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SPI CORP TERMS AND CONDITIONS

Sierra Pacific Innovations, Corp. (hereinafter “SPI”) hereby offers to supply goods and services expressly conditional upon the BUYER’S acceptance of the following sales terms and conditions. SPI, by commencing performance, shall not prejudice its rights to enforcement of these terms and conditions. SPI terms and conditions apply to anyone engaging in business or purchasing SPI products or services.

Offers, proposals, and/or quotations provided to prospective customers are not valid unless issued in writing by an SPI authorized representative. Any offers generated verbally or conveyed in a manner other than writing, express or implied, are not valid unless subsequently issued in writing and assigned a valid quotation number.

 All offers of sale by SPI are firm for thirty (30) days from the date of the offer unless otherwise explicitly stated in SPI’s written offer or as otherwise may be agreed to expressly in writing by SPI. All such SPI’s offers are subject to change without notice upon the expiration of the term of the original offer.

Prices offered by SPI for items and services sold do not include any custom’s charges, duties, fees, taxes, transportation charges, or insurance costs. Where applicable, these costs shall be borne by the BUYER. Pricing includes packaging in accordance with best commercial practices unless otherwise specified by the BUYER. Special packaging requests will only be performed if agreed to by SPI in writing and will be at BUYER’s expense.

SPI prices stated are exclusive of any federal, state, municipal, or other government tax that may be imposed upon the production, storage, sale, transportation or use of the products and services described herein. Buyer shall present SPI with a valid and correct tax exemption or direct payment certificate if applicable at the time of order placement. If a valid and correct tax exempt or direct payment certificate is not provided at the time of order placement, Buyer shall be responsible for payment of sales and/or use tax. Buyer shall be responsible to remit any applicable sales and/or use tax directly to the state.

The price for products and supplies containing materials and/or components with volatile market prices such as precious metals, nonferrous metals, magnetic minerals, proprietary alloys, and certain organic materials (petroleum based, for example) may be subject to the application of a surcharge(s) at time of shipment, based upon fluctuations in the market value of such materials.

4.) ORDER/CONTRACT ACCEPTANCE:

 Orders, purchase orders and contracts submitted to SPI by BUYER become binding upon acceptance by an SPI authorized representative. No terms and/or conditions issued by the BUYER shall alter SPI’s Sales Terms and Conditions in any respect and shall not apply to the transaction unless specifically agreed to in writing by an authorized SPI representative. Any BUYER terms and conditions shall only be considered as an offer and are not binding on SPI unless expressly accepted by an authorized SPI representative. BUYER shall not assign its rights or delegate its duties without the prior written consent of SPI.

BUYER agrees to obey and comply with all international, local, state and federal laws in obtaining and using any items sold by SPI.

BUYER acknowledges that SPI is not legally liable for any damages or claims as a result of any misusage of purchased products.

 SPI shall use its reasonably best efforts to make delivery in accordance with the accepted sales offer or contract, but shall not be liable to the BUYER for delays in manufacturing or delivery due to causes beyond its reasonable control, including, without limitation, fire, accidents, acts of God, acts of war (declared or undeclared), civil commotion, terrorism, hostilities, inability to secure materials or labor, non-issuance, lapse or withdrawal of U.S. export license, and government acts, laws, or regulations. In the event of such a delay, SPI reserves the right to extend the date for delivery by a period of time equal to the time lost by reason of the delay. In the event of late payment or performance on the part of BUYER, both parties shall negotiate an equitable adjustment in price and/or schedule. While SPI shall have no obligation to comply with unilateral directives to change schedules or temporarily cease work, SPI will endeavor to accommodate BUYER’s reasonable written request for acceleration or deceleration made within 60-90 days prior to scheduled delivery. Such changes may or may not be accepted by SPI at its sole discretion. In the event that SPI accepts such changes, SPI shall be under no obligation to comply with the request until a price adjustment, if deemed necessary, acceptable to SPI is negotiated between the parties and documented in a written contract amendment and/or offer modification.

Payment shall be made in full in U.S. Dollars immediately available to SPI by credit card, debit card, wire transfer, letter of credit, or via other monetary instruments and vehicles as otherwise agreed to by SPI to which these terms and conditions are attached. Payment terms, when offered based on the submission of a credit application by BUYER and subsequent approval by SPI of creditworthiness, are NET 30 DAYS calculated from the date of issuance of

invoice unless otherwise stipulated by SPI. In addition to any other rights or remedies available to SPI, failure to pay the amounts due within the time specified shall result in a late charge of one-and-one-half (1.5%) per month prorated daily to BUYER’s account until final payment is accepted and cleared.

Title of all goods and services shall pass to BUYER only upon payment in full. Until such time as title of goods and services rendered is transferred, SPI retains collateral interest in products and services. All designs, inventions (whether patented or not patented), processes, technical data, drawings, plans, trade secrets and/or confidential information related to the items or services to be purchased, not furnished by BUYER, are the exclusive property of SPI, and all rights, title, and interest in and to such properties shall remain exclusively with SPI notwithstanding SPI’s conveyance and/or disclosure of any part thereof to BUYER or BUYER’s payment to SPI for engineering or nonrecurring charges. BUYER shall not use or disclose such property to any third party or to anyone not having a “need to know”, including employees, without the expressed prior written consent of SPI. Title to all tools, test equipment and facilities not furnished by BUYER or specifically paid for by BUYER as a separate line item under any order, shall remain with SPI. SPI does not agree to submit to BUYER as a result of the consideration paid under any order, any information, technical data or drawings that are proprietary to SPI; nor does SPI agree to grant to BUYER any patent rights, title or license without SPI’s expressed prior written consent.

It is an express condition of any purchase of SPI products that BUYER shall neither reverse engineer, decompile, deconstruct, disassemble, synthesize, or extract any element of and/or otherwise discover any confidential information, nor request nor accept any disclosure of confidential information from a third party who reverse engineers, decompiles, deconstructs, disassembles, synthesizes, or extracts any element of and/or otherwise discovers any confidential information, nor otherwise attempt to derive confidential information contained or embodied in SPI’s products. In the event that BUYER breaches any obligation set forth in the preceding sentence, or otherwise misappropriates or makes

unauthorized use of SPI’s confidential information, any intellectual property resulting or deriving from the breach(es) shall be for SPI’s benefit, and SPI shall be the sole and exclusive owner of that intellectual property. BUYER will execute an assignment of invention(s) in the form approved by SPI for any intellectual property arising from a breach of this provision.

The aforementioned provisions shall in no way be considered to abridge, supplant or otherwise limit other legal or equitable remedies available to SPI for such breaches, and SPI may seek redress for such breaches to the fullest extent allowable by law. The obligations in this provision shall survive termination of this transaction.

Most SPI products are COTS, Final inspection and acceptance shall occur at SPI’s premises prior to shipment of goods. Final inspections, source inspections, and acceptance shall only occur after satisfactory completion of testing performed by SPI in accordance with SPI’s quality processes and procedures. Final inspections, source inspections, and acceptance may be regulated by the U.S. Government for foreign and classified programs. Failure to secure BUYER inspections and acceptance approval at SPI’s facility constitutes a force majeure event. Requests for source inspection by BUYER must be submitted at time of order placement.

BUYER shall comply with all applicable Federal, State, and local laws including, but not limited to: laws concerning procurement integrity, particularly the Office of Federal Procurement Act (41 USC 423), the Byrd Amendment (31 USC 1352), laws governing lobbying actions and activities (2 USC 261 & 267), laws prohibiting the offer and payment of bribes and/or gratuities (18 USC 201), the Foreign Corrupt Practices Act of 1977 and amendments (15 USC 78), Omnibus Trade and Competitiveness Act of 1988, Export Administration Regulations (EAR), Arms Export Control Act of 1976 (PL 90-629) and the International Traffic in Arms Regulations (22 CFR 120-130). BUYER acknowledges that if purchased items and services are destined for export (as defined in 22 CFR 120-130), BUYER has the complete responsibility and agrees to comply with all export laws and regulations of the U.S. Department of Commerce and the U.S. Department of State. Certain equipment offered for sale by SPI contains active emitting lasers that may present a risk to health and safety and may be regulated by the Food and Drug Administration (FDA) and/or the U.S. Department of Defense (DoD). BUYER agrees to resell and/or distribute regulated products in strict conformance with such relevant agency requirements. BUYER agrees to ensure that operating and user manuals, warning labels, stickers and other product safety information provided by SPI are not altered or removed from any SPI product. 12.) EXPORT: Products purchased are subject to U.S. Government export laws and regulations. BUYER shall not export, re-export, or transfer products or confidential information received from SPI without first obtaining the appropriate US Government approvals. Obtaining such licensing shall be the exclusive responsibility of BUYER and SPI makes no representation or warranty regarding the issuance of export licenses for any product.

SPI sales and all other business transactions are conducted only with U.S. Persons as defined by 22 CFR 120.15 as a person who is a lawful permanent resident as defined by 8 U.S.C. 1101(a)(20) or who is a protected individual as defined by 8 U.S.C. 1324b(a)(3) or with any corporation, business association, partnership, society, trust, or any other entity, organization or group that is lawfully incorporated, permitted and licensed to do business in the United States or any governmental (federal, state or local)

agency or entity. In entering into a transaction with SPI, BUYER represents that he/she/it possesses such lawful U.S. person or entity status unless otherwise disclosed.

All supplies and services are sold FOB origin (INCOTERMS 2000). That point of origin is the SPI facility. SPI assumes no responsibility for delays, breakage, damage, or loss after delivery to the carrier. SPI reserves the right to make partial shipments at its discretion. SPI will deliver shipment to a carrier it deems appropriate unless BUYER specifies its own preferred carrier at time of order placement.

New products are warranted for the duration of the original manufacturer’s warranty. Demonstrator or used equipment is warranted for a period of 30 days to a maximum of 1 year depending on SPI’s original sales offer.

In the event of order cancellation for breach of the contract provisions by BUYER, SPI shall have no further liability to BUYER and SPI shall not be liable for any costs of cancellation, special, incidental, or consequential damages (including punitive or exemplary damages) for any cause or of any nature whatsoever and such cancellation shall be in addition to any other rights and remedies of SPI under this order or law. Further, SPI reserves the right to cancel this order or any portion thereof without liability if BUYER fails to make payment as required by the terms of the order or if BUYER is adjudicated bankrupt, files a petition of bankruptcy, makes an assignment for the benefit of creditors or action under any law for the relief of debtors is taken.

If this order is accepted under a U.S. Government contract, it may be terminated for the convenience of the U.S. Government only in accordance with applicable federal procurement laws and regulations that shall govern the rights and obligations of the parties in any such termination.

If this order is accepted under a non-U.S. Government contract, it may be terminated for convenience by BUYER at a rate not less than twenty-five percent (25%) of the total contract value.

If an order is identified as including products deemed to be Special Order Products by SPI, then the BUYER is required to pay a nonrefundable deposit equal to 50% of the order total in advance. If SPI has accepted the BUYER’s order and if the BUYER cancels the order for any reason, the deposit is forfeited by the BUYER and serves to compensate SPI for its costs and expenses related to the order.

SPI warrants that all products and services under this limited warranty shall be free from defects in material and/or workmanship at the time of shipment and shall perform during the warranty period in accordance with the specifications of the order. Should any failure to conform to these warranties be discovered and brought to the attention of SPI during the warranty period, and be substantiated by examination at SPI’s facility or duly authorized and certified field personnel, then at its own cost, SPI shall correct such failure at SPI’s own and sole option, repair or replacement of the nonconforming item or portion therefore or return the unit purchase price of the nonconforming item or component. BUYER agrees that this remedy shall be its sole and exclusive remedy against SPI. In no event shall SPI be liable for any costs or expenses in excess of those described in this paragraph and expressly excluding any liability or damages for special, incidental, and/or consequential damages.

The limited warranty period for other than standard new product sales shall be as stated by SPI in any such sales offer and will commence on the date of invoice issuance but will not exceed three (3) months from date of invoice issuance. These warranties periods apply unless a different warranty period is expressly agreed to by SPI in writing. This warranty shall not extend to any item that, upon examination by SPI, is found to have been subject to:

a.) mishandling, misuse, negligence or accident,

b.) installation, operation, maintenance (or lack thereof) that was either not in accordance with SPI’s specification, instructions, and/or was otherwise improper,

c.) tampering as evidenced by broken seals, damaged packaging containers, etc.,

d.) repair and/or alteration by anyone other than SPI or SPI’s certified and authorized field network without SPI’s express advance written approval,

e.) damage due to battery leakage.

This warranty does not apply to expendable items such as batteries, bulbs, cleaning supplies, and other consumables nor does it cover cosmetic damage that does not impede form, fit, and function of the product. SPI shall be the sole determining evaluator and authority for adjudicating warranty claims by BUYER. BUYER agrees to conform with SPI’s established return procedures.

The expressed Warranties and Remedies constitutes SPI’s entire warranty and BUYER’s sole remedy with respect to any defect or nonconformance in equipment manufactured by and services provided by SPI. These warranties and remedies are exclusive and lieu of all other warranties expressed or implied, including the implied warranties of merchantability and of fitness for a particular purpose. SPI shall not, under any circumstances, be

liable for any damages greater than the unit price of any item(s) and/or service(s) sold with respect to which any claim is made, including all costs and expenses and attorney fees, special, incidental or consequential damages of any nature whatsoever whether arising from SPI’s breach of contract, or breach of expressed or implied warranty, arising in tort, at law or in equity, or any law giving rise to a claim of strict liability or for any other cause. SPI shall not, under any circumstances, be liable to any third party for any special, incidental and/or consequential damages arising from claims for personal injury, property damage, or for any other claim due to use, possession, or operation of the products sold hereunder, whether alleged to be due in whole or part to SPI’s fault and/or negligence.

SPI agrees that the Controller General of the United States or his duly authorized representative shall, until the expiration of three (3) years after final payment of the order, have access to and the right to examine any directly pertinent and relevant books and records available. SPI does not agree to any other audits or examination or records including but not limited to quality control records and process documents. SPI does not agree to any examination and/or audit of books and records by any other BUYER unless expressly accepted in writing.

Except where SPI has otherwise assumed such responsibility for itself under expressed provisions of a statement of work, BUYER shall agree to cooperate in all reasonable ways necessary to SPI’s performance of the work. BUYER covenants that it has disclosed fully and accurately to SPI all general and local conditions that can affect performance of the work prescribed in the order or the price thereof (for example: mounting platforms, information on interfaces, mission profiles, etc.). BUYER acknowledges that SPI is entitled to rely on information furnished by BUYER in developing its specifications, equipment selection, price and other terms of the order. For equipment interface requirements, BUYER shall agree to provide access to all relevant system platforms and fielded mounting interfaces related to completion of the work.

To the extent that the items ordered are manufactured to designs, drawings, specifications, or instructions furnished by BUYER, BUYER guarantees that the manufacture and sale or use of such items will not infringe upon any U.S. or foreign patents. BUYER further agrees to indemnify and hold harmless SPI from any expense, loss, cost, damage, or liability of any kind that may be incurred because of any such infringement or alleged infringement of patent rights with respect to such items and to defend, at its own cost and expense, any action and claim in which such infringement is alleged. BUYER shall promptly notify SPI of any such action and shall provide SPI an opportunity, at SPI’s option, to participate in any defense of such action or claim as SPI’s own expense. SPI shall hold BUYER harmless from costs actually incurred arising directly from the defense of any suit for infringement of any domestic or foreign patent by a SPI-manufactured item, provided that SPI shall be given timely written notice of such suit and the option to replace the same, obtain a license, demonstrate proof of indemnification, make other arrangements to avoid litigation or to defend the suit. No indemnification is offered for alleged infringement arising from the use of SPI’s items in combination with other items supplied by BUYER or from compliance with drawings, specifications, or instructions furnished by BUYER as described above. Further, no indemnification by SPI applies if order is accepted under a U.S. Government contract containing an Authorization and Consent Clause applicable hereto as prescribed under federal procurement laws.

If the BUYER does not specify a product revision level, then SPI shall interpret it to mean “same as last build” or latest revision in SPI engineering files, whichever is the most recent revision. SPI reserves the right to make substitution of materials without degrading the quality of the product or affecting form, fit, and function. BUYER approval shall be solicited when changes affect form, fit and function. SPI further reserves the right to discontinue any items without notice and to change or modify specifications at any time without incurring any obligation to incorporate new or modified features in components and products previously sold or shipped.

In addition to other liability limitation herein contained, neither party shall be responsible to the other for any loss or damage due to a failure or delay in performance or delivery of any of the items or services required under this order when such delay or failure is due to causes beyond the reasonable control of the failing or delaying party. Such causes shall include, without limitation, fires, floods, epidemics, quarantines, unusually severe weather events, embargoes, wars (declared and undeclared), political strife, riots, delays in transportation, compliance with any regulation or directives of any national, state, or local government or authority, and unforeseeable shortages in fuel, power, materials, or labor.

The failure of SPI to enforce at any time any of the provision of this order shall not constitute a waiver of such provisions or a waiver of the right of SPI to enforce any or all provisions. If any term or provision of this order is held invalid or unenforceable by any court of competent jurisdiction, as defined in the jurisdiction clause of this document, the remainder of this order shall continue to be valid, in force, and binding upon the parties unless performance thereof is rendered legally impractical and no longer fulfills the intention of the parties under this order.

This contract shall be deemed to have been made and performed in, and shall be construed, interpreted and the rights and obligations of the parties determined by the law of the State of Nevada, USA, excluding choice of law rules. All disputes that cannot be amicably resolved shall be decided by a state or federal court of competent jurisdiction located in the State of Nevada.

BUYER accepts and acknowledges that these sales terms and conditions are the entire and sole agreement and understanding between BUYER and SPI.

This order may not be modified, added to, deleted from, cancelled, or rescinded except through written instrument executed by both parties with the same formality. In the event of a dispute between the BUYER’s General Terms and Conditions and SPI’s offer and sales terms and conditions, SPI’s offer and terms and conditions shall take precedence.

By contacting, consulting and, or placing an order with SPI, the BUYER accepts all terms and conditions herein expressed.