TERMS AND CONDITIONS OF SALE

The following terms and conditions of sale apply to all quotations made and orders accepted by Cincinnati Gearing Systems, hereinafter referred to as "Seller". The Company ordering the goods and/or services is hereinafter referred to as "Buyer". The goods and/or services listed on this quotation or order are hereinafter referred to as "goods".

1. Acceptance: All orders are subject to acceptance by Seller in writing at Seller's principal executive offices in Cincinnati, Ohio, USA. If the Buyer's order contains terms and conditions in addition to or different from the terms and conditions contained in this quotation, then the Seller's acceptance of Buyer's order is expressly made conditional on Buyer's assent to the terms and conditions set forth herein and Seller expressly rejects Buyer's proposed additional and/or different terms and conditions. These terms and conditions shall constitute the entire and exclusive statement of the agreement between the parties which may hereinafter be modified, altered or amended only by written instrument executed by the authorized representatives of both parties. Buyer's placement of an order for the goods listed in this quotation shall constitute Buyer's assent to these terms and conditions. Buyer's acceptance of any goods covered by this quotation shall also constitute Buyer's assent to these terms and conditions.

2. Price:
A. The quoted prices are Seller's current prices and apply only to the specified quantity and delivery schedule quoted. Unless otherwise noted, all prices are subject to change, without notice, at any time prior to Seller's acceptance of Buyer's order. Any increase in material costs to Seller will increase the price to the Buyer by the amount of such increase. Any variations in quantities specified and/or delivery may necessitate a revision of such prices. Unless otherwise stated, prices are quoted FOB: Cincinnati, Ohio Metropolitan Area. All prices quoted are subject to an increase equal in any amount to any taxes which the Seller may be required to pay or collect under any existing or future law upon or with respect to the sale, purchase, delivery, transportation, storage, processing, use or consumption of any of the goods covered hereby; including taxes upon or measured by receipts from sales. Such additional amounts may be invoiced separately from the invoice for the goods.

B. If the Buyer makes changes to the drawings, design, specifications, quantities, method of shipment, packaging, materials, time and place of delivery, and such changes cause an increase in the cost of or time required for the performance of this order, the Seller shall have the right to an equitable adjustment to the order price, delivery or both.

3. Payment Terms: Payment is to be net in US Dollars. Payment terms are Net thirty (30) days from the date of the Seller's invoice. No cash discount is allowed. Seller may, at any time or times, suspend performance of any order or require payment in cash, security or other adequate assurance satisfactory to Seller when, in Seller's opinion, the financial condition of the Buyer or other grounds for insecurity warrant such action.

4. Buyer's Equipment and Materials:
A. If Buyer is to provide Seller with any equipment or other materials (including but not limited to patterns, castings, forgings, gear blanks, tooling and the like) relating to this order, such equipment and materials must be delivered to Seller within thirty (30) days of Seller's acceptance of this order. If Buyer fails to timely delivery such equipment and materials, Seller may, at its option, cancel, reschedule or adjust the price of the order as warranted by such delay. Such remedies shall be in addition to all of Seller's other remedies arising hereunder and at law or in equity.

B. Equipment and materials supplied by the Buyer shall be in a condition to make goods of the quality and quantity desired by the Buyer. Buyer shall be responsible for the conformity of Buyer's equipment and materials to the blueprints and/or design drawings for the ordered goods. Buyer shall clearly mark any such supplied equipment and materials as that of the Buyer and all charges and expenses of transporting such equipment and materials to and from the Seller's facilities, or other designated place, shall be borne by the Buyer.

C. Seller shall have no responsibility or liability for the wear to, loss of or damage to Buyer's equipment and materials. Buyer shall remove Buyer's equipment and materials, if any, from Seller's facilities within ninety (90) days after completion of the Buyer's order. If not so removed, Seller may dispose or return such equipment and materials as Seller deems necessary without liability to the Buyer after thirty (30) days written notice to the Buyer at the Buyer's last known address.

D. Seller shall not be responsible to Buyer for any equipment and materials scrapped during the manufacturing process of the goods ordered. Buyer shall not be responsible to Seller for any labor or machining costs incurred by Seller on any such scrapped equipment and materials unless such equipment and materials are found to be defective and inappropriate for the manufacture of the ordered goods; at which time the Buyer shall be liable to Seller for labor and machining costs.

5. Seller's Tooling and Designs: All tools, designs, dies, patterns, etc. acquired or constructed by Seller for Buyer, notwithstanding any charge therefore, shall be and remain the property of the Seller and shall be in the possession and control of the Seller.

6. Shipments/Force Majeure/Risk of Loss: A. Seller shall exercise its reasonable best judgment in routing shipments unless detailed instructions are given. Seller reserves the right to make shipments in installments and this contract shall be severable as to such installments. If shipments are delayed by Buyer, payments are due from the date when the Seller is prepared to make shipments. Goods held for Buyer are at Buyer's sole risk and expense.

B. If an estimate of time of shipment is made on the front of this quotation, it is understood that it is approximate only and the time of performance will begin to run only upon Seller's acceptance of Buyer's order and receipt of all specifications and equipment to be provided by the Seller. The Seller shall not be held accountable for late delivery caused by force majeure. Force Majeure shall mean any acts of God (including without limitation, fire, flood, mud slide, earthquake, tornado, cyclone, wind storm or any other similar natural disaster beyond the reasonable control of the Seller or the Seller's suppliers), acts of the public enemy, acts of the state or government in either its sovereign or contractual capacity, epidemics, disease, plague, work stoppages or slow downs, accidents, casualties, transportation delays, quarantine restrictions, strikes, blockade, embargoes, revolution, insurrection, mobilization, acts of foreign or domestic terrorism, labor or material shortages, unavailability or limited availability of electrical power or natural gas, in each case which could not have been avoided by the exercise of reasonable diligence. At no time shall an employee of the Seller be forced or required to travel internationally for any reason, including but not limited to current international political climate, geographic tensions, war or social unrest. Such inability to travel shall be deemed to be a force majeure.

C. The risk of loss of the goods shall pass to the Buyer upon delivery of the goods to a carrier at the Seller's plant.

D. Delivery times or dates quoted shall commence after all technical and commercial terms and conditions of the order have been agreed to by both parties.

7. Limited Warranty and Liability
A. Buyer must notify Seller of any discrepancy in weight or number in writing within ten (10) days after Buyer's receipt of the goods from carrier. In the event the goods furnished hereunder are rejected or claimed to be defective or non-conforming, such claims must be made in writing within thirty (30) days after Buyer's discovery of such defect or non-conformity and in no event later than twelve (12) months from the date of shipment from the Seller's facilities. Goods may not be returned for credit until and unless Seller consents in writing to accept such goods. Goods returned without Seller's written consent will be credited upon Seller's evaluation of same.

B. Seller's liability and the liability of any affiliate of Seller on any claim of any kind for any loss or damage arising out of or connected with, or resulting from Buyer's order or from the performance thereof or from the manufacture, sale delivery, resale, installation, inspection, repair, operation or use of any goods covered by this quotation shall in no case exceed the invoice price allocable to such good(s) which give rise to the claim.

C. In the event of any claims, suits or proceedings either directly or indirectly arising out of or connected with or resulting from Buyer's defective design or application of goods manufactured hereunder, Buyer shall defend any such suit or proceeding brought against Seller and its affiliates therewith and hold harmless and indemnify Seller and its affiliates against any and all damages and expenses including attorneys fees from such claims, suits or proceedings to damages or injuries.

D. Warranty shall not be extended to any item which has been subject to misuse, neglect, accident, ingestion of foreign object(s), lack of maintenance, or replacement of parts not in accordance with the technical manual or instructions of the Seller, nor does it extend to any item which has been repaired or altered in any manner by other than the Seller. The Buyer, upon request, shall furnish to the Seller reasonable evidence that the defect(s) arose from causes other than those contained above.

E. The Seller shall not warrant defects, deficiencies, deteriorations and failure caused by improper handling, storage, use or operation of the goods after delivery to the Buyer.

F. Field Service repair work for all warranted goods will be provided by Seller or Seller's Representative. However, if the work is determined by Seller to not meet the requirements of the terms of the warranty, all costs associated with the repair/field service of the goods, shall be the responsibility of the Buyer.

G. After the correction of a defect found to be under warranty, the Seller warrants that the corrected materials and/or workmanship will be free from further defect and will conform with the specification and other requirements of the contract for the remaining period of the original warranty following the completion of such repair or replacement.

H. Standard Warranty:
1. Cut Work Only
Where the Buyer furnishes equipment and material as described in Section 4, the Seller's warranty shall be for workmanship only for a period of twelve (12) months after shipment from Seller's facility. The Seller offers no express or implied warranty on any Buyer's design or design application.

2. Open Gearing
Where the Seller furnishes equipment and material in accordance with the Buyer’s drawings and specifications, the Seller is responsible for rejected, defective or non-conforming goods only to the extent of repairing or replacing them, or allowing credit for up to the invoice price. This warranty applies to material and workmanship only for a period of twelve (12) months from the date of shipment from Seller's facility. Seller's warranty shall not be enlarged and no obligation or liability shall arise out of Seller's rendering of technical advise, facilities or services in connection with Buyer's order for goods furnished hereunder. The Seller offers no express or implied warranty on any Buyer's design or design application.

3. Military Enclosed Drive
a. The Seller warrants, Seller provided design, material(s) and workmanship, for a period of twelve (12) months from the date of shipment from Seller's facility. The warranty provisions of this clause do not cover removal or alterations of bulkheads or other parts of the vessel/craft or unit in which the goods are installed, combat damage, liability for loss, damage or injury to third parties, or consequential damages. This warranty does not cover loss of vessel/craft/unit or loss of use of vessel/craft/unit.

b. Goods manufactured in accordance with the Buyer's design are warranted only for material and workmanship for a period of twelve (12) months from the date of shipment from Seller's facility. The warranty provisions of this clause do not cover removal or alterations of bulkheads or other parts of the vessel/craft or unit in which the goods are installed, combat damage, liability for loss, damage or injury to third parties, or consequential damages. This warranty does not cover loss of vessel/craft/unit or loss of use of vessel/craft/unit.

4. Marine Enclosed Drive
a. The Seller warrants, Seller provided design, material(s) and workmanship, for a period of twelve (12) months from the date of shipment from Seller's facility. The warranty provisions of this clause do not cover removal or alterations of bulkheads or other parts of the vessel/craft, liability for loss, damage or injury to third parties, loss of revenue or consequential damages. This warranty does not cover loss of vessel/craft or loss of use of vessel/craft.

b. Goods manufactured in accordance with the Buyer's design are warranted only for material and workmanship for a period of twelve (12) months from the date of shipment from Seller's facility. The warranty provisions of this clause do not cover removal or alterations of bulkheads or other parts of the vessel or craft, liability for loss, damage or injury to third parties, loss of revenue or consequential damages. This warranty does not cover loss of vessel/craft or loss of use of vessel/craft .

5. Industrial/Commercial Enclosed Drive
a. The Seller warrants, Seller provided design, material(s) and workmanship, for a period of twelve (12) months from the date of shipment from Seller's facility. The warranty provisions of this clause do not cover removal or alterations of any part of the unit in which the goods are installed, liability for loss, damage or injury to third parties, loss of revenue or consequential damages. This warranty does not cover loss of the unit in which the goods are installed or loss of use of such unit.

b. Goods manufactured in accordance with the Buyer's design are warranted only for material and workmanship for a period of twelve (12) months from the date of shipment from Seller's facility. The warranty provisions of this clause do not cover removal or alterations of any part of the unit in which the goods are installed, liability for loss, damage or injury to third parties, loss of revenue or consequential damages. This warranty does not cover loss of the unit in which the goods are installed or loss of use of such unit.

I. Extended Warranty: Warranty terms and periods for other than the standard twelve (12) months are subject to negotiation and mutual agreement.

J. Disclaimer: THE SELLER OFFERS NO EXPRESS OF IMPLIED WARRANTY OF MERCHANTABILITY OR OF FITNESS FOR A PARTICULAR PURPOSE. SELLER SHALL NOT BE LIABLE FOR INCIDENTAL OR CONSEQUENTIAL LOSSES, DAMAGES OR EXPENSES, DIRECTLY OR INDIRECTLY ARISING FROM THE SALE, HANDLING OR USE OF THE GOODS, OR FROM ANY OTHER CAUSE RELATING THERETO, AND SELLER'S LIABILITY HEREUNDER IN ANY CASE IS EXPRESSLY LIMITED TO THE INVOICE PRICE ALLOCABLE TO SUCH GOOD(S) WHICH GIVE RISE TO THE CLAIM WHETHER SUCH CLAIMS ARE BASED ON CONTRACT, TORT OR OTHERWISE INCLUDING BUT NOT LIMITED TO BREACH OF WARRANTY, NEGLIGENCE OR STRICT LIABILITY. CLAIMS AND/OR PENALTIES RESULTING FROM CONSEQUENTIAL DAMAGES ARE EXPRESSLY REJECTED.

9. System Responsibility/System Integration: It shall be the Buyer's responsibility to insure complete system integration with respect to any and all goods and/or services provided by Seller.

10. Patents, Trademarks, Copyrights: Buyer agrees to defend at its own expense, all suits and claims against the Seller or its affiliates for any alleged violation for infringement of any patent, trademark, copyright or any other proprietary or intellectual property right in any way accruing from Buyer's purchase and/or use or resale of the goods covered hereunder. Seller may, at its option and at Buyer's expense, be represented by and actively participate through its own counsel in any suit or proceedings. Buyer agrees to indemnify and hold Seller and its affiliates harmless from any loss, damage or expense of any kind whatsoever including costs and attorneys' fees arising from such alleged violation or infringement.

11. Cancellation:
In the event that Buyer cancels its order after acceptance by Seller, Buyer shall be charged for any goods manufactured or in process prior to cancellation, for the cost of equipment and materials discarded upon such cancellation and other cancellation charges as Seller deems warranted.

12. Waiver: No waiver, discharge or renunciation of any claim or right of Seller arising out of breach of these terms and conditions by Buyer will be effective unless signed in writing by Seller and supported by consideration. Any waiver by Seller of any breach by Buyer will be a waiver of that breach only and not of any prior or subsequent breach.

13. Assignment-Delegation: No right or interest herein shall be assigned, nor any obligation delegated, by Buyer without Seller's written permission.

14. Exclusive Agreement: This agreement, and any documents referred to herein, supersede all prior understandings, transactions and communications whether oral or written, with respect to the matters referred to herein and from the complete contract between the Buyer and the Seller.

15. Setoff: Payment for the goods will be subject to setoff or recoupment for any claims which Seller or any of its affiliated Companies may have against the Buyer.

16: Severability: In the event that any provision of this agreement is held or declared unenforceable or void for any reason, all provisions hereof which can be effected without such voided provisions shall remain in full force and effect.

17: Applicable Law(s): This contract and the obligations arising under this quotation and any resulting contract shall be governed by and construed according to the laws of the State of Ohio. The place of jurisdiction for all disputes under this contract shall be Cincinnati, Ohio.

18: Authority: Only an authorized representative of the Seller can accept an order, which acceptance must be in writing.

19. Confidentiality Agreement: During the quotation and/or contract periods, the Seller may disclose information and may give material or documents to the Buyer. In consideration of Seller's disclosure, the Buyer shall treat such disclosed information, material and documents as confidential and proprietary; shall not disclose or give such information, material or documents to a third party and shall disclose such information and provide such material and documents only to those employees of Buyer whose knowledge of the information or use of the material and documents is reasonably necessary. The Buyer shall maintain Seller's information, materials and documents in the same manner as it would Buyer's information, materials and documents. This agreement does not apply to any information known to Buyer prior to receipt of such information from Seller, nor does it apply to any information generally known to the public or relevant industry. The Buyer shall, upon request, return all such material and documents and any copies thereof.

20. Packing: Unless otherwise specified, packing and packaging shall be to good commercial practice.

21. Advertising: No news release, public announcement, denial or confirmation of same or any part of the subject matter of this order or any phase of this order shall be made without the prior written approval of the Seller.

22. Export Control: If this order is to be exported, the Buyer is responsible for all export costs.