FIVES MSI General Terms and Conditions - 07.2016

General Terms and Conditions of Sale

1. Definitions. For the purposes of these Terms and

Conditions of Sale (“Agreement”), the following definitions

shall apply:

a) “Seller” means FIVES MACHINING SYSTEMS, INC

as well as any entity controlling Seller, controlled by

Seller, or under common control with Seller, that may

sell goods and services to Customer from time to

time.

b) “Customer” means the party with whom Seller enters

into the Contract.

c) “Contract” means purchase agreements (“Purchase

Order(s)”) from Customer that are received and

acknowledged.

d) “Confidential Information,” whether disclosed in

written, oral, visual or tangible form, disclosed by

Seller to Customer, shall include such Seller’s

financial, Customer, product, technical, and business

information, including, but not limited to, product

specifications, process designs, trade secrets,

financial statements, strategic plans, Customer lists,

marketing plans, personnel information, and know-

how; provided, however, that “Confidential

Information” shall not include any information that:

(a) at the time of disclosure is generally available to

the public or, after disclosure, becomes generally

available to the public other than by a breach of this

Agreement or by any breach of confidentiality by a

third party; or (b) is already in the Customer’s

possession at the time of disclosure by the Seller and

was not acquired directly or indirectly from the Seller;

or (c) is later received by Customer on a non-

confidential basis from a third party having the right to

impart that information.

e) “Intellectual Property Rights” shall mean all patents,

rights to inventions, utility models, copyright and

related rights, trademarks, service marks, trade,

business and domain names, rights in trade dress or

get-up, rights in goodwill or to sue for passing off,

unfair competition rights, rights in designs, moral

rights, rights in Confidential Information (including

know-how and trade secrets) and any other

intellectual property rights, in each case whether

registered or unregistered and including all

applications for and renewals or extensions of such

rights, and all similar or equivalent rights or forms of

protection in any part of the world.

f) “Products” Unless the context otherwise requires,

“Product(s)" will refer to machine tool, parts,

components, accessories and assemblies of all the

foregoing (each, a "Part,” and, collectively, the

“Parts"); and computer software, and related

documentation licensed by Seller ("Software

Materials").

g) “Proposal” means firm price proposal, or quotation

issued to Customer by Seller and together with any

attachments, exhibits or amendments thereto.

h) “Effective Date” shall mean when the Contract comes

into force which shall occur when the Seller sends

acknowledgement of receipt of the Order.

i) “Software License Agreement” By installing, copying,

and/or using the Software Materials, the Customer

acknowledges that they have read, understand and

agree to be bound by this Agreement as well as any

third party licenses.

2. Acceptance of Orders. All Orders from Customer are

subject to acceptance by Seller. Customer’s submission

of a Purchase Order constitutes Customer’s

acknowledgement and consent to the terms and conditions

of this Agreement. Any acceptance by Customer of

Seller's Proposal is expressly limited to acceptance of this

Agreement and any applicable Proposal. Seller's

Proposal, this Agreement and any other provisions that are

otherwise agreed to in writing by Seller constitute the

complete and exclusive statement of the Agreement

superseding any differing statements, oral or written.

3. Reliance on Customer Information. Seller relies upon

the accuracy, completeness and timeliness of any and all

information furnished or to be furnished by Customer,

including, but not limited to, any technical design,

engineering and test data, manufacturing methodology,

drawings, plans, designs and specifications, software such

as computer aided engineering and design programs and

models (“Customer Information”). Any inaccuracy in the

Customer Information or delay in furnishing the Customer

Information to Seller may result in increased costs or affect

the timing of Seller’s performance. In the event of such

inaccuracy, Seller reserves the right to change the

Proposal or any other document relating to the Products in

order to correct such inaccuracy. Customer shall pay all

such increased costs and be responsible for any delay in

Seller’s performance resulting, directly or indirectly, from

any inaccuracy in the Customer Information or delay in

furnishing the Customer Information. Customer represents

and warrants that it is the owner of all Customer

Information furnished to Seller and agrees to defend,

indemnify and hold Seller harmless with respect to all

claims of any third party of infringement or related claims

associated with Seller’s use or reliance upon the Customer

Information.

4. Cancellation of Orders. Customer may cancel the

Contract only with Seller’s written consent and upon

payment of reasonable cancellation charges, including

reimbursement of Seller’s direct costs incurred, normal,

indirect, and overhead charges, and a normal profit, all as

reasonably determined by Seller. Seller will not accept

cancellation, modification, suspension, or delay in

shipment of Customer’s Order on terms that will not fully

indemnify and reimburse the Seller against loss.

5. Proposals. If Customer is responding to a Proposal

provided by Seller when ordering, then Customer shall

include the Proposal number on all Orders. Seller holds

Proposals open for thirty (30) days. Proposals are subject

to revision in case of clerical error.

FIVES MSI General Terms and Conditions - 07.2016

6. Pricing Changes, Taxes, and Fees. Seller reserves the

right to change its prices prior to formation of a binding

Contract. Unless Seller agrees otherwise in writing,

Customer agrees to pay Seller’s price in effect at the time

the Purchase Order is accepted by Seller for all goods and

services ordered. Unless otherwise stated in a Proposal to

Customer, prices are FCA Named Place INCOTERMS®

2010, and do not include sales, use or excise taxes,

custom duties, or similar taxes and fees (“Taxes”), which

are the responsibility of Customer in addition to the quoted

price. To the extent that Seller is required to pay any

Taxes related to the sale of goods and services under this

Agreement, Seller will invoice Customer for such Taxes.

Where applicable, the Customer will provide Seller with an

effective tax-exemption certificate. Seller shall be entitled

to retain any export duty drawbacks if Seller is the exporter

of record.

7. Payment Terms. Payment terms, other than the

prepayment of quoted prices, are subject to credit

approval, which shall be granted or denied in Seller's sole

discretion. Interest of one and one half percent (1.5%) per

month may be assessed on all amounts not paid by

Customer when due. To secure payment and Customer's

other obligations, Seller retains and Customer hereby

grants to Seller a security interest in all Products not fully

paid for in advance by Customer. Customer will sign and

deliver any financing statement agreement and other

documentation or evidence of the security interest

requested by Seller. Customer also hereby appoints

Seller as Customer’s attorney-in-fact for the execution and

filing of such financing statements as may be necessary or

desirable in order to protect Seller’s interest in the

Products. Unless payment terms are provided in an

applicable Proposal, the payment terms for goods and

services provided hereunder shall be due and payable

thirty (30) days from the date the invoice is issued. Unless

otherwise specified in the purchase Order all payments will

be in U.S. dollars.

Payments secured by an irrevocable letter of credit must:

(i) cover the full amount of the purchase price, less the

amount of any advance payment; (ii) accompany the Order

and carry an expiration date at least one hundred eighty

(180) days beyond the scheduled shipping date; (iii) allow

partial draws upon invoice coinciding with progress

payments, and (iv) be otherwise payable upon

presentation of bill of lading, commercial invoice, and

packing list. If, however, Seller is unable to ship for any

cause beyond Seller's reasonable control, Seller shall

have the right to draw upon the letter of credit by furnishing

a certificate of manufacture. Storage will be solely at

Customer's expense and risk.

8. Shipment and Delivery. The shipping schedule and

delivery dates may be provided in a Proposal and will

generally be computed from the date of Seller’s

acknowledgement of the receipt of any required down

payment and the Customer Information and approvals

necessary to proceed with design and manufacturer. If the

required payment or payment security is not received

within forty five (45) days of the due date, Seller may

suspend performance until payment is received. In the

event that Customer delays fulfillment of its obligations,

including the payment obligations, there will be a

corresponding extension of the delivery obligations.

Shipment and delivery may be subject to delays caused by

changes in specifications and/or Force Majeure events (as

defined below) that are beyond Seller’s control. All risk of

loss and damage passes to Customer per INCOTERMS®

2010. In the absence of specific instructions from

Customer, Seller may select the carrier and shipping route.

All shipping and carrier charges are the sole responsibility

of Customer and may be invoiced by Seller if incurred by

Seller on behalf of Customer.

9. Limited Warranty; Remedies. Unless otherwise set forth

below, or otherwise provided in an applicable Proposal, a

defective or nonconforming Product will be repaired or, at

Seller's option, replaced free of charge, FCA Named Place

INCOTERMS® 2010, if a warranty claim with regard to

such defective or nonconforming part is made within

twelve (12) months from the date of shipment (the “Limited

Warranty”). Unless provided in an applicable Proposal,

Seller does not warrant any Product beyond this twelve

(12) month period (the “Limited Warranty Period”). In the

event the Customer delays delivery and installation of the

equipment, the warranty will start based on the shipment

date specified on the Seller’s order acknowledgement. The

Limited Warranty does not cover or extend to: (a) any

Product that has a life, under rated and normal usage,

inherently shorter than the applicable warranty period

(e.g., perishable tooling) or consumables, including without

limitation, bulbs, filters, fuses, inserts, or recommended

spare Parts or (b) normal adjustments or calibration, or the

failures arising from Customer's failure to perform

adjustments or calibrations; or (c) defect or

nonconformance resulting from Customer’s use of any

Product in a manner that is inconsistent with Seller’s

documentation for such Product or is outside of Seller’s

anticipated use of such Product.

Seller may condition warranty replacement upon return of

any defective or nonconforming Product. Customer shall

pay the then-current list price for any replacement Parts

unless the defective or nonconforming Part is returned to

Seller within thirty (30) days of receipt of the replacement

Part. Seller reserves the right to deny a warranty claim if

the Customer erases, edits, or disables the CNC Error Log

file or denies the Seller access to the information

reasonably requested by Seller related to the defective or

nonconforming Product.

Parts furnished by Seller that prove defective or

nonconforming are guaranteed for ninety (90) days, and

will be repaired or replaced with a new or, at Seller's

option, like-new part free of charge only if Customer

makes a claim with regard to such defective or

nonconforming Part within ninety (90) days from

acceptance or, in the case of Parts supplied under

warranty, until the expiration of the machine, equipment or

system warranty, whichever is later. Such repair or

replacement is Customer’s exclusive remedy for a defect

or nonconformance related to Parts.

Seller warrants that Software Materials will generally

operate substantially in accordance with Seller’s then

current specifications for such Software Materials. In the

event that Software Materials do not operate substantially

in accordance with Seller’s current specifications for such

Software Materials, Seller will supply a software correction

free of charge, if (a) a substantiated warranty claim is

made per the Limited Warranty; (b) Customer provides

Seller with a sufficient description of the problem, and (c)

FIVES MSI General Terms and Conditions - 07.2016

the correction does not involve new Software Materials to

serve a function not originally specified. The foregoing

warranty shall be void if changes or additions are made to

Software Materials by the Customer without Seller's

express prior written approval. Failure of Customer to

promptly employ any update, upgrade or revision of any

Software Material which Seller supplies free of charge will

void this warranty and fully release Seller from any and all

liability arising out of or related to such failure. Third-party

Products, including, but not limited to, Software Materials,

will be warranted only to the extent that they are warranted

by their respective manufacturers.

All warranty claims must be made within two (2) weeks

after discovery of defect or nonconformity. In no event will

any warranty claim be made or honored if made after the

expiration of the Limited Warranty Period. The Limited

Warranties set forth in this Section: (i) are not transferable

or assignable; (ii) will not apply unless the Product has

been properly installed, maintained and operated in

accordance with all instructions and within the limits of

rated and normal operating conditions; (iii) do not apply to

defects, nonconformities or other failures due to Product

misuse or abuse, or other causes outside Seller's control;

and (iv) are void if the Customer provides the Seller with

incomplete or misleading information.

THE WARRANTIES SET FORTH IN THIS SECTION,

AND ANY SUCH ADDITIONAL WARRANTY OR

REPRESENTATION TO THE EXTENT AGREED TO IN

WRITING BY SELLER, ARE IN LIEU OF, AND SELLER

EXPRESSLY DISCLAIMS, ALL OTHER WARRANTIES,

EXPRESS OR IMPLIED, INCLUDING ANY IMPLIED

WARRANTY OF MERCHANTABILITY OR FITNESS FOR

A PARTICULAR PURPOSE.

In the event that the foregoing disclaimer of additional

warranties is not given full force and effect, any resulting

additional warranty shall be limited in duration to the

express warranties and be otherwise subject to and limited

by this Agreement. In the event the Limited Warranty is

voided as a result of Customer’s acts or omissions,

Customer shall reimburse Seller for reasonable costs

Seller incurred in connection with the voided Limited

Warranty.

10. Uptime Warranty Conditions. To the limited extent an

uptime warranty is expressly agreed to by Seller in writing,

Customer agrees that Seller shall not be responsible for

downtime attributable to or caused by: nonproductive

hours (weekends, holidays or off-shifts, etc.); normal or

preventive maintenance; tooling application changes or

tool breakage; set-up; operator absence; unavailability of

programs, tools or fixtures; improper use, programming,

maintenance or operation; user's improper fault diagnosis

or repair; searching for non-demonstrable (non-repeatable)

faults; Force Majeure event or disruption of utilities or other

support, such as, air supply, central coolant and the like.

11. Acceptance. Unless Customer has notified Seller of

Customer’s decision not to accept a Product, each Product

shall be deemed accepted upon the earliest of: (a) the first

commercial use of the Product by Customer or (b) ten (10)

days after delivery and complete installation of the Product

by Seller (to the extent that installation is required under

any applicable Proposal). Machine acceptance tests or

part runoff tests will limit acceptance of Products and/or

require Seller’s resources only where Seller expressly

agrees to such tests in writing, signed by an authorized

representative of Seller. Customer, at its expense, will

furnish parts (work pieces) in sufficient quantity and quality

to meet the requirements of any such agreed-upon tests or

runoff. Seller is not responsible for (1) late or unsuccessful

tests due to Customer's failure to supply such work pieces,

or (2) damaged or scrapped work pieces. Customer’s

failure to provide agreed upon runoff materials as required

in the Proposal constitutes acceptance. Unless, and to the

limited extent expressly agreed to in writing by Seller, any

acceptance, runoff or other performance criteria shall not

be deemed to be warranties.

12. Production Estimates. Estimates provided by Seller of

uptime, cycle time or other Product capability statements,

if any, shall not be deemed to constitute production

warranties or guarantees of any kind. Seller does not

make production warranties or guarantees. Production

estimates, if any, are estimates only, and are based on

Customer's prints, specifications or other Customer

Information available at time of the applicable Proposal.

The actual production capability of a Product is entirely

dependent upon production and other conditions in

Customer's plant that are beyond Seller's reasonable

control.

13. Machine Foundations. Standard foundation drawings, if

supplied by Seller, may include plan and elevation views.

Due to variations in soil type, adjacent equipment, third-

party workmanship, or other circumstances outside of

Seller's control, the foundation is not warranted by Seller

and Seller will not be responsible for any Product

inaccuracy or failure resulting from an inadequate

foundation, or for any subsurface or other latent conditions

including, but not limited to, toxic or hazardous waste or

substances, rock formations, and all other similar

conditions. Customer shall reimburse Seller for all costs

associated with any investigation and determination of the

failure or non-compliance of the foundation, if Seller

agrees, in its sole discretion, to perform such investigation

and determination.

14. Ownership of Intellectual Property. Seller retains all

rights, title and interest in and to all of Seller's inventions,

discoveries, developments, concepts and ideas embodied

in its Products, related documentation and other technical

data, delivered or disclosed to Customer verbally or in

drawings, written or printed matter, electronic storage

media, or other form whatsoever ("Developments"). The

Products created and prepared by Seller, shall not be

treated as Work Made for Hire, as that term is defined by

the Copyright Act (17 U.S.C.A. Section 101) Seller shall

retain any and all rights to Software Materials supplied by

Seller. Customer will be granted a limited, non-exclusive,

non-transferable, non-assignable and non-sublicensable

license to use the Software Materials only with the Product

with which the Software Materials are furnished.

Customer shall not remove, modify, or destroy any

proprietary markings of Seller, including, but not limited to,

legends and notice of Seller’s ownership and title to

trademarks, trade names, trade secrets, copyrights, or

patents placed upon or contained within the Software

Materials, and Customer shall reproduce all such markings

upon or within authorized copies of the Software Materials.

Customer shall take no action that jeopardizes or

FIVES MSI General Terms and Conditions - 07.2016

diminishes the value of any of Seller’s Intellectual Property

Rights. Customer shall not use any trademark or service

mark of the Seller without the prior written consent of the

Seller. Any permitted use of Seller’s Intellectual Property

Rights by Customer shall be done with strict adherence to

the most recent written guidelines provided by Seller and

is subject to Seller's prior written approval in each

instance.

15. Confidential Information. Confidential Information may

be used or disclosed by Customer only as provided herein.

Customer, on behalf of itself and its employees and

agents, agrees that, during the period of its business

relationship with Seller and for a period of two (2) years

thereafter Customer shall not at any time disclose to any

person, or use for its own benefit or the benefit of any third

party, any Confidential Information without the prior written

consent of the Seller. Notwithstanding the foregoing,

Customer may disclose Confidential Information to one or

more third parties if it is required to do so pursuant to law,

court order or other directive of a legislative body in which

case Customer shall immediately notify Seller of its

intention to disclose such Confidential Information.

Customer shall disclose such Confidential Information only

to those employees of Customer who: (i) have a need-to-

know such Confidential Information in the performance of

their duties associated with business relationship between

Customer and Seller and (ii) are advised by Customer of

the confidential nature of such information and are bound

by Customer to maintain such in confidence. Customer

shall maintain at least the same degree of diligence in the

protection of the Confidential Information as it uses with

regard to its own proprietary information. All Confidential

Information is provided “AS IS”, without warranty or

guarantee of any kind as to its accuracy, completeness,

operability, fitness for particular purpose, or any other

warranty, express or implied. Seller shall not be liable to

Customer for any damages, loss, expense, or claim of loss

arising from use of or reliance on the Confidential

Information. For purposes of clarification, Customer shall

keep confidential and not disclose, reproduce, excerpt or

distribute any portion thereof of Software Materials,

Developments and other proprietary information of Seller,

including but not limited to all information located on Seller

paper or letterhead. Seller shall retain ownership of all

rights, including all Intellectual Property Rights, in its

Confidential Information. No other right, immunity or

license to the Confidential Information, express or implied,

is granted by Seller to the Customer pursuant to this

Agreement under any patent, patent application, copyright,

trademark or other Intellectual Property Right, now or

hereafter owned or controlled by Seller. The limitations on

the use and disclosure of Confidential Information set forth

in this Agreement shall continue for a period of two (2)

years after the expiration or termination this Agreement;

provided, however, that any Confidential Information that

constitutes a trade secret under applicable law shall be

subject to the limitations on the use and disclosure of such

information hereunder for as long as such Confidential

Information constitutes a trade secret under applicable

law. Upon the expiration or termination of this Agreement,

Customer shall promptly return or destroy all Confidential

Information that Customer received from Seller, in

whatever form, without retaining any copies or excerpts

thereof. Seller reserves all Intellectual Property Rights to

standard assemblies. Seller agrees that Customer may

use drawings or documentation provided with machine

services manuals for maintenance purposes, but may not

use them for manufacturing purposes.

All information submitted to Seller by Customer shall be

deemed to be submitted on a non-confidential basis unless

agreed otherwise in writing.

16. Services. Seller may provide services to Customer from

time to time, including, without limitation, simultaneous

engineering or other technical, managerial or engineering

services. The parties anticipate that the terms and

conditions related to such services will be governed by a

separate written agreement signed by the parties. Seller

retains all right, title and interest in and to the design and

any Intellectual Property Rights resulting from any services

provided to Customer, unless and to the limited extent

expressly agreed to in writing by Seller, signed by an

authorized representative of Seller.

17. Intellectual Property Infringement. Customer shall

provide Seller with prompt written notice and copies of any

and all demands, process and pleadings alleging that any

Product, or use of either of the foregoing, infringes on the

Intellectual Property Rights of another entity. If any

Product, in the condition received from Seller, infringes the

Intellectual Property Rights of a third party (other than a

claim covering a process or the product thereof), Seller

may, at its option (i) procure for Customer the right to use

the Product; or (ii) modify or replace the Product so as to

avoid infringement. In the event that (i) or (ii) does not

cure the infringement, Seller may accept return of the

Product and reimburse Customer for the unamortized

portion of the purchase price assuming straight-line

amortization over a ten (10) year period and any

transportation expenses incurred. Seller will defend

Customer against infringement claim and pay any

damages and costs and expenses awarded against or

incurred by Customer. Customer shall give Seller prompt

written notice and copies of all demands, process and

pleadings and Customer shall reasonably cooperate in

giving Seller authority, control, information and assistance

at Seller’s expense for such defense or any settlement.

This Section states Seller's entire liability with respect to

any infringement of Intellectual Property Rights. Customer

hereby releases and shall defend and indemnify Seller

from liability arising from Product designs that are

manufactured, implemented or integrated by Customer or

third parties. To the extent that any Product is supplied

according to Customer's design, specifications or

instructions, Customer agrees to defend and indemnify

Seller for any claim that such Product infringes the

Intellectual Property Rights of another entity.

18. Termination of Orders. Customer has the right to

terminate any Order and Seller shall be compensated as

follows:

a) Any work that can be completed within thirty (30)

days from notification of termination will be completed

and shipped by Seller and be paid for in full by

Customer.

b) For work in process and any materials and supplies

procured or for which commitments have been made,

Customer will pay Seller its actual costs and

overhead expenses determined in accordance with

FIVES MSI General Terms and Conditions - 07.2016

generally accepted accounting practice, plus twenty-

five percent (25%).

c) For all special tooling or other Products for which

commitments have been made by Seller in

connection with the Order, Customer will pay Seller

the full price of such Products and such Products will

be provided to Customer.

d) No Products may be returned to Seller without prior

written permission from Seller. Upon approved return,

Customer shall pay shipping charges and a

restocking charge of twenty-five percent (25%) of the

Product's list price as of the date of restocking, and

Customer shall bear the risk of loss or damage in

transit.

19. Changes to Orders. Customer-ordered or caused

changes, including work stoppages, that affect price,

schedule or Seller's performance, will result in a

reasonable adjustment in price and/or time of

performance, as determined by Seller. Seller may

suspend its performance or perform under the original

Contract until mutual agreement is reached on such

adjustment.

20. Suspension. Seller is entitled to suspend performance of

its obligations only in the event the Customer fails to

perform in a timely manner any material obligation, until

the default is remedied, without prejudice to other

remedies that may be available and subject to the

following: Seller shall notify the Customer in writing of its

intent to suspend and grant a thirty (30) day time period to

the Customer to remedy the default, failing which the right

of suspension may be exercised without further delay.

This Paragraph does not affect the right provided to Seller

to suspend immediately and without a thirty (30) day

notice, the work in the event of any sum payable for the

Agreement is not received by Seller for more than forty five

(45) days from the due date of the invoice. Should the

suspensions last for more than ninety (90) days in

aggregate, the Seller shall have the right to terminate the

Agreement, without prejudice to all its rights under this

Agreement.

21. Liquidated Damages. In the case the Seller does not

comply, for reasons attributable solely to the Seller, with

the delivery dates or performance guarantees set forth in

Customer’s Purchase Order, then the Customer shall have

the right to assess liquidated damages at a rate of one-half

of one percent (1/2%) of the total amount of the delayed

Product for each week of delay with a thirty (30) day grace

period. Notwithstanding any provision to the contrary,

liquidated damages shall not exceed two percent (2%) of

the Contract price of the relevant Product delayed.

Further, Customer and Seller agree that the liquidated

damages shall be the sole and exclusive remedy in case

of delay of Product delivery or delay in achieving Product

performance guarantees.

22. Occupational Safety and Health. It is Customer's

responsibility to install and use any Product in a safe

manner in its facility and to provide all proper equipment,

tools and means that may be necessary to protect all

personnel from bodily injury that may result from

Customer's particular use, operation, set-up or service of

Seller's Product. Customer is advised to consult the

operator, machine and programming manuals, ANSI

Safety Standards and state and federal OSHA regulations.

CUSTOMER SHALL INSTALL AND USE THE

PRODUCTS AT ALL TIMES IN COMPLIANCE WITH THE

FOREGOING MANUALS, SAFETY STANDARDS,

APPLICABLE CODES, ORDINANCES, REGULATIONS

AND LAWS AND GENERAL STANDARDS OF CARE.

23. Indemnification. Customer hereby releases and agrees

to defend, indemnify and hold Seller harmless from and

against all claims, demands, suits and causes of action

("liability") for property damage, personal injury or death,

and other all loss, cost, damage and expense (including

reasonable attorneys' fees) incurred by Seller as a result

of:

(a) Customer's modification to, or change of the Product or

the failure to purchase, install, provide or implement any

Part (including, but not limited to, mechanical, electrical or

software interlock or other safety device) or Software

Materials offered to Customer or existing in a Product as

originally delivered;

(b) Products designed by Seller under any simultaneous

engineering order that is manufactured by Customer or

third parties on Customer's behalf;

Agreement;

(d) Customer’s misuse of the Products; or

(e) Any of Customer's other negligent acts or omissions.

24. Limitation of Liability. NOTWITHSTANDING

ANYTHING ELSE IN THIS AGREEMENT TO THE

CONTRARY, IN NO EVENT SHALL SELLER'S ENTIRE

LIABILITY UNDER THIS AGREEMENT EXCEED THE

AMOUNT PAID TO SELLER BY CUSTOMER FOR ANY

PRODUCT OR PART UPON WHICH ANY CLAIM IS

BASED. SELLER, ITS INSURERS AND ITS SUPPLIERS

SHALL NOT BE LIABLE FOR ANY LOSS OF USE OR

DOWNTIME OR LOST PRODUCTION, REVENUE OR

PROFIT, OR FOR ANY SPECIAL, CONSEQUENTIAL,

INCIDENTAL, PUNITIVE OR INDIRECT DAMAGES WITH

RESPECT TO THE PURCHASE, SALE, USE OR NON-

USE OF PRODUCTS, WHETHER SUCH LIABILITY IS

BASED UPON CONTRACT (INCLUDING BREACH OF A

REPRESENTATION OR WARRANTY), TORT

(INCLUDING NEGLIGENCE OR STRICT LIABILITY), OR

OTHER LEGAL THEORY WHATSOEVER, EVEN IF

SELLER HAD NOTICE OF THE POSSIBILITY OF SUCH

DAMAGES AND EVEN IF ANY WARRANTY OR

REMEDY IS HELD TO HAVE FAILED ITS ESSENTIAL

PURPOSE.

25. Government Restrictions. Seller's performance under

this Agreement is subject to the issuance of any required

export license or other necessary government

authorization. Seller may cancel or terminate any

Proposal and any Customer Purchase Order, without

liability, if Seller determines such sale, export or delivery

under such Proposal or Purchase Order would violate

applicable law. Termination will not affect the right of

Seller to recover the Contract price for any goods

delivered to Customer by Seller prior to such termination.

Customer shall not export or re-export any Product in

violation of applicable law. Customer understands and

agrees to comply with all applicable laws and regulations

FIVES MSI General Terms and Conditions - 07.2016

and confirms that the Products will not be imported,

exported, or re-exported for any chemical/biological

weapon, missile/rocket system, or nuclear uses, to

persons who commit, threaten to commit or support

terrorism or to entities or users on denial or prohibited end-

user lists. Customer shall use all Products in accordance

with current governmental user safety laws, including, but

not limited to, safety constraints on restricted, toxic and

hazardous materials as well as environmental, electrical

and electromagnetic considerations that apply to the

country of manufacture, sale or destination of such

Products. Customer hereby certifies that all Products used

by Customer or its affiliates in the United States of

America will be used in compliance with the Fair Labor

Standards Act of 1938, as amended (29 US. Code 201-

219). Customer will indemnify Seller against and hold

Seller harmless from any liability claims, demands, or

expenses (including attorney’s fees and other professional

fees, settlements and judgments) relating to Customer’s

noncompliance with this Section and shall provide any

additional certification reasonably required by Seller to

comply with applicable law.

26. Force Majeure. Seller shall not be liable to Customer for

any delay in a scheduled delivery or a failure in

performance caused by acts beyond Seller's control,

including, without limitation, improper or incomplete

specifications resulting from improper or incomplete

information received from Customer, acts of God, war,

terrorism, vandalism, sabotage, accidents, fires, floods,

strikes, labor disputes, mechanical breakdown, shortages

or delays in obtaining suitable parts or equipment,

material, labor or transportation, acts of subcontractors,

interruption of utility services, any act or failure to act by

any unit of government or governmental agency, or any

similar or dissimilar cause (each, a “Force Majeure” event).

27. Waiver. Seller shall have the benefit of all rights and

remedies provided by law or equity. Failure of Seller to

exercise or reserve any right or remedy, or term or

condition of any contract, including this Agreement, shall

not be construed as a waiver or relinquishment of any of

the other right, remedy, term or condition of any contract or

the future performance or exercise of any such term,

condition, right or remedy.

28. Severability. If any provision of this Agreement is

deemed invalid or unenforceable under any statute,

regulation, ordinance, executive order or other rule of law,

such shall be deemed reformed or deleted, but only to the

extent necessary to comply with such statute, regulation,

ordinance, order or rule, and the remaining provisions (or

part thereof) shall remain in full force and effect.

29. Amendment. This Agreement shall not be amended,

modified or discharged in any manner and no waiver

hereunder shall be valid or binding unless set forth in a

writing duly executed by the Seller and Customer. No

modification of any term or condition of this Agreement will

be valid or binding upon the parties unless approved by

each party in writing by such party’s duly authorized

personnel.

30. Governing Law. This Agreement and all claims that refer

or relate to it, will be governed and construed in

accordance with the laws of the State of Wisconsin,

without regard to its conflict or choice of law principles The

United Nations Commission on International Trade Law

shall not apply to the sale of goods and services under this

Agreement.

31. Compliance with Laws. Customer agrees to maintain

policies and procedures to ensure compliance with the

laws and regulations applicable to the Products and to

discipline employees as would be appropriate for violations

of such laws and regulations.

32. Dispute Resolution. Except as provided below, any and

all claims or disputes arising out of the purchase, sale,

license, use or nonuse of Products or the rendering or

provision of services, the Proposal, Customer's Purchase

Order, or the application, validity, interpretation or breach

of this Agreement, will be determined and settled solely

and exclusively by arbitration. Seller and Customer agree

that if any controversy or dispute arises out of or relates to

this Agreement or any breach of this Agreement, they will

attempt in good faith to settle the dispute through direct

negotiation within thirty (30) days of written notice of the

dispute. If the dispute is not settled through direct

negotiation, then the matter shall be settled by binding

arbitration, in accordance with the Commercial Arbitration

Rules of the American Arbitration Association, to be

conducted in Milwaukee, Wisconsin. Any award rendered

as a result of arbitration shall be enforced in any

Wisconsin court having jurisdiction, and the Party against

whom enforcement is sought, by virtue of this Agreement,

consents to entry of judgment for such enforcement. Any

request for arbitration must be filed in writing within one (1)

year after the act, omission, or alleged breach that gave

rise to the claim or dispute; otherwise, the right to any

remedy will be deemed forever waived. This agreement to

arbitrate will be specifically enforceable under the

prevailing arbitration law. Any award or decision rendered

by the arbitrator will be final and conclusive and the

arbitrator's award may be entered in any court having

jurisdiction. The arbitrator will not have the authority or

power to amend or modify this Agreement, nor to fashion

any relief or remedy that would have the effect of

modifying or amending this Agreement or of creating

additional rights or obligations. The arbitrator will have no

power or authority to award punitive or exemplary

damages.

Seller may seek injunctive relief from a court to prevent the

unauthorized use or transfer of proprietary Products or

Confidential Information including, but not limited to:

Software Materials. Customer will reimburse Seller for

Seller's attorneys' fees, legal costs and all other expenses

related to Seller’s reasonable actions taken to enforce

Seller’s rights under this Agreement.

33. Notice. All notices permitted or required under this

Agreement shall be in writing and shall be by a reputable

national overnight delivery service or by certified or

registered mail, return receipt requested, and shall

deemed given when received. Notices to Customer shall

be sent to Customer’s address set forth on Customer’s

Purchase Order. Notices to Seller shall be sent to the

addresses set forth below:

FIVES MSI General Terms and Conditions - 07.2016

Notices to Seller:

FIVES MACHINING SYSTEMS, INC.

Address as set forth on Customer’s Purchase Order

With a copy to:

FIVES MACHINING SYSTEMS, INC.

Attention: General Counsel

142 Doty Street

Fond du Lac, WI 54935 USA

Each party may change its address for notices hereunder

by notifying the other party of the new address pursuant to

this notice provision.

34. Change of Law. If, after the Effective Date, any law is

enacted, promulgated, abrogated or changed which affects

the cost and expenses of Seller and/or the schedule, the

Contract price shall be correspondingly increased and/or

the schedule shall be appropriately extended.

35. Assignment. Customer may not assign, voluntarily, by

operation of law or otherwise, any of its rights or delegate

any of its duties or obligations under this Agreement

without Seller’s prior written consent. Any attempt to do so

without that consent will be void. Seller may assign this

Agreement to any Seller entity or to the purchaser of

substantially all of the assets or equity of Seller.

36. Survival. The terms and provisions of this Agreement,

which by their sense and content are intended to survive

the termination or expiration of this Agreement by any

party hereto shall so survive the completion of termination

or expiration of this Agreement.