GRAHAM-WHITE MANUFACTURING CO.
Terms and Conditions of Sale

1. Terms of Sale. The terms and conditions (collectively "Terms") stated herein govern all sales by Graham-White Manufacturing Co. ("Graham-White") and the purchaser listed on the attached Purchase Order (the "Purchaser"). The Terms contained herein shall supersede all other terms, understandings and conditions inconsistent therewith. In case of a conflict between these Terms and any Purchase Order, these Terms shall prevail except where Graham-White has expressly agreed to the conflicting term in the Purchase Order in its written acceptance or order acknowledgement.

2. Payment. Terms of payment are net cash thirty (30) days after shipment. Interest at the rate of 1.5% per month will be charged on past due accounts commencing after the last day of the first calendar month following the date of invoice. All orders shall be subject to credit approval at Graham-White's main office. Graham-White reserves the right to limit or cancel the credit of Purchaser, and Graham-White may require or demand payment or adequate assurances of performance from Purchaser prior to taking any preparatory steps for performing in accordance with the Purchase Order or manufacturing the goods or materials described therein (the "Goods"). Graham-White may suspend credit, refuse shipment, or cancel unfilled orders whenever Graham-White believes Purchaser's credit is impaired.

3. Specifications. Graham-White makes no representations or warranties with respect to suitability for Purchaser's use or intended use , sufficiency or reasonableness of Purchaser's specifications, or suitability or utility of the Goods for any purpose whatsoever. Purchaser is solely responsible for assuring that the Goods are suitable and/or fit for Purchaser's use or intended use. Purchaser shall be solely responsible for all specifications relating to the strength and/or utility of the Goods for Purchaser's intended use. All Goods shall be subject to normal manufacturing variations of Graham-White and its raw materials suppliers as recognized in the industry. Graham-White reserves the right to change raw materials specifications and/or raw materials at any time and assumes no obligation to continue to supply any product, or products, previously sold.

4. Packaging. Graham-White shall provide adequate packaging for all goods shipped in accordance with recognized industry practice. All special packaging requirements of Purchaser shall be billed to Purchaser's account.

5. Shipment. Graham-White shall deliver the Goods F.O.B. Salem, Virginia, except as otherwise described in the Purchase Order. Graham-White may make partial shipments at Graham-White's sole discretion. Graham-White will use its commercially reasonable efforts to ship the Goods as they are manufactured. Graham-White's shipping dates are approximate.

6. Title and Risk of Loss. Title to the Goods passes to Purchaser when the Goods are fully paid for. Graham-White is not responsible for damage or loss in transit. All risk of loss to the Goods passes to Purchaser as the Goods are loaded for shipment onto trucks at Graham-White's facility in Salem, Virginia. Purchaser must obtain adequate insurance to cover the Goods from the time risk of loss has passed from Graham-White.

7.  
   1. Limited Warranty – Rail and Non-Rail Warranty, All Facilities

      Products manufactured by Graham-White Manufacturing when installed in accordance with instructions furnished by the manufacturer, are guaranteed against defects in material and workmanship for the term of 24 months after the manufactured date except for the 373 Series E-Bell and QBA Air Dryer System which is 36 months.  New Automatic Single Car Test Devices (ASCTD) are guaranteed against defects in mechanical parts and workmanship for the term of 24 months after the manufactured date and 12 months after the manufactured date for electrical parts.  Remanufactured Automatic Single Car Test Devices are guaranteed against defects in mechanical parts and workmanship for the term of 12 months after the remanufactured date.  There is no guarantee on electrical parts for remanufactured ASCTDs.  GW products remanufactured by Graham-White Manufacturing are guaranteed against defects in material and workmanship for the term of 14 months after the remanufactured date with the following exceptions:  1.) Remanufactured GW Dryer Systems which will be guaranteed against defects in material workmanship for the term of 24 months after the remanufactured date 2.) Air brake valves which will be guaranteed against defects in material workmanship for 18 months and 3.) Remanufactured QBA Air Dryer Systems will be guaranteed against defects in material workmanship for the term of 36 months after the remanufactured date.  Any claim made pursuant to this warranty shall be conditioned upon Graham-White’s inspection of the product upon which the claim is being made and the determination that there was in fact a defect in material and workmanship.  Graham-White’s obligation under this warranty is to repair or replace, at its option any defective product as stated previously.  This warranty does not extend to any product which, in our judgment, has been subjected to misuse, neglect, accident, improper installation or improper maintenance.  This warranty is given in lieu of other warranty implied or expressed and will not cover any consequential damages.  Graham-White products repaired or replaced pursuant to this warranty shall be warranted for the unexpired portion of the warranty applying to the original product.  Graham-White will not be obligated beyond the replacement of such Goods as are determined by Graham-White to be defective. Whether the Goods are manufactured by Graham-White or by another, such replacement shall be Purchaser's sole and exclusive remedy for breach of this limited warranty and neither Graham-White nor the manufacturer (if other than Graham-White) shall be subject to any other or further liability and no claim for consequential or incidental damages will be allowed. NO OTHER WARRANTIES, WHETHER EXPRESS OR IMPLIED, INCLUDING WARRANTIES OF MERCHANTABILITY AND FITNESS FOR A PARTICULAR PURPOSE, SHALL APPLY TO THE GOODS. GRAHAM-WHITE IS NOT LIABLE FOR NORMAL MANUFACTURING DEFECTS OR FOR CUSTOMARY VARIATIONS FROM QUANTITIES OR SPECIFICATIONS. THE FOREGOING WARRANTY IS EXCLUSIVE AND GRAHAM-WHITE DISCLAIMS ALL OTHER REPRESENTATIONS AND WARRANTIES OF ANY KIND (WHETHER ARISING BY IMPLICATION OR BY OPERATION OF LAW) WITH RESPECT TO THE GOODS, INCLUDING, WITHOUT LIMITATION, ANY WARRANTIES ARISING FROM COURSE OF DEALING OR USAGE OF TRADE. THIS SECTION SURVIVES THE TERMINATION OR CANCELLATION OF THE PURCHASE ORDER.

   2. Limited Warranty – Industrial Division Warranty Policy

      The Graham-White Manufacturing Company warrants that Air Systems manufactured and sold by Graham-White shall, when properly applied and operated under normal conditions, be free of defects in material and workmanship for a period of twelve (12) months from the date of shipment.

      Any claim made pursuant to this warranty shall be conditioned upon Graham-White’s inspection of the product upon which the claim is being made and the determination that there was in fact a defect in material or workmanship.  Graham-White’s obligation under this warranty is to repair or replace, at its option, any defective product as stated previously. This warranty does not extend to any product which, in our judgment, has been subjected to misuse, neglect, accident, improper installation or improper maintenance.  This warranty is given in lieu of any other warranty implied or expressed and will not cover any consequential damages. Graham-White products repaired or replaced pursuant to this warranty shall be warranted for the unexpired portion of the warranty applying to the original product.

      This warranty also applies to Air Systems that are remanufactured and sold by Graham White, when properly applied and operated under normal conditions.  Graham-White will not be obligated beyond the replacement of such Goods as are determined by Graham-White to be defective. Whether the Goods are manufactured by Graham-White or by another, such replacement shall be Purchaser's sole and exclusive remedy for breach of this limited warranty and neither Graham-White nor the manufacturer (if other than Graham-White) shall be subject to any other or further liability and no claim for consequential or incidental damages will be allowed. NO OTHER WARRANTIES, WHETHER EXPRESS OR IMPLIED, INCLUDING WARRANTIES OF MERCHANTABILITY AND FITNESS FOR A PARTICULAR PURPOSE, SHALL APPLY TO THE GOODS. GRAHAM-WHITE IS NOT LIABLE FOR NORMAL MANUFACTURING DEFECTS OR FOR CUSTOMARY VARIATIONS FROM QUANTITIES OR SPECIFICATIONS. THE FOREGOING WARRANTY IS EXCLUSIVE AND GRAHAM-WHITE DISCLAIMS ALL OTHER REPRESENTATIONS AND WARRANTIES OF ANY KIND (WHETHER ARISING BY IMPLICATION OR BY OPERATION OF LAW) WITH RESPECT TO THE GOODS, INCLUDING, WITHOUT LIMITATION, ANY WARRANTIES ARISING FROM COURSE OF DEALING OR USAGE OF TRADE. THIS SECTION SURVIVES THE TERMINATION OR CANCELLATION OF THE PURCHASE ORDER.

8. Conditions of Applicability of Limited Warranty. The limited warranty provided in Sections 7(a) and 7(b) above is void if (i) the Goods are not stored or handled appropriately, (ii) the defect in the Goods resulted from damages occurring after delivery of the Goods, (iii) the defect in the Goods has not been reported to Graham-White in writing within thirty (30) days after delivery of the applicable Goods, or (iv) the defect should have been discovered by Purchaser in Purchaser's inspection and it is not reported in writing within ten (10) days after the arrival of the applicable Goods at the destination.

9. Defective Goods. If the Goods do not conform to the limited warranty given in Section 7 and the limited warranty is not excluded therein or by Section 8, then Purchaser must promptly notify Graham-White in reasonable detail of such failure to conform. If Graham-White determines, after a reasonable investigation, that the Goods do not comply with the limited warranty provided in Section 7, then Graham-White will repair or replace the defective Goods at no cost to Purchaser. SUCH REPAIR OR REPLACEMENT AS PROVIDED IN THIS SECTION 9 IS THE SOLE AND EXCLUSIVE REMEDY OF PURCHASER FOR ANY BREACH OF THE LIMITED WARRANTY PROVIDED BY GRAHAM-WHITE.

10. Returns. Goods may not be returned without Graham-White's written permission unless otherwise agreed upon. Stock items, when returned, will be credited at lowest prevailing price, and subject to a minimum charge of 10% for handling and restocking. Return transportation charges must be prepaid.

11. Liability Limitation. IN NO EVENT WILL GRAHAM-WHITE BE LIABLE TO PURCHASER FOR ANY INCIDENTAL, SPECIAL, EXEMPLARY OR CONSEQUENTIAL DAMAGES, INCLUDING, BUT NOT LIMITED TO, ALL DIRECT AND INDIRECT LOST PROFITS, REGARDLESS OF WHETHER THOSE DAMAGES WERE FORESEEABLE. NOTWITHSTANDING ANYTHING IN THESE TERMS TO THE CONTRARY, GRAHAM-WHITE'S LIABILITY TO PURCHASER UNDER ANY THEORY OF RECOVERY WHATSOEVER ARISING FROM THE PURCHASE ORDER AND/OR THESE TERMS SHALL NOT EXCEED IN THE AGGREGATE THE PURCHASE PRICE PAID TO THE GRAHAM-WHITE FOR THE GOODS COVERED BY THE PURCHASE ORDER.

12. Cancellation. Orders may not be canceled, reduced, changed, or suspended without Graham-White's written consent and payment of reasonable and proper cancellation charges.

13. Intellectual Property. Purchaser agrees that it does not have any property interest in Graham-White's intellectual property, including, but not limited to, its trademarks, trade names, copyrights, trade secrets, patents, know how or other proprietary rights of any nature whatsoever, whether or not incorporated in the Goods described in the Purchase Order, and Purchaser will not attempt to reverse engineer any such Goods or disclose or use any such intellectual property without Graham-White's prior written consent.

14. Force Majeure; Excusable Delays. Graham-White is not liable or responsible for delay or failure to perform any of Graham-White's obligations under the Purchase Order to make delivery of Goods occasioned by (i) any cause beyond its reasonable control, including, but not limited to, a labor dispute, industry disturbance, fires, unusually severe weather conditions, earthquakes, floods, declared or undeclared war, epidemics, computer malfunctions, civil unrest, riots, lack of supplies, delay in transportation, terrorist attack, governmental, regulatory or legal action, act of God, or (ii) by acts or omissions of Purchaser, including, but not limited to, Purchaser's failure to promptly comply with the terms of payment under the Purchase Order (all of the foregoing under (i) and (ii) collectively, "Excusable Delays"). The date of delivery shall be extended for a period equal to the time lost by reason of any of the Excusable Delays.

15. Successors and Assigns. The Purchase Order and the Terms herein bind and inure to the benefit of Purchaser and Graham-White and their successors and assigns. Purchaser may not assign any interest in, nor delegate any obligation under the Purchase Order or Terms herein, without Graham-White's prior written consent.

16. Governing Law. The validity, construction and performance of the Purchase Order and the Terms herein are governed by, and must be construed in accordance with, the law of the Commonwealth of Virginia, without regard to its conflicts of law provisions. The parties agree that the Purchase Order and these Terms are to be construed in accordance with the Uniform Commercial Code as enacted in the Commonwealth of Virginia.

17. Jurisdiction and Venue. Purchaser irrevocably submits and agrees to the jurisdiction of the state and federal courts of the Commonwealth of Virginia in any action, suit or proceeding related to, or in connection with, the Purchase Order or the Terms herein and, to the extent permitted by applicable law, Purchaser hereby expressly waives and agrees not to assert as a defense in any such action, suit or proceeding any claim (i) that Purchaser is not personally subject to the jurisdiction of the state and federal courts of the Commonwealth of Virginia; (ii) that the venue of the action, suit or proceeding is improper, (iii) that the action, suit or proceeding is brought in an inconvenient forum; or (iv) that the subject matter of the Purchase Order or Terms herein may not be enforced in or by the state or federal courts of the Commonwealth of Virginia. Without prejudice to any other mode of service, Purchaser consents to service of process relating to any such proceedings by personal or prepaid mailing (air mail if international) in registered or certified form a copy of the process to the Purchaser at the address set forth in the Purchase Order.

18. Waiver. The waiver by Graham-White of any breach by Purchaser of any provision of the Purchase Order or the Terms herein may not be construed to be either a waiver of the provision itself as to subsequent application or any other provision of the Purchase Order. Waiver by either party of any default by the other shall not be deemed to waive any subsequent default.

19. Severability. If any provision of the Purchase Order or the Terms herein is held by a court of competent jurisdiction to be contrary to law or public policy, the remaining provisions of the Purchase Order or the Terms herein remain in full force and effect.

20. Notices. No notice or other communication under any Purchase Order or the Terms herein is sufficient to affect any rights, remedies or obligations of either party unless the notice or communication is in writing and (as elected by the party giving the notice) is (i) personally delivered, (ii) transmitted by facsimile (with a receipt acknowledgment), (iii) transmitted by electronic computer mail, (iv) transmitted by a recognized courier service, or (v) mailed (air mail if international) in registered or certified form, to the party to which notice or communication is being given at the following address:

    1. If to Graham-White: Graham-White Manufacturing Co.
       1242 Colorado St.
       Salem, VA 24153
       Attn: Leonard Wedge
       Fax: 540 387-5697 
       E-mail:Lenny.wedge@Wabtec.com

    2. If to Purchaser, at its address, fax number or e-mail address as designated on the face of the Purchase Order.

       Except as otherwise specified in the Purchase Order, all notices or communications are deemed to have been duly given (i) on the date of receipt if delivered personally, (ii) on the date of transmission if delivered by facsimile, (iii) on the date of transmission if transmitted by electronic computer mail, (iv) one day after pickup by courier if delivered by courier, or (v) five days after mailing if delivered by the postal service. Either party may change its address by notice to the other party.

21. Construction. The headings of the Sections in these Terms are provided for convenience only and may not be considered in the interpretation of the Purchase Order. The parties agree that the provisions of the Purchase Order may not be construed in favor of or against either party by reason of the extent to which a party or its professional advisors participated in the preparation of the Purchase Order or the Terms herein.

22. Survival. The terms of any Purchase Order that by their nature are reasonably intended by the parties to survive its expiration or earlier termination, including, but not limited to, Sections 7, 8, 9, 10, 11, 13, 16, 17, 20, 22, 23, 24, 25 and 26 of these Terms, survive the expiration or cancellation of any Purchase Order.

23. Indemnification. Purchaser agrees to protect, defend, indemnify, and hold Graham-White harmless from and against all liability, claims, actions, litigation, judgments, losses, penalties (including, but not limited to, penalties imposed by any governmental agency or tax authority), and/or expenses (including, but not limited to, attorneys' fees and costs and expenses of defense), incurred by Graham-White arising out of, resulting from or in any way connected with the installation, suitability or use of the Goods provided that Graham-White provides Purchaser (i) with prompt written notice of the claim; (ii) with the authority to control the defense of such claim; and (iii) reasonable assistance in the defense of such claim (at the expense of the Indemnifying Party). However, this indemnity obligation shall not apply if the liability incurred by Graham-White arose solely as a result of breach by Graham-White of its limited warranty under Section 7 above. The provisions of this section shall survive the expiration or earlier termination of the Purchase Order or Terms herein.

24. Attorneys' Fees and Costs. Notwithstanding any other provisions of these Terms, if any action is brought by Graham-White to recover any amount due under the Purchase Order or the Terms herein on the account of any breach of, or to enforce or to interpret any of the covenants, terms or conditions of the Purchase Order or Terms herein, Graham-White shall be entitled to recover from Purchaser as part of its cost the reasonable attorneys' fees incurred in bringing and prosecuting such action, the amount of which shall be fixed by the court and shall be made part of any judgment or decree rendered.

25. Safeguard Provision. Should any extenuating circumstances occur or become apparent, the occurrence or actual extent or impact of which had not been foreseeable by the parties affected thereby at the date of signing the Purchase Order and should the further performance of the Purchase Order render an undue hardship to Graham-White, the parties shall meet to discuss the situation, and whenever appropriate in the light of the intent of the Purchase Order and these Terms and the fair and legitimate interest of the parties hereunder, adjust the respective provisions of the Purchase Order.

26. Entire Agreement. The Purchase Order and the Terms herein comprise the complete and final agreement between Graham-White and Purchaser as to the transaction contemplated thereby and supersedes all prior negotiations, proposals, representations, commitments, understandings or agreements between Graham-White and Purchaser, either written or oral, on its subject. No other agreement, quotation or acknowledgment in any way purporting to modify any of the terms of the Purchase Order or the Terms herein is binding upon Graham-White unless made in writing and signed by Graham-White's authorized agent. Neither the Purchase Order, nor the Terms herein may be altered or modified except by written agreement of Graham-White and Purchaser. Any other representations or warranties made by any person, including employees or other agents of Graham-White, that are inconsistent with the Purchase Order or the Terms herein may not be relied upon by Purchaser and are not binding upon Graham-White.