PURCHASE AGREEMENT This Sales Agreement (the “Agreement”) is entered into to be effective on (the "Effective Date"), by and between COMPANY.(“SELLER”), an entity incorporated under the laws of Country, registered at Rm. ADDRESS and COMPANY., an entity incorporated under the laws of Country, registered at ADDRESS(“BUYER”). 1. DEFINITIONS The following terms shall have the following meanings under this Agreement: 1.1 Documentation It means computations, configurations, data, designs, drawings, manuals (including without limitation installation manuals, owner's manuals and service manuals), models, photographs, plans, renderings, samples, schematics, sketches, specifications and any other written and tangible materials provided by BUYER, or developed by SELLER in connection with this Agreement. 1.2 Products It means those products identified on Schedule 1 attached hereto and fully incorporated herein, and sold to BUYER pursuant to this Agreement. The Products covered by this Agreement may be changed from time to time upon the written consent of both parties. 1.3 Specifications It means the descriptive material itemizing the functional and operational requirements of the Products and such other technical specifications, drawings and other material as identified in Schedules 3 attached hereto and fully incorporated herein. Schedule 3 consists of the specification for the Products developed by SELLER and is hereinafter sometimes referred to as “SELLER’S Specifications. The Specifications covered by this Agreement may be changed from time to time upon the written consent of both parties. 1.4 NRE It stands for non-recurring engineering. NRE includes, but not limited to development cost such as development labor, tooling, sampling, test fixtures, third parties’ test expenses, safety and agency’s charges, and expenses that differ from Seller’s standard development, operation process and protocol as identified in Schedule 2 attached hereto and fully incorporated herein. The NRE payments will be based on specific project as stipulated in Schedule 3 and agreed upon from time to time by the Parties. And BUYER should follow the schedule as identified in Schedule 2 to pay NRE charges. 2. SUPPLY OF PRODUCTS 2.1 Sales SELLER agrees to supply the Products to conform to the Specifications, and to sell the Products to BUYER in accordance with the terms and conditions of this Agreement. Specific quantities of Products may be ordered by BUYER for purchase, by the placement of a purchase order issued by BUYER. BUYER and SELLER shall be bound by any purchase order placed by BUYER and accepted or deemed accepted by SELLER under Section 3.2 of this Agreement. 2.2 Forecast and Flexibility A rolling six (6) month’s forecast (“Forecast”) will be provided by the 25th day of each month by BUYER to SELLER. Notwithstanding the flexibility of quantity listed in the table below, BUYER shall be responsible for any and all expenses and damages incurred by SELLER in connection with long-lead-time parts and unique parts price list as identified in Exhibit E. Forecast issued by BUYER to SELLER shall be fully binding to BUYER according to the flexibility requirements specified as below: PERCENTAGE OF FLEXIBILITY Allowable Forecast Quantity Changes Time after Forecast provided by BUYER % Increase % Decrease 1st month 0% 0% 2nd month 20% 20 % 3rd month 40% 40% 4th month 60% 60% th 5 month & 6th month 100% 100% 3. PURCHASE ORDERS 3.1 Placement BUYER may place firm purchase orders for the delivery of Products by SELLER. Each firm purchase order shall specify a delivery date of not less than sixty (60) days following the date of the purchase order. In no event shall BUYER cancel any purchase order issued sixty (60) days before delivery date. BUYER shall be entitled to reschedule the purchase order, but the rescheduled delivery date shall never be thirty (30) days later than the original specific date. 3.2 Acceptance SELLER shall accept and acknowledge all purchase orders which are placed by BUYER, in conformance with the terms of this Agreement, within three (3) business days after it is transmitted by e-mail or facsimile. Any purchase order not placed in conformance with the terms of this Agreement must be rejected by written notice from SELLER to BUYER within three (3) business days after receipt of such purchase order or, otherwise, will be deemed accepted by SELLER. In the event that SELLER uses a form of acknowledgment that conflicts in any way with this Agreement or BUYER’S form of purchase order, the terms of this Agreement and BUYER’S purchase order shall be controlling. 3.3 Guaranty BUYER shall ensure the quantity of the first purchase order for the product which is 5,000 pcs. 4. PAYMENT TERMS 4.1 Prices. The total purchase prices for the Products are set forth in Schedule 4 attached hereto. Prices for any of the Products may not be increased by SELLER during the term of this Agreement without the prior written consent of BUYER. The prices as set forth in Schedule 4 does not include any governmental taxes, excise taxes, tariffs, withholding taxes or other governmental charges that may be imposed on sale, transportation, production, storage or export of the Products. Buyer shall pay any and all such taxes and charges and SELLER, its agents and distributors shall have no liability therefore. 4.2 Payment of Purchase orders. A. Invoices issued by Seller shall, including, but not limited to, clear description of the Products, part number, quantity, unit price, total amount, delivery term and bill to party. PAGE 5 B. The payment shall be made in U.S. dollars and wire transferred to SELLER’s account pursuant to the instructions provided in Schedule 5. C. BUYER shall follow the schedule as below to pay payments for the first purchase order subject to Section 3.3: % of selling amount of Step Time points the first purchase order 1. 50% Effective Date of this Agreement 2. 50% Before Shipment D. BUYER shall follow the schedule as below to pay payments for the following purchase order: % of selling amount of Step Time points the first purchase order 1. 50% Acceptance of Purchase order by SELLER 2. 50% Before Shipment 5. DELIVERY 5.1 Shipment SELLER will ship the Products F.O.B. Xiamen, at BUYER’S cost. Title to the Products and risk of loss or damage shall pass from SELLER to BUYER upon delivery of the Products to BUYER’S preferred carrier as set forth and listed on purchase order, or other carrier specified by BUYER. 5.2 Rescheduling. BUYER may request changes in delivery dates appearing in its purchase orders at no charge provided written notice of such change is received by SELLER not less than thirty (30) days prior to the rescheduled delivery date to which the change pertains. In no event, other than upon a breach of this Agreement or as otherwise contemplated by this Agreement, shall BUYER cancel any purchase order once the purchase order has been accepted by SELLER unless mutually agreed upon by BUYER and SELLER. 5.3 Late Shipments SELLER shall deliver all Products on the dates as specified in purchase orders subject to Section 5.1. Shipments are considered late if Products are not delivered to BUYER’S preferred carrier on the confirmed delivery date as specified in purchase orders subject to Section 5.1. Upon BUYER’s request, SELLER will be responsible for cost difference in airfreight or sea freight charges incurred for the shipment of Product resulting from late shipments attributable to SELLER. BUYER shall be responsible for all airfreight charges incurred, at BUYER’S request, to obtain early delivery prior to the normal delivery schedule provided above. If late delivery occurs, the Seller must pay a penalty, and the Buyer shall have the right to lodge a claim against the Seller. The rate of penalty is charged at 0.1% of the shipment value for every day. The total penalty amount will not exceed 3% of the shipment value. The penalty shall be deducted by the paying bank or the Buyer from the payment. 6. INTELLECTUAL PROPERTY 6.1 Trademark License SELLER shall have no right, title or interest in any BUYER name, trade name, or Trademarks, registered or not, anywhere in the World, pursuant to this agreement. SELLER’S sole privilege under this Agreement is a non-exclusive, limited license to sell Product to BUYER, some of which bear in whole or in part Trademarks owned by BUYER. Upon the termination or expiration of this Agreement, SELLER’S limited PAGE 5 privilege to sell products using such Trademarks shall immediately cease. Any Trademarks used in the course of this Agreement must be reviewed and approved in advance, in writing, by BUYER. 6.2 Trademark BUYER. SELLER shall affix the Trademarks on all Products manufactured pursuant to this Agreement, and packaging therefore, in a manner as specified by BUYER. SELLER shall not use the Trademarks in any manner inconsistent with the instructions of BUYER nor on any products except as manufactured pursuant to this Agreement. Upon the expiration or termination of this Agreement, SELLER shall immediately discontinue the use of the Trademarks, and thereafter shall not use the Trademarks, or marks, or names that are confusingly similar thereto, directly or indirectly in connection with its business or that of its affiliates or principals. During the term of this Agreement, SELLER will promptly notify BUYER in the event that it learns of any infringement or unauthorized use of the Trademarks by any person. 6.3 Proprietary Designs of Product. All rights, title, and interest in and to the proprietary designs, intellectual property, and information related to the Products shall be remained and reserved to SELLER. 6.4 All Documentation, Specifications and Trademarks owned by BUYER or SELLER prior to entering into this Agreement shall remain the property of each respective party, and the other party shall have limited use under this Agreement for distribution purposes of the Product only. SELLER’S Specifications will remain the property of SELLER; and BUYER’S Specifications shall remain the property of BUYER. BUYER shall be protected from disclosure of Documentation or Specifications in accordance with the provisions of Article 8 of this Agreement. 7. WARRANTY, SUPPORT, ETC. Seller warrants that the Products will be free from defects in design, materials and workmanship for a period of 13 months, or for an applicable period of time agreed upon by both parties, whichever is longer, from the shipment date to Buyer (the “Warranty Period”). The Warranty Obligations as provided by the Seller that the Product and its relevant parts, items, components and accessories: 7.1 shall be free from any defects in design, material and workmanship throughout the Warranty Period; 7.2 shall be acceptable in appearance, fit and finish; 7.3 shall fulfil relevant safety regulations and shall otherwise be safe and durable; 7.4 shall be fit for all purposes for which it is commonly supplied and will perform all its functions; 7.5 shall have been manufactured in accordance with good industry practice; 7.6 shall comply with all applicable laws and industry standards; 7.7 shall not infringe the Intellectual Property rights of any person or entity, and that there was no infringement of the Intellectual Property rights of any person or entity in the manufacture of the Product or any of its parts, items, components and accessories; 7.8 shall be free from any and all claims whatsoever by any person or entity; PAGE 5 8. QUALITY ASSURANCE 8.1 Quality Certification. SELLER represents that it maintains a documented quality procedure and agrees to maintain the procedure throughout the term of this Agreement. BUYER seeks and encourages the cooperation of SELLER to implement and maintain a certified quality assurance program under the ISO 9000 and/or QS 9000. 8.2 SELLER'S Inspection SELLER shall inspect the Products before delivery to assure compliance with the Specifications subject to Schedule 3. SELLER shall not deliver any Products which fail such inspection. Upon request by BUYER, SELLER shall provide the record of such finished goods’ inspection. 8.3 Defective on Arrival. After BUYER’s inspection,, if Products inspection passing rate in less than 98% of respective purchase order quantities, it will be deemed to reject and return products; and if Products inspections pass rate in more than 98% of respective purchase order’s quantities, it will be deemed to accept Products, and BUYER should issue the RMA request form (reference to Schedule 6) to SELLER in fifteen (15) days, the SELLER would warrant that replace all defective Products 8.4 Traceability. SELLER agrees to give each Product a unique serial number, which shall be recorded for purposes of defect and warranty traceability and provided to BUYER with the order. SELLER shall also maintain a record keeping system with such data and provide BUYER with access to such data as necessary. 9. SERVICE For any service related issues not herein agreed upon, Parties agree to refer to the Service Agreement which may be separately agreed upon and executed prior to or after the execution of this Agreement. 10. CONFIDENTIALITY Each party has executed, in association with this Agreement, a reciprocal non-disclosure agreement. Said reciprocal non-disclosure agreement is fully incorporated herein and shall remain in full force and effect throughout the term of this agreement. 11. LIMITATION OF LIABILITY 11.1 IN NO EVENT SHALL EITHER PARTY BE LIABLE FOR ANY INDIRECT, SPECIAL, INCIDENTAL OR CONSEQUENTIAL DAMAGES OF ANY KIND (INCLUDING WITHOUT LIMITATION LOST PROFITS, LOSS OF INCOME OR OTHER TANGIBLE BUSINESS LOSS) ARISING OUT OF OR IN CONNECTION WITH THIS AGREEMENT, THE DEVELOPMENT SERVICES, THE PRODUCTS OR THE PROTOTYPES, WHETHER IN AN ACTION IN CONTRACT OR TORT OR OTHERWISE, EVEN IF SUCH PARTY HAS BEEN ADVISED OF THE POSSIBILITY OF SUCH DAMAGES. 11.2 EITHER PARTY’S AGGREGATE LIABILITY IN CONNECTION WITH THIS AGREEMENT, REGARDLESS OF THE FORM OF ACTION GIVING RISE TO SUCH LIABILITY (WHETHER IN CONTRACT, TORT OR OTHERWISE) SHALL NOT EXCEED THE AMOUNT OF THE PRODUCTS IN THE DIRECTLY APPLICABLE PURCHASE ORDER WHICH IS THE SUBJECT OF CAUSE OF SUCH ACTION. PAGE 5 11.3 THE LIMITATIONS OF LIABILITY CONTAINED IN THIS AGREEMENT ARE A FUNDAMENTAL PART OF THE BASIS OF EACH PARTY’S BARGAIN HEREUNDER, AND NEITHER PARTY WOULD ENTER INTO THIS AGREEMENT ABSENT SUCH LIMITATIONS. 12. MISCELLANEOUS 12.1 Relationship of Parties This Agreement does not create the relationship of principal and agent between BUYER and SELLER nor shall it be construed as creating any form of legal arrangement which would impose liability upon one party for the act or omission of the other party. 12.2 Severability If any provision of this Agreement shall be determined by an arbitrator to be invalid, illegal, or unenforceable, the validity, legality and enforceability of the remaining provisions shall not in any way be affected or impaired thereby. 12.3 Entire Agreement With the exception of that certain Service Agreement of even date herewith, this Agreement (including any schedules attached hereto) contains the entire agreement of the parties with respect to the Products to be furnished hereunder (except for any additional terms or conditions that may be contained in any purchase order that may be issued by BUYER pursuant to this Agreement). Any modification or amendment of any term or provision of this Agreement shall not be valid or binding unless the same is in writing and signed by each party hereto. 12.4 Assignment. Neither party shall assign any of its rights or obligations under this Agreement without the prior written consent of the other party, which consent may be withheld at the other party's sole and absolute discretion. This Agreement shall be binding upon and shall inure to the benefit of the legal successors and assigns of the parties hereto. 12.5 Governing Law and Venue This Agreement shall be governed by and construed in accordance with the laws of the Republic of China, and the parties hereby confirm that the Convention for the International Sale of Goods shall not be applicable. The parties also expressly agree that any dispute relating directly or indirectly to this Agreement must be brought in Taipei, Taiwan, pursuant to Section 12.7 below. 12.6 Waivers No waiver of any of the terms or conditions of this Agreement by either party shall be valid or binding unless the same is in writing and signed by an authorized officer of the waiving party. A waiver by either party or a breach of any of the provisions of this Agreement shall not be construed as a waiver of any further breach of the same provision or of any other provision of this Agreement. 12.7 Arbitration Any dispute arising out of this Agreement shall be submitted to Taiwan Taipei District Court. 12.8 Attorneys' Fees In the event that any arbitration or other proceeding is brought to enforce or interpret the provisions of this Agreement, the prevailing party shall be entitled to an award for its reasonable attorneys' fees and costs, as determined by the arbitrator appointed pursuant to Section 11.8 above. 12.9 Heading PAGE 5 Headings used in this Agreement are for the purposes of convenience only and shall not affect the legal interpretation of this Agreement. 12.10 Draftsmanship This Agreement shall be deemed jointly drafted and no ambiguities, duties or obligations shall be resolved against the deficit party. 12.11 Counterparts This Agreement may be executed in one or more counterparts, each of which shall be deemed an original but all of which together will constitute one and the same instrument. IN WITNESS WHEREOF, the parties have executed this Agreement as of the date set forth above. BUYER SELLER By: By: Print Name: Print Name: ____________ Title: Title: ___________ Date: Date: PAGE 5 SCHEDULE 1 PRODUCTS Type Model Name Description Remark SCHEDULE 2 Development Time-Line and NRE Charges Development Time-Line Events Items Time-Line If deadline miss occurs, the Seller must pay penalty to BUYER. The rate of penalty is charged at 0.1% of the NRE charges for every day. The total penalty amount will not exceed 3% of the NRE charges. NRE charges and payment schedule No. Amounts Payment date BUYER should follow the payment schedule as above to pay NRE charges. SELLER would not process any development job which mentioned in Development Time-Line before receiving the payment, if BUYER did not pay NRE charges on schedule, and BUYER have no right to ask SELLER penalty for the development delay. SCHEDULE 3 SPECIFICATIONS SCHEDULE 4 PRICES The First Order The following Orders SCHEDULE 5 PAYMENT INSTRUCTION SCHEDULE 6 Protech RMA Request Form Applied Company： Date： Contact Person： Page：1 of 1 E-mail： DOA NO. (BY PROTECH BU)： □DOA □Regular RMA No. Model Serial Warranty *Defect Description Environment Remark Number Status 1 2 3 4 5 6 7 * Please provide detailed written description about the defect under Defect Description. By providing us with a detailed defect description will allow us to provide a faster repair service for you. Sign by .