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Standard Terms and Conditions of Sale

1. ACCEPTANCE

Any acceptance by ADS Drives (herein after "Seller") of Buyer"s order is hereby expressly made conditional on Buyer"s assent to any additional or different terms and conditions contained herein, and all sales of, and charges for the goods and services listed herein shall be, in the case of conflict between the terms and conditions of Buyer and Seller, interpreted and governed exclusively by the terms and conditions contained herein. Seller shall not be bound by any terms and conditions proposed by Buyer, whether in its purchase order or otherwise, which are additional to or different from the terms and conditions set forth herein, unless and only if accepted in writing by a principal officer of the Seller or its designated representative.

2. QUOTATIONS AND PUBLISHED PRICES

Quotations automatically expire thirty (30) days from the date issued unless otherwise stated in the quotation and are subject to change or withdrawal at any time. Seller reserves the right to unilaterally extend such quotation up to 6 months from date of Issue. Prices shown on the published price lists and other published literature issued by the Seller are not unconditional offers to sell, and are subject to change without notice. The Seller"s prices for equipment, unless otherwise specified, do not include an allowance for installation and/or final on site adjustment.

3. TAXES

The Sellers prices do not include any applicable federal, state or local sales, use, excise or similar taxes; and the amount of any such tax which the Seller may be required to pay or collect will be added to each invoice unless the Buyer has furnished the Seller with a valid tax exemption certificate acceptable to the taxing authorities which exempts the transaction from such tax. Where the Buyer fails to furnish the required documentation, the previously unpaid sales, use, excise, or similar tax will be billed to the Buyer. If, upon subsequent sales, use, excise, or similar tax audit, an exception provided to the Seller by Buyer is, through no fault of the Seller, determined to be invalid, the Seller will attempt to acquire a valid exemption certificate, notarized affidavit of exempt use or other necessary documentation from Buyer. If Buyer fails to timely furnish a valid exemption certificate, notarized affidavit or other necessary documentation, the previously unpaid sales, use or similar excise tax will be billed to Buyer.

4. TERMS OF PAYMENT

Except as otherwise provided herein, terms are cash net 30 days from date of invoice. Amounts past due shall bear interest at the rate of 1.5% per month (or fraction thereof) or maximum contract rate permitted by law. Buyer agrees to pay all of Seller"s reasonable attorney fees, collection fees, and costs arising out of any breach by Buyer of this or any subsequent agreement.

5. DELIVERY

Delivery dates indicated in the contract documents are approximate and are based on prompt receipt by Seller of all necessary information regarding the equipment covered by the contract. Any delivery and/or performance date for the goods or services acknowledged by Seller is a desired and not a promised date. The Seller will use reasonable efforts to meet the indicated delivery dates, but will not be responsible for its failure to do so. In the event of any delay in the delivery caused by the Buyer, or by any causes beyond Seller"s reasonable control, the Seller will store and handle all items ordered by Buyer and will invoice the Buyer for the unpaid portion of the contract price, plus storage, insurance and handling charges, on or after the date which the equipment is ready for delivery, payable in full within 30 days from invoice date. Risk of loss or damage shall pass to the Buyer upon the date that goods are ready for delivery, notwithstanding non-delivery caused by Buyer or by any causes beyond Seller"s reasonable control. Title to the goods shall pass to Buyer upon delivery to carrier.

6. SHIPPING AND HANDLING

Shipments are F.O.B. point of shipment. Shipping/handling will be prepaid and billed as a separate item on the equipment invoice on the basis of Seller"s current shipping/handling policies.

7. CHANGES

Buyer may, with the prior written consent of the Seller, make changes in the specifications for goods or services covered by any contract created hereunder. In such event, the contract price and delivery dated may be adjusted. The Seller may be entitled to payment for reasonable profit plus costs and expenses incurred by it for work and materials rendered unnecessary as a result of such changes and for work and materials required to effect said changes.

8. CANCELLATION

Undelivered parts of any order may be canceled by the Buyer only with the prior written approval of the Seller. In the event of any cancellation of any order by either party, the Buyer shall pay to the Seller the reasonable costs and expenses(including engineering expenses and all commitments to its suppliers and subcontractors) incurred by the Seller prior to receipt of notice of such cancellations, plus the Seller"s usual rate of profit for similar work.

9. SECURITY INTEREST

Buyer shall, and hereby does, grant to Seller a security interest in and lien upon, all goods whether in the possession of Seller, Buyer, or common carrier, for the purposes of securing the payment of all amounts due and owing by Buyer to Seller. Buyer agrees to execute any and all documents which Seller may reasonably deem necessary to create and/or perfect such security interest.

10. DEFAULT

Upon Buyer"s failure to pay or otherwise perform in accordance with the terms of this agreement, all amounts owing to Seller by Buyer shall, at Seller"s option and without notice, become immediately due and payable. In addition to all the rights and remedies of a seller of goods and/or a secured party under the Maryland Uniform Commercial Code and other applicable law, Seller may require Buyer to assemble the goods for shipment to a place designated by Seller which is reasonably convenient to both parties and/or may take immediate possession of the goods or render them unusable and sell, lease or otherwise dispose of them in whole or in part, at public or private sale, on or off the premises of Buyer. Upon default, Buyer shall be liable for all costs of collection and realization on the collateral, including Seller"s attorney"s fees if placed in the hands of an attorney for collection.

11. WARRANTIES

Seller expressly warrants the equipment and/or system manufactured by it as set forth herein. The following shall constitute the sole and exclusive remedies of Buyer for any breach by Seller of its warranties hereunder.

A. EQUIPMENT WARRANTY

Seller warrants (1) that the equipment will conform in all material respects to the specifications; (2) that Buyer shall receive good and marketable title to the Equipment upon delivery, free of any liens or claims; and (3) that the equipment will be free of defects in workmanship and materials for the lesser of 18 months after shipment to Buyer or 12 months after start up by Buyer. The foregoing warranty shall not apply if the Equipment or component parts have been subjected to abuse, misuse, accident, alteration or neglect. Expendable items such as belts and knives or any component which is subject to normal wear are not included in the warranty. The aforementioned warranties shall insure to Buyer, its successors and assigns. SELLER’S SOLE AND EXCLUSIVE LIABILITY AND BUYER’S SOLE AND EXCLUSIVE REMEDY for any claim based on the foregoing warranty shall be, at Seller’s option, to repair or replace (with new or functionally equivalent and compatible parts) equipment found not to conform to such warranty during the warranty period. Labor is not included.

B. SYSTEM WARRANTY

Seller warrants that, for a period of 12 months the lesser of 18 months after shipment to Buyer or 12 months after start up by Buyer of the System, the System will operate in substantial conformity to the System specifications. Seller, at its own expense, upon receipt of written notice from Buyer within such period, will make all adjustments and modifications necessary to cause the System to so operate. Any onsite labor is not included but can be purchased by Seller at standard rates. Seller warrants that upon delivery of the System to Buyer and payment in full of the purchase price, Buyer shall obtain good and marketable title to the System, free from any lien or encumbrance. Seller warrants that it has the right and authority to grant Buyer the right and license in any computer programs included in the system.

C. INFRINGMENT

Seller shall defend, at its sole cost and expense, any action or proceeding brought against Buyer that is based upon a claim that the Equipment, the System, or any component thereof infringes any patent, copyright, or trade secret of a third party in the United States. In the event the Equipment, the System, or any component thereof, is determined in any such action or proceeding to infringe any such patent, copyright, or trade secret, Seller may, at its option, replace the infringing Equipment, System, or component with a non-infringing substitute, modify the infringing Equipment, System, or component too eliminate the infringement, or secure the right for Buyer to continue use of the infringing Equipment, System, or component without replacement or modification. Buyer shall accept any such replacement, modification or resolution, provided it does not have a substantial adverse effect on operation of the Equipment or System. Buyer agrees to cooperate as may be reasonably required, and at its own expense to provide such assistance as Seller may request in resolving the infringement.

D. LIMITATION

EXCEPT AS EXPRESSLY STATED IN THIS AGREEMENT, SELLER DISCLAIMS ALL WARRANTIES, EXPRESS OR IMPLIED, RESPECTING THE EQUIPMENT AND THE SYSTEM AND ALL SERVICES PROVIDED UNDER THIS AGREEMENT, INCLUDING ANY IMPLIED WARRANTIES OF MERCHANTABILITY AND FITNESS FOR A PARTICULAR PURPOSE. In no event shall Seller be liable for any indirect, exemplary, incidental, or consequential damages arising out of or otherwise relating to the use or performance of the Equipment or the System, even if Seller has been advised of the possibility or likelihood of such damages.

12. DISCLOSURE TO THIRD PARTIES

The Buyer agrees to allow the Seller to publish magazine articles with the intent to promote the Sellers machinery or system including the identity of the buyer. The seller agrees to not disclose any confidential information, which is the property of the buyer in such disclosures.

13. REGULATORY LAWS AND STANDARDS

The Seller takes reasonable steps to keep its products in conformity with various nationally recognized standards and such regulations which may affect its products; however, the Seller recognizes that its products are utilized in many regulated applications and that from time to time, standards and regulations are in conflict with each other. The Seller makes no warranty or representation that its products will conform to any federal, state or local laws, ordinances, regulations, codes or standards, except as particularly agreed upon for compliance in writing as a part of the contract between Buyer and Seller. The Seller prices do not include the cost of any related inspections or permits or inspection fees.

14. NONWAIVER

Seller"s failure to enforce or declare a default with respect to any particular term or condition of this agreement shall not be considered a waiver of Seller"s right to enforce or declare a default with respect to any other term or condition or, on a subsequent occasion, with respect to that particular term or condition.

15. APPLICABLE LAWS

Each transaction shall be governed by the laws of the state of Maryland in force at the date hereof. The courts of Maryland shall have exclusive jurisdiction over all controversies arising out of or in connection with each such transaction.

16. INTERPRETATION

Should any term or provision contained in the contract contravene or be invalid under applicable law, the contract shall not fail by reason thereof but shall be construed in the same manner as if such term or provision had not appeared therein.

Rev 1: September 2009