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Terms and Conditions of Sale

Sale of any Products or services described or referred to herein at the prices indicated is expressly conditioned upon the terms and conditions set forth below. Any order for or any statement of intent to purchase any such Products or services, or any direction to proceed with engineering, procurement, manufacture or shipment shall constitute assent by Purchaser to said terms and conditions and a representation that Purchaser is solvent. Any additional or different terms or conditions set forth in any communication from Purchaser are hereby objected to by Hartzell Propeller Inc. (hereinafter referred to as “Seller”) and shall not be effective or binding unless assented to in writing by an authorized representative of Seller. Any additions to, changes in, modifi cations to, or revisions of this order proposed by Purchaser are hereby rejected by Seller unless otherwise expressly agreed to in writing by Seller. Without limiting the generality of the foregoing, Purchaser may for its own convenience make use of its own preprinted forms in connection with correspondence concerning purchases hereunder, but terms stated on such forms shall not affect the terms hereof unless expressly so agreed in writing by Seller.

1. SHIPMENT AND DELIVERY: Seller will use reasonable efforts to effect delivery of the Products both in quantities and at times specified by Purchaser; provided, however, that failure by Seller to make deliveries as so provided will not constitute a breach or default by Seller and Seller will not be liable for any damages, including consequential and incidental damages, as a result of a failure to make such deliveries, unless Seller shall have otherwise expressly guaranteed delivery in writing. Purchaser will be responsible for the cost and expense of all transportation, insurance, and duties of Products in transit. Unless otherwise requested by Purchaser, Seller will arrange for shipment of Products hereunder at Purchaser’s cost and expense. Expedited means of shipment will be used only if Purchaser requests such routing. In all cases, the carrier will be deemed to be an agent of Purchaser and Purchaser will bear the entire risk of loss or damage to Products in transit.

2. TITLE TO PRODUCTS: Title to Products will remain in Seller until payment in full is made by Purchaser. Failure to make any payment as provided hereunder shall entitle Seller to cease and stop shipments without notice to Purchaser, and Purchaser consents that Seller, its successors and assigns, shall be and are herby authorized to retake possession and custody of any shipments already made or received by Purchaser and, upon written notice to Purchaser, cancel the balance or unexecuted portion of this order and hold Purchaser liable for any and all damages incurred by Seller as a result of or in any manner growing out of the default or failure of Purchaser to make such payment.

3. ACCEPTANCE OR REJECTION OF PRODUCTS: If upon delivery any Products do not materially conform with the requirements of Purchaser’s order, then Purchaser will promptly advise Seller in writing within ten (10) days of receipt of the Products being rejected and the nature of the nonconformity. Seller will then have the right to inspect the Products that Purchaser believes are nonconforming. If the Products are in fact nonconforming, Seller will promptly send Purchaser instructions for disposition, replacement, and/or correction as Seller, in its sole discretion, may determine is appropriate. If Purchaser does not provide Seller with written notice of any alleged nonconformity of the Products within the (10) days of delivery, Purchaser shall be deemed to have accepted the Products as satisfactory in all respects.

4. TERMINATION AND RESCHEDULES: Purchaser may terminate an order, in whole or in part, for its convenience by giving Seller written notice thirty (30) working days before Seller’s planned shipping date. In the event of such termination, Purchaser will accept Products which were ready for shipment prior to the termination notifi cation. If Purchaser terminates an order, Purchaser shall make fair compensation to Seller for work performed on such order which shall take into account reasonable costs and expenses incurred and commitments already made by Seller in connection with such order and the termination hereof. Purchaser will be advised of the amount of such charges.

5. EXCUSABLE DELAYS: Neither party will be liable for damages for delay in delivery that is not the result of its fault or negligence including without limitation delays arising out of acts of God, acts of the public enemy, acts of the Government in either its sovereign or contractual capacity, fires, floods, epidemics, quarantine restrictions, war, riots, strikes, freight embargoes, unusually severe weather, and any other causes beyond its reasonable control as it relates to obtaining necessary labor, materials, or processing facilities.

6. PRICES AND PAYMENT: The price or prices for Products delivered to Purchaser hereunder will be the purchase price set forth in Seller’s quote or invoice, plus any additional charges and less any deductions set forth on Seller’s quote or invoice. The terms of payment will be as specifi ed by Seller on its invoice. If the terms of payment are not specifi ed in Seller’s invoice, Purchaser shall make payment in full upon receipt of the invoice. In the event Purchaser fails to pay Seller the purchase price within the period specifi ed in the invoice or referred to above, whichever is later, Purchaser shall pay Seller interest on such delinquent payment at the rate of one and one-half percent (1.5%) per month or the highest rate permitted by law. Purchaser shall pay all collection expenses, including but not limited to attorney’s fees, incurred by Seller in the collection of amounts owed by Purchaser.

7. TAXES: Except as otherwise set forth on the quote or invoice, Seller’s prices will be exclusive of any federal, state, provincial, or local sales, use, or excise taxes levied upon or measured by the sale, the sales price, or use of Products. Seller will list separately on its invoice any such tax lawfully applicable to any such Products, and such tax will be payable by Purchaser provided that Purchaser does not furnish to Seller satisfactory evidence of exemption.

8. PRODUCT WARRANTY: As to each new and unused Product manufactured by Seller and sold to Purchaser hereunder, Seller warrants such Product to be free from defects in material and workmanship in normal use and service for the first One Thousand (1000) operating hours of use or a period of one (1) year from the date first placed in service, whichever first occurs. As to Products or component parts thereof manufactured or supplied by others, Seller extends to Purchaser the applicable product warranty, if any, extended by such manufacturer or supplier to customers of Seller. Used and reconditioned Products are sold AS IS and WITH ALL FAULTS and without any warranties expressed or implied of any kind or nature. The provisions of the warranty set forth in the preceding paragraph will not apply to any Product which is used for a purpose for which it is not designed, which is altered in any way, or which is subjected to misuse, negligence, accident, or neglect, so as, in the judgment of the Seller, to affect adversely the condition or value of such Products. EXCEPT AS EXPRESSLY PROVIDED IN THE PRECEDING PARAGRAPH, ALL GUARANTEES, WARRANTIES, CONDITIONS, OR REPRESENTATIONS, EITHER EXPRESS OR IMPLIED, WHETHER ARISING UNDER A STATUTE, COMMON LAW, COMMERCIAL USAGE, OR OTHERWISE, INCLUDING IMPLIED WARRANTIES OF MERCHANTABILITY AND FITNESS FOR A PARTICULAR PURPOSE, ARE HEREBY EXCLUDED. Seller will have no obligation to Purchaser under the warranty unless and until Purchaser has returned the Product to Seller within the time limits specifi ed above, transportation and handling charges prepaid, and provided Seller with a written statement describing the alleged defect. Upon Purchaser’s return of the Product alleged to be defective, Seller will inspect the same and advise Purchaser whether or not Seller will either repair and redeliver the original Product, deliver a replacement Product, or issue a credit to Purchaser. Seller’s entire obligation under such warranty will be fully discharged by such repair, replacement, or issuance. If Seller does not agree that the Product is defective or otherwise determines that the product is not covered by the above warranty, then Seller will return the Product to Purchaser as is, transportation and handling charges collect. THE WARRANTIES IN THIS CLAUSE ARE GIVEN AND ACCEPTED IN LIEU OF ANY OTHER WARRANTIES, REMEDIES, RIGHT OR CLAIMS RESPECTING CONSEQUENTIAL, INCIDENTAL, SPECIAL, DIRECT, INDIRECT, TORT, CONTRACT, OR ANY OTHER DAMAGES, WHETHER OR NOT ARISING FROM ANY CAUSE OR ACTION OF ANY TYPE INCLUDING, WITHOUT LIMITATION, ANY DAMAGES ARISING FROM SELLER’S NEGLIGENCE, ACTUAL OR IMPLIED. Purchaser shall indemnify Seller for any claims which arise in the event of the failure of Purchaser or others down the contractual chain to limit, in accordance with this clause, Seller’s liability and obligations.

9. LIMITATION OF LIABILITY: Seller’s liability for any claim of any kind, including negligence and breach of warranty, for any loss or damage resulting from, arising out of, or connected with this order, or from the performance or breach thereof, or from the manufacture, sale, delivery, resale, repair, or use of the Products covered by or furnished under this order shall in no case exceed the purchase price of the Products which give rise to the claim.

10. PATENT INDEMNIFICATION: Seller will indemnify and hold harmless Purchaser from and against any and all loss, liabilities, and damages resulting from any claims that the manufacture, use, sale, or resale of the Products infringe any patent or patent rights; provided, however, that such indemnifi cation will not apply to any such infringement arising out of Purchaser’s use of the Product as a component part of another product or Seller’s compliance with Purchaser’s designs or specifi cations. In the event of an award arising out of any infringement determined with respect to Purchaser’s sales price for Products or Products for which Products are components, Seller’s total liability under the clause will not exceed Seller’s sale price to Purchaser.

11. ARBITRATION: Seller may, at its discretion, settle any claim or controversy arising out of or relating to this order, or the breach or nonperformance of any provision thereof, by arbitration in accordance of the Arbitration Rules of the American Arbitration Association in effect at the time such claim or controversy arises. Purchaser and Seller agree that any arbitration shall be administered and conducted in Piqua, Ohio.

12. REMEDIES: In the event of Purchaser’s default of this order, Seller shall have available all rights and remedies at law or in equity. Purchaser agrees to pay Seller all costs and expenses, including attorney’s fees, incurred by Seller in exercising any of its rights and remedies. No failure or delay on the part of Seller in exercising any right or remedy shall operate as a waiver thereof. No waiver by Seller of any default shall constitute a waiver by Seller of any additional or subsequent default.

13. SEVERABILITY: If any provision hereof shall be finally determined to be unlawful, then such provision shall be deemed to be severed and every other lawful provision hereof shall remain in full force and effect.

14. REGULATORY LAWS AND/OR STANDARDS: The Seller makes no promise or representation that the Products will confirm to any state or local laws, ordinances, regulations, codes or standards, except as particularly specified and agreed upon for compliance in writing as a part of the contract between Purchaser and Seller. The Seller’s prices do not include the cost of any related inspection permits or inspection fees.

15. ASSIGNMENT: Any assignment, transfer, pledge, or other disposition of this order, or any rights hereunder, by the Purchaser without the written consent of Seller shall be void.

16. JURISDICTION AND VENUE: All quotations are made and all orders are accepted by Seller with reference to the laws of the State of Ohio and the rights and duties of all parties and the construction and effect of all provisions thereof shall be governed by and construed according to the laws of that state. Purchaser hereby submits to the jurisdiction of the Courts of the State of Ohio with respect to any claim or controversy arising out of or relating to this order or the breach or non-performance of any provision hereof.

March, 2002

Hartzell Propeller