buyer may not cancel any Order of Products identified as “non-standard” or “custom” or as requiring special handling, testing or other processing without EPC’s prior written consent, which shall not be unreasonably withheld.

(c) EPC’s Cancellation: EPC shall have the right to cancel any unfilled Order without notice to Buyer in the event of Buyer’s insolvency, petition for or consent to any relief under any bankruptcy or reorganization statute, or Buyer’s inability to meet its financial obligations in the normal course of business or the filing of any bankruptcy petition by or against Buyer.

7. LIMITED WARRANTY

For any Product supplied by EPC that, for a period of one (1) year following the date of shipment of such Product, is not free from material defects in materials and workmanship or does not substantially conform to EPC’s published specifications or other specifications accepted in writing by EPC, EPC’s sole obligation, and Buyer’s sole remedy, shall be, at EPC’s option, to repair, replace or issue credit for such Product, provided that, within fourteen (14) days of following the expiration of such one (1)-year period, (i) EPC has received written notice of such defect or nonconformity from Buyer; (ii) after EPC’s written authorization, Buyer has returned such Product to EPC; and (iii) EPC has determined that the Product is defective or nonconforming and that such defect or nonconformity is not the result of Buyer’s improper installation, repair or other misuse. Notwithstanding the foregoing, EPC shall have no obligation, and Buyer shall have no remedy, with respect to any Product which has been subject to misuse, neglect, accident, modification or disassembly, used in applications which exceed the Product’s specifications or ratings, has been improperly installed or which has been soldered or altered such that it is not capable of being tested under normal test conditions. EPC shall make the final determination as to whether a Product is defective or nonconforming. THE FOREGOING RIGHTS AND REMEDIES ARE EXCLUSIVE AND MADE EXPRESSLY IN LIEU OF ALL WARRANTIES, EXPRESSED, IMPLIED OR OTHERWISE, INCLUDING, WITHOUT LIMTATION, WARRANTIES OF SATISFACTORY QUALITY, MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE AND NON-INFRINGEMENT. EPC DOES NOT ASSUME OR AUTHORIZE ANY PERSON TO ASSUME FOR IT ANY OTHER LIABILITY IN CONNECTION WITH THE PRODUCTS, AND EPC MAKES NO WARRANTY WHATSOEVER FOR PRODUCTS NOT SUPPLIED BY EPC NOR FOR ANY PRODUCT PURCHASED OR ACQUIRED FROM ANY DISTRIBUTOR, BROKER OR OTHER SOURCE NOT AUTHORIZED BY EPC. THIS DISCLAIMER SHALL APPLY EVEN IF THESE TERMS FAIL OF THEIR ESSENTIAL PURPOSE. Buyer shall pass the foregoing rights and remedies to any third-party purchaser of the Products.

8. LIMITED LIABILITY

NOTWITHSTANDING ANYTHING IN THESE TERMS OR OTHERWISE, EPC SHALL NOT BE LIABLE TO BUYER, OR ANY THIRD PARTY, WITH RESPECT TO THESE TERMS OR ANY PRODUCT, UPON THE BASIS OF ANY CONTRACT, TORT (INCLUDING NEGLIGENCE), STRICT LIABILITY OR OTHER LEGAL OR EQUITABLE THEORY FOR (I) ANY SPECIAL, CONSEQUENTIAL, INCIDENTAL, EXEMPLARY OR INDIRECT DAMAGES INCLUDING, WITHOUT LIMITATION, INSTALLATION AND REMOVAL COSTS OR LOSS OF DATA, USE, PRODUCTION OR PROFIT, EVEN IF EPC WAS ADVISED OF THE POSSIBILITY OF SUCH DAMAGES, (II) THE COST OF PROCUREMENT OF SUBSTITUTE GOODS, SERVICES OR TECHNOLOGY OR (III) ANY AMOUNT IN EXCESS OF THE AGGREGATE AMOUNT PAID TO EPC FOR PRODUCTS FROM WHICH SUCH LIABILITY AROSE.

9. INDEMNIFICATION

Subject to the limitations herein, EPC will defend any suit and proceeding brought against Buyer based on a claim that any Product furnished by EPC pursuant to an Order constitutes an infringement of any intellectual property rights enforceable in the U.S., Canada, Japan, European Union or any European Free Trade Association member country; provided that EPC is notified promptly in writing of such claim and is given full and complete authority, information and assistance (at EPC’s expense) to defend and settle such suit or proceeding. EPC shall have the absolute right to control the defense and settlement of any such or proceeding. EPC will pay damages and costs awarded against Buyer, but shall not be responsible for any settlement or compromise made without EPC’s prior consent. In no event shall EPC have any liability for damages and costs (including attorneys’ fees and costs) in any amount that exceeds the price specified in the Order for the Products subject to EPC’s indemnity obligations hereunder. In providing such defense, or in the event that a Product is held to infringe a third party’s intellectual property rights and the use of such Product is enjoined, EPC, in its discretion, shall procure the right for Buyer to continue using such Product, or EPC shall modify the Product so that it becomes non-infringing, or EPC shall have the right to cancel the shipment of undelivered quantities of such Product without liability. EPC’s indemnity obligations does not extend to any claims arising from (i) EPC’s compliance with Buyer’s design, specifications and/or instructions, (ii) use of any Product in combination with other products or technology not supplied by EPC, (iii) a manufacturing or other process, (iv) any modification of a Product by anyone other than EPC or (v) any activity that is incidental to the Product such that the infringement does not primarily result from the Product or its use. THE FOREGONG IS IN LIEU OF ANY WARRANTIES OF NON-INFRINGEMENT WITH RESPECT TO THE PRODUCTS AND ALL SUCH WARRATIES ARE EXPRESSLY DISCLAIMED.

10. INTELLECTUAL PROPERTY

As between the parties, EPC retains and shall exclusively own all right, title and interest (except as expressly licensed herein) in and to all inventions (whether patentable or not), discoveries, improvements, methods, processes, know-how, skills and techniques, ideas, documentation and other works of authorship fixed in any tangible medium of expression and mask works and all intellectual property and proprietary rights recognized anywhere in the world therein, which are embodied in any of the Products or are made, created, developed, written, conceived or first reduced to practice by EPC solely, jointly or on its behalf, in the course of, arising out of, or as a result of work performed under an Order. EPC hereby grants to Buyer, subject to Buyer’s compliance with these Terms, a non-exclusive, worldwide, limited license under EPC’s intellectual property rights to use the Products in accordance with EPC’s published specifications. There are no implied licenses of EPC’s intellectual property rights and EPC reserves all rights not expressly licensed hereunder and Buyer shall obtain no interest in any mask or other tooling used in the production of any Product. Buyer shall not, nor permit any third party to, reverse engineer, disassemble or decompile all or any portion of any Product or otherwise attempt to discover any ideas, inventions or technology embodied in any Product nor allow or assist others to do so. Buyer agrees not to remove, alter, erase, deface or cover over any patent, copyright or other proprietary rights notices or legends on any Product or its packaging.

11. LIFE SUPPORT, MILITARY AND AUTOMOTIVE APPLICATIONS

THE PRODUCTS ARE NOT AUTHORIZED FOR USE AS CRITICAL COMPONENTS IN LIFE SUPPORT DEVICES OR SYSTEMS WITHOUT THE PRIOR EXPRESS WRITTEN APROVAL OF EPC’S CEO. As used herein: (a) Life support devices or systems are devices which (i) are intended for surgical implant into the body, or (ii) directly support or sustain life and whose failure to perform when properly used can be reasonably expected to result in significant injury to the user; (b) a critical component is any component in a life support device or system whose failure to perform can be reasonably expected to cause the failure of the life support device or system or to affect its safety or effectiveness. The Products are neither designed nor intended for use in military/aerospace applications or environments unless the Products are specifically designated by EPC as military-grade. Buyer acknowledges and agrees that any such use of the Products which EPC has not designated as military-grade is solely at Buyer’s risk, and that Buyer is solely responsible for compliance with all legal and regulatory requirements in connection with such use.

The Products are neither designed nor intended for use in automotive applications or environments unless a Product is designated by EPC as compliant with ISO/TS16949 requirements. In any case of such use of non-designated Products, EPC will not be responsible for any failure to meet ISO/TS16949 requirements.

Buyer represents and warrants to EPC that it has all the necessary expertise in the safety and regulatory ramifications of its applications, and Buyer acknowledges and agrees that it is solely responsible for compliance with all legal, regulatory and safety-related requirements concerning its products and any use of the Products in Buyer’s applications, notwithstanding any applications-related information or support that may be provided by EPC.

12. CONFIDENTIAL INFORMATION

Buyer shall hold confidential and shall not use, disclose or permit others to use any information identified as confidential by EPC in writing or orally or information which Buyer knows or which Buyer would reasonably be expected to believe is confidential, proprietary or trade secret information of EPC including, without limitation, trade secrets embodied in Products or Product designs or specifications.

13. FORCE MAJEURE

EPC shall not be liable for any delay in delivery of Products or its performance hereunder due to any cause beyond EPC’s control including, without limitation, acts of God, earthquakes, tsunamis, shortage of supplies, disruption in transportation, labor disputes, shortages of materials, riots, war, flood, fire, explosion or epidemics. Any delivery date shall be deemed extended for a period of time equal to any delay excused under this Paragraph 13. In the event EPC’s production is curtailed for any of the foregoing reasons so that EPC cannot supply the entire quantity of Products pursuant to an Order, EPC may allocate deliveries among customers, as determined in EPC’s sole discretion, provided that EPC will endeavor to make such allocation in a commercially fair and reasonable manner. When an allocation has been determined, EPC will notify Buyer of the estimated quantity of Products to be made available to Buyer and when such Products will be made available.

14. EXPORT REGULATIONS

Buyer agrees to comply with all export laws and restrictions and regulations of the Department of Commerce or other United States or foreign agency or authority, and not to knowingly export, or allow the export or re-export of any Product, or derivative or any direct product thereof in violation of any such restrictions, laws or regulations, or, without all required licenses and authorizations, to Cuba, Iran, Iraq, Libya, North Korea, or Rwanda or to any Group D:1 or E:2 country specified in the then current Supplement No. 1 to Section 740 of the U.S. Export Administration Regulations (or any successor supplement or regulations).

15. ASSIGNMENT AND SUBCONTRACTING

EPC shall be entitled at all times to assign its rights under any Order (in whole or in part) or to subcontract any part of the work or services to be performed by EPC as EPC deems necessary or desirable in its sole discretion. None of Buyer’s rights or obligations under these Terms or any Order may be assigned or otherwise transferred by Buyer (by operation of law or otherwise) without EPC’s prior written consent and any purported assignment without such consent shall be null and void. These Terms shall be binding and inure to the benefit of the successors and permitted assigns of the parties.

16. SUBSTITUTIONS AND MODIFICATIONS

EPC reserves the right to modify the specifications of any component or Product, provided that, in EPC’s opinion, the modification will not materially affect the form, fit, or function of such component or Product.

17. WAIVER

Failure by EPC to exercise or enforce any rights hereunder shall not be deemed to be a waiver of any such right nor operate so as to bar the exercise or enforcement thereof at any time or times thereafter.

18. APPLICABLE LAW; VENUE; ATTORNEYS’ FEES

Unless otherwise agreed in writing, the terms and conditions contained herein shall be governed by and construed under the laws of the State of California, USA, without regard to its conflicts of law provisions. All communications pursuant or relating to these Terms shall be in English. These Terms are written in English and English shall govern all interpretations of these Terms. Any translation of these Terms into another language shall be for convenience only and shall have no effect on the interpretation of these Terms. EPC and Buyer specifically submit themselves to the jurisdiction of the state and U.S. federal courts located in the County of Los Angeles, California, each party agrees that such courts have the sole and exclusive jurisdiction over any and all disputes and causes of action arising out of or relating to these Terms. The prevailing party in any legal action brought by one party against the other shall be entitled, in addition to any other rights and remedies it may have, to reimbursement for its expenses incurred thereby, including court costs and reasonable attorneys’ fees.

19. ENTIRE AGREEMENT

These Terms set forth the entire agreement between EPC and Buyer with regard to the subject matter and supersede all previous and contemporaneous understandings, agreements, proposals and other communications relating to the same subject matter. No addition to or modification of any provision of this contract shall be binding upon EPC unless made in writing and signed by a duly authorized EPC representative. If any provision of these Terms is held to be illegal or unenforceable, such provision shall be limited or eliminated to the minimum extent necessary so that the remainder of these Terms will continue in full force and effect and enforceable.