PURCHASE ORDER ACKNOWLEDGMENT AND TERMS AND CONDITIONS

1. REJECTION OF ORDERS WITH CONTRADICTORY TERMS-All orders submitted by a buyer are subject to approval by an officer or other authorized official of Heidenhain Corporation (hereinafter referred to as “Seller”) at its offices in Schaumburg, Illinois. Orders submitted on buyer’s own purchase order forms, which forms may contain statements, clauses, or conditions modifying, adding to, repugnant to, or inconsistent with the terms and provisions of the Seller herein contained are hereby rejected. Such orders will only be accepted by the Seller upon the condition and with the express understanding that notwithstanding any such statements, clauses, or conditions contained in any order forms of the buyer are void and have no effect and that the obligations and liabilities of the Seller and Buyer shall be determined solely by the terms and conditions of sale contained in this Order Acknowlegment.

2. PRICES AND TERMS OF PAYMENT-An order is accepted subject to Seller’s selling prices in effect as of date of shipment. All prices are FOB Seller’s plant, in Schaumburg, Illinois. Published prices and discounts are subject to change without notice. Remittances are to be made in funds collectible at par in Schaumburg, Illinois. Unless otherwise specifically agreed to by Seller in writing, the terms of sale shall be net thirty (30) days based on the date of invoice, except when an unexpired quotation provided by Seller expressly provides otherwise. All written quotations expire after thirty (30) calendar days from the date of quotation unless withdrawn, in writing, at an earlier date. If the product shall be installed by Seller, Seller shall be entitled to be reimbursed for all its out of pocket expenses related to the installation in addition to payment for its services.

3. TAXES-Prices on the products ordered are exclusive of any tax, duty, custom or other fee of any nature imposed upon the products, their sale, transportation, delivery, use or consumption (“Taxes”), including without limitation, Federal, State or Municipal Taxes on manufacture, sales, receipts, gross income, occupation, use and similar taxes. Such Taxes are not included in either Seller’s net catalog or the price quoted by Seller and will be added to the invoice as a separate charge and paid by Buyer. If Seller is required to prepay any Taxes, Buyer will reimburse Seller. No refund or adjustment to previously withheld taxes will be made by Seller sixty (60) days after the invoice date.

4. CREDIT-Buyer agrees to make prompt payment in accordance with terms hereof. Seller reserves the right to modify, change or withdraw credit terms at any time without notice and to require guarantees, security or payment in advance of the amount of credit involved.

5. PACKAGING-Seller reserves the right to select the manner in which the product is packaged. Special requirements from the Buyer for packing will be subject to extra charges to be paid by Buyer unless otherwise agreed to by Seller in writing.

6. TRANSPORTATION-All shipments are FOB Schaumburg, Illinois. If Buyer prefers alternate transportation, expedited delivery or specialized service for shipments complete instructions must be given. In the absence of specific directions before date of shipment, products will be shipped by the method and by the carrier or delivered to a forwarding agent selected by Seller.

7. DAMAGE OR DELAY IN TRANSIT-Seller assumes no liability beyond delivery to the carrier or forwarding agent of the product in good order, and is not liable for loss damage or delay occurring thereafter. All claims for breakage and damage should be made to the carrier. Seller will cooperate with Buyer in securing satisfactory adjustment of such claims.

8. SHIPPING SCHEDULE-Upon reasonable and timely notice received from Buyer, Seller will establish planned delivery schedules as closely as possible in accordance with the Buyer’s expressed needs, and will provide estimated delivery dates when requested. However, Seller shall not be liable for delays in the performance of any purchase order or default in delivery arising out of causes beyond the control and without the fault or negligence of Seller, including, without limitation, shortages or delays of labor, fuel, power, materials or supplies, inability to secure permits, and Buyer’s delays in approving or providing specifications.

9. FORCE MAJEURE-Seller will not be liable for any delay in the performance hereof or for any damages suffered by the Buyer by reason of such delay if caused or arising directly or indirectly from fires, floods, earthquakes, substantial damage to its plant, accidents, riots, acts of God, open hostilities, declarations of national emergencies, war, governmental interference or embargoes, strikes, labor difficulties, shortage of labor, fuel, power, materials or supplies, inability to secure permits, Buyer’s delays in approving or providing specifications or other causes (whether or not similar in nature to any of those hereinabove specified) beyond its control.

10. CANCELLATION AND ALTERATION-Orders accepted by Seller cannot be countermanded, and deliveries may not be deferred by Buyer, except with Seller’s prior written consent and then only upon such terms as shall be acceptable to Seller. Orders for special items or for standard catalog items not normally produced or stocked in quantity may be cancelled or altered by the Buyer only upon payment of reasonable charges based upon expenses already incurred by Seller, including reasonable profit. Cancellation charges on such completed items will be 100% of the selling price. Seller reserves the right to manufacture ahead of the planned delivery schedule whenever it is deemed necessary and such advanced manufacture shall not void Buyer’s responsibility for cancellation or alteration. If product is RENCO brand, Buyer may not modify dates or quantities of planned/scheduled material within four (4) weeks of acknowledged ship date.

11. INSPECTION AND ACCEPTANCE-The products covered hereby shall be deemed finally inspected and accepted within ten (10) days after receipt thereof unless notice of claim is given in writing to the Seller within that period.

12. WARRANTY- EXCEPT AS EXPRESSLY PROVIDED HEREIN, SELLER MAKES NO REPRESENTATION OR WARRANTY OF ANY KIND, EXPRESSED OR IMPLIED WITH RESPECT TO ANY PRODUCTS, PARTS OR SERVICES PROVIDED BY SELLER INCLUDING, BUT NOT LIMITED TO, THE IMPLIED WARRANTIES OF MERCHANTABILITY AND FITNESS FOR A PARTICULAR PURPOSE, APPLICATION OR USE.

A. The warranties provided for in subparagraphs B, C and D of this section are subject to the following:

(1) Before purchasing product, buyer shall determine the suitability of the product for its intended use, and Buyer assumes all risk and liability therefore.

(2) In order to assert a warranty claim Buyer must (i) provide immediate written notice to Seller and (ii) return the product to Seller’s factory or designated agent with transportation charges prepaid.

(3) Seller shall conduct an examination of the product to determine if the product is defective.

(4) No warranty shall apply if: (a) a product has not been properly installed or maintained; (b) a product has not been operated within the usual and customary limits of ratings for normal usage; (c) any repairs, alterations or other work has been performed by Buyer or others on such product, other than work performed with Seller’s authorization and according to its approved procedures; or (d) the alleged defect is a result of abuse, misuse, improper maintenance, accident or the negligence of any party other than Seller. The warranty set forth herein is conditioned upon proper storage, installation, use and maintenance in accordance with applicable written recommendations of Seller. Any warranty furnished hereunder does not extend to damage to items purchased hereunder resulting in whole or in part from the use of components, accessories, parts or supplies not furnished by Seller.

(5) All recommendations and representations as to the working accuracy of a system or device are based upon tests and performance of the unit at Seller’s factory. Such recommendations and applications are not applicable to any loss of performance of the unit resulting from misuse or any variation in the environment from the standard conditions at Seller’s factory existing prior to shipment.

(6) Buyer shall provide labor for the removal of the defective component or item and installation of its replacement at no charge to Seller. Buyer shall bear all risk of loss or damage to returned goods while in transit and pay all expenses related to shipping and handling. In the event no defect or breach of warranty is discovered by Seller upon receipt of any returned item, the item will be returned to Buyer at Buyer’s expense and Buyer will reimburse Seller for the transportation charges, labor and associated charges incurred in testing the allegedly defective item.

(7) All remedies provided in subparagraphs B, C, and D herein shall be the sole and exclusive remedies of the Buyer.

B. WARRANTY FOR PRODUCTS DESIGNED AND MANUFACTURED BY HEIDENHAIN- Seller warrants that all new products manufactured according to Seller’s designs and specifications will, for a period of two (2) years from the date of shipment, be free from substantial defects in design, material and workmanship. If the foregoing warranty is breached, Seller shall, in its sole discretion, repair or replace without charge to Buyer.

C. WARRANTY FOR PRODUCTS DESIGNED BY BUYER AND MANUFACTURED BY HEIDENHAINSeller warrants that all new products manufactured according to Buyer’s designs and specifications will, for a period of two (2) years from the date of shipment, or within such other time as is specified by the Seller on the face hereof, under normal use and service, be free from substantial defects in material or workmanship. If the foregoing warranty is breached, Seller shall, in its sole discretion, repair or replace without charge to Buyer.

D. WARRANTY FOR RENCO PRODUCTS – In accordance with the terms of the Heidenhain “End of Life” letter dated July 8, 2009, Seller warrants that all new Renco end-of-life shipped prior to December 31, 2010 will be free from substantial defects in design, material and workmanship for a period of one (1) year from the date of shipment. If the foregoing warranty is breached, Seller shall refund the purchase price to Buyer. All Renco end-of-life products shipped after December 31, 2010 are sold “as is” and without any warranty of any kind, express or implied.

13. LIMITATION OF SELLER’S LIABILITY- Seller’s liabilities shall in no event exceed the purchase price of the product. Notwithstanding anything to the contrary contained herein, Seller shall not be liable in any event to Buyer or any third parties for indirect, special, punitive, incidental or consequential damages (including any damage for lost profits), resulting from late delivery or non-delivery, from use, sale, handling or possession of the product, or from any other cause whatsoever.

14. PATENTS-Subject to the terms and conditions listed below, Seller agrees to defend Buyer in any legal proceeding, lawsuit or other judicial action claiming that the products, any parts thereof, or method of using the products sold by the Seller infringe any United States patent. With regard to any claim of patent infringement for which Buyer has indemnification obligations hereunder, Buyer’s obligations are subject to the following conditions: (i) Buyer shall notify Seller in writing of such claim within ten (10) business days; and (ii) Seller shall have the sole and exclusive control of the defense or settlement of the claim. Seller may at its own discretion and expense (a) procure for said Buyer the right to continue using and selling the product or part, (b) replace the product or part with non-infringing apparatus, (c) modify it so it becomes non-infringing, or (d) remove the product and refund the purchase price, the transportation, and installation cost thereof. IN NO EVENT DOES SELLER AGREE TO PAY SPECIAL, INCIDENTAL, OR CONSEQUENTIAL DAMAGES BASED UPON THE BUYER’S USE OF SELLER’S PRODUCTS, REGARDLESS OF THE THEORY OF LIABILITY. THE FOREGOING STATES THE ENTIRE LIABILITY OF SELLER.

15. ALL RIGHTS RETAINED BY SELLER – Seller reserves any industrial property rights and/or copyrights pertaining to its cost estimates, drawings and other documents (hereinafter referred to as “Documents”). The Documents shall not be made accessible to third parties without the Seller’s prior written consent and shall, upon request, be promptly returned without cost to the Seller.

16. COMPLIANCE WITH LAWS-Seller will comply with all Federal and State laws and regulations governing Seller’s performance. Seller hereby certifies that all products covered by this contract were produced in compliance with (a) all applicable requirements of Sections 6, 7 and 12(a) of the Fair Labor Standards Act of 1938 as amended, and of regulations and orders of the United States Department of Labor issued under Section 14 thereof, and (b) all non-discrimination provisions because of race, color, creed or national origin as set forth in Title VII of Civil Rights Act of 1964 and Executive Order 11246 to insure equality of opportunity in all aspects of employment.

17. RETURNS-No product may be returned for credit without the prior written authorization of the Seller. Authorized return shipments must be returned in good order to Seller’s factory from which initially shipped, must be accompanied by a packing slip, and must have transportation charges prepaid. Correspondence concerning all returned products should be addressed to our Schaumburg, Illinois office. Seller reserves the right to deduct an adequate service charge to cover inspection, testing and handling from any credit.

18. REPAIR-All transportation charges on products returned for repairs are made on an f.o.b. basis, and must be prepaid by the Buyer. Warranty period for all repairs is one (1) year from date of repair.

19. WEIGHTS AND DIMENSIONS-Published weights are actual or careful estimates but are not guaranteed. Dimensions in catalogs and quotations are normally accurate but are not to be used for construction. Upon specific request, details for construction purposes will be furnished.

20. LITERATURE EXPIRATION-The design and dimensions of a new product are described in the Seller’s catalog descriptions. The basis for ordering from Seller’s is the catalog edition valid at the time the contract is made. However, design and dimensions information provided in quotations for products actually ordered takes precedence.

21. PROTOTYPE-If the product ordered by the Buyer is a prototype or pilot product (hereafter collectively referred to as a Non-Series Product), it has not been built in the normal flow of Seller’s series production nor has it been inspected and tested as a series product. Use of a non-series product is at the sole risk of, and danger to, the Buyer, according to whose specific instructions the product was delivered in the form of a nonseries product. It is Buyer’s responsibility to ensure that the Non-Series Product is not used in active production equipment, but only in a sufficiently protected test environment. The Non-Series Product is provided to Buyer “AS IS” and without any warranty, whether express or implied, as to its performance, accuracy, completeness or non-infringement.

22. SOFTWARE LICENSING- If the product ordered by the Buyer includes software that was not created or modified by Seller (“Third-Party Software), the license requirements of the manufacturer of the Third-Party Software shall apply. Seller will make the Third-Party Software license information available to Buyer if it is not included with the software. If the product incorporates software owned by Seller (“Software”), Seller shall grant Buyer the nonexclusive license to use the Software, but only in conjunction with the use of the product. Such license shall be indefinite unless otherwise provided. Seller does not authorize, and Buyer shall not make use of, the Software other than with the particular product with which it was sold. Multiple licenses shall be requried if the Software shall be installed on more than one device at any one time or in a network. Where multiple licenses are obtained the Seller shall confirm in writing the number of permitted copies of the Software and the number of devices and/or workplaces where the Software may be used. Buyer shall be permitted to make one back-up copy of the Software, in machine readable object code-only format. Buyer agrees that it will not in any manner attempt to modify, decompile, isolate, translate or reverse engineer the Software. For open source Software, the Seller shall make the open source code available to the Buyer, and the open source terms of use shall apply. Seller grants Buyer the revocable right to assign the Software to a third party in conjunction with the sale or assignment of the device provided for use with such Software and on which the Software has been installed. The third-party recipient shall be bound by the same terms and conditions of the license as the Buyer, and the Buyer shall ensure such compliance. Buyer shall not retain any copies of the Software after such assignment. Buyer shall ensure that the assignment of the Software to a third party, or any subsequent end-user, does not breach any U.S. export controls. Where multiple licenses have been obtained all such licenses may only be assigned together with all devices and workplaces.

23. The products are sold subject to Illinois law. These terms and any dispute or claim relating to these terms or the sale of products (“Claim”) shall be governed by and construed under Illinois law, notwithstanding its law of conflicts of law. Any Claim shall be heard, tried, and determined in the Circuit Court of Cook County, Illinois or federal court located in Cook County Illinois, USA.

24. Any required notices shall be given in writing, to the addresses set forth on the face of this document, or to such other address as either party may substitute by written notice to the other and shall be deemed given upon personal delivery, overnight delivery or three days following deposit in the mail.

25. Except as expressly provided herein, no changes or modifications to, or waiver of, any of these terms and conditions shall be valid or binding on either party unless in writing and signed by an authorized representative of each party. Seller’s failure or delay to exercise or enforce any of its rights hereunder shall not constitute or be deemed to be a waiver of such rights or forfeiture of such rights, and Seller may, at its option, from time to time, exercise any of its rights or remedies.

26. These Terms bind Buyer and its successors and permitted assigns.

27. EXPORT CONTROL – Where applicable, the Seller complies with all international export control. If Buyer transfers any products supplied by Seller (hardware and/ or software and/ or technology as well as corresponding Documentation, regardless of the mode of provision) to a third party, Buyer shall comply with all applicable national and international export control regulations.

Prior to any transfer to a third party, Buyer shall check and guarantee by appropriate measures that

• There will be no infringement of any embargo imposed by the European Union, by the United States of America and/ or by the United Nations by such transfer, by brokering of contracts concerning those goods, works and services or by provision of other economic resources in connection with those goods, works and services, also considering the limitations of domestic business and prohibitions of by-passing those embargos;
• Such goods, works and services are not intended for use in connection with armaments, nuclear technology or weapons, if and to the extent such use is subject to prohibition or authorization, unless required authorization is provided;
• The regulations of all applicable Sanctioned Party Lists of the European Union and the United States of America concerning the trading with entities, persons and organizations listed therein are considered.

If required to enable authorities or Seller to conduct export control checks, Buyer, upon request by Seller, shall promptly provide Seller with all information pertaining to the particular end customer, the particular destination and the particular intended use of goods, works and services provided by Seller, as well as any export control restrictions existing.

Buyer shall indemnify and hold harmless Seller from and against any claim, proceeding, action, fine, loss, cost and damages arising out of or relating to any noncompliance with export control regulations by Buyer, and Buyer shall compensate Seller for all losses and expenses resulting thereof.

REV. 03/12