Sample Business Contracts

Quotation - Remmele Engineering Inc. and Ultrafem Inc.

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                             REMMELE ENGINEERING INC.
                               AUTOMATION DIVISION

                                      October 17, 1995

Ultrafem Inc.
415 N. Higgins, Suite 14
Missoula, MT 59802

ATTENTION: Mr. Wendell Guthrie

Remmele Engineering, Inc. is pleased to submit the following revised 
quotation for Softcup-Registered Trademark- assembly equipment to be furnished 
to Ultrafem Inc. for use at their facility in Missoula, Montana. This 
quotation supersedes all previous proposals and quotations. All changes are 
noted with lines in the left margin.


Remmele Engineering will design, build and install equipment to support your 
startup production. The equipment design will be based on the manufacturing 
processes which have been developed and defined by Ultrafem.

Two independent, manually-loaded systems will be provided; a heat seal 
station and a thermoforming system consisting of a pre-heat station and a 
forming station. Each of these three stations will perform its operation of 
forty (40) units per equipment cycle. (Refer to attached drawings: 

The cycle rate of these stations will be dependent on the rate of manual 
loading and unloading as well as the rate of each process. Based on a 
6-second heat sealing and vacuum forming cycle, a 15-second average station 
cycle rate can be anticipated.

PLCs will be used to control all automatic functions. The heat seal station 
will be controlled by its own PLC, and the thermoforming system will have one 
PLC to control both the pre-heat station and the forming station.

Product will be carried to and from these stations in specially-designed 
product carriers. These product carriers will be manually loaded with rims 
upstream of the equipment and manually unloaded after assembly and forming. 
Each carrier will hold forty (40) units in a 4 by 10 matrix. Twelve (12) 
product carriers will be supplied with the equipment.

An operator will be required to load carriers to a manually-operated carrier 
shuttle on each station. These carrier shuttles will be designed to allow the 
operator to position the carrier without placing his hands in an unsafe 
location. Pushing the shuttle to its fully inserted location will initiate 
the station cycle; retracting the shuttle will reset the station.


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A simple non-powered conveyor system will be provided to convey carriers 
through the assembly sequence. [Refer to attached drawing. PLAN VIEW.]


The Heat Seal Station will heat seal 10 mil Kraton film to Softcup-Registered 
Trademark- rims.

The assembly of the film to the rim will be performed by tooling contained in 
a heat sealing die set. Heat sealing will be accomplished by 
electrically-heated dies mounted to a water-cooled platen. Cooling water will 
be provided by a chiller supplied with the system.

Our preferred approach to the design of the die heating and mounting system 
is to employ a replication of your system which uses one heater to heat five 
dies. Eight (8) heater/die assemblies, providing a total of forty (40) dies, 
will be incorporated in the die set.

We recognize your concern for maintaining temperature consistency between 
dies. We will expedite the design and construction of this portion of the 
system to provide maximum opportunity to take action, if necessary, to assure 
acceptable performance of this heating system.

A film stripper and heat seal stripper, similar to your existing system, will 
also be incorporated into the die set.

The Kraton film will be supplied to the system from a roll. The film will be 
pulled between the heater dies and the product carrier by a manually-operated 

One station operator will load a carrier to the carrier shuttle and push the 
shuttle into position. With a segment of Kraton film in position, the heat 
seal die will be automatically actuated when the carrier shuttle reaches its 
fully inserted position. The sequence of heater and stripper operation will 
be controlled automatically by the PLC. When this sequence is complete, a 
second operator will be signaled to retract the shuttle to the load position. 
This operator will remove the finished pallet from the shuttle and return it 
to the conveyor. The operator will then manually index the film feeder to 
present a new segment of film, preparing the station for the next cycle.


The Thermoforming System will thermoform the product into its final 
configuration. It will be able to accept product in the product carriers 
immediately after processing by the Heat Seal System. The thermoforming 
system will have a pre-heat station and a forming station, each of which will 
be manned by an operator. The timing requirements for forming after pre-heat 
are such that the carriers can be manually transferred between stations.

Pre-heating will be accomplished by a radiant heating system. This system 
will provide a uniform watt density over the area of the product carrier. The 
exact energy input to the product will be a function of distance from the 
product to the heat source and time.

The pre-heat station operator will load a carrier onto the carrier shuttle 
and push the shuttle into position. A timer will be initialized when the 
carrier shuttle reaches its fully inserted position. After a programmed 
period of time has elapsed, the operator will be signaled to retract the 
shuttle to the load position. The operator will then pass the pre-heated 
carrier down the conveyor to the forming station.


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The forming station operator will position the pre-heated carrier on the 
carrier shuttle and push the shuttle into position. When the carrier shuttle 
reaches its fully engaged position, the carrier will be lifted by a lower 
platen and pressed against vacuum cavities mounted to a stationary upper 
platen. This pressing action will create a seal between the rim and the 
vacuum cavity. Once this is achieved, a second lower platen containing male 
pushers will be elevated. These male pushers will both initiate the forming 
of the film in the center of the rim and partially cool the film in the 
center of the rim where the film experiences maximum deformation. All three 
elements of this mechanism--the lower platen, the male pusher and the vacuum 
cavity--will be temperature controlled to approximately -plus/minus-5 degrees 
of a specified temperature.

When the male forming tool and lower platen are in position, vacuum will be 
introduced in the vacuum cavity to form the Softcup-Registered Trademark-. 
There will be no monitoring of the forming vacuum in this system, based on 
your experience that defects can be detected visually with reliability. After 
a programmed period of time has elapsed, vacuum will be turned off, the male 
forming tool and lower platen will be returned to their starting position, 
and the operator will be signaled to retract the shuttle to the load 
position. The operator will then pass the completed carrier down the conveyor 
for unloading.


We assume that the manual assembly modules will operate in a controlled 
environment designed to minimize sources of product contamination. The 
product to be assembled is a medical device and will be manufactured under 
FDA GMP guidelines.

The assembly modules will be designed and constructed to operate while 
minimizing introduction of contamination to the product, assuming the 
equipment is maintained to specification standards and operated by trained 
employees. Instructions and procedures for maintaining the equipment to these 
standards shall be included in the equipment manual provided with the 

Tooling components which come in direct contact with the product shall either 
be aluminum with a hard anodize or stainless steel. Two exceptions to this 
shall be: 1) the heat seal tools, which will have a Silver Stone EMC 420 soft 
textured finish, and 2) the vacuum cavities, which will be unfinished 6061-T6 


As discussed during our meeting in Missoula on September 1, there may be ways 
in which the design of the heat sealing tools and the heating system can be 
improved, including the provision of individual heaters for each heat seal 
tool. The ultimate design will optimize heat sealing performance of multiples 
of up to one hundred (100) tools while minimizing the operating, maintenance 
and replacement costs of the tools.

For the manual line proposed in this quotation, Remmele will commit to a heat 
sealing heating system which will provide consistent and reliable performance 
of the heat seal operation. This assumes a temperature tolerance of 
approximately -plus/minus-5 degrees F., from an optimum setpoint at each tool. 
The profile design of the weld tools in the area of the weld is considered 
finalized and will be incorporated into the design of the manual equipment.

Throughout the development of this manual equipment, Remmele will be 
considering ways to improve the design of the heat sealing system for 
incorporation into the fully automated system.


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The Equipment will be painted or otherwise finished for neat appearance and 
to resist corrosion. It will be painted per Ultrafem's instructions for 
meeting O.S.H.A. standards. Commercial components will be supplied with their 
original finish.


ELECTRICAL EQUIPMENT:     480-volt, 3-phase, 60 Hertz. All wiring will be done
                          in  accordance  with  the National Electric Code, in
                          particular  NEC  Article  670, INDUSTRIAL MACHINERY,
                          and  its  referenced  standard  NFPA  79, ELECTRICAL
                          STANDARD FOR INDUSTRIAL MACHINERY.

PNEUMATIC EQUIPMENT:      This  equipment will operate off plant air supply at
                          approximately 80 P.S.I.G.

COOLING WATER:            The  equipment  will  require  a  supply  of cooling
                          water; this will be supplied by Ultrafem.

PART DRAWINGS &           Reference  OP-1001-3,  Part  #0001   dated   8/11/93.
SPECIFICATIONS:           Process   parameters   per   list   agreed  upon  by
                          Remmele  and  Ultrafem  during  meeting   on  9/1/95
                          and  supplied  by   Ultrafem  via  fax  on  10/6/95.


The Equipment is guaranteed to conform to the description and specifications 
as outlined herein during the length of the warranty period.


Remmele will notify Ultrafem when the Equipment is ready for inspection. We 
request that you schedule an acceptance run as soon as possible after such 

The acceptance run at Remmele's facility will be two (2) hours in length. 
During this acceptance run, the equipment efficiency shall not be less than 
90 percent of the gross production possible with a 15-second cycle. Two (2) 
operators will man the heat seal station, one (1) operator will man the 
pre-heat station, and one (1) operator will man the vacuum forming station. 
Product- and process-induced failures shall not be included in this 

Product-induced failure incidents are defined as those resulting from product 
materials supplied by Ultrafem being out of specification (e.g., holes or 
foreign material in the film). Process-induced failure incidents are defined 
as those resulting when a process is executed in accordance with 
specifications supplied by Ultrafem and the resultant product is 
unacceptable. Remmele assumes responsibility for incidents associated with 
design and construction of the equipment which inadequately executes the 
processes as defined by Ultrafem. The classification of failure incidents is 
a responsibility shared by the Remmele Project Engineer and the Ultrafem 
Project Manager. Both individuals must agree on the outcome. We would further 
expect that simple operator mistakes would not be included in efficiency 
calculations for acceptance.


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An identical acceptance run will be performed at Ultrafem's facility after 
installation. The conditions existing during the acceptance run at Remmele's 
facility, including the condition of samples and the environment in which the 
Equipment is placed, shall be duplicated to the furthest extent possible 
during the acceptance run at Ultrafem's facility. It shall be the joint 
responsibility of Remmele and Ultrafem to inspect and recognize the 
conditions existing during the acceptance run at Remmele's facility and to 
duplicate those conditions during the acceptance run at Ultrafem's facility. 
Upon successful completion of the acceptance run at Ultrafem's facility, 
final acceptance will occur.

Remmele will thoroughly instruct Ultrafem's representatives in the proper 
operation and maintenance of the Equipment during their visit to our plant.


To assure that Remmele can meet its delivery commitment and performance 
guarantee, production part samples will be required according to the 
following schedule:

  (100) rims and (1) roll of Kraton film   Two (2) weeks after receipt of order
  to begin equipment design

  (100,000) rims and (10) rolls of Kraton  10,000   units/week   for  four  (4)
  film for equipment development and       weeks,  commencing  four  (4)  weeks
  debug                                    after receipt of order; remainder to
                                           be supplied 30,000 units/month   for
                                           two  (2)  months,  commencing  eight
                                           (8)  weeks  after  receipt of order.

  (40,000) rims and (4) rolls of Kraton    Sixteen  (16) weeks after receipt of
  film for the acceptance run at           order
  Remmele's facility

  (40,000) rims and (4) rolls of Kraton    Twenty-two  (22) weeks after receipt
  film for the final acceptance run at     of order
  Ultrafem's facility


The Equipment price includes labor costs for installation and startup support 
and final acceptance testing at Ultrafem's facility. Transportation and 
living expenses for these services, including the cost of traveling to and 
from the location of the Equipment, are not included in the Equipment price 
and will be charged to Ultrafem at cost.

Remmele's representative in your area is Mr. Carmen Pistillo of Griot Group 
Inc., 2230 S. McClintock Dr., Suite 1, Tempe, AZ 85282. His telephone number 
is (602) 968-4428.


$357,000.00 F.O.B. Remmele's dock skidded for domestic shipment.


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The Equipment price includes paper copies of the following documents: 
electrical schematics, air schematics, timing diagrams and assembly drawings. 
These will be drawn to ANSI Y14.5 standards on Remmele forms.

A Remmele standard equipment manual is included in the Equipment price. The 
manual will include the following information:

                - Safety
                - Equipment overview
                - Description of operations and controls
                - Setup, calibration and adjustment
                - Recommended spare parts list
                - Fabricated parts list
                - Purchased parts list
                - Purchased part literature

These documents will become the property of Ultrafem.


30% of total with order.

The balance is to be paid through progress payments at the following 

     30% after an acceptable review at Remmele's facility of approximately 
         80% of the mechanical and electrical design -- (approximately 6 weeks 
         after receipt of order);

     15% upon start of assembly -- (approximately 14 weeks after receipt of 

     10% upon acceptance of the equipment at Remmele's facility -- 
         (approximately 20 weeks after receipt of order; and

     15% upon acceptance of the equipment at Ultrafem's facility, covered by 
         a Letter of Credit, Escrow Account, or other similar mutually-
         acceptable instrument. This instrument must be presented upon 
         acceptance of the equipment at Remmele's facility; shipment of the 
         equipment from Remmele's facility will be contingent upon Remmele 
         receiving the mutually-acceptable instrument.

All payments are due net ten (10) days after receipt of invoice.


Twenty (20) weeks from receipt of purchase order to acceptance at Remmele, 
subject to confirmation at time of order.

This quotation includes and is subject to the attached Remmele Automation 
Division Standard Conditions of Sale. In the event there are conflicts 
between this quotation and the attached Standard Conditions of Sale, this 
quotation will control. (This quotation and the attached Standard Conditions 
of Sale will be referred to together as the "Quotation.")


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No statement or recommendation not contained or referenced herein shall have 
any force or effect unless in an agreement signed by an officer or authorized 
representative of Remmele Engineering, Incorporated.

                                       Respectfully submitted:

                                       AUTOMATION DIVISION

October 17, 1995                       By   /s/ William F. Iacoe
                                            William F. Iacoe
                                            Vice President and General Manager

                                       We accept this Quotation and order the 
                                       items as quoted, and we accept the 
                                       attached Standard Conditions of Sale, 
                                       including all warranty provisions.

                                       ULTRAFEM INC.

                                       By  /s/ John W. Andersen

                                       Title Chairman/CEO

                                       Dated Oct. 18, 1995

                           REMMELE ENGINEERING, INC.

                             AUTOMATION DIVISION  

                              CONDITIONS OF SALE
  I. ACCEPTANCE OF THIS QUOTATION: This Quotation is an offer to sell which 
     is not binding upon Remmele until accepted by the Buyer. To accept this 
     Quotation, Buyer must return a fully executed copy of the Quotation to 
     Remmele within sixty (60) days from the date hereof. Buyer's acceptance of 
     this Quotation is limited to the terms of the Quotation. The contract 
     shall consist of all the terms and conditions set forth herein, unless 
     Remmele agrees in writing to other terms and conditions. If this Quotation 
     is not accepted within the sixty (60) day period, it shall no longer be 
     binding upon Remmele unless reaffirmed at the request of the Buyer.

 II. CANCELLATION: The Buyer may cancel an order by submitting a written 
     notice of cancellation to Remmele before the Equipment is delivered. If 
     the Buyer cancels an order, it must compensate Remmele at Remmele's 
     standard rates and profit margins for the material and labor that Remmele 
     expended or committed, up to and including the date on which the written 
     notice of cancellation was received by Remmele. Upon cancellation and 
     payment by the Buyer, all parts will become the Buyer's property. All 
     designs, plans, drawings and specifications shall remain the property of 

III. DELAYS: If a delay occurs in any of the events described in this 
     Quotation for which payment is due and such delay is not attributable to 
     Remmele but is, instead, attributable in substantial part to an act or 
     omission on the part of the Buyer, the Buyer will pay to Remmele eighty 
     percent (80%) of the amount due within sixty (60) days from the scheduled 
     completion date for such event. The remaining twenty percent (20%) will be 
     paid upon the actual completion of the event.


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      If delays which substantially inhibit Remmele's performance under this 
      contract exceed one hundred twenty (120) days in the aggregate, and such 
      delays are not attributable to Remmele but are, instead, attributable in 
      substantial part to an act or omission on the part of the Buyer, Remmele 
      may, at its option, consider the order canceled by the Buyer and subject 
      to the cancellation provision contained in these Conditions of Sale.

  IV. CHANGE REQUESTS AND CHANGE ORDERS: If the Buyer wishes to expand or 
      modify the work scope of the contract between Remmele and the Buyer, the 
      Buyer must submit a written work scope change request. Remmele will 
      respond promptly to such a request by stating in writing what effect, if 
      any, the request will have on the purchase price and delivery date of the 

      After Remmele and the Buyer agree upon a work scope change request and any
      adjustments to the purchase price or delivery date, the Buyer shall submit
      a written change order to Remmele, signed by an authorized representative
      of the Buyer. A written change order must be received by Remmele before
      any changes will be made to the present scope of work.

   V. DELIVERY: Every effort will be made to ship orders by the date 

  VI. SAMPLES: The Buyer must send sufficient samples of product to Remmele 
      for design and test purposes. These samples must be clean and dry. They 
      should be shipped at the time of the order and will be provided at no 
      cost to Remmele. All products will be retuned with the completed 
      Equipment. It is understood that a portion of said products may be 
      damaged during setup and run-in of the Equipment.

      As with any automated equipment, it is very important for the samples 
      to conform to specifications and to be consistent. For this reason, this 
      Quotation is based on the premise that the samples provided for 
      Remmele's design and test purposes will consistently conform to the 
      Buyer's production specifications/drawings in every respect and will be 
      consistently within specification/drawing limits. Failure to comply with 
      this premise could affect delivery time, project cost, functionality, 
      production rate, or all of these factors.

 VII. SPARE PARTS: The purchase price of the Equipment does not include any 
      spare parts; however, upon request, Remmele will furnish the Buyer with 
      a list of parts which we would recommend that you stock for maintenance 

VIII. TAXES: Any tax or other federal, state or local governmental charge on 
      the production, sale or shipment of the Equipment, now or hereafter 
      imposed, shall be added to the price herein quoted and shall be paid by 
      the Buyer.

  IX. SAFETY REQUIREMENTS: Remmele warrants that the goods covered by this 
      order will conform to nationally recognized standards under the 
      Occupational Safety and Health Act (O.S.H.A.) at the date of the 
      purchase order; however, Remmele does not assume any responsibility for 
      conformance to local codes or those codes not known by Remmele. Buyer 
      agrees to participate with Remmele in a review of the equipment for 
      compliance of nationally recognized codes.

      Remmele will fully cooperate with the Buyer in the design, manufacture 
      or procurement of additional safety features or devices which are 
      deemed necessary under subsequent O.S.H.A. standards or any other 
      statute, ordinance or governmental regulation. The price at which all 
      such additional services and equipment shall be furnished by Remmele will 
      be at Remmele's standard rates or prices then in effect, or as mutually 
      agreed to by Remmele and the Buyer.

      The Buyer agrees, at its own cost and expenses, to train all equipment 
      users not trained by Remmele to follow safe operating procedures and to
      understand and retain the information contained in the operating 
      manuals, maintenance manuals and safety warning signs.

   X. PERMITS: The Buyer shall be responsible for the procurement at its 
      expense of any special permits required for the design, fabrication, 
      testing, transport, installation or operation of the Equipment.

  XI. TITLE AND ACCESS TO THE EQUIPMENT: Title to the Equipment shall pass 
      from Remmele to the Buyer at the time Equipment is delivered or shipped 
      under the F.O.B. terms contained in this Quotation. Prior to that time, 
      the Buyer will be given reasonable access to the Equipment.

      In the event that this Quotation includes an acceptance test at the 
      Buyer's facility, the following shall apply: Although title shall pass 
      to the Buyer at the time of delivery or shipment, the Buyer will have no 
      right to work on or with the Equipment without Remmele's authorization 
      until final acceptance at the Buyer's facility. If the Buyer works on or 
      with the Equipment prior to final acceptance without Remmele's 
      authorization, all warranties, guarantees and remedies extended in this 
      Quotation are void, Remmele's obligations under this Quotation will be 
      deemed complete, and Remmele will not be in any way responsible for any 
      damage to the Equipment or other property or for any injury to any 
      person. After the Equipment is delivered to the Buyer, but before final 
      acceptance, the Buyer shall give Remmele reasonable access to the 
      Equipment for the purposes of: (1) installing the Equipment, in the 
      event that installation services are included in this Quotation; and 
      (2) preparing the Equipment for final acceptance testing. Remmele shall 
      have the right until final acceptance to take parts from the Equipment 
      back to its facility for purposes related to achieving final acceptance.

XII.  WARRANTIES: Remmele warrants that the Equipment shall conform to the 
      description and specifications found in this Quotation. The warranty 
      period is one (1) year and begins on the date of final acceptance at 
      Buyer's facility.


      In order for the warranties contained in this Quotation to remain in 
      effect, the Buyer must follow and demonstrate compliance with Remmele's 
      and any of Remmele's suppliers recommended maintenance procedures.

      On all items purchased by Remmele, the warranties of the manufacturer 
      of those items shall apply to those items.

XIII. PATENT INFRINGEMENT: Remmele warrants that it is without knowledge that 
      the Equipment and its sale or intended use designated in this Quotation 
      according to Remmele's specifications or written recommendations, if any, 
      will infringe any third party patent rights; but Remmele makes no 
      warranty whatsoever for infringement of third party patents with respect 
      to Equipment incorporating designs or specifications furnished by the 
      Buyer to Remmele or to claims that the product produced by the Equipment 
      itself infringes or otherwise constitutes unauthorized use of any patent, 
      copyright, trade secret or other intellectual property right. Except as 
      limited below, Remmele shall indemnify and hold the Buyer harmless from 
      any infringement in breach of the above warranty, provided the Buyer 
      gives Remmele prompt notice of any claimed infringement and the right to 
      assume the defense of such claim. Furthermore, in the event of any such 
      claimed infringement, Remmele may, at its sole option, procure for the 
      Buyer, at Remmele's expense, the right to continue using the Equipment, 
      modify it so it becomes noninfringing, or remove the Equipment and refund
      the total purchase price therefor plus the expenses incurred by the Buyer
      in shipping the Equipment to the Buyer's facility. In no event shall 
      Remmele's cumulative liability for the above indemnity or for any past or
      future royalties or damages exceed the purchase price of the Equipment.


Page 9 of 9

  XIV. REMEDIES: Remmele shall repair or, at its option, replace any 
       Remmele-designed and manufactured item which, within one (1) year of 
       the date of shipment, proves defective in design or workmanship. All 
       claims relating to defects in the Equipment or in any of its parts must 
       be submitted to Remmele in writing within one (1) year of shipment. If 
       the defective item can be sent to Remmele, Remmele's responsibility to 
       repair or replace shall be contingent upon the Buyer returning the 
       defective item to Remmele. The Buyer will be invoiced for the 
       replacement part, and credit will be issued upon the return of the 
       defective part to Remmele.

       Remmele will provide the Buyer with on-site warranty assistance, 
       provided the defective part cannot be sent to Remmele or the issue in 
       question cannot be resolved over the telephone. Remmele will make its 
       best reasonable effort to respond to any warranty issues in a timely 
       fashion to meet the Buyer's needs. If the Buyer and Seller mutually 
       agree that the situation could have been resolved by qualified Buyer 
       maintenance personnel and telephonic consultation with Seller project 
       personnel, transportation and living expenses incurred during these 
       warranty calls, including the cost of traveling to and from the 
       location of the Equipment, will be billed at cost.

       Remmele's responsibility and liability to the Buyer is limited to the 
       repair and replacement remedy set forth in this section, provided, 
       however, that if the cost of repair or replacement exceeds the quoted 
       price of the Equipment, Remmele may, at its option, refund the quoted 
       price to the Buyer. These are the Buyer's sole and exclusive remedies. 
       If these limited remedies are held to have failed of their essential 
       purpose, or are otherwise held invalid or inapplicable, Remmele's 
       liability is limited to the purchase price of the Equipment, regardless 
       of the legal theory of any claim. IN NO EVENT AND UNDER NO CIRCUMSTANCES
   XV. NON-WARRANTY SERVICE AGREEMENT: Service calls that are not related to 
       warranty work will be provided under Remmele's current service rates.

  XVI. THIRD-PARTY INDEMNIFICATION: Remmele agrees, at its own cost and 
       expense, to defend and hold the Buyer harmless from any claim by any 
       person, firm, corporation or governmental unit which is caused by or 
       arises out of the intentional malfeasance or negligent acts or omissions 
       of Remmele.

       The Buyer agrees, at its own cost and expense, to defend and hold 
       Remmele harmless from any claim by any person, firm, corporation or 
       governmental unit which is caused by or arises out of the intentional 
       malfeasance or negligent acts or omissions of the Buyer.

       out of: (1) the negligent or careless use or intentional misuse of the 
       drawings and documents supplied pursuant to this Quotation by the Buyer 
       or the Buyer's employees in maintaining or supporting the Equipment; or 
       (2) any use of these drawings and documents, other than in maintaining 
       or supporting the Equipment, by the Buyer, the Buyer's employees, or 
       anyone else other than Remmele or its vendors, the Buyer hereby agrees 
       to defend, indemnify and hold Remmele harmless from all expense, 
       including payment of damage awards, settlements, costs and legal fees, 
       incurred by Remmele in the defense of said claim. In the event of an 
       indemnifiable claim, Remmele, at Remmele's sole option, may permit the 
       Buyer to treat said claim as if it had been brought directly against the 
       Buyer and to settle or defend said claim at the Buyer's expense and as 
       the Buyer sees fit.

XVIII. INTEGRATION: This Quotation sets forth the entire understanding and 
       agreement between Remmele and the Buyer relating to the Equipment and 
       merges all prior oral discussion between them. No modification, 
       extension, or waiver of these documents or any provision hereof shall be 
       binding unless mutually agreed to in writing.

  XIX. FORCE MAJEURE: The obligations of Remmele and the Buyer to perform 
       shall be excused during each period of delay caused by matters which 
       are beyond the reasonable control of the party obligated to perform, 
       such as strikes, shortages of raw materials, government orders, or acts 
       of God, and the time for performance shall be extended for such period; 
       provided that if an event of FORCE MAJEURE occurs, the party who is 
       claiming to be excused from performance shall give prompt notice of the 
       event of FORCE MAJEURE to the other party; and provided further that if 
       an event of FORCE MAJEURE occurs which prevents performance of the 
       contract and continues for a period of more than one hundred twenty 
       (120) days, Remmele may, at its option, cancel the contract without 
       further liability to Remmele.

   XX. HEADINGS: All section and paragraph titles and captions are asserted 
       for ease of reference only and are without contractual significance or 

  XXI. SEVERABILITY: If any provision of this Quotation is held unenforceable 
       or invalid or in conflict with the law of any competent jurisdiction, 
       it will be deemed severed from this Quotation and the remaining portions 
       of this Quotation shall remain in full force and effect.

 XXII. APPLICABLE LAW: The Buyer and Remmele agree that this Quotation shall 
       be deemed to be executed in the State of Minnesota. The Buyer and 
       Remmele further agree that this Quotation shall be governed by and 
       shall be construed and interpreted in accordance with the laws of the 
       State of Minnesota.

XXIII. RESOLUTION OF DISPUTES: Any controversy, claim or dispute arising out 
       of or relating to this Quotation, or to the alleged breach of any 
       element of this Quotation either by Remmele or the Buyer, shall be 
       settled as follows: Both parties will first attempt in good faith to 
       promptly resolve the controversy, claim or dispute by negotiations 
       between senior executives of the parties who have authority to settle 
       the matter (and who do not have direct responsibility for administration
       of this agreement). If the controversy, claim or dispute has not been 
       resolved by such negotiations within sixty (60) days after written 
       request by either party, the matter shall upon written request of either 
       party then be settled by binding arbitration before three (3) 
       arbitrators in accordance with the Commercial Arbitration Rules of the 
       American Arbitration Association (the "AAA"), and judgment on the award 
       rendered by the Arbitrators may be entered in any court having 
       jurisdiction thereof. At least two of the three arbitrators shall be 
       experienced in and have knowledge of factory automation. The parties 
       agree that any arbitration hearing shall be held in Saint Paul, 
       Minnesota. Any claim in connection with this Quotation not made within 
       two (2) years after delivery of the Equipment shall be waived.