TERMS AND CONDITIONS

The following are the standard terms and conditions of all orders with Quantum Precision Inc., hereinafter referred to as Seller. Unless special terms are negotiated and documented in the quotation or by Quantum Precision Inc. written acknowledgement these terms and conditions apply.

I. TERMS OF CONTRACT: Unless Buyer notifies Seller in writing by certified mail, return receipt requested, within three days after receipt of the order or order acknowledgement by Buyer, acceptance of the terms and conditions hereof by Buyer shall be indicated and in the absence of such notification, the sale and shipment by Seller of the goods covered hereby shall be conclusively deemed to be subject to the terms and conditions hereof. In the event that any inconsistencies in terms and conditions exist between this statement of terms and conditions and the Buyers purchase order or statement of terms and conditions, these (Sellers) terms and conditions shall control.

II. SAMPLES: If requested, Seller will submit samples for approval when commencing operations upon any order. However, Sellers machines may start production immediately after they are set correctly to Buyers supplied specifications, and Seller will assume responsibility for having the product in conformity with such specifications while awaiting Buyers approval. Any changes in original specifications will be made only at Buyers direction and expense. If changes are to be made, Seller must be notified at once by telephone or fax, but always with written confirmation. If buyer intends to use the samples to test a new or unproven design, Buyer should always include this as part of the quotation to withhold production for an agreed time. Failure of Buyer to notify Seller of sample approval results within three (3) days of sample receipt by Buyer will be deemed as an approval of samples by Buyer.

III. QUANTITIES: All quotations are based on Buyer accepting over-run or under-run on each individual item not exceeding 10% of quantities ordered. Where closer control of quantity is required special arrangements must be made, otherwise Sellers responsibility is only to deliver a quantity of parts within this range.

IV. BUYERS MATERIAL: Quotations covering machining of Buyers material are made subject to delivery of the amount of material as specified by Seller in 12' lengths, F.O.B. Sellers plant, and are subject to changes, if material furnished by Buyer is defective or will not machine with reasonable wear on tools at the speed and feed estimated. Chemical and physical specifications are the sole responsibility of Buyer, and parts manufactured from Buyers material, which conform to blueprint specifications, shall be accepted by Buyer. Seller does not guarantee to deliver more than 90% of the quantity ordered, as stated in "III. QUANTITIES." If Buyers material proves defective, in total or in part, or of a different character than represented by either Buyer or material producer, all work performed by Seller shall be reimbursed by Buyer.

V. TOLERANCES: All dimensions must be limited by a specific tolerance. When not specified, it is understood that the following tolerances will apply: Decimal Dimensions: All diameters plus or minus .005" Lengths plus or minus .010" Fractional Dimensions: Diameters plus or minus .015" Lengths plus or minus 1/64" (over 18" +/- 1/32) Intersecting Surfaces: Fillets .020" Max. Corners: .020" Max. Radius of Chamfer Angles: Plus or minus 2-1/2 degree Drilled holes the greater of + .005 / - .005 or Plus 3% and minus 1% Samples are to be considered as denoting fractional dimensions, unless otherwise specified and dimensions of samples will be considered "mean" dimensions. Where cross drilling, milling and similar operations are specified, the location will be without relation to other dimensions unless otherwise specified. When Buyer purchases to his own specifications, Seller will not be responsible for the design and fitting of parts. Concentricity requirements, if any, must be specified separately from dimension and will be subject to inspection only at the point where the relation is shown on the blueprint. When a concentricity limitation is specified, it is understood that it means the actual eccentricity allowable between the center lines of the dimensions, which is one-half of a dial-reading registration (or TIR). When concentricity is not specified, the work will be manufactured in the most economical manner without particular regard to concentricity.

VI. THREADS: Unless otherwise specified, threads will be of the ANSI Unified Screw Threads and will be made to Class 2A and Class 2B fit tolerances. When Buyer specifies threads other than sizes in the Coarse Thread Series or Fine Thread Series or in other classes of tolerances or limits, gages are to be furnished by Buyer or charged for by the Seller. EXTERNAL THREADS: Where threading to the shoulder is specified, if a relief or under-cut of sufficient width is not provided for, it will be understood that the last full thread will not be closer to the shoulder than a distance of two and one-half threads and in the case of fine pitches, closer than 1/16". INTERNAL THREADS: Unless otherwise specified, blind tapped holes may not have a full thread closer from the bottom than three and one-half threads and in case of fine pitches, not closer than 5/32".

VII. GAGES: Where dimensions cannot be readily gauged with micrometers and require special gages, such gages may be furnished by Buyer or supplied by Seller at an extra charge. In the case of threads, the inspection gages shall conform to the limits specified by the latest National Bureau of Standards Handbook H28, as supplemented, entitled "Screw Thread Standards for Federal Services for Inspection Gages."

VIII. INSPECTION: Inspection by Seller is made on a percentage basis only. It is assumed 100% inspection is not required. If 100% inspection is required, it is an added cost at Buyers expense. Seller will normally use a 1.0 AQL on critical part features when no other requirements are noted. If there does need to be any special lot or shipment acceptance criteria, including the designation of sampling plans or statistical data, it must be established by Buyer in writing prior to quotation by Seller. Otherwise, Seller reserves the right to adjust his quotation or delivered part price in consideration for the requirements established by Buyer.

IX. TOOLS, TOOLING CHARGES, FIXTURES, ETC: Tools, dies, jigs, fixtures, programs, gages, and their engineering and design, are integral parts of Sellers manufacturing processes. Therefore, separate quotation to, or payment by Buyer for these items, supplied by Seller, conveys neither ownership nor the right of removal from Sellers factory.

X. PATENTS: It is not the intention of Seller to manufacture any product which is an infringement of a patent. Buyer will defend and reimburse Seller for all expense and damages resulting from claims of infringement related to filling the Buyers orders. This will apply to orders for individual parts or assemblies.

XI. SHIPMENT TERMS: F.O.B. Quantum Precision Inc., Aurora, Illinois.

XII. SHIPMENT: In ordering, Buyer should state explicitly the method of shipment preferred and, in the absence of shipping directions, Seller will use discretion forwarding by air or rail express, truck or parcel post when packages are small and, therefore, subject to loss in transit. When considered prudent by the Seller, shipment will be insured at Buyers expense, unless otherwise specified by Buyer. All goods are sold F.O.B. shipping point so Buyer assumes freight cost and liability for any loss or damage to goods once the goods have left Sellers premises.

XIII. DELIVERIES: Seller does not assume any responsibility due to default or delay in production or delivery of all or any portion of any contract or purchase order from the buyer resulting directly or indirectly from: (A) accident to, or breakdowns of Sellers plant machinery or equipment; labor disputes; fire; riots; national emergency; delays of suppliers; carriers; or governmental restrictions, prohibitions; or allocations; or (B) any cause beyond the control of Seller. In no event shall Seller be liable for any consequential, special, or contingent damages arising out of Sellers default or delay in filling a buyers purchase order delivery request or requirement.

XIV. DELIVERY SCHEDULES: Unless otherwise agreed between Buyer and Seller, orders are accepted for delivery as fast as manufactured by complete or partial shipment packed in bulk. If special delivery schedules and lot quantities are required, it may affect price and should be detailed in part of the quotation.

XV. QUOTATIONS AND ACCEPTANCE: All orders and contracts are subject to acceptance only at Sellers home office. Typographical errors are subject to correction by seller and may affect price.

XVI. CREDIT: Accounts will be opened only on approved credit. Seller reserves the right to decline delivery except for cash, whenever doubt as to Buyers financial condition develops or unpaid invoices are aged over 45 days. Payment terms are 1% 10 days Net 30 days (1% discount if the invoice is paid within ten (10) days of invoice date and the full amount is due in thirty (30) days of invoice date.) All invoices in which payment has not been received, at our premises, within forty-five (45) days of the invoice date will be assessed a .0329% daily (1% monthly) late charge on the unpaid balance of the invoice. Once any unpaid invoice for an account reaches sixty (45) days aging past the invoice date, the account will automatically be put on C.O.D status and any future shipment(s) that will be made will require payment of the items shipped as well as the amount required to bring the account back within a 30 day aging situation.  Buyer will be responsible for all collection costs incurred by Seller including attorney fees and time spent in the collection process.

XVII. TAXES: Taxes imposed by any present or future law of federal, state, county, or municipal authority on the manufacture, sale or use of the articles purchased hereunder and required to be paid by Seller shall be added to the amount to be paid by Buyer. Buyer shall furnish evidence of exemption if applicable. Custom duties or taxes are not included in prices; Buyer shall reimburse Seller for any such duties or taxes as Seller may pay or subsequently be assessed.

XVIII. CANCELLATION: Orders may not be cancelled by Buyer without written consent of Seller. If the Seller provides written consent of acceptance of an order cancellation, the Buyer assumes immediate liability for the unit sales price of completed work, work in process on the basis of the percentage completion, raw material costs, unamortized tooling costs, engineering, handling, overhead charges, and other cancellation charges incurred on the basis of cost to Seller, as well as, lost profits. All cancellation charges will be determined by Seller.

XIX. CLAIMS: If Buyer claims delivery of material, parts or product is not as ordered, Buyer must notify Seller within fifteen (15) days of receipt of shipment. If such claim is sustained, Seller shall, at its option, repair, replace, credit or complete order. Charges for repair or inspection of parts by Buyer without prior authorization cannot be honored. Seller shall have the option of inspecting the goods on Buyers premises or of taking back the goods and deciding whether to replace goods or credit Buyer. Claims for shortage of goods must be presented within fifteen (15) days from the date of receipt of goods and must state the packing slip number, weight including tare and the method used in arriving at a count of the parts. Any claim for error in weight or shortage, not presented in accordance with this provision, will conclusively be deemed waived. Seller may, at Sellers discretion, request the shipment be returned in its entirety for full evaluation. Seller will not allow claims on those goods further processed by Buyer resulting in change of dimensions or characteristics from parts as ordered.

XX. WARRANTY:

IN NO INSTANCE IS THERE ANY WARRANTY OF FITNESS FOR A PARTICULAR USE. LIABILITY UNDER THIS WARRANTY SHALL EXTEND ONLY TO REPLACEMENT OR CORRECTION, FOB OUR PLANT, OF ANY PART OR PRODUCT DETERMINED TO BE COVERED UNDER WARRANTY BY SELLERS INSPECTION. SELLER MAKES NO WARRANTIES, EXPRESS OR IMPLIED AND SELLER IS NOT RESPONSIBLE FOR ANY CONSEQUENTIAL DAMAGE RESULTING FROM USE BY BUYER OR USER. SELLERS LIABILITY IS LIMITED TO THE SELLERS COST OF THE PRODUCT SOLD. WARRANTY IS VOID AFTER FIFTEEN DAYS OF RECEIPT OF PRODUCT BY BUYER. BUYER AGREES THAT PRODUCT CONFORMS TO BUYERS SPECIFICATIONS  AFTER FIFTEEN DAYS IF SELLER IS NOT NOTIFIED WITHIN FIFTEEN DAYS OF RECEIPT OF PRODUCT BY BUYER.

Seller warrants that goods manufactured by him will conform to the drawings and specifications furnished by Buyer. If within fifteen (15) days of receipt by Buyer, the goods manufactured by Seller are found to have defects in material or workmanship as compared to Buyers written specifications, and written notice is received by Seller no later than fifteen (15) days after date of receipt of such goods by Buyer, Seller will, at his option and without regard to limitations under paragraph III, "Quantities," provide correction, or replacement of such products determined by Seller to be defective. Seller shall have the option of inspection of the goods on Buyers premises or authorizing their return. No goods are to be returned without written consent nor shall the Seller be liable for any expense, including inspection expenses, incurred by Buyer in order to remedy defects in said goods. Products manufactured by others but furnished by Seller are limited to the original manufacturers warranty and Seller shall not be liable under any circumstances for defects in such products. Because goods furnished hereunder are to Buyers specifications and are used or combined by Buyer with other equipment or components not furnished by Seller, Buyer agrees to indemnify Seller for all claims resulting from the use or incorporation of said goods in the Buyers product.

Permission for any warranty returns must be obtained from Seller prior to shipment using its NCMR procedures which may be obtained form Seller. A “Returned Goods Authorization” (RGA) reference number will be provided so as to control the returning products. This RGA number must be shown on all correspondence including the packing slips shipped with the package or box containing the returning products. No shipments will be accepted unless this RGA number is clearly identified.
Buyer must ship all warranty returns, freight prepaid, and provide a complete explanation of the defect and circumstances.
Upon receipt, Seller will inspect the products and determine responsibility. Should Seller find no fault in materials, workmanship or dimensional characteristics, the time spent to review the returned products will be subject to charges at Sellers prevailing hourly repair rate. Seller will determine a cost for the time and effort spent and will advise the Buyer of such charges. All freight charges are the responsibility of the Buyer.
However, should Seller find that the products are under warranty; Seller will, at its option, either correct or replace the products within its normal manufacturing schedule lead time.

IT IS EXPRESSLY AGREED THAT THIS WARRANTY IS IN LIEU OF ANY AND ALL OTHER WARRANTIES AND LIABILITIES, EXPRESSED OR IMPLIED, INCLUDING BUT NOT LIMITED TO ANY WARRANTY OF MERCHANTABILITY OF FITNESS FOR ANY PURPOSE AND ANY LIABILITY FOR CONSEQUENTIAL DAMAGES ARISING OUT OF THE USE OF THE PRODUCT SOLD HEREUNDER. THE FOREGOING STATES SELLERS ENTIRE AND EXCLUSIVE LIABILITY AND BUYERS EXCLUSIVE AND SOLE REMEDY. SELLER WILL IN NO EVENT BE LIABLE FOR ANY CONSEQUENTIAL, SPECIAL OR CONTINGENT DAMAGE OR EXPENSE ARISING DIRECTLY OR INDIRECTLY FROM ANY DEFECT IN ITS GOODS OF FROM THE USE THEREOF, NOR IS ANY OTHER PERSON AUTHORIZED TO ASSUME FOR SELLER ANY SUCH LIABILITY XXI. LIMITATIONS:

Any controversy or claim arising out of or related to this contract, or the breach thereof, must be commenced within fifteen (15) days of initial product shipment from Seller to Buyer.

 QUANTUM PRECISION INC. 2760 Beverly Drive Building One Aurora,IL 60504
PHONE 630-692-1545 FAX 630-692-1549 EMAIL sales@quantumprecision.com