P.O. TERMS AND CONDITIONS

1. ACCEPTANCE: No terms or conditions other than those set forth in (a) this Purchase Order, and (b) any documents attached to or incorporated by reference in this Purchase Order shall be binding upon Elite Abrasives, LLC (“Buyer”) unless accepted in writing by a duly authorized representative of Buyer. All final plans, specifications, drawings, notes, instructions, engineering notices or technical data referred to in this Purchase Order or prepared in connection with the Project described on the front of this Purchase Order (“Project”) are incorporated herein by reference.  Delivery of any goods or services by Seller pursuant to this Purchase Order shall be conclusively deemed acceptance of this Purchase Order and these terms and conditions, and any additional or different terms included in Seller’s confirmation, acceptance or acknowledgment shall be void and without effect.  The materials, products, goods or services covered by this Purchase Order shall be referred to herein as the Goods.

2. ENFORCEABILITY OF PURCHASE ORDER: Where Buyer may not be the ultimate consumer of the Goods, or where the Goods are incorporated into a Project which is not owned by the Buyer, Seller agrees that Buyer’s rights under this Purchase Order shall inure to the benefit of, and may be exercised and enforced by, Buyer, the Project Owner and/or the Project Owner’s Architect or Engineer, provided Buyer shall have agreed in writing to such exercise or enforcement.

3. COMPLIANCE WITH LAWS: Seller warrants that the Goods have been or will be produced, sold, delivered and furnished in strict compliance, and that the Goods comply in all respects, with all applicable federal, state and local laws, rules, regulations and orders pertaining to employment in the production of and/or sale of the Goods, including but not limited to applicable provisions of the Rehabilitation Act of 1973, the Veterans Employment and Readjustment Act of 1972, the Equal Employment Opportunity Act and the Fair Labor Standards Act. In addition, Seller warrants that it has complied with all applicable Executive Orders, and all rules and regulations promulgated by the Secretary of Labor pursuant thereto, in the production and/or sale of the Goods, and will comply with any and all applicable orders, rules and regulations which become effective during the efficacy of any provision of this Purchase Order.  Seller shall execute and deliver such documents as may be required by any federal, state or local governing body to affect compliance.  Seller shall also deliver to Buyer such documents as Buyer requests as evidence of compliance.  All such applicable laws, rules, regulations and orders are incorporated herein by this reference.  Seller shall defend and hold Buyer harmless from any action which may be instituted against Buyer, or any liability which may be imposed upon or threatened against Buyer, as a result of Seller’s or the Goods’ failure to so comply with said laws and regulations.  Seller further agrees, as a condition precedent to payment, to attach to or to stamp on each invoice issued in connection with this Purchase Order the following statement:  “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.”

4. BILLING, SHIPPING AND PAYMENT: All charges for packing, hauling, storage and transportation to the point of delivery are included under this Purchase Order unless otherwise herein specified. Seller shall pay all such delivery charges in excess of delivery charges which Buyer has specifically agreed in writing to pay.  All shipments shall be accompanied by a packing slip which describes the Goods shipped, states the appropriate purchase order number and shows the shipment’s destination.  No charge whatsoever shall be made by Seller or any other party, for drayage or storage unless otherwise stated herein.  All state and federal excise, sales and use taxes, where applicable, shall be specifically stated separately on the invoice.  Any applicable cash discount period shall be computed from the date of receipt by Buyer of (a) an acceptable invoice, or (b) the Goods, whichever occurs later.  On invoices returned for correction, the cash discount period will commence from the receipt of the corrected invoice.  Unless freight, taxes and other charges are separately itemized, any discount will be taken on the full-face amount of the invoice.  All payments are subject to adjustment for shortage or rejection.  Any reduction in Seller’s costs resulting from a reduction in freight rates, custom duties, import taxes, excise taxes, sales taxes and/or other like charges or taxes from those in force on the date hereof shall be paid to Buyer by Seller in reduction of the price of the Goods.  Buyer will not be liable for over shipments in excess of quantities specified, and Buyer may return any such over shipments at Seller’s sole risk and expense, which shall include handling, packaging and transportation costs (each way).

5. CONDITION TO PAYMENT: If the Goods are to be incorporated into a Project which is not owned by the Buyer, Seller agrees that it is relying on the credit and ability to pay of the Project Owner, and not of the Buyer, for payment for the Goods furnished hereunder. Seller agrees that payment by the Project Owner to Buyer for the Goods furnished by Seller shall be a condition precedent to any payment obligation of Buyer to Seller and Seller shall bear the risk of Project Owner nonpayment.  Seller agrees that the liability of the surety on Buyer’s labor and material payment bonds, if any, for payment to Seller, is subject to the same conditions precedent as are applicable to Buyer’s liability to Seller.  Buyer agrees to pay Seller no later than 10 working days after receipt of payment by Owner.  Retainage will be withheld if specified by the Purchase Order.

6. DELIVERY: Seller bears all risk of loss in transit. Delivery shall not be deemed complete until the Goods are actually received and accepted by Buyer, notwithstanding any agreement to pay freight, express, parcel post or other transportation charges.  In the event Buyer is assessed any damages as a result of the acts or omissions of Seller in connection with the delivery of the Goods, Seller shall pay Buyer in full for such damages upon written demand by Buyer.

7. CHANGES IN SPECIFICATIONS OR SCHEDULES: Buyer may at any time make changes in this Purchase Order as to any Goods. No change will be made to this Order other than by written amendment issued by the Buyer; no officer, employee or agent to the Buyer is authorized to direct any oral change to this Order.  Buyer may at any time send Seller a Request for Proposal for proposed changes to this order.  Seller, within 10 days of receiving a Request for Proposal will notify the Buyer in writing of the affect the proposed changes would have on the cost and time required for performance of this Order.  After receiving Seller’s written response to a Request for Proposal, Buyer may issue a Pending Change to this Order.  Seller will not incorporate any proposed changes on a Request for Proposal or Pending Change into this Order until receiving a written Amendment to this Order.  Unless otherwise enumerated on the face thereof, changes in cost and time required for performance shown on a Pending Change are firm for the duration of the Project.

8. WARRANTIES OF SELLER: Seller warrants that all Goods will conform to any and all drawings, specifications or samples provided by Buyer or Seller, will be merchantable, of good material and workmanship and free from any and all defects. Seller also expressly warrants that the Goods will be fit and sufficient for the purpose intended and will be subject to Buyer’s inspection at Seller’s factory or upon delivery.  Payment for, inspection of or receipt of any or all of the Goods shall not constitute a waiver of any breach of warranty.  Defective Goods may be returned to Seller for full credit or for replacement with new Goods, at Buyer’s option and at Seller’s risk and expense, including all charges for handling, packaging and transportation (each way).  In no event shall Seller attempt to limit damages or remedies available under applicable law for any rejection, revocation of acceptance or breach of warranty, and the parties agree that any such limitation shall be void and without effect.  No replacement of defective Goods shall be attempted or made except as authorized by a replacement Purchase Order issued by Buyer.  The Warranties described herein shall be applicable to the Goods regardless of whether Seller subcontracts for the production and/or acquisition of all or any part of the Goods.

9. DESIGNS, PATTERNS, AND SPECIAL TOOLING: Title to and the right of immediate possession of any drawings, specifications, designs, blueprints, patterns, tools, equipment or material furnished or paid for by Buyer shall remain solely in Buyer. While retained by Seller, such property shall be maintained in good and usable condition at no cost to Buyer, and the risk of loss thereof or damage thereto shall be borne exclusively by the Seller.  Seller further agrees to maintain adequate insurance coverage upon such property at Seller’s sole expense.  Invoices for any Goods which consist of patterns, tools, dies, equipment or material will be approved for payment only after production samples created therefrom are inspected and accepted by Buyer.  If the Goods included in the Purchase Order are made according to designs, specifications or blueprints or by means of any patterns, tools or dies furnished by Buyer, Seller agrees that the same designs, specifications, blueprints, patterns, tools and dies will not be furnished to any other person and that such items or information gained therefrom will not be used for the direct or indirect benefit of any other person without Buyer’s prior written consent.

10. PATENTS: Seller agrees to indemnify and hold harmless Buyer, and/or its customers, against any and all liability, loss and expense, including attorney’s fees, by reason of any claim, action or litigation arising out of alleged or actual, direct or contributory infringement of patent arising from the purchase, use or sale of the Goods. In case the purchase, use or sale of the Goods, or any part thereof, is held to constitute infringement and/or is enjoined, Seller shall, at its own expense, procure for Buyer and its customers the right to continue to purchase, use and sell such Goods, or, with the approval of Buyer, shall modify said Goods so that they become noninfringing, or remove said Goods and refund the purchase price and the transportation and installation costs thereof.

11. CANCELLATION: Buyer, without cost to Buyer, and in addition to any other rights and remedies, reserves the right to cancel this Purchase Order in whole or in part on account of defects in material, equipment, workmanship or quality or in the event any of the Goods are not shipped as specified herein, or in release orders issued hereunder, or are not received by Buyer in such condition as is specified by blueprints, drawings, specifications or other written instructions issued in connection herewith and/or incorporated herein. Buyer may also cancel this Purchase Order in whole or in part in the event Seller  makes an assignment for the benefit of its creditors or if a receiver is appointed for Seller or its property, or if proceedings in bankruptcy or for corporate reorganization are filed by or against Seller, or upon Seller’s failure to comply with any of the terms and conditions of this Purchase Order.  In addition, Buyer reserves the right to cancel this Purchase Order at any time in whole or in part in the event any governmental law, regulation or administrative act or omission of any nature or kind either directly or indirectly requires such suspension or cancellation or prevents Buyer from carrying out the intended use for which the Goods are purchased.  Buyer reserves the right to terminate this Purchase Order or any part hereof if the Goods or any part thereof are no longer needed by Buyer and, in the event of such termination, Buyer will make settlement with Seller on an equitable basis cover Seller’s actual cost of the Goods theretofore received by Buyer.

12. BUYER’S RIGHT TO COVER: If Seller fails to make delivery or repudiates or if Buyer rejects the Goods or revokes acceptance thereof, then with respect to any Goods involved, and with respect to the whole if the breach goes to the whole contract, Buyer may cancel the contract and, whether or not it has done so, Buyer may, in addition to recovering so much of the purchase price as it had paid, cover (as such term is employed by the Uniform Commercial Code) and recover damages as to all Goods affected whether or not they have been identified to the contract. Buyer may cover by making any purchase of goods or any contract to purchase goods in substitution for the Goods due from Seller.  Buyer shall recover from Seller as damages the difference between the cost of cover and the contract price together with any incidental or consequential damages.  The foregoing shall be in addition to, and not exclusive of, any other remedies which Buyer may have hereunder or by law.

13. INSPECTION: Seller shall provide and maintain an inspection system which will assure that all Goods delivered to Buyer conform to the requirements of this Purchase Order whether manufactured or processed by Seller, or procured from subcontractors or vendors. Seller shall maintain adequate records of all inspections and tests, which records shall indicate the nature and number of observations made, the number and type of deficiencies found, the quantities approved and rejected and the nature of any and all corrective action taken.  Such records shall be available to Buyer at all times and, unless otherwise agreed to by Buyer, shall be retained by Seller for a period of at least 5 years from the date of this Purchase Order.  The failure of Seller to maintain such records as herein provided shall be a breach of the terms and conditions of this transaction, and shall be grounds for Buyer’s cancellation of the same.

14. PROHIBITION AGAINST ASSIGNMENT: No assignment of this Purchase Order or any interest therein, or any payment due or to become due hereunder, shall be made by seller without obtaining the prior written consent of the Buyer.

15. OTHER AGREEMENTS: Seller agrees to defend and save harmless Buyer and its subsidiaries, its and their successors and assigns, customers and users of its and their products, including the Project Owner and its Architects and Engineers, against all suits at law or in equity and from all expenses, damages, claims or demands arising out of the death or injury to any person or damage to property alleged to have resulted from or in connection with the Goods, and, upon tender of any suit or claim to Seller, to defend the same at Seller’s expense as to all costs, attorney’s fees and damages. In the event of Seller’s breach of any obligation in connection with this Purchase Order, Buyer may, in addition to all other remedies, recover court costs and attorney’s fees expended in connection with such breach, as well as prejudgment interest at the highest legal rate.

16. EXCLUSION OF PRIOR DEALING: These terms and conditions and those on the face of the Purchase Order are intended by the parties as a final expression of their agreement and as a complete and exclusive statement of the terms thereof. It is the intent of the parties to negate the effect of any prior course of dealing in the construction and interpretation of this agreement, and no such prior course of dealing shall be read into this Agreement for any purpose whatsoever.