FIRST CORP INTERNATIONAL CREDIT POLICY

1. Scope and Purpose

First Corp International, Inc. d/b/a Diamond Drilling Industries (“FCI”) evaluates and determines appropriate terms and credit limits for all our customer accounts. This Credit Policy applies to all sales of FCI products to customers located in the United States.

The purpose of this Credit Policy is to define the requirements for establishing and maintaining credit lines and payment terms for FCI’s customers. This Credit Policy also provides alternative payment methods for accommodating sales to customers who do not qualify for credit with FCI.

2. Policy

In order to facilitate the flow of orders and shipments of products, it is FCI’s policy that credit will be extended to all customers who demonstrate both the ability to pay and have an established history of timely payment of debts. FCI’s credit department will evaluate all new customers who apply for credit to determine what payment terms and methods will be required and what level of credit will be established. Decisions are based on references (both bank and trade), payment histories, and alerts obtained through our application process, which includes, but is not limited to, credit applications and customer credit reports generated through Experian.

FCI’s credit department will also periodically review and reevaluate payment terms and credit lines of existing customers to support customer requirements and to manage risk as financial and business conditions change.

3. Responsibility

FCI’s credit department is responsible for authorizing all communications with FCI’s customers (new and existing) regarding credit acceptance status, credit line value, and payment terms and methods. FCI’s credit department will determine which financial information of the customer is required and what dollar credit limit will be approved.

FCI’s sales department is responsible for ensuring that FCI’s Credit Application Form is submitted to the credit department by a new customer, in advance of order acceptance.

4. Credit Lines and Payment Terms

A credit evaluation is performed by FCI’s credit department in order to recommend a credit line (if any), payment terms, and any other conditions of sale specific to the customer. The credit evaluation and proposal is submitted to and signed off by the appropriate signature levels. After approval, FCI’s sales department will be notified of the results.

The standard form of credit is an open credit line without a security interest . Based on the credit evaluation, FCI’s credit department has the discretion to require some tangible form of security in order to continue the credit approval process. Such additional security requirements can include, but are not limited to, (i) an irrevocable letter of credit; (ii) a guarantee from a bank or other financial institution; (iii) a guarantee from the parent or other affiliated entity; (iv) a personal guarantee from the owner(s) or principal(s); or (v) an interest in secured collateral.

FCI’s terms of payment are net thirty (30) days from the date of product shipment. If an invoice is not paid within thirty (30) days from the date of shipment it will be considered past due, and among other remedies, FCI’s credit department can place, in its sole discretion, an account or shipment on credit hold and to make disclosures to Experian or any other credit agency. Prepayment discounts are not offered in the standard corporate payment terms. All other non-standard terms or conditions require approval from FCI’s President or Director of Finance .

5. Alternatives to Credit

The result of the credit evaluation may be a denial of credit to a customer whose risk factors are assessed as too great or whose level of risk is indeterminable due to an insufficient amount of information or background history. The denial of credit does not constitute, and therefore will not be communicated as, a rejection of sales to the customer.

Alternative payment terms that can be approved by FCI’s credit department and extended to these customers are:

A. Cash in Advance (CIA)—payment is delivered to FCI and receipt of funds are confirmed by FCI’s credit department prior to shipment of the product.

B. Credit Card (CC)—payment is made electronically using a major credit card, including Visa, Master Card, or American Express. Upon authorization or approval of the purchase, the product is released for shipment.

6. Credit Holds and Releases

FCI’s credit department can place, in its sole discretion, an account or shipment on credit hold and to make disclosures to Experian or any other credit agency due to any of the following reasons: (i) the customer’s credit line is or will be exceeded; (ii) payments are overdue; (iii) the customer faces financial hardship or operational setback; (iv) termination of the business relationship between FCI and the customer; or (v) any other reassessment of risk by the credit department.

The credit department will notify the sales department, in advance, of all pending shipments that are being put on credit hold. The credit department will begin to work with the customer service and sales departments to effectively resolve any issues upon institution of the credit hold.

No orders or shipments with a credit hold status can be released without approval from the credit department.


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