DEFINITIONS

As used in this purchase order, “GEAR MOTIONS” means China Gear Motions, Inc., Dongguan Gear Inc., Chongqing Gear Inc. or any of its subsidiaries or divisions. As used in this purchase order “SUPPLIER” means, the vendor of supplies. “SUPPLIES” designates raw materials, material components, intermediate assemblies, technical data, drawings, or services to be furnished by SUPPLIER to GEAR MOTIONS under the purchase order.

The only terms and conditions that apply to this purchase are those set forth in this order. No term or condition contained in any form or other communication between GEAR MOTIONS and vendor pertaining to this purchase, subsequent or prior to the issue of this order, which in any way differs from or adds to the terms and conditions set forth in this order shall become part of the contract between the parties unless GEAR MOTIONS expressly consents in writing thereto. GEAR MOTIONS failure to object to any term or condition contains in any form other communication from SUPPLIER will be a waiver of the provisions hereof.

1. APPLICABLE LAW

The contract resulting from the acceptance of the purchase order is to be construed according to the laws of the State of Guangdong.

2. ASSIGNMENT OF CONTRACT

This purchase order is not assignable by the SUPPLIER in whole or in part without the prior approval of GEAR MOTIONS.

3. ACCEPTANCE

The written acceptance by SUPPLIER of this purchase order or the commencement of any work or the performance of any services hereunder by SUPPLIER, (including the commencement of any work or performance of any services with respect to samples) shall constitute acceptance by SUPPLIER of this purchase order and all of its terms and conditions.

Any exceptions which SUPPLIER wishes to take to any of the terms, conditions, prices or specifications stated herein should be communicated to GEAR MOTIONS Purchasing on acknowledgement of the purchase order. Such exceptions shall only be effective to the extent approved in writing by GEAR MOTIONS.

4. INVOICING

Unless otherwise agreed to in writing between SUPPLIER and GEAR MOTIONS, invoices are paid net forty five (45) days from receipt of SUPPLIES. Invoices must show GEAR MOTIONS purchase order number, location shipped to and receiving department number.

5. DELIVERY

Deliveries are to be made in quantities and at times specified by GEAR MOTIONS. GEAR MOTIONS will have no liability for payment for SUPPLIES delivered which are in excess of quantities specified in the delivery schedule and reserves the right to return such SUPPLIES at the expense of the SUPPLIER, or to store them at SUPPLIERS expense. Delivery of SUPPLIES is not considered complete until all SUPPLIES have been received and accepted by GEAR MOTIONS.

6. MATERIAL FURNISHED BY GEAR MOTIONS

All jigs, fixtures, gauges, patterns, tools, dies or any equipment purchased and paid for, in part or in whole, by GEAR MOTIONS for the manufacture of or use in any SUPPLIES for GEAR MOTIONS shall remain property of GEAR MOTIONS, for Gear Motion’s sole use, and shall be subject to removal by GEAR MOTIONS at any time upon demand. Such property shall, at all times, be properly housed, maintained and repaired by SUPPLIER and will be used only in connection with applicable SUPPLIES ordered by GEAR MOTIONS.

7. WARRANTY

SUPPLIER warrants that the SUPPLIES covered by this purchase order shall conform to the specifications, drawings, samples, or other description furnished or specified by GEAR MOTIONS and will be fit and sufficient for the purpose intended, merchantable, of good material and workmanship and free from defect. The warranties and remedies provided for in the Paragraph shall be in addition to those implied by or available at law and shall exist notwithstanding the acceptance by GEAR MOTIONS of all or a part of the SUPPLIES with respect to which such warranties and remedies are applicable.

8. PATENTS

SUPPLIER agrees to defend at its expense all suits, actions, or proceedings brought against GEAR MOTIONS or GEAR MOTIONS products, for actual or alleged infringement of any China or Foreign letters patent because or on account of any material or products used on fulfilling this order, or their resale, and further agrees to indemnify and hold harmless GEAR MOTIONS and users of its products from and against any and all damages and expenses which may be incurred in connection with any suit, action, or proceeding.

9. SEVERABILITY

If any provision of the agreement as documented is held by a court of jurisdiction to be contrary to law, the remaining provisions of the agreement remain in full force and effect.

10. TERMINATION

GEAR MOTIONS may at any time terminate all or any part of undelivered quantities on this purchase order, or any revisions thereof, or any release and shipping schedule pursuant thereto. SUPPLIER aggress that any termination charges made in consequence shall be limited to costs of materials and labor incurred on items terminated prior to knowledge of their termination.

11. CHANGES

GEAR MOTIONS shall have the right at any time prior to the delivery of ordered SUPPLIES to make changes in drawings, designs, specifications, packaging, time, and place of delivery. If any such changes cause an increase or decrease in the cost or time to deliver the agreed upon SUPPLIES, an equitable adjustment shall be made and a change order will be issued to the original purchase order.

12. PACKING

All shipments must contain a packing slip listing SUPPLIES, GEAR MOTIONS part number, if any, purchase order number, shipping location name and receiving department number. All packages in that shipment must contain the same information.

13. COMPLIANCE WITH LAWS

SUPPLIER represents that it has and will continue during the performance of this order to comply with provisions of all Federal, State and local laws and regulations from which liability may accrue to GEAR MOTIONS for any violation thereof, including, but not limited to, the Fair Labor Standards Act of 1938 as amended.

14. INDEMNIFICATION FOR CLAIMS

SUPPLIER shall defer, indemnify and hold harmless GEAR MOTIONS and its directors, employees, agents, and other representatives from and against any and all claims, damages or expense in any manner arising out of or resulting from any failure, fault or negligence of SUPPLIER or its employees, agents, subcontractors or other representatives in connection with the performance of this order.

15. INSURANCE

Before commencing work, SUPPLIER shall furnish to GEAR MOTIONS a certificate of insurance showing that SUPPLIER carries adequate public liability and property damage insurance with insurers and in amounts acceptable to GEAR MOTIONS and Workmen’s Compensation insurance (or evidence of authority to self-insure). The failure by SUPPLIER to furnish to GEAR MOTIONS, or the failure by GEAR MOTIONS to obtain such a certificate of insurance will not constitute a waiver of the requirement for such certificate or of any other provision of this order. If this order covers the performance of labor for GEAR MOTIONS, SUPPIER agrees to indemnify and protect GEAR MOTIONS against all claims or demands for injuries or damages to any person or property growing out of the performance of this order by SUPPLIER, its servants, employees, agents or representatives. SUPPLIER further agrees to furnish insurance certificates showing that the SUPPLIER has insurance coverage in amounts not less than the following: Workmen’s Compensation Statutory Limits by State or States in which work is to be performed. Employer’s Liability $100,000. General Liability bodily injury $250/500,000, property damage $250,000, automobile liability bodily injury $250/500,000 property damage $250,000.

Said certificate must set forth the amount of coverage, number of policy and date of expiration. If SUPPLIER is self-insurer, the Certificate of the Department of Labor and Industry of the state in which said labor is to be performed must be furnished by such department directly to GEAR MOTIONS. The purchase of such insurance coverage or the furnishing of the aforesaid certificate shall not be a satisfaction of SUPPLIER’s liability hereunder or in any way modify SUPPLIER’s indemnification of GEAR MOTIONS.

16. PREMIUM SHIPMENT COST

If, because of failure of SUPPLIER to meet the delivery requirements of this purchase order, GEAR MOTIONS finds it necessary to require shipment of any of the SUPPLIES covered by this purchase order by a method of transportation other than the method originally specified by GEAR MOTIONS, SUPPLIER shall reimburse GEAR MOTIONS the amount, if any, by which the cost of the more expeditious method of transportation exceeds the cost of the method of transportation originally specified, unless such failure is due to causes beyond the control and without the fault or negligence of SUPPLIER.

17. SALES – USE TAX STATUS

GEAR MOTIONS Sales Tax exemption number is supplied, if exemption applies. Individual line items are indexed as to tax status.

18. EQUAL EMPLOYMENT OPPORTUNITY

There are incorporated in this order the provisions of Executive Order 11246 (as amended) of the President of China on Equal Employment Opportunity and the Rules and Regulations issued pursuant thereto with which the SUPPLIER represents that he will comply, unless exempted.

19. PRICE GUIDELINES

SUPPLIER shall comply with applicable Federal or State wage and price guidelines, voluntary or mandatory, regarding price increases.