KNECTIV LLC TERMS AND CONDITIONS FOR CONTRACT MANUFACTURING SERVICES

1. KNECTIV LLCs (“KNECTIV”) Quotation, together with KNECTIV’s Terms and Conditions stated herein

and any other Terms and Conditions or specifications made a part hereof, contain the complete and final

Agreement between Buyer and K NECTIV to provide contra ct manufacturing services. None of the Terms

and Conditions of this Agreement can be added to, modified, superseded or otherwise altered except by a

written instrument signed by an authorized representative of KNECTIV after the date of this Quotation and

delivered by KNECTIV to Buyer.

2.DEFINITIONS. As used in these Terms and Conditions, the following terms shall have the following meaning:

(a)"Assembly drawing" shall mean a drawing showing how components are placed or inserted on the

bare Printed Circuit Board (PCB).

(b)"Assembly of PCBs" shall mean any or all of the following: preparation (i.e., bending and/or clipping

leads) of at components and materials, insertion or placement of components on PCBs, lead trimming.

soldering and cleaning.

(c)"Bill of Materials" (BOM) shall mean a document that will state as to each component required for completed

assembly, the name of the manufacturer, manufacturers part number, reference designator, total

quantity, general description, package size and style. component tolerance, and possible substitute

manufacturer and part number.

(ci)"Comprehensive engineering specification" shall mean a document which defines the physical.

electrical, functional, parametric, mechanical and environmental attributes of a circuit design. It should

also include any testing, reliability, durability and quality requirements.

(e)"Contract manufacturing services provided by KNECTIV" shall mean any or all of the following: electronic

engineering design services, procurement of components, assembly of PCBs, testing of completed

assembly and final assembly of product (Job).

(I)"Electrical schematic" shall mean a drawing detailing circuit design

(g)"Electronic engineering design services" shall mean creation of an electronic schematic and

prototype, development of the circuit and creation of Bill of Materials.

(h)"Final product assembly" shall mean actual placement of completed PCB inside a module or

enclosure and includes packaging the completed assembly for shipment.

(i) “Functional Testing” shall mean the process of using a customer provided or defined test fixture and

evaluating the completed PCB for proper function.

(j) “Manufacturing defect analysis" shall mean the process in which most of the components on the

completed PCB assembly are tested for proper static value with no power applied to PCB, using a

computerized testing system.

(k)"PCB design and layout" shall mean layout of traces, etc. to emulate a schematic and creation of any

assembly drawing.

(l) “Procurement of components. ” shall mean obtaining the necessary components and materials required

to assemble PCBs.

(m) "Testing of completed assembly" shall mean either manufacturing defect analysis (MDA) or functional

testing.

3. PRICE. Any prices quoted in writing shall be valid for 30 days from issuance. Components, their price

and availability, are subject to change without notice. KNECTIV may increase the price of any components,

to be procured by KNECTIV on behalf of Buyer, but not yet shipped by KNECTIV's supplier, if KNECTIV's

cost of such parts has been increased by KNECTIV's supplier. KNECTIV may increase its quoted price

by a percentage equal to the percentage of increase in KNECTIV's costs for the components and Buyer

agrees to pay such increased price in accordance with these terms.

4.PAYMENT TERMS. Terms of payment are 50% of all product related charges due with receipt of order,

and the balance due 5 days after validation unless otherwise specified by KNECTIV in writing. If Buyer

requests partial shipments or for KNECTIV to hold goods in stock, the balance is due 5 days after receipt

of first partial shipment. If KNECTIV purchases components for Buyer, 100% of those charges must be

paid in advance if specified in the formal quotation. Terms of payment are subject to KNECTIV's approval

of Buyers credit. KNECTIV may revise Buyer's payment terms at any time. Payments received from Buyer

may be applied by KNECTIV against any obligation under this or any other written Agreement between Buyer

and KNECTIV. KNECTIV may refuse or delay shipments if Buyer fails to pay promptly any payments due

KNECTIV under any purchase order or Agreement. All release dates must appear on Buyers Purchase Order.

5.BUYER'S SPECIFICATIONS. Buyer will provide KNECTIV with its Product Requirements Document (PRD)

which shows sufficient detail necessary for KNECTIV to perform the manufacturing of the goods as

specified in the Buyer's purchase order. The PRD shall include specifications t hat state all materials

to be used, tests to be performed, the proper placement of compone nts on the PCBs. Buyer will

also provide to KNECTI V a comprehe nsive Bill of Materials and complete assembly drawing. If any

additional assembly, testing, or packaging is to be carried out, Buyer is responsible for detailing it in the

PRD. If Buyer requests KNECTIV to perform electronic engineering design services, Buyer must provide a

comprehensive engineering specification to KNECTIV. All contract manufacturing services shall be based

solely upon information provided by Buyer. If Buyer requests a change to the contract manufacturing

services or if any information or the specifications provided by Buyer is determined by KNECTIV to be

inaccurate or incomplete, KNECTIV may: (a) stop until Buyer and KNECTIV agree on an adjustment. or (b)

upon ten (10) calendar days prior notice, terminate this Agreement immediately, without liability to KNECTIV

and assess Buyer cancellation charges.

6.INSPECTION AND ACCEPTANCE OF GOODS. Final inspection and acceptance of the goods shall be at Buyers

facility. Buyer shall be responsible for conducting the final acceptance tests, if necessary. These tests

shall be completed promptly and in no event later than fifteen (15) calendar days after delivery, at which

time Buyer must either accept or reject the goods in accordance with Paragraph 8. Any discrepancy in

shipment quantity must be reported to KNECTIV in writing within two (2) working days of receipt or the

goods will be deemed accepted at the quantity set forth in KNECTIV's shipper.

7.DELIVERY AND TRANSPORTATION. All orders will be shipped EXW from China. KNECTIV fulfils

obligation to deliver when the goods available at his premises (i.e. works, factory, warehouse, etc) to the

buyer. The buyer bears all costs and risks involved in taking the goods from the seller's manufacturing

location to the desired destination. Buyer shall pay all freight, handling, delivery (including, but not

limited to. V.A.T., duty and customs), special packing and insurance charges for shipment of orders.

Choice of carrier and shipping method and route shall be at election of Buyer, specifying their

preferred method on the purchase order.

8.LIMITED WARRANTY/REMEDY FOR DEFECTS IN WORKMANSHIP. KNECTIV guarantees that the work it performs

on the goods is free from defects in workmanship and conforms to the specifications regarding proper

placement of components on the PCB as set forth in Buyer's electrical schematics and follows all other

details as provided on the PRD provided by buyer. This warranty shall exist for any particular detect only if:

(a)Buyer gives written notice of the defect to KNECTIV within five (5) calendar days after Buyer first can

determine that the goods are defective. and in no event later than fifteen (15) calendar days after delivery;

(b)KNECTIV has the right to inspect the goods at any reasonable time; and

(c)KNECTIV determines to its reasonable satisfaction on inspection that the goods are, and have been,

subjected only to ordinary use and service.

This warranty does not cover damage through accident or misuse. Buyer's sole and exclusive remedy

against KNECTIV regarding goods (where KNECTIV has not performed electronic engineering design

services) shall be limited to KNECTIV's repair of goods having a defect in workmanship or not

conforming to the specifications as set forth in Buyer's PRD.

9 .R EM EDY F OR COMPONENT DEF ECTS . K NECTI V MAK ES NO WARRANTY CONCERNI NG

COMPONENT D EFECT S. B uye r a cknowl edge s t ha t K NECTI V i s acti ng solel y a s a Purcha se r of t he

components sold by the component distributor and that the manufacturer, licensor or other vendor of the

components is solely responsible to Buyer, KNECTIV and to third parties for all liability, claims, damages.

obligations and cost and expenses related to the components. Buyer agrees to look solely to the

manufacturer, licensor or other vendor of the goods for breaches of the licensor's o r manufacturer's

warranty and/or for any maintenance, support, repair or replacement of the goods. KNECTIV MAKES NO

R E P R E S E N T A T I O N , C O V E N A N T O R W A R R A N T Y W I T H R E S P E C T T O T H E E X T E N T O R

ENFORCEAB I LI TY OF TH E MANUFACT URER'S OR LI CENSOR'S WARRANT Y. I f com pone nt s a re

defective, KNECTIV will return such components to the component distributor to be replaced by non-defective

component parts. KNECTIV shall not be responsible for labor or any other costs incurred with removal or

replacement of such component parts. If Buyer requests, and KNECTIV agrees, to perform the necessary

labor to remove the defective component parts, rework the PCBs, and replace with non -defective

component parts, KNECTIV will be paid its technical rates to perform such work.

10.REMEDY FOR IMPROPER CIRCUIT DESIGN AND IMPROPER OPERATION OF COMPLETED ASSEMBLY. KNECTIV

MAKES NO WARRANTY CONCERNING  CIRCUIT DESIGN OR PROPER OPERATION OF THE

COMPLETED ASSEMBLY IN THE EVENT KNECTIV HAS NOT DESIGNED THE ELECTRICAL

SCHEMATIC. In the event KNECTIV provides electronic engineering design services, along w ith the

assembly services, it warrants that the PCBs delivered pursuant to its design shall be merchantable

and fit and of satisfactory quality for the purpose required by Buyer as may be known to KNECTIV by

Buyer as set forth in Buyers comprehensive engineering specification. Buyer's sole remedy against

KNECTIV for improper circuit design or improper operation of the completed assembled circuit board when

KNECTIV has designed and assembled such circuit board shall be limited to repairing, reworking or

replacing the circuit board.

11.DISCLAIMER. KNECTIV IN NO EVENT SHALL HAVE ANY LIABILITY FOR PAYING INCIDENTAL OR

CONSEQUENTI AL DAMAGES, I NCLUDI NG WITH OUT LI MIT ATI ON, DAMAGES RESULTI NG FROM

PE RS O NAL O R B OD I LY I NJ U RY O R D EA T H , O R D A MA G ES T O, OR L O SS O F US E O F , ANY

PROP ERT Y . NOT WI T H ST A ND I NG A NY O F T H ESE T ER MS AND CO ND I T I ONS, T H E WA RRA NT I ES

I N T HI S AGREEMENT SH ALL APPLY I N CONNECTI ON WI TH ANY MAT ERI ALS D ELI VERED AS A

RESULT OF CONT RACT MANUFACTURING SERVI CES BY K NECTIV AND ARE I N LI EU OF ALL OTHER

WARRANT I ES, EX PRES S OR I MPLI ED , I NCLUD I NG WARRANT I ES OF MERCH ANT AB I LIT Y OR

FI T NES S FO R A PA RT I CULA R P UR POS E, WH I CH A RE EX PR ESS LY D I SCLAI MED , EX CE PT AS

ST AT ED I N PA RAG RAPH 10. KNECTIV MAKES NO WARRANTY CONCERNING THE COMPLIANCE OF THE PRODUCT

WITH ANY LOCAL, STATE OR FEDERAL REGULATIONS, INCLUDING WITHOUT LIMITATION ELECTRICAL, BUILDING, OR

OTHER CODE REQUIREMENTS. K NE CT I V MAK E S N O WA RR ANT Y CO NC ER NI N G, A ND D OE S NOT

ASSU ME I N T H I S OR ANY OTHER AGREEMENT ANY OBLIGATION OR LIABILITY IN CONNECTION

WITH PATENT I NFRI NGEMENT SUI T S B ROUGHT AGAI NST B UY ER WI TH RESPECT TO T H E

PROD UCT.

12.PROCUREMENT OF COMPONENTS BY KNECTIV OR CONSIGNMENT OF COMPONENTS TO KNECTIV. If Buyer

consigns components to KNECTIV, Buyer will purchase and supply all necessary materials and

components to KNECTIV for assembly on PCBs. Buyer should provide an additional three percent (3%) of

all small parts to KNECTIV for attrition. KNECTIV will notify Buyer of any component shortage within two

(2) working days after receipt of components by providing a shortage list indicating which parts and what

quantities still need to be provided to KNECTIV, Buyer may also request K NECTIV to procure such

components. NO AS SE MB LY WI L L B E GI N B Y K NE CT I V U NT I L ALL CO M PO NE NT S A R E R EC EI VED ,

COU NT ED A ND VISUALLY INSPECTED. All unused components will be returned to Buyer.

13.TESTING OF COMPLETED ASSEMBLY. If Buyer requests KNECTIV to provide testing of completed assembly,

Buyer shall state the method of testing requested, being either manufacturing defect analysis or functional

testing or combination as set forth in the PRD.

14.CANCELLATION/CHANGE. Orders accepted by KNECTIV may be cancelled only upon written consent of

KNECTIV. Where KNECTIV consents to a cancellation or other withdrawal of an order, Buyer shall pay

KNECTIV, at KNECTIV's discretion, reasonable cancellation charges (in an amount not less than 15 percent

(15%) of the cancelled order). Buyer agrees to pay all KNECTIV's costs associated with

cancellation/change, including but not limited to, retooling and setup charges, reworking and

reprogramming charges. Buyer further agrees to comply with component distributors return/cancellation

policies and agrees to pay all costs associated with such return or cancellation, including but not limited to

costs for restocking and short-rating. All orders to component distributors for non-standard items are non-

cancellable, non-returnable and nonrefundable.

15.FORCE MAJEURE. KNECTIV shall not be liable for delays in delivery or for failure to perform due to causes

beyond the reasonable control of KNECTIV, which causes shall include, without limitation, acts of God, acts or

omission of Buyer, acts of civil or military authorities, fire, strikes, power surges or outages, epidemics,

quarantine restrictions, flood, earthquakes, riot, war, delays in transportation or inability to obtain necessary labor,

materials or supplies. In the event of any delay, the set date of delivery. if any, shall be extended for a reasonable

period, or, at KNECTIV's option, cancelled.

16.DEFAULT. In the event of any default, Buyer shall pay all costs incurred by KNECTIV in collecting any amounts

due under this Agreement, including reasonable attorney’s fees and costs. The waiver by KNECTIV of any

breach or default in any payment shall not deemed to be a waiver of any later breach or default. KNECTIV shall

have all remedies provided under the Uniform Commercial Code, including those of a secured party and

any other remedies which KNECTIV may have at law, in equity or under any other Agreement. All such

remedies shall be cumulative. The exercise or failure to exercise any remedy shall not preclude the exercise

of that remedy at another time or of any other remedy at any time.

17. LATE PAYMENTS. Any amount not received by Knectiv by the due date of an undisputed invoice shall

accrue interest, dated from initial date in which payment was due under such invoice, compounded daily, at

the lower of 1.5% or the maximum rate allowed by applicable law. Additionally, informal may withhold the

Services and/or any Deliverable(s) until the Fees related to such Services and Deliverable(s) are paid in full.

18.INDEMNIFICATION. Buyer represents and warrants that all specifications provided by it, including but not limited

to electrical specifications, Bill of Materials and assembly drawings shall be accurate and complete . Buyer

shall indemnify, defend and hold harmless KNECTIV, including reasonable attorney’s fees, court costs and

costs of investigation and defense, from any harm or damages or liability caused to it by any breach of

the foregoing representations or for the failure to comply with any laws or regulations.

19.DISPUTES. All disputes under any contract concerning the order not otherwise resolved between KNECTIV

and Buyer shall be resolved in a court of competent jurisdiction from the location of KNECTIV's place

of business in the state of Texas. No action, regardless of form arising out of, or in any way connected

with the services rendered by KNECTIV, may be brought by Buyer more than one (1) year after the cause

of the action has accrued.

20.INTEGRATION. This Agreement sets forth the sole and entire Agreement between the parties with regard to the

sale of contract manufacturing services herein and supersedes any and all prior or contemporaneous oral

agreements between them regarding the same. When Buyer and KNECTIV enter into additional written Agreements

with respect to contract manufacturing services to be provided to Buyer by KNECTIV, these Terms and Conditions

shall be deemed incorporated by reference in those additional writings.

21.GENERAL. If any provision or portion of this Agreement is held to be invalid, illegal, unconscionable or unenforceable,

the other provisions and portions hereof shall not be affected. The several captions used herein are for the

convenience of the parties only and shall not affect the construction or interpretation hereof. Any clerical errors are

subject to correction. This Agreement and performance by the parties hereunder shall be construed in accordance

with the laws of the State of Texas.