General Terms and Conditions of Sale

Product and Sale TermsSPARK Microsystems

These Terms and Conditions of Sale are the sole terms and conditions governing the sale of semiconductor products (“Products”) of SPARK Microsystems Inc. (“SPARK ”)  and/or services to the party listed on SPARK’s offer documentation (“SPARK’s Offer”) and subsequently listed in the purchase order or other order documentation (“Buyer”) executed by the parties (the “Buyer’s Order”). SPARK’s acceptance of Buyer’s Order is expressly conditioned on Buyer’s acceptance of these terms and conditions. Any and all Buyer terms and conditions (including any Buyer legal terms incorporated into or referenced in any Buyer order documentation) are hereby rejected and shall be of no effect. Buyer shall be conclusively deemed to have accepted these terms and conditions upon any of the following by Buyer, its agents or representatives:

(i) written or electronic acknowledgment or acceptance of the SPARK’s terms and conditions including execution of any order or order documentation that incorporates these terms by reference,

(ii) transmission to SPARK, its agents or representatives of any order for SPARK Products, or

(iii) acceptance of or payment for any Product and/or services agreed in Buyer’s Order and covered hereby. SPARK’s failure to object to any provision contained in any communication from Buyer shall not be deemed a waiver of any provision hereof.

Prices, Quotations and Taxes:  Unless otherwise agreed in writing, the applicable prices for Products shall be those quoted by SPARK and contained in Buyer’s Order.  Buyer agrees to pay all applicable taxes and shipping costs (shipped Ex Works point of origin).

Terms of Payment:  Subject to SPARK approval of Buyer’s credit, and unless expressly stated otherwise in an order accepted by SPARK, payment terms are net thirty (30) days from date of SPARK’s invoice. Buyer shall pay interest on all late payments at a rate equal to the lesser of: (i) one and one-half percent (1.5%) per month or (ii) the highest rate permissible under applicable law, calculated daily and compounded monthly. Buyer shall reimburse SPARK for all costs incurred in collecting any late payments, including, without limitation, attorneys’ fees. In addition to all other remedies available SPARK at law, shall be entitled to suspend the delivery of any Products if Buyer fails to pay any amounts when due hereunder and such failure continues for fifteen (15) days following written notice thereof. Buyer shall not withhold payment of any amounts due and payable by reason of any set-off of any claim or dispute with Seller, whether relating to Seller’s breach, bankruptcy or otherwise. If SPARK at any time determines, in its sole and absolute discretion, that Buyer may be unable to pay in full and in a timely manner all amounts due to SPARK, shall have the right to require immediate payment in full in cleared funds prior to continuing work or incurring any further cost. Buyer must raise any dispute relating to an invoice within fifteen (15) days of the date of invoice. If Buyer’s dispute is held to be valid, SPARK shall credit Buyer the disputed amount.

Shipment:  Buyer shall provide specific instructions for shipping, including but not limited to carrier and account number. If specific instructions are not provided SPARK may select the carrier and ship the Products to Buyer’s address indicated on Buyer’s purchase order. All Products will be scheduled for shipment in accordance with SPARK’s minimum order policy and applicable shipment sequence. SPARK reserves the right to make shipments in installments. SPARK reserves the right to make shipments when Product is available and shall invoice shipments as made. SPARK reserves the right to allocate production and deliveries among its various customers under any circumstances. SPARK will confirm in writing, and amend as appropriate, the shipment schedule. SPARK will not assume any liability in connection with the shipment or constitute any carrier as its agent. Buyer shall be responsible for making all claims with carriers, insurers, warehouses’ and others for non-delivery, loss, damage or delay. All claims for damages to the Products or shortages must be made within thirty (30) days of shipment. Under no circumstances shall SPARK be liable to Buyer for any delay either in shipment or in delivery. In the absence of timely and specific shipping instructions from Buyer, or the failure of Buyer’s selected carrier to accept Products on the acknowledged shipment date, SPARK may select another carrier and service level similar to that of Buyer’s selected carrier (if any), so as to complete the order as originally acknowledged by SPARK.

Title and Risk of Loss:  All Products will be shipped Ex Works point of origin (Incoterms in effect as of the date of Buyer’s Order) point or as otherwise designated by SPARK in a notice to Buyer. Products held or stored by SPARK, at Buyer’s request or due to Buyer’s failure to accept delivery, after the scheduled shipment date in the applicable order, shall be at the sole risk of Buyer, and Buyer shall pay to SPARK all SPARK’s expenses associated with holding or storing such Products.

Modifications to Order:  Buyer’s Order may only be modified by written instrument signed by duly authorized representatives of the Parties

Return Authorization: Buyer’s return of nonconforming or defective Products to SPARK Microsystem is subject to SPARK then current return authorization process and procedures. Buyer must advise SPARK in writing of any claims within the warranty period, obtain SPARK return authorization, return the Product(s) to a facility or location directed by SPARK, and provide any reasonably requested assistance.  If the Product(s) are outside of their warranty period, SPARK shall, at SPARK option, either refund the purchase price of the Product(s) or provide the same or equivalent replacement Product(s), and shall reimburse Buyer for any commercially reasonable cost of transporting the non-conforming Product(s).  In no event, shall SPARK be responsible for any non-conformance or other defects in the Product(s) resulting from improper handling during or after shipment, misuse, neglect, improper installation or operation, repair, alteration, accident or for any other cause not attributable to defective workmanship or failure to meet specifications on the part of SPARK. This warranty shall not be expanded, and no obligation or liability will arise, due to technical advice or assistance, computerized data, facilities or services SPARK may provide in connection with Buyer’s purchase.  SPARK provides no warranty for SPARK Product(s) purchased through unauthorized sales channels.  SPARK warrants replacement Product(s) for the remaining term of the warranty on the originally delivered Product(s).

Source Inspection:  Source inspection by Buyer or Buyer’s customer must be mutually agreed in writing, at the time of ordering, and is subject to reasonable charges and safety and security conditions. Buyer shall have no right of access to any SPARK’s facility except as specifically authorized in advance by SPARK. Buyer shall indemnify and hold harmless SPARK and its affiliates from any and all suits, damages, and expenses of Buyer, its agent or its customer resulting from personal injury including death or loss or damage of property occurring during, or in connection with, any visit to any facility of SPARK or its affiliates.

Product Warranty:  Except as otherwise provided herein, SPARK warrants to Buyer that for one (1) year from the date title to the Product passes, each Product sold hereunder will be free of material defects in materials or workmanship and will conform to specifications set forth in SPARK’s published data sheets or, where applicable, user manuals for SPARK Microsystem’s system/module products in effect at the time title passes.

Product Warranty Limitation:  For unpackaged semiconductor dice or wafers (“Unpackaged Product”), SPARK’s Product Warranty shall be limited to the good dice (as noted in the accompanying Wafer map) or the individually sold die (Un-tested). Buyer assumes full responsibility to ensure compliance with the appropriate handling, assembly and processing of Products (including, as applicable, proper die preparation, die attach, back grinding, singulation, wire bonding and related assembly and test activities), and compliance with all guidelines set forth in the applicable SPARK’s specifications. SPARK assumes no responsibility for environmental effects on Products or for any activity of Buyer or a third party that damages the Products due to improper use, abuse, negligence, improper installation, accident, loss, damage in transit, or unauthorized repair or alteration by a person or entity other than SPARK. SPARK assumes no responsibility for improper back grinding or improper singulation of Unpackaged Products. Except as expressly provided herein, Buyer shall assume responsibility for all warranty issues with respect to its customers and end users.

Warranty Remedy:  SPARK sole liability and responsibility for Products under this warranty is for SPARK to repair or replace any Product that is returned to it by Buyer or credit Buyer’s account for such returned Product, provided that SPARK shall have the right to reject any such remedy where SPARK determines that the Warranty does not apply Product returned to SPARK for warranty service will be shipped to SPARK at Buyer’s expense and will be returned to Buyer at SPARK expense. SPARK obligation to honor its warranty for a Product is contingent upon receipt of payment in full for such Product.

Warranty Disclaimer:  EXCEPT AS PROVIDED HEREIN, SPARK DISCLAIMS ALL WARRANTIES, EXPRESS OR IMPLIED, INCLUDING ANY WARRANTY OF MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE, TITLE OR NONINFRINGEMENT. LABELING ON PRODUCTS AND PACKAGING IS INTENDED SOLELY FOR COMPLIANCE WITH APPLICABLE LAW AND SPARK DISCLAIMS ALL WARRANTIES, EXPRESS OR IMPLIED, THAT ARISE FROM SUCH LABELING OTHER THAN AS REQUIRED BY APPLICABLE LAW. IN NO EVENT SHALL SPARKBE RESPONSIBLE UNDER ITS WARRANTY FOR ANY DEFECT THAT IS CAUSED BY NEGLIGENCE OF BUYER OR A THIRD PARTY, STATIC DISCHARGE, MISUSE OF A PRODUCT OR MISTREATMENT OF A PRODUCT. SPARK SHALL HAVE NO RESPONSIBILITY FOR ANY PRODUCT THAT HAS BEEN ALTERED OR MODIFIED IN ANY WAY. SPARKSHALL HAVE NO RESPONSIBILITY TO THE EXTENT ANY DEFECT OR FAILURE IS CAUSED BY NONCOMPATIBILITY OF THE PRODUCTS WITH OTHER COMPONENTS USED BY BUYER OR ITS CUSTOMERS. SPARK SHALL HAVE NO RESPONSIBILITY FOR NON-STANDARD PRODUCTS OR PRODUCTS PURCHASED THROUGH UNAUTHORIZED CHANNELS. THE WARRANTY OF REPLACEMENT PRODUCTS SHALL TERMINATE WITH THE WARRANTY OF THE ORIGINAL PRODUCT. UNLESS SEPARATE TERMS ARE PROVIDED, ALL SOFTWARE IS EXPRESSLY PROVIDED “AS IS”.

Limitations of Liability:  IN NO EVENT SHALL SPARK’S ”S AGGREGATE LIABILITY ARISING OUT OF OR IN CONNECTION WITH THE SALE OF PRODUCT(S) OR SERVICES HEREUNDER OR THE USE OF ANY SPARK PRODUCT PROVIDED HEREUNDER, EXCEED THE PURCHASE PRICE OF THE PARTICULAR PRODUCT(S) OR SERVICES WITH RESPECT TO WHICH LOSSES OR DAMAGES ARE CLAIMED.

IN NO EVENT SHALL SPARK BE LIABLE FOR SPECIAL, INCIDENTAL OR CONSEQUENTIAL DAMAGES OF ANY NATURE WHATSOEVER (INCLUDING, BUT NOT LIMITED TO, LOSS OR DISGORGEMENT OF PROFITS, LOSS OF USE AND LOSS OF GOODWILL), REGARDLESS OF WHETHER SPARK HAS BEEN GIVEN NOTICE OF ANY SUCH ALLEGED DAMAGES, AND REGARDLESS OF WHETHER SUCH ALLEGED DAMAGES ARE SOUGHT UNDER CONTRACT, TORT OR OTHER THEORIES OF LAW.

Use in Life Support and Other Critical Applications:  Products sold by SPARK are not designed, intended or approved for use in life support, implantable medical devices, transportation, nuclear, safety or other equipment where malfunction of the Product can reasonably be expected to result in personal injury, death, severe property damage or severe environmental harm. Notwithstanding the foregoing, if Buyer uses or sells Products for in such critical applications, it does so at Buyer’s own risk and Buyer agrees to defend, indemnify and hold harmless SPARK from any and all damages, claims, suits or expenses resulting from such use.

Patent, Copyright, and Trademark Indemnification:   SPARK shall hold harmless and indemnify Buyer against all third party claims, judgments, costs, and fees, including attorney fees, relating to infringement of any patent, copyright, trademark, or design to the extent that (i) the infringing Products are manufactured, sold, or used, in whole or in part, pursuant to SPARK’s specifications, designs, drawings, or other technical data and (ii) provided that Buyer notifies SPARK in writing of any such claim as soon as reasonably practicable, and allows SPARK to control, and reasonably cooperates with SPARK in, the defense of any such claim and related settlement negotiations and has in no way acted to the prejudice of the SPARK’s ability to control and defend such claims. To the extent that any Products are held by a court of competent jurisdiction or are believed by SPARK to infringe or otherwise violate a third party’s proprietary rights, SPARK may, at its option and expense, either (i) modify the affected Products to be non-infringing; or (ii) obtain for Buyer a license to continue using such Products on substantially the same terms set forth herein; or (iii) if neither of the foregoing alternatives are reasonably available to SPARK , SPARK may require Buyer to return the infringing Products and all rights thereto, and refund to Buyer the price paid to SPARK by Buyer for the infringing Products. SPARK shall have no obligation under this provision to the extent any claim is based on (i) modifications of Products or deliverables by a party other than SPARK or SPARK’s authorized representative; (ii) the combination, operation, or use of Products with equipment, devices, software, or data not supplied by SPARK; (iii) the use or installation of Products in an environment for which Products were not intended; (iv) Buyer’s failure to use updated or modified versions of Products provided by SPARK; or (v) the negligent acts or omissions or willful misconduct of Buyer, its employees, representatives, or affiliates. This Section, and the indemnification provided herein, does not apply to any Products manufactured, sold, or used, in whole or in part, pursuant to Buyer’s specifications, designs, drawings, or other technical data. THE FOREGOING CONSTITUTES THE ENTIRE LIABILITY OF SPARK AND BUYER’S SOLE AND EXCLUSIVE REMEDY WITH RESPECT TO ANY CLAIMS OF INFRINGEMENT OF ANY THIRD-PARTY INTELLECTUAL PROPERTY RIGHTS.

Software: Products may contain or be delivered with or as digital media containing software proprietary to SPARK or a third party. All software is provided under license only, and not as a sale or other transfer of ownership. Buyer undertakes to accept and be bound by any applicable End User License Agreement (EULA) or other license agreement imposed by SPARK or a third party for such software

Assignment:  Neither Party may assign, delegate, sublicense, or transfer, whether by operation of law or otherwise, their obligations or rights hereunder without the other Party’s written consent and any assignment, delegation, sublicense, or transfer without such written consent is void and of no effect. If consent is given, the obligations and liabilities of Buyer’s Order shall be binding upon and inure to the benefit of the successors and assigns of the Parties. Notwithstanding this provision, SPARK may subcontract work to be performed under Buyer’s Order to third parties or assign Buyer’s Order to a parent, subsidiary, or affiliate company of SPARK. In addition, without securing such prior consent, SPARK shall have the right to assign Buyer’s Order to any successor, by way of merger, consolidation, or the acquisition of substantially all of the business and assets of SPARK relating to the subject matter of Buyer’s Order; provided, however, that such successor shall expressly assume all of the assignor’s obligations and liabilities under Buyer’s Order.

Disputes and Arbitration:  The Parties shall attempt to resolve any dispute, controversy, or claim arising under or relating to SPARKS’s Offer, Buyer’s Order or the terms of this Agreement, including their interpretation, performance, or termination. If the Parties are unable to resolve such dispute, either Party may refer the dispute to arbitration. The arbitration shall be conducted in English by one (1) arbitrator all in accordance with the National Arbitration Rules of The ADR Institute of Canada, Inc., which shall administer the arbitration and act as appointing authority. The arbitration, including the rendering of the decision and/or award, shall take place in Montreal, Quebec, Canada, and shall be the exclusive forum for resolving the dispute, controversy, or claim and the parties shall equally bear the cost of the arbitration, including the cost of the arbitrator’s attendance and travel to the venue. The arbitrator shall make the final determination as to any discovery disputes between the Parties. Examination of witnesses by the Parties and by the arbitrator shall be permitted. A written transcript of the hearing shall be made and furnished to the Parties. The cost of this transcript shall be borne equally by the Parties. The award or decision of the arbitrator shall state the reasons upon which the award or decision is based and shall be final and binding upon the Parties. The prevailing Party shall be entitled to an award of attorneys’ fees, at the discretion of the arbitrator. Both Parties waive their right to any appeal under any system of law. The award shall be enforceable before any court of competent jurisdiction upon the application to such court by either Party. The arbitrator shall have no authority to award any of the types of damages excluded hereunder and shall be so instructed by the Parties.

Governing Law:  The performance of the Parties, and any judicial or arbitration proceedings, shall be construed and governed in accordance with the laws of the Province of Quebec, Canada and the Federal laws applicable therein. Neither (i) the United Nations Convention on Contracts for the International Sale of Products; (ii) the 1974 Convention on the Limitation Period in Contracts for the International Sale of Products (hereinafter referred to as the “1974 Convention”); nor (iii) the Protocol Amending the 1974 Convention held at Vienna, Austria, on April 11, 1980, apply in any manner to the interpretation or enforcement of SPARK’s Offer, or Buyer’s Order.

Force Majeure:  SPARK shall not be liable for any loss or damage resulting from any delay in delivery or failure to give notice of delay when such delay is due to any cause or event beyond SPARK’s control, including, without limitation, acts of God, pandemics, epidemics, unavailability of supplies or sources of energy, riots, wars, terrorist acts, sabotage, fires, strikes, labor difficulties, delays in transportation, delays in delivery or defaults by SPARK’s vendors, or acts or omissions of Buyer. In the event of delay due to any such cause, time for delivery shall be extended for a period of time equal to the duration of such delay and Buyer shall not be entitled to refuse delivery or otherwise be relieved of any obligations as a result of the delay. If, as a result of any such cause, any scheduled delivery is delayed for a period in excess of one-hundred-twenty (120) days, SPARK or Buyer shall have the right by written notice to the other to cancel the order for the Products subject to the delayed delivery without further liability of any kind.

General

Export Compliance:  If, at the time(s) of SPARK performance hereunder, an export license is required for SPARK to lawfully export Product(s) or technical data, then the issuance of the appropriate license to or its subcontractor shall constitute a condition precedent to SPARK’s obligations hereunder. SPARK reserves the right to stop performance at any time if SPARK believes that such performance may violate USA export laws.  Buyer agrees to comply with all applicable export laws, regulations and orders, including, but not limited to, all such laws, regulations and orders of (i) the Government of Canada, including the Export and Import Permits Act, the United Nations Act, the Special Economic Measures Act, the Defense Production Act, and the Canadian Criminal Code; (ii) the country of Buyer; and (iii) the country of the end-user.  Specifically, but without limitation, Buyer agrees that it will not resell, re-export or ship, directly or indirectly, any Product(s) or technical data in any form without obtaining appropriate export or re-export licenses.  Buyer acknowledges that the applicable export laws, regulations and orders may differ from item to item and/or time to time

Severability:  If any provision of this document is held invalid, all other provisions shall remain valid.

No Agency: SPARK and Buyer are independent contractors, and no agency, partnership, joint venture, employee-employer or franchisor-franchisee relationship is intended or created by these terms and conditions. Buyer is solely responsible for its employees and agents and shall indemnify SPARK against any claim, liability, cost or damage related to Buyer’s actions or those of its employees or agents, including, but not limited to, the making of unauthorized warranties or representations on behalf of SPARK.

Third Party Beneficiaries: Buyer represents and warrants that there exist no third-party beneficiaries to Buyer’s rights hereunder.

Separate Transactions: Each shipment made hereunder shall be considered a separate transaction. In the event of any default by Buyer, SPARK may decline to make further shipments. If SPARK elects to continue making shipments, such action shall not constitute a waiver of any default by Buyer or in any way affect SPARK legal remedies for such default.

Entire Agreements and Amendments: These terms and conditions together with any executed order form constitute the entire agreement between the parties and supersede all previous communications, whether oral or written. Any change to these terms and conditions may be made only upon mutual agreement of the parties in writing.

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