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Terms and Conditions of Sale

1. SCOPE AND DEFINITIONS

The terms and conditions of sale set forth herein (“Terms and Conditions”) apply to all sales of Ikanos Communications, Inc. (“Seller”) products except in the case that a separate written agreement has been negotiated between Seller and you (“Buyer”). These Terms and Conditions apply both to hardware products and software products (collectively “Products”), provided that to the extent that Products include bundled software provided with the purchase of hardware products, the terms “purchase”and “sale”refer to the acquisition of a license, further described in the applicable software license agreement as described in Section 12.

2. ACCEPTANCE OF ORDER BY SELLER

All orders must be initiated by written purchase order, and will not be binding on Seller until approved and accepted by Seller in writing. Seller’s acceptance of Buyer’s order is conditioned on Buyer’s unqualified acceptance to the Terms and Conditions set forth herein in lieu of any terms and conditions in Buyer’s purchase order. Seller hereby rejects any term, provision or condition in Buyer’s purchase order or other communication with Seller in conflict with, or purporting to add to or modify these Terms and Conditions and any such term, provision or condition shall be deemed stricken and shall not be binding upon Seller unless and until an officer of Seller accepts such term, provision or condition in writing.

3. TITLE AND DELIVERY; ALLOCATION OF PRODUCTS

Title to hardware Products and the risk of loss or damage to any Products shall pass to Buyer upon delivery of Products to a common carrier at Seller’s shipment facility, said carrier being deemed to be Buyer’s agent. Seller may choose the method of shipment in its discretion unless Seller has received specific shipping instructions from Buyer. Provided that Seller receives all necessary information from Buyer, Seller will make reasonable efforts to meet the delivery dates identified on Seller’s acceptance form. Seller may ship Products earlier than the specified delivery date. If Buyer delays shipments, payments shall become due on the date when Seller is prepared to make shipment. Products held for Buyer during any such delay shall be at the risk and expense of Buyer. In no event shall Seller be liable for delay in delivery due to shortages in energy, components, raw materials or supplies, acts of god, labor unrest, fire, flood, explosion or earthquakes. In the event of any such delay, the date of delivery shall automatically be extended for a period equal to the time lost by reason of the delay. In the event that Seller, for any reason, has insufficient supplies of Products to meet future demand or accepted offers, Seller reserves the right in its sole discretion to make partial deliveries of Products and invoice for them separately, which shall not relieve Buyer of the obligation of accept other parts of its order. In any event, Seller shall not be in default for any failure to deliver Products to Buyer unless Seller does not begin to cure such failure within ten (10) days after receipt of written notice of failure to deliver from Buyer. In the event that Seller so defaults, Buyer’s sole remedy for such default shall be cancellation of the applicable order. Seller shall have no other liability to Buyer as a consequence of any such default.

4. CANCELLATION/RESCHEDULES

Buyer must place orders in accordance with Seller’s quoted manufacturing lead time. Once placed, Buyer may not cancel any order, in whole or in part, and any purported cancellation shall be void. Buyer may not reschedule the delivery of any order. Change Order shipment requests are acceptable if outside the thirty (30) day window of Buyer’s requested delivery date and if scheduled to ship within the same ninety (90) day calendar quarter as the original Buyer requested delivery date.

5. ACCEPTANCE OF PRODUCTS BY BUYER

All Products furnished hereunder which meet Seller’s published specifications shall be deemed accepted by Buyer upon receipt. Buyer has one (1) year from the date Products were accepted to request a Return Material Authorization for the Products.

6. PRICE AND PAYMENT TERMS

Prices quoted shall be valid only for the period of time indicated in the quotation, and only if signed by an authorized representative of Seller. All prices are exclusive of transportation, insurance, taxes, duties and other charges related thereto. Such charges when applicable will appear as separate additional items on the invoice. No discounts whatsoever are authorized unless and until Buyer and Seller have expressly agreed in writing to a discount and such writing has been approved by an officer of Seller. If Buyer has established an open account with Seller, payment shall be due and payable net thirty (30) days from the date of the invoice unless otherwise indicated on the invoice. Prior to Buyer’s establishment of an open account with Seller, payment is due prior to shipment. Even after Seller’s acceptance of an order, shipments or deliveries will at all times be subject to Seller’s approval, and Seller may at any time decline to make any shipments or deliveries until receipt of payment or upon additional terms and conditions or security satisfactory to Seller. All overdue amounts shall bear interest at a rate of 1.5% per month or the maximum rate permitted by law, whichever is less. Payments due hereunder shall not be subject to any set–off for claims by Buyer. Seller reserves the right to declare all sums immediately due and payable hereunder for any breach of these Terms and Conditions including, without limitation, failure to comply with credit terms.

7. TAXES

Except to the extent that Buyer provides Seller with a tax-exempt certificate acceptable in the appropriate taxing jurisdiction prior to shipment of the Products, Buyer shall pay any present or future excise, sales, use or similar tax and other governmental charges except for taxes based on Seller’s income, and Buyer agrees to indemnify Seller against liability for payment of such taxes. Such taxes, when applicable, will appear as separate additional items on the invoice.

8. INSOLVENCY OF BUYER

In the event of the bankruptcy or insolvency of Buyer or in the event any proceeding is brought by or against Buyer under the bankruptcy or insolvency laws applicable to Buyer, Seller shall be entitled to cancel any order then outstanding and shall entitled to receive reimbursement for its cancellation charges.

9. LIMITED WARRANTY

Seller warrants that each Product to be delivered hereunder shall, under normal use and conditions, at the time of shipment and for one (1) year thereafter conform substantially to Seller’s relevant published specifications in all material respects. This limited warranty does not cover defects resulting from acts of God, use contrary to Seller’s specifications or instructions, or repair or modification by anyone other than Seller or Seller’s authorized agents. IF ANY PRODUCT DOES NOT CONFORM TO THE FOREGOING WARRANTIES, BUYER’S EXCLUSIVE REMEDY AND SELLER’S EXCLUSIVE OBLIGATIONS WILL BE AS FOLLOWS:

• a) Buyer must first notify Seller in writing of the alleged defect and allow Seller a reasonable opportunity to inspect the allegedly defective Product.
• b) No Product may be returned without Seller’s consent, and Seller’s Return Material Authorization must accompany all returns. All returns must be delivered to Seller within the warranty period.
• c) Buyer may then, at its own expense, return the allegedly defective Product, freight prepaid and in the same packing condition in which it left Seller’s premises, accompanied by a brief statement explaining the alleged defect to Seller.
• d) If Seller determines that any returned Product is not defective, Seller will return the Product to Buyer at Buyer’s expense, freight collect, along with a written statement setting forth Seller’s conclusion that the returned Product was not defective, and Buyer agrees to pay Seller’s reasonable cost of handling and testing such Product.
• e) Upon determining that a returned Product is defective, Seller, at its option may (i) repair or replace the Product and ship the repaired or replaced Product to Buyer at Seller’s expense or (ii) refund the purchase price paid by Buyer for such Product. Any replacement Product will be warranted under this Agreement for the remainder of the original warranty period or thirty (30) days, whichever is longer.
• f) Seller shall in no event be responsible for repair or replacement of, or refund of the purchase price for, any Products in Buyer’s distribution channels or in the possession of Buyer’s customers or for any costs incurred by Buyer incidental to the replacement of any defective Product, including, but not limited to, any costs incurred by Buyer related to the repair or replacement of any Products not in Buyer’s possession.

10. DISCLAIMER OF WARRANTIES

THE WARRANTIES SET FORTH IN THESE TERMS AND CONDITIONS ARE IN LIEU OF ALL OTHERS, AND SELLER EXPRESSLY DISCLAIMS ANY AND ALL OTHER WARRANTIES, WHETHER EXPRESS, IMPLIED OR STATUTORY, INCLUDING, BUT NOT LIMITED TO, THE IMPLIED WARRANTIES OF MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE, OR NONINFRINGEMENT. BUYER ACKNOWLEDGES AND AGREES THAT THE PRODUCTS OF SELLER HAVE NOT BEEN DESIGNED, TESTED, OR MANUFACTURED FOR USE OR RESALE IN APPLICATIONS WHERE THE FAILURE, MALFUNCTION, OR ANY INACCURACY OF THE PRODUCTS CARRIES A RISK OF DEATH OR SERIOUS BODILY INJURY, INCLUDING BUT NOT LIMITED TO, USE IN NUCLEAR FACILITIES, AIRCRAFT NAVIGATION OR COMMUNICATION, EMERGENCY SYSTEMS, OR OTHER APPLICATIONS WITH SIMILAR DEGREE OF POTENTIAL HAZARD. NO PERSON IS AUTHORIZED TO MAKE ANY OTHER WARRANTY OR REPRESENTATION CONCERNING THE PERFORMANCE OF THE PRODUCTS OTHER THAN AS PROVIDED IN THESE TERMS AND CONDITIONS. THE WARRANTIES SET FORTH IN THESE TERMS AND CONDITIONS SHALL EXTEND TO BUYER ONLY AND NOT TO BUYER’S CUSTOMERS OR ANY OTHER THIRD PARTY.

11. INTELLECTUAL PROPERTY INDEMNITY

Seller agrees, at its expense, to defend all legal proceedings instituted against Buyer to the extent that such proceedings are based on any claim that any hardware Product or any part thereof furnished hereunder infringes a copyright or a United States patent or constitutes misappropriation of any trade secret and to pay any costs (including reasonable attorneys’fees) and damages attributed to such claim in such proceedings awarded by a court of final appeal against Buyer or through settlement of such claim, provided that (i) Buyer gives Seller immediate written notice of such claim; (ii) Buyer grants Seller sole control of the defense and settlement or compromise of such claim, and (iii) Buyer fully cooperates with Seller and provides Seller with all information and applicable evidence to Buyer in the defense of any such claim.

• a) Seller shall have no obligation under this section for any claim of infringement to the extent that any such claim arises out of (i) compliance with designs, plans, or specifications of Buyer, (ii) use of the Product in combination with devices or products not purchased hereunder where the use of the Product would not itself be infringing; (iii) use of the Product in an application or environment for which such Product was not designed or contemplated; or (iv)Buyer’s failure to use any material or follow any instructions provided by Seller with respect to the use of the Product to avoid such infringement claim.
• b) In any event, if any Product becomes, or in Seller’s opinion is likely to become, the subject of any such claim, Seller shall have the right, at its sole option and expense, to (i) procure for Buyer the right to continue using such Product, (ii) modify such Product so as to make such Product non-infringing/misappropriating, or (iii) require the return of such Product and credit Buyer the net book value of such Product at the time of such return.
• c) THIS SECTION 11 SETS FORTH BUYER’S SOLE AND EXCLUSIVE REMEDY AND SELLER’S SOLE AND EXCLUSIVE OBLIGATION IN THE EVENT THAT ANY PRODUCT FURNISHED HEREUNDER INFRINGES THE INTELLECTUAL PROPERTY RIGHTS OF A THIRD PARTY. SELLER SHALL HAVE NO INDEMNIFICATION OBLIGATIONS UNDER THIS AGREEMENT WITH RESPECT TO ANY SOFTWARE PRODUCTS FURNISHED HEREUNDER. SELLER’S INDEMNIFICATION OBLIGATIONS WITH RESPECT TO SOFTWARE PRODUCTS, IF ANY, ARE SET FORTH IN A SEPARATE SOFTWARE LICENSE AGREEMENT, AS DESCRIBED IN SECTION 12.
• d) Buyer shall hold Seller harmless and shall indemnify Seller from any damages, losses, liabilities and/or settlement costs (including reasonable attorneys’fees) resulting from any claim, including, without limitation, any intellectual property infringement or misappropriation claim against Seller arising out of (i) use of any Product in combination with devices or products not purchased hereunder where the Product is not itself infringing, or (ii) use of any Product in an application or environment for which such Product was not designed or contemplated.

12. SOFTWARE LICENSE

All software incidental to Products delivered to Buyer hereunder is protected by copyright and international treaty. Buyer receives no license or right to use any software Products delivered to Buyer hereunder unless such use is in conjunction with hardware Products purchased from Seller. Additional software terms pertaining to specific Products may be contained in an End User Software License accompanying such Products.

13. NONDISCLOSURE OF CONFIDENTIAL INFORMATION

Buyer acknowledges that it may gain access to trade secrets and confidential information of Seller, including, but not limited to, design information, processing technology and testing procedures. At all times during or after Buyer’s relationship with Seller, Buyer agrees to undertake all necessary and appropriate steps to maintain the secrecy of Seller’s trade secrets and confidential information. Buyer further acknowledges and agrees that, except as otherwise provided in the relevant license agreement between Buyer and Seller, the sale to Buyer of Products does not convey any license expressly or by implication or estoppel to Buyer, and Buyer shall not manufacture, reverse engineer, duplicate, or otherwise copy or reproduce, in any manner, any of the Products or any part thereof.

14. SUBSTITUTIONS AND MODIFICATIONS

Seller shall have the right to make substitutions and modifications from time to time in the specifications of Products sold by Seller provided that such substitutions or modifications will not materially effect overall Product performance. Seller shall give Buyer ninety (90) days notice of material Product changes.

15. NOTICE

All notices, authorizations and requests required to be given under these Terms and Conditions shall be deemed given (i) three (3) days after being deposited in the U.S. mail postage prepaid, certified or registered, return receipt requested; or (ii) one (1) day after being sent by overnight courier, charges prepaid, and in each case addressed as set forth on the purchase order or acknowledgement, as the case may be or to such other address as the party who is to received the notice or request so designates by written notice to the other provided in accordance with this Section 15.

16. NONASSIGNABILITY

Buyer shall not assign this order or any of its right hereunder without the prior written consent of Seller. Any purported assignment by Buyer shall be void and of no effect.

17. EXPORT REQUIREMENTS

The Products and all related technical information and materials are subject to U.S. export control laws. Buyer will not export, re-export, divert, transfer or disclose, directly or indirectly, the Products or any related technical information or materials without complying strictly with U.S. or other applicable export control laws and regulations and all other legal requirements, including without limitation, obtaining the prior approval of the U.S. Department of Commerce.

18. GOVERNMENT CONTRACTS

Use, duplication, or disclosure by any unit or agency of the United States Government of the Products and all technical information and documentation related thereto is subject to the restrictions set forth in these Terms and Conditions and as provided by DFARS 227.7202-1(a) and 227-7202-3(a), DFARS 252-227-7013(c) (1)(ii)(Oct 1988). FAR 12-212 (c), (ii) FAR 52.227-19, or (iii) FAR 52.227-14(ALT III), as applicable. Seller represents that the Products were developed entirely at private expense, and that no part of the Products, including any software, was first produced in the performance of a United State Government contract. Seller shall not be subject to any ‘flowdown’provision required by Buyer (if Buyer is a government entity) unless agreed to by Seller in writing. Buyer agrees that in the event that Buyer supplies any Product or any technical information or documentation related thereto to any unit or agency of the United States Government, Buyer will ensure that such Products, technical information or documentation bears a legend in the form of this Section 18.

19. LIMITATIONS OF LIABILITY

IN NO EVENT SHALL SELLER BE LIABLE FOR ANY INDIRECT, PUNITIVE, EXEMPLARY, SPECIAL, CONSEQUENTIAL OR INCIDENTAL DAMAGES, INCLUDING, WITHOUT LIMITATION, LOSS OF REVENUE, PROFITS, DATA, OR GOODWILL, THAT BUYER MAY SUFFER, DIRECTLY OR INDIRECTLY, ARISING OUT OF OR IN CONNECTION WITH THE PURCHASE, SALE, USE, PERFORMANCE OR FAILURE OF THE PRODUCTS, WHETHER SUCH LIABILITY ARISES UNDER CONTRACT, TORT, (INCLUDING NEGLIGENCE), STRICT PRODUCT LIABILITY OR OTHERWISE, EVEN IF SELLER HAS BEEN ADVISED OF THE POSSIBILITY OF SUCH DAMAGES OR IF SUCH DAMAGES COULD HAVE BEEN REASONABLY FORESEEN. IN NO EVENT WILL SELLER’S LIABILITY TO BUYER ARISING OUT OF OR RELATING TO THESE TERMS AND CONDITIONS EXCEED THE AMOUNT OF THE PURCHASE PRICE PAID TO SELLER BY BUYER FOR THE PRODUCT THAT GIVES RISE TO THE CLAIM.

20. SEVERABILITY

If any provision of these Terms and Conditions are found by a court of competent jurisdiction to be illegal, invalid or unenforceable, the remaining provisions shall remain in full force and effect.

21. GOVERNING LAW: JURISDICTION AND VENUE

The validity, interpretation, construction and performance of these Terms and Conditions shall be governed by the laws of the State of California, exclusive of the body of laws know as conflict or choice of law. The U.N. Convention on Contracts for the International Sale of Goods shall not apply. The California State courts of Santa Clara County, California (or, if there is exclusive federal jurisdiction, the United Stated District Court for the Northern District of California located in Santa Clara County, California) shall have exclusive jurisdiction and venue over any dispute arising out of, or in any way related to, these Terms and Conditions, and Buyer hereby expressly consents to the jurisdiction of such courts.

22. ENTIRE AGREEMENT

These Terms and Conditions, together with the applicable license agreement(s), represent the entire agreement and understanding between Seller and Buyer with respect to the subject matter hereof, and all prior quotations, invoices, negotiations, understandings, representations, and/or agreements between the parties, whether oral or written, are superseded in their entirety. Seller’s failure to specifically object to any term or condition contained in any communication from Buyer shall not be deemed a waiver of these Terms and Conditions. These Terms and Conditions shall not be modified, supplemented, qualified or interpreted by any trade usage or course of dealing not made a part of these Terms and Conditions in a writing signed by each party. The failure by Seller to enforce at any time any of the provisions herein or to exercise any election or option provided herein, shall in no way be considered as a waiver of such provision or option or the right of Seller thereafter to enforce each and every such provision or option. Buyer hereby acknowledges that it has not entered in to these Terms and Conditions or any other agreement related hereto in reliance upon any warranty or representation by any person or entity, except for the warranties and representations expressly set forth herein.

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