BESLY CUTTING TOOLS, INC.

520 Blackhawk Blvd #135
South Beloit, IL 61080

STANDARD TERMS AND CONDITIONS OF SALE

1. Applicability
All quotations and sales covering products and services sold by Besly Cutting Tools, Inc. (hereinafter referred to as Seller) are made, and all purchase orders for such products and services are accepted, subject to these Standard Terms and Conditions of Sale. Seller shall not be deemed to have waived the following terms and conditions if it fails to object to the provisions appearing, incorporated by reference, or attached to Buyers Purchase Order. Terms and Conditions of Buyers order which are in any way in conflict or inconsistent with, or in addition to these Standard Terms and Conditions of Sale, shall not be binding on Seller and shall not be considered applicable to any sale, unless expressly agreed to in writing and signed by the Director of Marketing, or his designee.

2. Acceptance of Orders
All orders are subject to acceptance by Seller at its main office in South Beloit, Illinois. Sellers order acknowledgment constitutes its acceptance of Buyers order upon the terms and conditions specified in Sellers order acknowledgment pursuant to these Standard Terms and Conditions of Sale unless written objection is received by Seller within ten (10) days after its acknowledgment.

3. Prices
Prices quoted are firm for thirty (30) days from date of Sellers quotation, and are thereafter subject to change without notice.

4. Terms of Payment
All products and services will be invoiced as of the time of shipment in accordance with the following:
A. Unless otherwise specified in writing by Seller terms are 1% 10th prox, net thirty (30) days from date of invoice.
B. Finance charge of 2% per month or the maximum contractual rate permitted by law, whichever is less will be assessed on all unpaid or past due invoices.
C. Pro rata payments are due from BUYER as shipments are made by SELLER. If shipments are delayed by BUYER, payments become due and payable from the date SELLER is prepared to make shipment. If work to be performed under a purchase order is delayed by BUYER, payments shall be due based on the purchase price and percentage of completion of work.
D. If at any time SELLER determines that the financial condition of BUYER does not justify the terms of payment extended herein, SELLER may require full or partial payment in advance by credit card or shall have the right to cancel any purchase order and shall receive reimbursement for its reasonable and proper cancellation charge. SELLER shall have the right to cancel any purchase order in the event of bankruptcy, voluntary or involuntary, or insolvency proceeding brought against BUYER, or if BUYER makes an assignment for the benefit of creditors.

5. Title and Delivery
All shipments shall be F.O.B. Sellers plant and shall become the property of Buyer upon delivery to the carrier. Buyer shall assume all risk and liability for loss or damage after delivery to the carrier. Seller shall not be liable for delays in the performance of any purchase order or default in delivery arising out of causes beyond the control and without the fault or negligence of Seller. Such causes include, but are not restricted to fires, strikes, act of God, acts of Government, or failure of suppliers or subcontractors to meet scheduled deliveries. In the event of any such delay, the delivery date shall be extended for the period equal to the time lost by reason of the delay.

6. Packaging and Shipment
All products will be packaged in accordance with standard commercial practice for domestic shipment and will be shipped by ways deemed most appropriate by Seller. Premium shipments (e.g., air freight, express, etc) are at Buyers expense. Minimum transportation charges (e.g. common carrier, UPS, etc.) will be allowed on all domestic orders of $350.00 net or more.
International shipments will be charged the actual shipping charges plus a $40.00 export documentation fee. Buyer is responsible for all taxes and duties on all International shipments.

7. Limitation of Liability
Sellers liability for any claim or action of any kind arising out of, in connection with or resulting from the manufacture, sale, delivery, resale, use or repair of products or component parts furnished, or services rendered by Seller under a purchase order shall not exceed Sellers price for the product, component part thereof, or service which gives rise to such claim or action, except as provided in the paragraph hereof entitled Patents, Trademark and Copyright Indemnity. Buyer assumes all other liability for any loss, damage or injury to persons or property arising out of, in connection with, or resulting from the use of Sellers products, either alone or in combination with other products. IN NO EVENT WILL SELLER BE LIABLE FOR INCIDENTAL OR CONSEQUENTIAL DAMAGES.

8. Patents, Trademark and Copyright Indemnity
Seller shall indemnify Buyer from any and all damages and costs finally awarded for infringement of any United States patent, trademark or copyright in any suit by reason of the sale or use of any product sold to Buyer under an order where Seller is an infringer with respect to its sale thereof, and from reasonable expenses incurred by the Buyer in defense of such suit if Seller does not undertake the defense thereof, provided that Seller is promptly notified of any such suit and, except for suits against the U.S. Government, Buyer offers Seller full and exclusive control of the defense of such suit when products of Seller only are involved therein; and the right to participate in the defense of such suit when products other than those of Seller are also involved therein; except that this indemnity shall not extend to infringement resulting from Sellers compliance with buyer designs, processes or formulas. Sellers liability for damages hereunder is limited to those computed solely on the value of any product sold to Buyer under an order. In no event shall Seller be liable for consequential damages or costs applicable thereto. Seller shall also indemnify Buyers customers and agents for such infringement if and to the extent that Buyer has agreed so to indemnify them, but to no greater extent than Seller has indemnified Buyer herein and under the same conditions as set forth herein. The above is in lieu of any other indemnity or warranty, express or implied, with respect to patents, trademark, or copyright.

9. Cancellation for Convenience
Buyer may cancel an order for its convenience only upon prior written notice and upon advance payment to Seller of reasonable and proper cancellation charges, as will in accordance with good accounting practice, satisfy all costs incurred by Seller, together with its proportionate profit on such costs.

10. Taxes
Prices are subject to increase for the inclusion of any and all taxes which are applicable to, and which arise form the sale, delivery or use of Sellers products or services and for the collection of which Seller is or may be responsible to any Government authority, unless authorized exemption certificates are furnished by Buyer.

11. Assignment
Neither the rights nor the obligations of either party under a purchase order are assignable or transferable in whole or in part without prior written consent of the other party.

12. Changes
Seller reserves the right to make changes in design or additions to or improvements in its products without liability to install such change, addition or improvement in any product manufactured prior thereto.

13. Inspection
Seller shall provide and maintain a final test and inspection system in accordance with Sellers commercial standards.

14. Warranty
Seller warrants that at the time of delivery to Buyer, its products will be free from defects in material and workmanship. Seller further warrants that its products will conform to drawings and specifications mutually agreed upon in writing. Written notice of any claimed nonconformity or defect must be given within thirty (30) days after the date of delivery to Buyer. Sellers obligation under this warranty is limited, at its option, to repairing or replacing at its plant, with transportation charges prepaid by Buyer, the product or component part thereof that is proved to be other than as herein warranted. This warranty does not extend to any of Sellers products which have been subject to misuse, accident or improper installation, maintenance or application; nor does it extend to products which have been repaired or altered outside of Sellers plant unless authorized in writing by Seller or unless such installation, repair or alteration is performed by Seller; nor does this warranty extend to any labor charges for removal and/or replacement of the nonconforming or defective product or component part thereof. THIS WARRANTY IS IN LIEU OF AND EXCLUDES ALL OTHER WARRANTEES; EXPRESS OR IMPLIED, ARISING BY OPERATION OF LAW OR OTHERWISE, INCLUDING THE IMPLIED WARRANTIES OF MERCHANTABILITY AND FITNESS FOR A PARTICULAR PURPOSE, AND IN NO EVENT WILL SELLER BE LIABLE FOR INCIDENTAL OR CONSEQUENTIAL DAMAGES. No agreement or understanding relative to the foregoing warranty will be binding upon Seller unless agreed to in writing.

15. Governing Law
The interpretation and construction of the provisions of an order shall be in accordance with the laws of the State of Illinois.

16. Fair Labor Standards Act
Seller represents and warrants that all products and services will be manufactured or furnished by Seller in accordance with all applicable standards, provisions and stipulations of the Fair Labor Standards Act of June 30, 1938 (29 USC 201-209) as amended, and in connection therewith. Seller certifies as follows: We hereby certify that these goods were produced in compliance with all applicable requirements of Sections 6, 7, and 12 of the Fair Labor Standards Act as amended, and of regulations and orders of the United States Department of Labor issued under Section 14 thereof (29 USC 206, 207, 212 and 214).