Terms and Conditions - Sale of Goods

Shift Controls, Inc.
Standard Terms and Conditions - Sale of Goods

1. Acceptance:
All Purchase Orders (as defined herein) or other proposed agreements for the sale of goods (“Goods”) by Shift Controls, Inc. (“Seller”) are subject to acceptance, in writing, by Seller and are not binding on Seller unless so accepted. These Standard Terms and Conditions for the sale of Goods (“Standard Terms of Sale”) are applicable to all Purchase Orders, quotations, schedules or ancillary agreements concerning the sale of Goods, of any nature (collectively the “Purchase Order”) and are the only terms and conditions that apply to the sale of Seller’s Goods, except those specifically set forth in any Purchase Order and accepted in writing by Seller. Any term or condition or standard of performance different from or in addition to these Standard Terms of Sale, whether set forth on the Purchase Order or otherwise proposed by Buyer, must agree to, in writing, by Seller in advance, and in the event of any conflict or inconsistency, whether latent or patent, between these Standard Terms of Sale and any Purchase Order or other document proposed by Buyer, these Standard Terms and Conditions will control. Seller hereby expressly objects to and rejects any other terms and conditions proposed by Buyer by way of Purchase Order or otherwise, which are different from or in addition to these Standard Terms of Sale, unless accepted by Seller in writing. Buyer agrees that Buyer’s submission of a Purchase Order to Seller or Buyer’s acceptance of any Goods provided by Seller shall constitute Buyer’s irrevocable acceptance of these Standard Terms of Sale.

2. Prices:
Prices for the Goods set forth in the Purchase Order, unless otherwise state in writing, do not include taxes, as set forth in the “Taxes” section of these Standard Terms and Conditions, transportation or shipping charges, special packaging or other services unless otherwise set forth in the Purchase Order. Prices are in U.S. dollars and good for 30 days, unless otherwise stated. Seller reserves the right to correct any error in prices.

3. In-Stock Quantities and Lead Times:
Seller will update stock quantities and product lead-times for Goods based on Seller’s information available at that time. Lead-times are based on component manufacturer’s information that Seller has no control over and will be updated when possible. In-stock quantities and status may change from time a quote is provided and time a purchase order is placed or order submitted. Seller reserves the right to correct in-stock quantities and lead times, based on the most current information.

4. Terms of Payment:
Unless otherwise stated, the terms of payment are Net 30 Days, from the date of the invoice. Late charges shall be added at the rate of 1.0%, per month, on past due invoices.

5. Minimum Order:
Seller reserves the right to set a minimum total for the Purchase Order.

6. Buyer Inspection:
Upon Buyer’s receipt of shipment, Buyer shall inspect the Goods. Unless Buyer provides Seller with written notice of any claim for shortages or defect in the Goods within 5 days after the receipt of shipment, such Goods shall be deemed finally inspected, checked and accepted by Buyer.

7. Delivery/Risk of Loss/Transportation/Insurance/Packaging:

A. Seller shall use reasonable commercial efforts to make delivery of Good within the time requested on Buyer’s Purchase Order. In absence of written shipping and packing instructions from Buyer, Seller shall use its own discretion in choice of carrier and method of packing. All shipments are F.O.B. the original shipping point and risk of loss shall pass to Buyer at such time as possession of such Goods is given to a Shift Controls, Inc. - Terms and Conditions Page 1 of 5 transportation carrier. Unless otherwise stated in writing by the parties, Seller has no obligation to obtain insurance for Buyer covering Goods in transit to Buyer.

B. Prices stated are based on Seller’s standard packaging. Packaging will be standard commercial packaging and acceptable to the commercial carrier. Special customer packaging will be furnished only when specified and so stated in writing and Seller will charge Buyer and Buyer will be responsible for the charges for the special packaging.

C. Unless otherwise stated, Goods in stock will be shipped promptly and Goods not in stock will be shipped as soon as possible. However all shipping dates are approximate and are based upon current availability of materials, present production schedules and prompt receipt of all necessary information.

8. Cancellation and Returns:

A. Orders cannot be terminated, cancelled or modified, or shipment deferred after acceptance of Buyer’s order by Seller, except with Seller’s written consent and subject to the conditions described in this Section.

B. Buyer may not return Goods and Seller is not obligated to accept returned Goods without Seller’s authorization and Buyer has received from Seller a return authorization number. Returned Good are subject to Seller’s then current restocking charge. Special order items or Goods manufactured to order are not returnable.

9. Force Majeure:
Seller will not be liable or otherwise responsible for any damage, loss, fault, or expenses arising out of delays in the manufacturing, shipment or other non-performance of this Agreement caused or imposed by: strikes, fires, disasters, riots, acts of God, Intervention of government, war or threat of war, acts of terrorism, conditions similar to war, sanctions, blockades, embargoes, acts of Buyer, shortages of labor, fuel, power, materials, supplies, transportation, or manufacturing facilities, governmental action, subcontractor delay or any other cause, condition or circumstance beyond Seller’s reasonable control (collectively, “Force Majeure”). If there is any such delay or nonperformance, then Seller, upon notice to Buyer, may at its option, and without liability, revoke all or any portion of its acceptance of Buyer’s Purchase Order and/or extend any date upon which any performance thereunder is due. However, Seller shall use commercially reasonable efforts to give written notice to the Buyer whenever such contingency or other act becomes reasonably foreseeable.

10. Limited Warranty/Disclaimer of Warranties:
The Seller warrants only that Goods shall be manufactured in substantial accordance with Buyer’s specifications contained in the Purchase Order. The parties expressly agree that Buyer’s sole and exclusive remedy against the Seller shall be for the repair or replacement of defective Goods as provided herein. The foregoing warranty is in lieu of all other warranties, express or implied, including those of merchantability or fitness for a particular purpose, all of which are expressly disclaimed. No Affirmation of Seller, by words or action, other than as set forth in this paragraph or any written warranty furnished by Seller, nor any additional warranties, express or implied, made by Seller to Buyer of the Goods shall constitute a warranty hereunder. Seller’s warranty does not apply to any Goods that have been subjected to overload, misuse, mishandling, misapplication, neglect - including, but not limited to, improper maintenance, accident, improper installation, modification including, but not limited to use of unauthorized parts or attachments, or adjustment or repair performed by anyone other than Seller. In no event shall Seller be responsible for any indirect or consequential damages, injury, or death due to errors in measurement, control, or failure of the product to perform properly. Seller shall not be responsible for the quality or performance of any goods manufactured by other parties, such Goods shall carry only the warranty of the manufacturer. Seller warrants products to be free from defects in material and workmanship for a period of 90 days from date of shipment. Any product found to be defective within this time period may be returned to our factory, freight prepaid. Prior return authorization is required for repair or replacement, at the discretion of the Seller.

11. Limitation of Liability:
Shift Controls, Inc. - Terms and Conditions Page 2 of 5 In no event shall Seller be liable for any consequential, special, incidental, or punitive damages to any person, whether based upon breach of warranty, negligence, strict liability, tort, breach of contract or any other theory, regardless of whether the replacement or refund remedy set forth above fails of its essential purpose hereof shall include, without limitation, loss of use, income or profit, or losses sustained as the result of injury (including death) to any person or loss damage to property, including without limitation, property handled or processed by the use of the Goods. In no event shall the responsibility of Seller for any act exceed the individual price of the product on which liability is asserted. In no event shall Seller be responsible for warranty, repair, or other claims regarding the products unless Seller’s analysis confirms that the products were properly handled, stored, installed, and maintained and not subject to contamination, abuse, overload, misuse, or inappropriate modification or repair.

12. Safety Information:
Seller has supplied or made available to Buyer certain information relating to safety conditions and procedures (refer to operations manual) concerning the Goods that are the subject of the Purchase Order, and buyer acknowledges receipt thereof and further acknowledges that it has reviewed and understands same. Seller acknowledges that any reference guides do not replace the operations manual and its safety procedures therein.

13. Trademarks:
The purchase of Goods from the Seller shall not entitle Buyer to use, register, or otherwise identify Buyer or its business the the name, trademark, service mark or other identity of Seller without express written permission for Seller. All such marks and goodwill associated with such marks remain the sole and exclusive property of Seller.

14. Taxes:
Unless otherwise specifically provided on the face of any invoice or quotation for Goods, the price for the Goods purchased is net and does not include sales, use, excise or similar taxes, whether federal, state or local tariffs, duties and special assessments. The amount of any such taxes, tariffs, duties and special assessments applicable to the Goods shall be paid by Buyer in the same manner and with the same effect as if originally included in the purchase price.

15. Additional Charges:
If substitute or additional Goods or repair parts are purchased by Buyer from Seller, the provisions of these Standard Terms of Sale shall be applicable to such purchase, the same as if such substitute or additional Goods or repair parts had been originally purchased hereunder.

16. Non-disclosure:
Buyer acknowledges, upon issuance of the Purchase Order, that certain information of Seller that may or may not have been patented, may be disclosed by Seller to the Buyer for certain limited purposes (including evaluation of the Goods) and Buyer covenants and agrees, through its issuance of the Purchase Order and without further action required on the part of Buyer and Seller, to the following terms and conditions:

A. As used herein, “Proprietary Information” shall mean all Seller information disclosed in any medium including, without limitation, electronically, orally, by samples, or in writing, including but not limited to processes, procedures, know-how, trade secrets, technical and marketing information, data, product and processing ideas, inventions, patent applications, designs, drawings, prototypes, specifications for component parts used to manufacture Seller’s assemblies, memoranda, correspondence, notes and plans. The provisions of this agreement shall apply retroactively to any Proprietary Information that may have been disclosed in connection with discussions and negotiations regarding any project prior to the effective day of this agreement.

B. Any information which (i) was in possession of the Buyer prior to receiving it from Seller, or (ii) was known or hereafter may become known, in the public domain, the public literature or generally in the industry through Shift Controls, Inc. - Terms and Conditions Page 3 of 5 no fault of the Buyer, or (iii) was disclosed on an unrestricted basis to the Buyer from a third party source which has the right to disclose such information without violation of any obligation of confidentiality shall not be entitled to protection as proprietary Information.

C. Subject to Paragraph B of this section, upon Buyer’s receipt of any Proprietary Information, the Buyer must only use the Proprietary Information as authorized in writing by Seller and shall in no event be used to benefit any third parties. The Buyer shall take reasonable care to protect the Proprietary Information from unauthorized use or disclosure for any purpose other than as authorized hereunder. As a minimum, the Buyer shall give the Proprietary Information at least the same degree of protection as it gives its own proprietary or confidential information.

D. The Buyer agrees not to reproduce, re-engineer, disasemble, modify or transcribe any of the Seller’s Proprietary Information, without Seller’s prior written consent and further agrees that it shall return all such Proprietary Information, including material and parts embodying any portion of such Proprietary Information to Seller upon written demand of Seller.

E. No other use of Seller’s Proprietary Information, in whole or in part, may be made by the Buyer without the prior written consent of the Seller. All know-how, ideas, inventions, discoveries, modifications and improvements, whether patentable or not, relating to Seller’s Proprietary Information shall be the sole property of Seller.

F. The Buyer further agrees not to disclose, publish or otherwise disseminate Seller’s Proprietary Information to any person or entity for any purpose whatsoever, except as specifically authorized hereunder. The Buyer shall have the right to disclose the Proprietary Information only to those of its employees who need to know such information for the fulfillment of the stated purpose. The Buyer shall ensure that all such employees execute confidentiality agreements imposing obligations no less restrictive than herein.

G. No rights or obligations other than those expressly recited in this Section are to be implied from the sale of the Goods. No license or transfer of any property right or interest in the Proprietary Information is intended.

17. Entire Agreement:
These standard terms of sale together with the terms and conditions contained in the Seller’s invoice or quotation, constitute the entire agreement between Seller and Buyer with respect to the matters contained therein, and supersede all prior oral or written representations, proposals, correspondence, discussions, negotiations and agreements. No course of prior dealings, acceptance or acquiescence in a course of performance and no usage of the trade shall be relevant to supplement, explain or modify any terms contained herein. All representations, promises, warranties or statements by an agent or employee of Seller that differ in any way from the terms and conditions hereof shall be given no effect or force. No waiver or alteration of terms herein shall be binding unless in writing signed by an executive of the Seller.

18. Priority:
In the event of any inconsistency among the provisions in these Standard Terms of Sale or the Purchase Order, precedence shall be given first to these Standard Terms of Sale and second to the special terms and conditions of the Purchase Order and accepted, in writing, by Seller.

19. Governing Law:
The sale of Goods pursuant to the Purchase Order shall be subject to and construed in accordance with the laws of the State of Colorado without reference to or application of conflict of laws.

20. Severability:
If any provision of these Standard Terms of Sale is deemed invalid or unenforceable by any court of competent jurisdiction or under any statute, regulation, ordinance, executive agreement or other rule of law, such provision shall be deleted or modified, at the election of Buyer and Seller, but only to the extent necessary to comply with such ruling, statute, regulation, ordinance, agreement or rule, and the remaining provisions of these Standard Terms of Sale and the Purchase Order shall remain in full force and effect. Shift Controls, Inc. - Terms and Conditions Page 4 of 5

21. Non-waiver No change, modification of waiver of any provision of these Standard Terms of Sale shall be valid or binding unless it is accepted by Seller. A waiver by either party of any breach or failure to enforce any term or condition of these Standard Terms of Sale shall not in any way affect, limit or waive such party’s right at any time to enforce strict compliance with that or any other term or condition of these Standard Terms of Sale.

22. Binding Effect / Non-Assignment: This contract shall be binding upon and shall in inure to the benefit of the successors and permitted assigns of Buyer and Seller, provided, however that Buyer may not assign any portion of its rights or delegate any portion of its obligations hereunder or under any Purchase Order without in each instance obtaining Seller’s prior written consent. Any attempted assignment by Buyer or assignment by Buyer of this contract without Seller’s prior written consent is void.

23. Seller’s Performance Excused Upon Buyer’s Breach: In addition to the rights and remedies conferred upon Seller by law or in equity, Seller shall not be required to proceed with the fulfillment of any Purchase Order or the performance of any contract if Buyer is in default in the performance of any order or contract with Seller, and in cases of doubt as to Buyer’s financial responsibility, shipments under this order may be suspended or sent sight draft with bill of lading attached to Seller. Additionally, in the case of subsequent orders or, in the case of open Purchase Orders, Seller is not required to proceed with the fulfillment of any subsequent order or perform such open Purchase Order if Buyer is in breach with regard to any prior fulfilled orders, including, without limitation, non-payment.