Terms of Purchase

TERMS AND CONDITIONS OF PURCHASE OF TOVA INDUSTRIES, INC.

1. CONTROLLING TERMS AND CONDITIONS. Tova Industries, Inc. (the "Purchaser") expressly limits acceptance to the terms and conditions set forth in this purchase order, and in no event shall any of the terms and conditions obtained in Seller's acceptance, whether by acknowledgement or otherwise, become a part of this purchase order contract. This purchase order, including its terms and conditions, constitutes the complete and final agreement between Purchaser and Seller. Seller will be deemed to have assented to all terms and conditions contained herein if any part of the described merchandise shipped or if purchase order is not expressly rejected in writing within 10 days of the date hereof.

2. PRICES. All prices are to be in U.S. Dollars and are firm unless otherwise agreed in writing. The goods shipped under this order shall not be invoiced at a higher price than shown without the prior written consent of the Purchaser. If no price is stated on this order, Seller shall invoice at the lowest prevailing market price or at the lowest price last quoted or charged to Purchaser, whichever is less. If any contradiction in prices exists between any written quote and any verbal quote, then in such event, the lowest price quoted shall prevail.

3. TERMS OF PAYMENT. Unless otherwise expressly to in writing by the parties, a separate invoice shall be issued for each shipment with payment due dates and discounts calculated from the date of receipt of the goods or receipt of invoice, whichever is later. Payment shall be in U.S. Dollars.

4. TAXES. Purchaser shall not pay Seller any state or local sales, use, or similar tax unless separately stated and itemized in this purchase order or any federal excise tax unless included in the price or prices stated herein, and Seller agrees that except as otherwise provided herein, all such taxes which, at the date of delivery, Seller is required by law to collect from Purchaser are so included or separately stated or itemized, and agrees that the prices stated herein do not and the amounts hereunder will not include any tax with respect to which exemption is available or is indicated by Purchaser herein or otherwise, or any federal excise tax with respect to which Purchaser has furnished Seller an exemption certificate. The Seller agrees to pay any and all personal property and/or ad valorem taxes assessed or otherwise levied against any property placed in the hands of the Seller by the Purchaser for the purpose of fulfilling this purchase order. In case it shall ever be determined that any tax included in the prices was not required to be paid by Seller, Seller agrees to notify Purchaser and to make prompt application for the refund thereof, to pay the same, including interest, if any, to Purchaser.

5. WARRANTY. All merchandise shipped under this order shall be subject to all statutory and implied warranties and shall be further subject to all express warranties created by acts and statements of the Seller. In addition to all warranties implied in fact or in law, Seller expressly warrants that (i) each of the goods described herein shall conform exactly to the description herein and to Purchaser's specifications and drawings, if any; (ii) all goods, materials, and workmanship covered by this order shall be free from defects in material, workmanship, and design, and shall satisfy all requirements of samples, drawings, and specifications referred to or incorporated herein or supplied to Seller in connection herewith, (iii) shall be free from claims of others relating to ownership and title and shall be free and clear of all liens, claims, and encumbrances; (iv) shall be of the highest quality commensurate with the grade specified and shall meet or exceed all performance standards, claims, and specifications set forth in applicable literature; (v) shall be fit for their intended purpose when such purpose is stated herein or when Seller has participated in preparing the drawings and specifications; and (vi) shall be merchantable. Seller further warrants that the goods shall be in compliance with and manufactured or furnished in accordance with all provisions and stipulations of federal, state, and local laws or ordinances and all orders, rules, and regulations issued thereunder applicable to this order and its performance in effect on the date of delivery, including, but not limited to, those relating to labeling, environmental protection, safety and health, wages and hours, equal opportunity, employment of veterans, employment of handicapped, and utilization for minority business enterprises. Seller further represents, warrants, and certifies that the goods covered by the invoice were produced in compliance with the Fair Labor Standards Act and the Contract Work Hours and Safety Standards Act, including, without limitation, 40 U.S.C. Section 328(b) (1), and that Seller is in compliance with the requirements for consegregated facilities set forth in 41 CFR, section 60-1.3 Unless otherwise provided herein, Seller warrants that the prices named herein are as low as any net prices given by Seller to any other customer for like goods or services under similar conditions, and Seller agrees that if at any time during the life of this purchase order, it quotes or sells at lower net prices like goods or services under similar conditions, such lower net prices shall from that time be substituted for the prices named herein. Any exclusion of the foregoing warranties by the Sellers shall be of no effect.

6. PATENT INDEMNITY. Seller agrees to indemnify and hold harmless the Purchaser and its affiliates, officers, directors, agents, employees, vendees, successors, and assigns from any and all loss, expense (including, but not limited to reasonable attorneys' fees and cost of defense), damage, liability, claims, or demand either at law or in equity, for actual or alleged infringement of any patent, invention, design, trademark, or copyright arising from the purchase, manufacture, use, or sale of the materials and/or goods required by this purchase order. In case such goods or any part thereof are, in such suite, held to constitute infringement, and the use of said goods or part thereof is enjoined, Seller shall, at its own expense, and in Purchaser's discretion, either procure for Purchaser the right to continue using said goods or part thereof, or replace same with non-infringing goods or part thereof, or modify it so it becomes non-infringing, or remove said goods or part thereof and refund the purchase price and the cost of transportation and installation.

7. EXTRA CHARGES. No charges of any kind, including but not limited to charges for containers, crating, boxing, palleting, bundling, cartage, damage, drayage, storage, interest, or repeat delivery will be allowed unless specifically agreed to by Purchaser in writing. Price is to cover net weight of material, unless otherwise agreed.

8. TRANSPORTATION: SHIPPING INSTRUCTIONS. (a) All goods specified in this purchase order shall be properly packed, marked, and shipped by an insured carrier in accordance with the requirements hereof and the requirements of the carrier transporting such goods and with such other instructions as the Purchaser may furnish Seller. If applicable, all goods shipped shall include full and complete English language instruction and maintenance manuals with as-built drawings. Shipments shall be routed in accordance with Purchaser's instructions, and Seller shall reimburse Purchaser for all expenses incurred by Purchaser as a result of improper packing, marking, routing, or which results from any deviation from Purchaser's instructions.

(b) Unless otherwise specified, all transportation charges shall be prepaid by Seller, F.O.B. Purchaser's plant in Louisville, Kentucky, or C.I.F. Purchaser's plant in Louisville, Kentucky, whichever is applicable under generally accepted industry standards or commercial practices.

(c) Purchaser's count or its weight shall be final and conclusive on shipment not accompanied by an accurate packing list, or Seller may provide an official net weight certificate with the invoice.

(d) Delay in receiving invoices or errors or omissions on invoices will be considered just cause for withholding payment without loss of discount privileges and without interest, service charges or carrying charges of any kind.

(e) Purchaser assumes no obligation for goods shipped in excess of the quantity ordered hereunder and not accepted by Purchaser. Shipments in excess of quantity ordered may be returned to Seller, and Seller shall pay Purchaser for all handling, storage, and transportation expenses incurred in connection with such shipment, except where such excess quantity is relatively nominal and customary for such product.

(f) Separate invoices shall be issued for shipments applying against different purchase order numbers.

(g) Seller shall procure insurance from a reliable insurance company covering the goods during shipment in the full amount of the purchase price under this purchase order, payable to the party bearing the risk of the loss at time of injury to said goods

9. RISK OF LOSS. The risk of loss or damage to goods, regardless of cause, shall be Seller's responsibility and shall not pass to Purchaser until or unless the goods have been delivered into Purchaser's possession at Purchaser's plant regardless of the F.O.B. point specified.

10. DELIVERY SCHEDULE. Unless otherwise agreed in writing, Seller shall not make material commitments or production arrangements in excess of the amount or in advance of the time necessary to meet Purchaser's delivery schedule. It is Seller's responsibility to comply with this schedule, but not to anticipate Purchaser's requirements. Goods shipped to Purchaser in advance of scheduled delivery dates may be refused by Purchaser and be returned to Seller at Seller's expense.

11. DELAYS IN DELIVERY. Seller will not be liable for damages for delay in delivery due to causes beyond its reasonable control. If Seller, however, for any reason, does not substantially comply with Purchaser's delivery schedule, Purchaser, at its option, may either approve a revised delivery schedule or may terminate the order without Purchaser incurring any liability to Seller on account thereof.

12. REJECTIONS. If any goods are found at any time to be defective in material or workmanship or otherwise not in conformity with the requirements of the order, including drawings and specifications, if any, Purchaser, in addition to any other rights which it may have under warranties or otherwise, shall have the right to reject and return such goods at Seller's expense, such goods not to be replaced without suitable written authorization from Purchaser.

13. CHANGES. Time is of the essence in this contract. No act of Purchaser, including acceptance of late deliveries, shall act as a waiver of this provision. Purchaser reserves the right and option to extend scheduled delivery dates exercisable by written notice to Seller. Seller shall comply with best commercial practices for domestic or international shipments adequate for safe arrival at destination and storage. A packing list must accompany each shipment and clearly indicate Seller's name, quantity shipped, part number, description, purchase order number, and lot number, if any. By written instructions to Seller, Purchaser may, from time to time, require changes in any of the specifications for goods or work ordered hereunder, and Seller's failure to notify Purchaser in writing within seven (7) days after receipt of Purchaser's change order shall constitute Seller's agreement to conform to such change without an increase in price or extension of the time for performance. Purchaser shall have the right to make changes in the order, but no additional charge will be allowed unless authorized in writing by Purchaser. If such changes on the amount to be charged Purchaser affect delivery, Seller shall notify Purchaser immediately and negotiate an adjustment.

14. PURCHASER'S PROPERTY. Unless otherwise agreed in writing, all tools, equipment, or material of every description furnished to Seller by Purchaser or specifically paid for by Purchaser and any replacement thereof or any materials affixed or attached thereto shall be and remain the personal property of Purchaser. Such property, and whenever practical, each individual item thereof, shall be plainly marked or otherwise adequately identified by Seller as "Property of Purchaser" and shall be safely stored separate and apart from Seller's property. Seller shall not substitute any property for Purchaser's property and shall not use such property except in filling Purchaser's orders. Such property while in Seller's custody or control, shall be held at Seller's risk, shall be kept insured by Seller at Seller's expense in an amount equal to the replacement cost with loss payable to Purchaser, and shall be subject to removal at Purchaser's written request, in which Seller shall prepare such property for shipment and shall redeliver to Purchaser in the same condition as originally received by Seller, reasonable wear and tear excepted.

15. INFORMATION DISCLOSED TO PURCHASER. Seller shall not disclose to Purchaser any information which Seller deems to be confidential, and any knowledge or information which Seller shall have disclosed or may hereafter disclose to Purchaser in connection with the purchase of the goods or services covered by this order shall not, unless otherwise specifically agreed upon in writing by Purchaser, be deemed to be confidential or proprietary information, and shall be acquired by Purchaser free from any restrictions whatsoever as part of the consideration of this order.

16. INFORMATION DISCLOSED TO SELLER. Seller shall not disclose to any person outside of its employ or use for any purpose, other than to fulfill its obligations under this order, any information received from Purchaser. All communications of Purchaser to Seller except such information which is otherwise publicly available, shall be deemed confidential. All specifications, drawings, technical information, and data heretofore or hereafter furnished by Purchaser to Seller in connection with the purchase of goods or services covered by this order shall remain the property of Purchaser.

None shall be copied or duplicated in any manner, nor shall extracts be taken therefrom for a purpose or use unrelated to work performed for Purchaser without Purchaser's advance written consent, and the same shall be used only in the manufacture or production of goods for Purchaser and shall be returned to Purchaser whenever requested and, in any event, at the conclusion of the work. No information relating to this order shall be disclosed other than to Seller's employees immediately concerned with the work hereunder without the advance written approval of Purchaser. Seller shall not, without prior written approval of Purchaser, publicize this order, or disclose, confirm or deny any details thereof to the third parties or use Purchaser's name in connection with Seller's sales promotion, advertising, or publicity without prior written approval from Purchaser. Seller shall not make or offer gifts or gratuities of any kind to Purchaser's employees or members of their families, which gifts or offerings may be construed as Seller's attempts to improperly influence the business relationship between the parties.

17. FOR WORK ON PURCHASER'S OR ITS CUSTOMER'S PREMISES. If Seller's work under the order involves operations by Seller on the premises of Purchaser or one of its customers, Seller shall take all necessary precautions to prevent the occurrence of any injury to person or property during the progress of such work, and except to the extent that any such injury is due solely and directly to the Purchaser's or its customer's negligence, as the case may be, shall indemnify the Purchaser against al loss which may result in any way from any act or omission of Seller, its agents, employees, or subcontractors, and Seller shall maintain such Public Liability, Property Damage, and Employees Liability and Compensation Insurance as will protect Purchaser from said risks and from any claims under any applicable Workmen's Compensation and Occupational Disease Acts.

18. QUANTITIES. It is Seller's responsibility to furnish the property quantity called for on this order. No variation in the quantities specified herein will be accepted as compliance with this order except by prior written agreement. Purchaser reserves the right to return excess shipments at Seller's expense, except where such excess quantity is relatively nominal and customary for such product.

19. SUBCONTRACTING; NON-ASSIGNMENT. Seller shall not subcontract nor delegate performance of all or any part of the work under this order without the prior written consent of the Purchaser. Assignment of this order or any interest therein or any payment due or to become due thereafter without the written consent of the Purchaser shall be void.

20. SET-OFF. Purchaser shall be entitled, at all times, to set-off any amount owing at any time from Seller to Purchaser or any of its affiliated companies against any amount payable at any time by Purchaser or any of its affiliated companies to Seller.

21. TERMINATION. If Seller ceases to conduct its operations in the normal course of business (including inability to meet its obligations as they mature), or if any proceeding under the bankruptcy or insolvency laws is brought by or against Seller, or a receiver for Seller is appointed or applied for, or an assignment for the benefit of creditors is made by Seller, Purchaser may terminate the order without liability except for deliveries previously made or for goods covered by the order then completed and subsequently delivered in accordance with the terms of this order.

22. FORCE MAJEURE. (a) Neither party shall be liable for a failure to perform its obligations hereunder if such failure results from storm, flood, fire, or other act of God, strike or other labor disturbance, or other unforeseeable cause beyond its reasonable control and without its fault or negligence, provided that business losses or other financial distress or hardship shall not be deemed to be such an unforeseeable cause, and further provided that Seller's default shall not be excused unless written notice of any such contingency is given to Purchaser within five (5) days of the time that Seller first received knowledge of the occurrence thereof.

(b) Notwithstanding anything to the contrary herein contained, Seller agrees that in the event of a strike or other labor dispute resulting in possible delay in the performance of this purchase order, Purchaser shall have the option, exercisable by written notice to Seller, to vest title in itself to tools, finished parts, raw materials, or work in process associated with this purchase order, and Seller will, upon request from Purchaser, deliver any or all such tools, finished parts, raw materials, and work in process to Purchaser at a point outside Seller's plant.

23. PLANT ACCESS. Seller shall allow Purchaser and/or Purchaser's designee access to the facilities involved in performing this purchaser order for purposes of reviewing the status and progress of production and witnessing any tests and inspections. Such access shall not relieve Seller of any of its obligations.

24. APPLICABLE LAW; JURISDICTION. The validity, performance, and construction of this contract shall be governed by the laws of the State of Kentucky for contracts made and to be performed in the State of Kentucky. Seller hereby irrevocably submits to the exclusive jurisdiction and venue of the Jefferson Circuit Court, Louisville, Kentucky or the United States District Court for the Western District of Kentucky sitting in Louisville, Kentucky. Seller hereby agrees that, in addition to any methods of service of process provided for under applicable law, all service of process in any such suit, action or proceeding in the Jefferson Circuit Court or Federal Court sitting in Louisville, Kentucky can be made upon Seller by prepaid postage sent certified or registered mail, return receipt requested, directed to Seller at its address set forth in the purchase documents, and service so made shall be deemed conclusively complete five (5) days after the same shall have been so mailed.

25. NON-WAIVER. The failure of Purchaser to insist in any one or more instance upon the performance of any of the terms, covenants, or conditions of this agreement or to exercise any right or remedy hereunder or at law or in equity, shall not be construed as a waiver or relinquishment of any such term, condition, right, or remedy or of any other terms, conditions, rights, or remedies under this agreement or of any future performance of any term, covenant, or condition or the future exercise of any such right or remedy. Each shipment made hereunder shall be considered a separate transaction. In the event of any default by Seller, Purchaser may decline to accept further shipments. If Purchaser elects to continue to accept shipments, Purchaser's action shall not constitute a waiver of any default by Seller or, in any way, affect Purchaser's legal rights or remedies for any such default.

26. ENTIRE AGREEMENT. This contract constitutes the entire agreement between the parties relating to the purchase of the goods described herein and supersedes all previous communications, representations, or agreements, either oral or written, with respect to the subject matter hereof. No representations or statements of any kind made by any representative of Purchaser, which are not stated herein, shall be binding on Purchaser. No addition to or modification of any provision to the contrary shall be binding upon Purchaser unless made in writing and signed by a duly authorized representative of Purchaser located at Purchaser's business office. No course or dealing or usage of trade or course of performance shall be relevant to explain or supplement any term expressed in this contract.

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