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                  SALES AGREEMENT (REMOTE/CONSIGNMENT PROGRAM)

THIS AGREEMENT, made and entered into this 30th day of April, 1998,
by and between HITACHI SEMICONDUCTOR (AMERICA) INC., a Delaware corporation,
having an office at 2000 Sierra Point Parkway, Brisbane, California 94005-1835
(hereinafter referred to as "HSA") and SIMPLE TECHNOLOGY, INCORPORATED, with its
principal place of business at 3001 Daimler Street, Santa Ana, CA 92705
(hereinafter referred to as "Buyer").

                              W I T N E S S E T H:

WHEREAS, HSA desires to sell to Buyer, and Buyer desires to purchase from HSA,
certain semiconductor products or devices described below (the "Products"); and

WHEREAS, the parties deem it desirable by means of this Agreement to establish
the terms and conditions which shall govern the sale and purchase of the
Products;

NOW THEREFORE, in consideration of the mutual obligations set forth herein the
parties hereto agree as follows:

1.   TERM. This Agreement shall become effective as of the date hereof and shall
     continue for one year thereafter unless sooner terminated in accordance
     with the terms hereof. Either party shall have the right to terminate this
     Agreement with or without cause on sixty (60) days' notice to the other
     party.

2.   PURCHASE ORDERS; FORECASTS.

     a.   HSA agrees to sell and Buyer agrees to purchase the Products listed on
          the attached Schedule A. The purchase of Products pursuant to this
          Agreement shall be accomplished by means of blanket purchase orders,
          individual purchase orders and/or other release documents issued by
          Buyer and accepted or otherwise acknowledged by HSA (hereinafter
          sometimes individually or collectively referred to as "purchase
          order(s)"). At a minimum, each purchase order shall include the
          following: purchase order number; Buyer part number; HSA part number;
          current unit price; quantity of each Product covered by such purchase
          order; Buyer ship-to address; and Buyer bill-to address.


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     b.   Buyer shall deliver a blanket purchase order to HSA via electronic
          data interchange ("EDI") within ten (10) days after execution of this
          Agreement and, thereafter, no later than the first day of every
          calendar quarter during the term of this Agreement. In addition to the
          information required to be included in every purchase order (as
          described in Subsection 2(a) above), each blanket purchase order shall
          also include the start date and expiration date thereof. Buyer shall
          not have the right to make changes to the first four (4) weeks of any
          blanket purchase order without HSA's prior written consent. On any
          particular date during the effective period of a blanket purchase
          order, the quantities covering the next thirty (30) days of such
          blanket purchase order shall be firm and noncancellable.

     c.   Upon execution of this Agreement and, thereafter, on or before Monday
          of every week during the term of this Agreement, Buyer will provide to
          HSA via EDI a forecast of the quantities of Products anticipated to be
          purchased from HSA by Buyer each week over the next twenty-six (26)
          weeks. In addition to the information required to be included in every
          purchase order (as described in Subsection 2(a) above), each forecast
          shall also include the forecasted quantity (i) on a weekly basis for
          weeks 0 - 12 and (ii) on a monthly basis thereafter; and total
          forecasted quantity for the entire period of the forecast. The first
          four (4) weeks of each forecast shall be consistent in all respects
          with the prior forecast for such weeks. Buyer will continually improve
          the accuracy and reliability of its forecast. If Buyer does not have a
          current blanket purchase order on file with HSA, then Buyer shall be
          deemed to have placed an order for the quantities that Buyer forecasts
          for consumption during the first thirty (30) days of the most current
          forecast and such quantities shall be firm and noncancellable.

3.   DELIVERY BY HSA AND RECEIPT BY BUYER. Shipping costs between HSA's
     warehouse facility and Buyer's Warehouse (hereinafter defined) shall be
     paid by Buyer. Buyer shall promptly notify the applicable HSA sales office
     of any delays in shipping. Immediately upon receipt of Product into the
     Warehouse, Buyer shall advise HSA via EDI and conduct an incoming
     inspection of the Products. If Buyer has not received the number of boxes
     indicated on the packing list, Buyer shall immediately notify HSA. Buyer
     shall inspect all received Products for tampering, verify same against
     delivery documents prior to removal and refuse to accept damaged Products.
     Upon arrival of Product, Buyer shall conduct a weight verification and note
     any visual damage or pilferage. Buyer shall note any shortages, damages, or
     quantity or weight discrepancies on the carrier's freight bill or delivery
     document, shall cause the driver to co-sign the bill or document and shall
     immediately

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     reconcile any such errors with the applicable HSA field sales office. At
     HSA's option, Buyer will immediately return damaged Products to HSA's
     Fremont Distribution Center or the damaged Products' originating location.

4.   INVENTORY OF PRODUCTS AT WAREHOUSE

     a.   HSA hereby authorizes Buyer to store Products in the warehouse
          facility owned and operated by Buyer located at 3001 Daimler Street,
          Santa Ana, CA 92705, (the "Warehouse") so long as Buyer maintains the
          Warehouse (i) in a manner consistent with the condition of the
          Warehouse at the time of approval by HSA and (ii) in compliance with
          the requirements set forth in this Agreement. Buyer shall not relocate
          Product to a facility other than the Warehouse without prior written
          approval from HSA. Buyer shall not commingle the Products with other
          products until Buyer withdraws the Product from the Warehouse.

     b.   HSA will initially consign Product at the Warehouse within the
          Leadtime set forth on Schedule A hereto and in quantities that reflect
          the inventory levels of each Product described in Schedule A.
          Thereafter, HSA shall use commercially reasonable efforts to maintain
          inventory at the Warehouse equivalent to the average number of
          Products maintained in inventory at the Warehouse over the prior four
          (4) weeks. HSA will notify Buyer if it is unable to maintain inventory
          in the Warehouse in the manner required by this Section.

     c.   Buyer shall be liable for loss and theft of and damage to the Products
          while in the care, custody, and control of Buyer to the extent caused
          by the negligence or willful misconduct of Buyer or any employee,
          agent, contractor or other party acting through Buyer.

     d.   If Buyer stores any Product on other than shelves, the bottom box must
          not touch the floor nor be stacked higher than five feet (5') high.
          Buyer shall use drainboards underneath boxes, where appropriate or
          where designated by HSA.

     e.   Buyer will store each Product with HSA's red "REMOTE WAREHOUSE" label
          showing for audit purposes.

     f.   Buyer shall provide a safe, secure storage area for the Products in
          the Warehouse and will ensure that temperature and humidity at the
          Warehouse comply with the following specifications throughout the day:


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                 Temperature:     between 5 and 35  C (41 and 95  F)
                 Humidity:        between 45% and 75%

     g.   Until Buyer withdraws Product from the Warehouse, Buyer shall not be
          permitted to open any box or break any seal for the purpose of
          inspecting for Product damage.

     h.   Buyer will conduct cycle counts and/or physical inventories once per
          month for each Product regardless of whether inventory of such Product
          has been received or shipped during such month. In addition, Buyer
          will conduct a cycle count or physical inventory for a Product on any
          day when such Product is received at or shipped from the Warehouse.
          Additional cycle counts may be requested at HSA's option at additional
          expense to HSA.

5.   WITHDRAWAL OF PRODUCTS BY BUYER

     a.   Buyer may withdraw Product from the Warehouse at any time; provided,
          however, Buyer shall withdraw each Product from the Warehouse no more
          than thirty (30) days after such Product's receipt at the Warehouse.
          If Buyer fails to do so, HSA shall have the option to either (i)
          invoice Buyer for such Product that has not been withdrawn or (ii)
          demand that such Product be returned to HSA's warehouse facility in
          California within five (5) business days of such demand. Return
          shipment, if any, shall be FOB HSA's warehouse facility and Buyer
          shall bear any and all risk of loss or damage to said Products until
          properly received at HSA's warehouse facility.

     b.   Title and complete liability for loss or damage to the Products shall
          pass to Buyer upon Buyer's withdrawal of each Product from the
          Warehouse. Any loss or damage thereafter shall not relieve Buyer from
          any obligation hereunder, including without limitation Buyer's
          obligation to pay for such Products. Buyer shall notify HSA via EDI
          immediately upon withdrawal of Product from the Warehouse.

     c.   Unless otherwise approved by HSA, Buyer will withdraw Products from
          the Warehouse on a FIFO basis and in standard box quantities or
          multiples thereof.

     d.   Within five (5) business days following Buyer's withdrawal of a
          Product from the Warehouse, Buyer will accept or reject such Product.
          In the event the parties agree that such Product does not comply with
          the applicable Specifications, Buyer will have the right to reject the
          Product within such 5-business day period and HSA will, at its option,
          repair the Product or replace it with a Product


                                       4
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          that does so comply in accordance with the procedures for replacement
          and return of defective Products set forth in Section 17 below or
          credit Buyer the price of the Product in full satisfaction of such
          claim. Failure to reject a Product within the time fixed or to
          strictly comply with all requirements of this paragraph shall
          constitute an unconditional acceptance of the Product by Buyer. No
          claim shall be made after the Products are changed in any manner from
          their original condition.

6.   REPORTS AND AUDITS.

     a.   No later than Monday of each week, Buyer shall furnish to HSA an
          inventory report that identifies (i) the quantity of each Product
          received at and withdrawn from the Warehouse during the prior week and
          (ii) the quantity of each Product remaining in the Warehouse as of
          such date. Buyer will keep complete records of all receipts,
          withdrawals and inventories of Products for three (3) years.

     b.   [CONFIDENTIAL TREATMENT REQUESTED]

     c.   [CONFIDENTIAL TREATMENT REQUESTED]

     d.   Upon reasonable notice, HSA's duly authorized representative shall
          have the right to audit the records of Buyer regarding HSA's Products
          (including without limitation Buyer's records regarding (i) Total
          Available Market and HSA's percentage thereof in any month during the
          Term and (ii) any services performed by Buyer on behalf of HSA). Buyer
          shall maintain its records in accordance with generally accepted
          accounting principles and practices. HSA shall also have the right to
          visit, observe and inspect the Warehouse to ensure that Buyer is
          operating the Warehouse in the manner required by the terms of this
          Agreement and to conduct monthly audits to verify cycle count
          processes and ensure inventory accuracy.

     e.   HSA shall give reasonable advance notice to Buyer prior to


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          conducting an audit (the parties hereby agreeing that 24 hours prior
          notice is reasonable). If it shall be determined as a result of any
          audit that there has been a deficiency in the number of Products
          maintained at the Warehouse or that any boxes have been opened while
          stored in the Warehouse, then Buyer shall pay to HSA the value of such
          deficiency, as determined by HSA in its reasonable discretion, within
          thirty (30) days after notification from HSA. HSA shall notify Buyer
          of deficiencies (if any) within seven (7) business days after
          completing its audit. If it shall be determined as a result of any
          audit that Buyer has not been utilizing all of the HSA Contribution
          (as defined in Section 11 below) in the manner required by this
          Agreement, then HSA shall be entitled to a credit against the next HSA
          Contribution(s), until such credit has been fully exhausted, in an
          amount equal to the deficiency discovered by HSA.

     7.   EDI. Transactions between the parties pursuant to this Agreement shall
          be made via electronic data interchange ("EDI"). EDI transactions
          shall be governed by the terms and conditions set forth on Schedule B
          to this Agreement.

     8.   PRICES. The initial prices for each Product are set forth on Schedule
          A hereto. The parties agree to meet on the 1st of each month (or the
          first business day thereafter if such calendar day falls on a
          Saturday, Sunday or federal holiday) to negotiate changes in the
          pricing. The price in effect at any time shall remain in effect until
          the parties agree in writing to a change in pricing. Prices do not
          include any taxes, now or hereafter applicable, which apply or may
          apply to the Products. Any such taxes will be added by HSA to the
          sales price where HSA is required by law to collect same, and will be
          paid by Buyer unless Buyer provides HSA with a proper tax exemption
          certificate in form and substance satisfactory to HSA.

     9.   PRICE REVISIONS. The prices contemplated by this Agreement are based
          on present freight rates and are subject to all present and future
          tariffs, import and export duties, border taxes and similar import
          surcharges and taxes which shall be solely at the cost and risk of
          Buyer. If any such rates or charges are included in this Agreement or
          any purchase order (whether shown as a separate charge or not) and
          shall be increased pending delivery, Buyer shall pay such increased
          rates or charges in addition to the price set forth in this Agreement
          or the applicable purchase order. Notwithstanding any other provision
          in this Agreement, in the event of a "Price Revision" (defined below),
          HSA shall have the right, subject to the provisions set forth below,
          to increase the selling price of the Products affected by the Price
          Revision by an amount not to exceed the amount of the Price Revision,
          as of the effective date of


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          such Price Revision. HSA shall notify Buyer of such Price Revision
          and, if consistent with the applicable government action, Buyer will
          have ten (10) days from the date of such notice to advise HSA in
          writing whether it is willing to pay the Price Revision specified by
          HSA. If Buyer elects not to pay the Price Revision, HSA may terminate
          the applicable purchase order (or this Agreement as to those Products
          affected by the Price Revision and scheduled for delivery to Buyer
          after the date of HSA's notice to Buyer of the Price Revision),
          without further liability to Buyer. As used herein, "Price Revision"
          means:

          a.   Special or additional duties, including antidumping duties,
               imposed on any of the Products; or

          b.   An increase in the selling price or HSA's cost of any of the
               Products as a result of or in connection with the actions of any
               government and/or any agency or instrumentality thereof including
               any direction or recommendation to establish or implement some
               form of minimum price system.

10.  [CONFIDENTIAL TREATMENT REQUESTED]

11.  [CONFIDENTIAL TREATMENT REQUESTED]


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12.  RESCHEDULE. Buyer may reschedule deliveries of standard Products within
     zero to 30 days of the originally confirmed delivery date(s) only if one of
     the following two conditions is satisfied: (a) the proposed delivery date
     is within such 30-day period; or (b) HSA agrees to such rescheduling in its
     sole discretion. Buyer may otherwise reschedule deliveries of standard
     Products without penalty so long as (i) HSA receives notice thereof more
     than 30 days before the originally confirmed dock date; (ii) such
     deliveries are rescheduled within ninety (90) days of the originally
     confirmed dock date and (iii) the unit cost for the affected Product will
     be invoiced and paid for at the unit price of the originally confirmed dock
     date.

13.  CANCELLATION. Buyer may not cancel any purchase order of standard Products
     within the Leadtime set forth on Schedule A hereto unless agreed upon by
     HSA in its sole discretion. Buyer shall have the right to cancel any
     purchase order of standard Products at no cost provided the number of days
     between the originally confirmed delivery date and the date of the
     requested cancellation is more than the Leadtime set forth on Schedule A
     hereto.

14.  SPECIAL ORDERS. Notwithstanding anything to the contrary set forth in this
     Agreement, if Buyer refuses to accept delivery of all or any portion or
     installment of Products specially manufactured for Buyer (which Products
     the parties hereby agree would be impractical for HSA to resell), Buyer
     shall be subject to the liability terms of any separate agreement entered
     into between Buyer and HSA regarding such Products and HSA shall have the
     right to recover (a) the agreement price for any installment of the
     Products as to which delivery has been refused, (b) the value of work in
     progress, (c) the cost of material purchased by HSA or HSA's suppliers in
     order to manufacture such Products, and (d) incidental damages incurred by
     HSA, including, but not limited to, commercially reasonable charges,
     expenses and commissions incurred in stopping delivery, in the
     transportation, care and custody of such Products after Buyer's breach, and
     reasonable attorney fees in enforcing HSA's rights hereunder.

15.  PRODUCT SUPPLY. Due to uncertainties in the supply/demand situation, HSA
     may not have sufficient supplies of one or more products


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     from its then-contemplated sources of supply to meet the full requirements
     of all of its customers, contract or otherwise. Whenever that situation
     exists and HSA's performance hereunder is not otherwise excused, HSA may
     reduce deliveries of such product(s) on any basis which in HSA's opinion is
     equitable, allowing for such priorities to such classes of customers as HSA
     deems appropriate. No such reduction need be made up. If any such reduction
     occurs, Buyer shall have the option to accept such reduction or to
     terminate this Agreement as to any or all Products by 15 days' notice to
     HSA given at any time within 30 days after the notice of reduction.

16.  PAYMENT

     a.   Unless otherwise agreed in writing, payment by Buyer shall be made in
          United States dollars and shall be made no later than thirty (30) days
          from date of HSA's invoice to Buyer. Invoices shall be for an entire
          standard box quantity, even if Buyer has withdrawn less than an entire
          box from the Warehouse.

     b.   Payment as required by the terms of this Agreement must be made when
          due regardless of any claim by Buyer. Buyer shall pay interest on the
          unpaid balance of all bills after the due date thereof until such
          balance is paid in full at a rate two percent (2%) higher than the
          prime rate then charged by major California banks to substantial and
          responsible corporate borrowers; provided however, that if such
          interest rate shall be higher than that permitted by law, Buyer shall
          pay interest at the highest rate permitted by law. Such interest shall
          be in addition to, and without limitation on, any other rights or
          remedies which HSA may have under this Agreement or at law or in
          equity. Buyer agrees to pay any attorneys' fees and costs incurred by
          HSA in the collection of any delinquent amounts due under this
          Agreement.

17.  WARRANTY

     a.   HSA warrants to Buyer that all Products sold under this Agreement will
          be free from defects in material and workmanship; will conform to
          HSA's specifications, or to Buyer's specifications where agreed to in
          writing; and will be free from liens and encumbrances, for a period of
          one year from the date of withdrawal of such Product from the
          Warehouse, or if the Product is a development system, board or
          development software, for a period of ninety (90) days from the date
          of withdrawal of such Product from the Warehouse, provided that:

          i.   HSA is promptly notified (within the warranty period) of any


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               warranty claim; and

          ii.  The Product is returned to HSA, freight collect, within seven (7)
               days after Buyer has received a return material authorization
               number from HSA; and

          iii. HSA's examination of such Product shall disclose to its
               reasonable satisfaction that the claimed defect was not caused by
               misuse, static discharge, abuse, neglect, improper handling,
               installation, unauthorized repair, alteration or accident.
               Modification of a Product by Buyer, or at Buyer's direction,
               unless specifically authorized in writing by HSA, shall
               invalidate the above warranty.

     b.   If HSA determines that a Product is covered by the warranty provided
          herein, HSA shall, at its option, either repair the Product, replace
          the Product or issue Buyer a credit for the Product in the amount of
          the unit price set forth in the purchase order. Any repair or
          replacement shall not extend the warranty period. HSA shall have no
          other liability to Buyer for Products covered by the warranty provided
          herein.

     c.   THIS WARRANTY IS EXTENDED TO BUYER ONLY AND IS NOT TRANSFERABLE TO
          SUBSEQUENT PURCHASERS OR USERS OF THE PRODUCTS. THIS WARRANTY IS GIVEN
          IN LIEU OF ALL OTHER WARRANTIES, EXPRESS OR IMPLIED, INCLUDING IMPLIED
          WARRANTIES OF MERCHANTABILITY AND FITNESS FOR A PARTICULAR PURPOSE,
          AND HSA EXPRESSLY DISCLAIMS ANY WARRANTY, EXPRESS OR IMPLIED, THAT A
          PRODUCT IS COMPATIBLE WITH ANY OTHER GOODS, MATERIALS OR DEVICES.

18.  PATENT WARRANTY AND INDEMNIFICATION

     a.   HSA warrants that the Products furnished hereunder shall be delivered
          free of rightful claims of any third person of infringement of a
          United States patent. HSA agrees to defend, at its expense, any suit
          or proceeding brought against Buyer based upon such claim, and to hold
          Buyer harmless for any actual damages which may be awarded against it
          based upon such claim, subject to the following terms and conditions:

          i.   The agreement and obligation shall arise only if Buyer gives HSA
               prompt notice of the infringement claim; grants HSA, in writing,
               exclusive control over its defense and settlement; and provides
               reasonable information and assistance to HSA, at HSA's expense,
               in the defense of such claim;


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          ii.  The agreement and obligation will cover only the Products as
               delivered by HSA to Buyer, and not to any modification or
               addition made by Buyer or third parties;

          iii. The agreement and obligation shall not cover: (A) any claim based
               on the furnishing of any information, service or technical
               support to Buyer; or (B) any claim of infringement of any third
               party's rights which is based on the use of any Product in
               combination with other goods if such infringement would be
               avoided by the use of the Product alone, nor does it extend to
               any Product of Buyer's design or formula.

          iv.  If an infringement claim is asserted, or if HSA believes one
               likely, HSA will have the right, but not the obligation: (A) to
               procure for Buyer the right to use the Products for the use
               contemplated by HSA and Buyer in making this Agreement; or (B) to
               modify the Products as appropriate to avoid such rightful claim
               of infringement, as long as modification for this purpose does
               not materially impair the operation thereof; or (C) to accept the
               Products returned and reimburse Buyer for the purchase price
               thereof less a reasonable charge for wear and tear.

          v.   The sale of any Product does not convey any license by
               implication, estoppel, or otherwise, covering combinations of any
               Product with other devices or elements.

          THE FOREGOING STATES HSA'S EXCLUSIVE OBLIGATION WITH RESPECT TO CLAIMS
          OF INFRINGEMENT OF PROPRIETARY RIGHTS OF ANY KIND, AND THE WARRANTY
          PROVIDED HEREIN IS IN LIEU OF ALL OTHER WARRANTIES, EXPRESS OR
          IMPLIED. EXCEPT AS REGARDS HSA'S OBLIGATION HEREUNDER TO DEFEND BUYER,
          IN NO EVENT SHALL HSA'S TOTAL LIABILITY TO BUYER EXCEED THE CUMULATIVE
          PURCHASE PRICE OF THE ALLEGED INFRINGING PRODUCTS PURCHASED BY BUYER
          AS OF THE DATE OF THE INFRINGEMENT CLAIM.

     b.   Buyer shall indemnify and hold HSA and its suppliers harmless against
          any expense or liability from claims of patent infringement of any
          patents related to Products arising from: (i) HSA's compliance with
          specifications or instructions furnished by Buyer; (ii) use of any
          Products in connection with a manufacturing or other process; or (iii)
          use of any Products in combination with


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          products not supplied by HSA.

19.  PROPRIETARY RIGHTS. As used herein, "Proprietary Rights" means all patent
     rights, patent applications, rights to apply for patents, copyrights,
     copyright registrations, trade secrets, trademarks, service marks,
     trademark and service mark registrations, logos, related goodwill and
     confidential and proprietary information owned by HSA. Buyer acknowledges
     and agrees that HSA and its suppliers have and will retain all Proprietary
     Rights in the Products. Buyer will leave intact all Proprietary Rights
     notices (including, without limitation, copyright notices, patent
     registration numbers and trademarks) on all Products purchased hereunder.
     Buyer shall include identification of HSA's Proprietary Rights on Buyer's
     final product in accordance with the compatibility designations attached to
     this Agreement as Schedule C.

20.  USE RESTRICTIONS. Buyer represents and warrants to HSA that, as of the date
     of this Agreement, Buyer does not intend to use the Products in life
     support devices or systems or other applications which pose a significant
     risk of personal injury. Buyer hereby agrees to obtain HSA's prior written
     approval if, at any time during the term of this Agreement, Buyer intends
     to use the Products for any such application. If HSA approves such use,
     such approval shall not be effective until Buyer and HSA enter into an
     addendum to this Agreement satisfactory to HSA for the sale of Products for
     such restricted uses.

21.  FORCE MAJEURE. This Agreement and HSA's performance hereunder are subject
     to all contingencies beyond HSA's control or beyond the control of HSA's
     suppliers (whether or not now in the contemplation of either of the
     parties), including but not limited to, force majeure; strikes; labor
     disputes; floods; civil commotion; war; riot; acts of God; rules; laws;
     orders; restrictions; embargoes; quotas or actions of any government,
     foreign or domestic, or any agency or subdivision thereof; casualties;
     fires; accidents; shortages of transportation facilities; detention of
     Products by customs authorities; loss of Products in public or private
     warehouses; or other casualty or contingency beyond HSA's control or the
     control of HSA's suppliers or otherwise unavoidable. In any such event, HSA
     shall perform its obligations under this Agreement within a reasonable time
     after the causes for nonperformance or delay have terminated.


22.  GOVERNMENT PROCUREMENT REGULATIONS. If the face of a purchase order issued
     by Buyer and acknowledged by HSA provides that the Products purchased
     pursuant to such purchase order will be sold, or incorporated into products
     to be sold, under a United States Government contract or subcontract, then
     those clauses of applicable federal procurement regulations that are
     required pursuant to federal statute or


                                       12
<PAGE>

     regulation to be inserted in United States Government contracts or
     subcontracts are hereby incorporated by reference in this Agreement in
     connection with that specific purchase order only. HSA reserves the right
     to reject, without penalty of any kind, purchase orders for Products
     intended to be sold, or incorporated into other products sold, under a
     United States Government contract or subcontract.

23.  COMPLIANCE WITH LAWS; EXPORT REGULATIONS

     a.   Buyer agrees to comply, and do all things necessary for HSA to comply,
          with all applicable federal, state and local laws, regulations and
          ordinances governing Buyer's performance under this Agreement. Neither
          party shall commit any act or request the other party to commit any
          act which would violate either the letter or spirit of the export
          control laws, rules or regulations of the United States or the
          government of any country having jurisdiction over the parties or the
          transaction(s) contemplated herein, and neither party shall fail to
          take any action reasonably within its capacity to assure compliance
          with such laws, rules or regulations.

     b.   Buyer agrees that it shall not, directly or indirectly, export,
          reexport or transship Products, technology or software provided under
          this Agreement ("the Commodities") in violation of any applicable
          export control laws, rules or regulations promulgated and administered
          by the United States or any other country having jurisdiction over the
          parties of the transaction(s) contemplated herein. Buyer shall, in a
          timely manner, obtain the required government documents and approvals
          prior to exporting from the United States any Products.

     c.   HSA shall have the right to refuse to accept purchase orders from
          Buyer for Products, or to deliver Products to fulfill any previously
          accepted purchase order from Buyer, if HSA determines, in good faith,
          that such proposed sale or other disposition of the Products poses an
          unreasonable risk of a violation of any applicable export control law
          or regulation. In the event HSA refuses to deliver any Products to
          fulfill previously accepted purchase orders from Buyer as set forth in
          the immediately preceding sentence, or the necessary export or
          reexport authorizations are not obtained within a reasonable period of
          time, HSA, at its option, may cancel such purchase order or contract,
          without penalty.

24.  BUYER'S DEFAULT. Upon any default or breach in payment or otherwise by
     Buyer, HSA shall have the right, after notice to Buyer, to do any or all of
     the following: (a) cancel all or any part of this Agreement; (b) cancel any
     undelivered portions of this Agreement; (c) demand immediate payment of all
     outstanding amounts owing from Buyer to HSA pursuant


                                       13
<PAGE>

     to this Agreement; and/or (d) exercise all of such other rights and
     remedies as may be available to it under law or otherwise.

25.  LIMITATIONS. HSA SHALL NOT BE LIABLE FOR ANY SPECIAL, INCIDENTAL OR
     CONSEQUENTIAL DAMAGES, EVEN IF INFORMED OF THE POSSIBILITY THEREOF IN
     ADVANCE. THESE LIMITATIONS APPLY TO ALL CAUSES OF ACTION IN THE AGGREGATE,
     INCLUDING WITHOUT LIMITATION BREACH OF CONTRACT, BREACH OF WARRANTY,
     NEGLIGENCE, STRICT LIABILITY, MISREPRESENTATION AND OTHER TORTS. NO ACTION
     MAY BE BROUGHT BY EITHER PARTY AT ANY TIME MORE THAN TWELVE (12) MONTHS
     AFTER THE CAUSE OF ACTION AROSE, EXCEPT THAT AN ACTION MAY BE BROUGHT WITH
     RESPECT TO PAYMENT AT ANY TIME WITHIN THE APPLICABLE STATUTE OF
     LIMITATIONS.

26.  GOVERNING LAW. This Agreement shall be governed by and construed in
     accordance with the laws of the State of California without regard to its
     conflict of law rules and the exclusive forums for the resolution of any
     disputes hereunder shall be California state courts in the County of San
     Francisco or federal district courts in the Northern District of
     California.

27.  WAIVER. Any failure by either party to enforce this Agreement as to any
     breach hereof by the other party shall not be deemed to be a waiver of the
     rights of such party as to such breach or any subsequent breach.

28.  NOTICES. Wherever in this Agreement it shall be required or permitted that
     notice, request, demand or other communication be given or served by either
     party to or on the other, it shall, except as otherwise provided herein,
     not be deemed to be given or served unless such notice is in writing and
     personally delivered, or forwarded by certified or registered mail, or sent
     for next-day delivery through a courier or delivery company providing
     nationwide service, addressed to the addressee at the address specified
     below. Either party may change such address by written notice by certified
     or registered mail to the other given at least ten (10) days prior to the
     effective date of the change.

     To HSA:           2000 Sierra Point Parkway
                       Brisbane, CA  94005-1835
                       ATTN: Vice President, Sales Operations

     To Buyer:         3001 Daimler Street
                       Santa Ana, CA 92705
                       ATTN: Sales Department


                                       14
<PAGE>


29.  COMPLETE AGREEMENT. This Agreement, along with any Schedules, Attachments,
     Exhibits or Addenda hereto, constitutes the entire agreement between the
     parties as to the subject matter hereof, and supersedes and replaces all
     prior or contemporaneous agreements, written or oral, regarding such
     subject matter. All purchase orders issued by Buyer under this Agreement
     shall be governed exclusively by the terms and conditions of this
     Agreement. No additional or different terms proposed by Buyer or set forth
     on Buyer's purchase orders shall apply and all such terms and conditions
     shall be deemed stricken from such purchase order and of no force or effect
     unless expressly assented to in writing by HSA. Buyer acknowledges that
     neither acknowledgment of Buyer's purchase order nor delivery of any
     Product shall be deemed or construed as acceptance of Buyer's additional or
     different terms and conditions. No amendment or modification of this
     Agreement shall be valid except if set forth in a writing stating that it
     is such an amendment or modification and signed by an authorized
     representative of each of the parties hereto.

30.  ATTORNEYS' FEES. In any action or proceeding between the parties to this
     Agreement, or brought to enforce the terms of this Agreement, the
     prevailing party in such action or proceeding shall be entitled to recover
     its attorneys' fees and costs.

31.  SEVERABILITY. If any provision or provisions of this Agreement shall be
     held to be invalid, illegal, or unenforceable, such provision shall be
     enforced to the fullest extent permitted by applicable law and the
     validity, legality, and enforceability of the remaining provisions shall
     not in any way be affected or impaired.

32.  ASSIGNMENT. Neither party shall assign any right or interest nor delegate
     any duty or obligation under this Agreement without the prior written
     consent of the other party, except that HSA may assign its rights or
     delegate its duties under this Agreement to an HSA-related company without
     Buyer's prior written consent. Notwithstanding the foregoing, this
     Agreement shall apply to and bind the successors and assigns of the
     parties.

IN WITNESS WHEREOF, an authorized representative of each party has executed this
Agreement as of the date first above written.

HITACHI SEMICONDUCTOR                       SIMPLE TECHNOLOGY,
(AMERICA) INC.                              INCORPORATED

BY:  /s/ Michael Brown                      BY:  /s/ Manouch Moshayedi
     ----------------------------------          -------------------------------
NAME:    Michael Brown                      NAME:    Manouch Moshayedi
     ----------------------------------          -------------------------------
TITLE:   Vice President                     TITLE:   Vice President
     ----------------------------------          -------------------------------

DATE: May 18, 1998                         DATE: April 30, 1998


                                       15
<PAGE>

                                   SCHEDULE A

                                    PRODUCTS

<TABLE>
<CAPTION>


                  HSA PART         INITIAL            LEAD
                  NUMBER           INVENTORY LEVEL    TIME
                  ---------------  ---------------   -------
                  <S>              <C>               <C>
                  HN29W64AH0STE-1      TBD           8 weeks

                  HN29W6411TBE-50*     TBD           8 weeks

                  HN29W6411TBV-50*     TBD           8 weeks

                  HN29W6411TT-50*      TBD           8 weeks

</TABLE>

NOTE: HSA Part Numbers followed by an asterisk (*) are Component Products.


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