General Terms & Conditions

§ 1 Scope (1) These General Terms & Conditions of Business (hereinafter called TCB) apply to all contracts for goods and services issued by EMIS Electrics GmbH, Neckarsulmer Strasse 3-5, a company based in 03222 Lübbenau/Spreewald, Germany (hereinafter called EMIS). (2) Any contract partner's General Terms & Conditions of Business that may differ from the TCBs of EMIS (hereinafter called customer) do not become contractual content, even if an order is accepted or an unconditional service is provided. Any customer's General Terms & Conditions of Business that may differ [from the TCBs of EMIS] shall only become contractual content with the express written consent of EMIS. (3) These General Terms & Conditions of Business also apply to future business transactions with the customer to the extent that these are legally constituted transactions of a related nature. (4) Quotations from EMIS are subject to the requisite approvals being issued.

Section 2 Copyright EMIS retains unrestricted ownership and copyright including rights of usufruct in respect of all documents, samples, cost estimates, quotations/calculations, drawings and illustrations, brochures and other comparable documents as well as information, also in electronic form that EMIS may provide to a customer. The customer must not make the aforementioned documents available to third parties, nor enable them to be used wholly or in part, or in any other way without the express written consent of EMIS. If an order is not awarded, EMIS is entitled to demand the return of all of the aforementioned documents.

Section 3 Deadlines for the delivery of products & services (1) The delivery deadlines for goods and services are only binding in nature if these are confirmed by EMIS in writing, or are expressly defined in the contract. (2) If an effective deadline is agreed, this shall be extent accordingly in the event of force majeure and of other events that EMIS is powerless to prevent such as transport and traffic obstructions, delivery problems with materials and/or required components, strikes - even for upstream suppliers to EMIS - war, terrorist attacks or similar incidents. (3) The beginning of and compliance with effective and agreed delivery lead times and due dates requires above all the timely receipt of all documents to be provided by the customer (schematics, drawings etc.), the requisite approvals and releases as well as clarification of the pertinent technical questions between the parties. In addition, effective and agreed delivery lead times and due dates require the timely and proper fulfillment of all obligations on the part of the customer (including any payment obligations that may apply), except in cases where EMIS is responsible for causing the delays. The right to appeal on the grounds of an unfulfilled contract is upheld. (4) If the customer is in default of acceptance or culpably violates any other obligations to cooperate, EMIS has the right to claim commensurate damages resulting therefrom including possible additional expenditures. EMIS upholds the right to exercise more extensive claims. In cases where the above conditions are met, the risk of accidental loss or of accidental deterioration of the item or service provided by EMIS passes to the customer at the point where the customer falls into arrears over acceptance or of payment. (5) In the event of EMIS failing to meet an effective and agreed delivery commitment, and of the customer incurring a loss as a consequence of that delay, the customer can demand compensation from EMIS for each completed week of the delay to an amount of not more than 0.5% per week, and up to a maximum of 5% of the price of the part of the service affected by the delay. (6) The customer is not entitled to make compensation claims that exceed the limits defined in Section 3 (5) of this TCB, which covers delays in delivery of goods or services, even after an extended deadline set by EMIS has elapsed without a positive outcome. The same applies to compensation claims raised in lieu of performance. This does not apply in evidently prosecutable cases of deliberate intent, gross negligence or due to injury to life, limb or health. The customer only has legal grounds for withdrawing from the contract in cases where EMIS is responsible for the delay in performance. (7) The customer is obliged, on demand from EMIS, to declare within a reasonable period of time whether he continues to insist on delivery of the service and/or to make clear which of the claims and rights to which he is entitled he intends to enforce.

Section 4 Services from EMIS (1) EMIS shall deliver services in accordance with the rules of technology applicable when the order was awarded, and to do so with the level of diligence typically associated with this sector. The customer bears the risk of usability of the goods or services, especially when they are being put to a use other than the one defined in the contract. (2) In cases where EMIS avails itself of the services or one or more third parties on behalf of the customer or with the consent of the customer as a basis or a component of its contractual services, it can also found its services upon the ongoing delivery of services in this manner without formal examination, unless the customer stipulates to EMIS expressly and in writing that these third party services should be examined formally. (3) Partial services from EMIS are permitted provided that it is acceptable to expect the customer to accept them. (4) In the event of culpable violation of its service obligations, EMIS is initially entitled to carry out rework free of charge unless it would be unreasonable to expect the customer to accept rework as a remedial solution. (5) EMIS is entitled to sub-contract orders to third parties.

Section 5 Prices (1) The EMIS prices are quoted in euro. Prices do not include value-added tax. Alternatives only apply if they have been agreed expressly and in writing with the customer. In business transactions with customers in Germany, EMIS shall additionally apply value-added tax at the prevailing rate on the date goods or services are delivered. (2) Unless otherwise expressly provided for in the contract, EMIS prices apply, plus the costs of packaging, ex-factory transport, installation/assembly and other other additional costs that may be required (e.g. travel costs, costs for the transport of tools, personal luggage, accommodation allowances etc.). (3) Except in cases where specific prices have been agreed for the goods and services provided by EMIS, the valid list prices applicable on the date of delivery of the goods and/or services shall apply, as well as the taxes and costs defined in Sections 5 (1) and (2) of the TCB. (4) EMIS can demand an appropriate increase in remuneration for additional cost incurred by modifications to the task profile requested by the customer, or for other reasons for which EMIS is not responsible.

Section 6 Payment terms (1) Payments must only be made to one of the EMIS accounts shown on the invoice. The deduction of a cash discount by the customer requires a special written agreement with EMIS. (2) Unless otherwise agreed, the invoice figure is due for payment within 14 calendar days of the delivery of goods and/or services. Interest on payment arrears shall be levied at the rate of 5 percentage points above the prevailing basic rate of interest as defined in Section 247 of the German Civil Code [BGB] and for businesspeople at the rate of 8 percentage points above the prevailing base rate defined in accordance with section 247 BGB. EMIS reserves the right to apply an even higher rate of interest on arrears. (3) EMIS is not obliged to accept bills of exchange or cheques. In cases where EMIS accepts a bill of exchange or a cheque, this will only be accepted on account of performance The customer must pay all pre-empt fees and cash discount charges and the tax on exchange of goods together with the invoice amount. EMIS provides no assurance over the timely presentation, raising of a protest and returning of a bill of exchange in the event of it not being encashed. (4) For payments of all kinds, fulfillment does not occur until EMIS has cleared funds in its account. (5) EMIS shall not be bound by any declarations from the customer to the effect that payments must be made in a certain way. (6) The customer is only entitled to offset receivables against payments pending if the customer's receivables are undisputed or have been established in a court of law, and provided that any such offset shall be announced to EMIS 14 days before payment is due. Furthermore, the customer only has the right to withhold payment if the counter claim results from the same contractual relationship.

§ 7 Delivery, installation and assembly The following provisions apply to every kind of service that EMIS delivers to a customer, unless otherwise agreed: 1. The customer must provide the following at his own expense, and in a timely manner: the auxiliary teams of staff such as handymen and skilled workers with the tools required to do their jobs, in the correct number, required for proper acceptance and performance of on-site EMIS services, in particular earthwork, foundations, building, cutting, scaffolding, plastering, painting and other ancillary tasks not normally associated with this sector, together with the specialist and auxiliary staff, building materials, auxiliary materials and other materials, the sundries and miscellaneous items needed for the assembly and commissioning work in relation to power, water, compressed air and other media used at that location and including the requisite connections, heating and lighting, sufficiently large, dry and lockable rooms and appropriate work and leisure rooms for the assembly operatives with space at the installation location for the storage of machine component, items of apparatus, materials, tools etc., and also to include appropriate sanitary facilities; furthermore, the customer is obliged to provide the same level of on-site protection for the property of EMIS and the assembly personnel as he would for items in his own possession, to provide 7 protective clothing and guards that may be required by unusual circumstances on the installation site and that are not in common use by the contractor in this sector. 2. Before starting installation work, the customer must provide the required details of all concealed on-site electricity cables, gas lines, water pipes or similar facilities together with their associated structural details, and must do so without needed to be called upon to do so. 3. Before starting a delivery with installation or assembly, the customer must take steps to ensure that the additional items and objects needed by EMIS to perform this work are all present and correct on the installation or assembly site, and that all masonry, carpentry and other preliminary tasks are at such an advanced stage when construction work commences that EMIS is able to commence with its contractually agreed installation or assembly work, and can continue through to completion without interruption. Approach roads and the installation and assembly location must be on level and cleared ground. 4. In the event of installation, assembly or commissioning work being delayed by circumstances over which EMIS has no control, the customer is obliged to meet the resultant additional cost to EMIS to a commensurate extent, in particular for time lost waiting as well as additional journeys required by EMIS or by its assembly personnel. 5. The customer must provide the assembly personnel of EMIS with written and certified evidence of their working hours, and must also provide the assembly personnel of EMIS with written certification on completion of installation / assembly / commissioning work, and must do so without delay. 6. EMIS is not liable for additional work carried out by its employees or by its sub-contracted staff provided that this work is not associated directly with delivery / installation / assembly (at least to the extent that no prosecutable action can be detected), or where that additional work was carried out further to a direct instruction from the customer. 7. If EMIS has agreed to perform the installation or assembly work against an individual calculation, the following provisions then apply: The customer remunerates EMIS on the basis of the billing rates for working time agreed when the order was placed as well as for premium rates applicable to overtime, night-time hours, Sundays and public holidays, as well as for work under arduous conditions as well as for planning and surveillance. Furthermore, EMIS shall be reimbursed separately for travel costs, for the costs of transporting tools, personal luggage and the allowance for rest days and public holidays. 8. Objects supplied by EMIS shall be accepted by the customer, even if they manifest signs of minor damage in transit.

Section 8 Transfer of risk / Acceptance (1) For deliveries from EMIS without installation or assembly, risk is transferred to the customers even in freight-free delivery cases, once the object being delivered has been handed over to the person entrusted with its transport and no later than the time when the object being delivered has left the production facility or warehouse, even in cases where partial deliveries are being made. (2) If shipment, delivery and the start or implementation period for installation and/or assembly is postponed at the customer's request or is delayed for reasons over which EMIS has no jurisdiction, the risk is transferred to the customer throughout the period of any such delay or postponement. However, EMIS is obliged if the customer so requests, and at the customer's expense, to arrange for any forms of insurance cover that the customer may demand. (3) The customer is obliged to accept factory goods or services immediately. Acceptance is always based solely on the end results owed. (4) The customer shall notify EMIS in writing within 14 working days of receipt of factory goods or services as to whether these have been recognised as contractually compliant, or must advise EMIS immediately and no later than within the aforementioned period of time of any specific defects, with a precise description of each. Failure to do so will mean that acceptance is deemed to have been forthcoming. Acceptance is deemed to have taken place if the goods or services supplied enter use, and if necessary after conclusion of a test phase agreed in writing. (5) In the event of minor defects, the customer is not entitled to refuse acceptance nor refuse to accept delivery of goods or services. (6) If it is has been agreed expressly and in writing that a formal acceptance test should take place, the customer is obliged to accept the goods or services involved and to issue EMIS with written acceptance certification. The customer is obliged to perform the formal acceptance procedure immediately. The provisions of sections 8 (3) to (5) of this TCB apply accordingly. (7) EMIS can demand interim acceptance tests of interim and partial deliveries of goods and services provided that constitutes a basis for the delivery of further goods and services. The provisions of sections 8 (3) to (6) of this TCB apply accordingly to interim and partial acceptance procedures.

Section 9 Retention of title (1) EMIS retains title to the items delivered until such time as full and final payment of all receivables from a contract has been made, also in respect of all future deliveries, and also if EMIS does not specifically call for this to be done. EMIS is entitled to take back the supplied goods or services if the customer infringes the contract. (2) The customer is obliged, until such time as title has been transferred to him, to treat the goods and services supplied by EMIS with due care and attention. In particular, the customer is obliged to insure them at his own cost against theft, fire and water damage on an old-for-new basis. If maintenance and service work needs to be carried out, the customer must arrange for this at his own expense. (3) Until such time as title has been transferred, the customer is not permitted to entail the goods or services delivered, nor to use them as collateral to secure credit. The customer must advise EMIS immediately and in writing if a delivered item has been entailed in the above manner, or made available as collateral to any form of intervention from third parties. Unless the third party is able to refund us the judicial and extra-judicial costs of such a claim in accordance with Section 771 ZPO, the ordering party shall be held liable for the loss incurred. (4) In the event of contractual violations by the customer, in particular with reference to payment arrears, EMIS is entitled to take back the goods or services, and the customer is obliged to return them to EMIS. After their return, EMIS is entitled to dispose of them as it sees fit. EMIS shall carry out that disposal properly and shall add to the liabilities of the customer the difference between the proceeds of a disposal sale and the disposal costs incurred at a commensurate rate. (5) The customer is entitled to sell on any consignment goods in the course of normal everyday business. The receivables of the customer from the sale of consignment goods are being settled now to EMIS at the level of final invoice amount agreed with EMIS (including value-added tax). This assignment applies irrespective of whether the sale item has been sold on before or after processing. The customer shall still be entitled to the collection of these receivables after the assignment. The right of EMIS to collect these receivables itself is not affected by this. However, EMIS commits itself not to collect the receivables as long as the customer meets its obligation to pay from the received revenues in accordance with the agreement, is not in default and in particular, if no application for opening insolvency proceedings has been made and/or cessation of payment exists. (6) The intended processing or reconstitution of the services/goods from EMIS is performed by the customer in the name of and on behalf of EMIS. In this case, the rights of EMIS continue to apply to the reconstituted item. If the item is processed using other objects that do not belong to EMIS, EMIS acquires shared title to the new item as a proportion of the objective value of products and services provided by EMIS to the other processed objects at the time such processing takes place. The same applies in the case of mixing. If mixing takes place in a manner where the item of the customer is then viewed as the primary object, the agreement stipulates that the customer must assign a proportion of the title to those goods to EMIS, thereby preserving sole or shared title for EMIS. To protect the receivables of EMIS in favour of the customer, the customer shall also assign such receivables to EMIS that proceed from the connection of consignment goods to a plot of land in favour of a third party; EMIS already accepts this assignment at this time. (6) To the extent that the sum total of all secured values belonging to EMIS exceeds the total of all secured claims by more than 10 percent, EMIS shall release a corresponding share of those secured values to the customer when the customer requests this. EMIS is free to choose which securities to release.

Section 10 Liability for defects and notification of defects (1) EMIS can decide whether to rework all goods and/or services free of charge, to supply or implement new replacement items free of charge that prove to be defective during the statutory period of limitation without regard to the length of time in operation, provided that the cause of defect predates the transfer of risk. (2) Product-related defects have a 12-month statutory period of limitation. This does not apply in cases where legislation in accordance with sections 438 paras. 1 no. 2 (building works and assets for building works), 479 para. 1 (recourse action) and 634a para. 1 no. 2 (construction defects) BGB stipulates longer limitation periods. Nor does it apply in cases where fatal or serious injury or harm to health results from deliberate intent or a grossly negligent violation of obligations by EMIS and in the event of deliberate concealment of a known defect. This does not affect the legislative provisions governing the suspension of the statute of limitations, suspension or recommencement of the limitation periods. (3) In all cases, the customer is obliged to investigate the goods/services supplied by EMIS immediately after delivery and, if a visible defect is detected, to notify EMIS immediately and in writing - although by no later than within 3 days - of receipt of the goods or services. In cases where a defect of this nature is not immediately apparent, the customer must notify EMIS immediately and in writing following discovery of the defect. If the customer fails to notify EMIS in a timely manner and in writing, the goods/services from EMIS shall be deemed to have been approved unless some inalienable legislative provision opposes this. (4) In cases where the customer has notified a product defect properly and in accordance with section 10 (3) of this TCB, EMIS shall be given an opportunity to choose either to rework the item or to supply replacement goods or services within a reasonable period of time. Rework or replacement by EMIS shall not be deemed to have failed until after the second unsuccessful attempt by EMIS to take remedial action. The fact that an attempt to effect a remedy through rework or replacement has failed must be notified by the customer to EMIS immediately and in writing. Section 10 (3) of this TCB applies accordingly. (5) In the event ultimately of remedial work by EMIS failing, the customer is entitled, without prejudice to his rights to any compensation claims - unless this is expressly excluded – to withdraw from the contract or to reduce the level of remuneration due. (6) Claims from the customer in relation to the expenditure necessarily incurred in the course of remedial work, in particular in respect of transport, travel to work, labour and material costs, are excluded to the extent that expenditure increases because the object of delivery is moved retrospectively to a different location than the subsidiary of the customer, unless this relocation corresponds to its original intended use. (7) In the case of notifications of defects, payments can only be retained by the customer to the extent that they represent a reasonable proportion of the cost actually incurred by those defects. The customer is only entitled to withhold payments if a defect notification can be upheld, and over which there is no doubt as to its authenticity. If a notification of defect is found to be unlawful, EMIS is entitled to demand reimbursement from the customer of any expenditure incurred by EMIS. (8) Defect-related claims do not apply to minor deviations from agreed properties where the use of the item is only slightly impaired, nor to natural wear and tear or to damage caused after the transfer of risk by incorrect or negligent handling, excessive stresses and strains, inappropriate tooling, defective construction work, an unsuitable construction site or special external factors not anticipated by the contract, and to non-reproducible software defects. If inappropriate modifications or repair work is performed by the customer or by third parties, no defect-related claims can be applied for these, nor for resultant secondary damage. (9) More extensive claims by the customer than those covered in section 10 of this TCB against EMIS and its agents as a result of a material defect are excluded unless liability can be established on the grounds of a violation of contractual obligations founded upon deliberate intent or gross negligence or where fatal or physical injury or harm to health occurs, or because a guarantee of assured properties has been taken out. These provisions are not associated with any change to the burden of proof to the detriment of the customer.

Section 11 Defective titles The provisions of section 10 of this TCB applies to any instance of defective title.

Section 12 Liability (1) EMIS has unlimited liability for any fatality, physical injury or harm to health for which it is responsible and shall provide an amount of up to €500 000 by way of restitution for each individual incident where it is found liable for such damages. In cases where damage is incurred by data carrier materials, the obligation to replace does not cover the cost of restoring lost data and information. (2) More extensive damage-related and cost claims from the customer, arising from whatsoever legal grounds, in particular in relation to the violation of contractual obligations and from unauthorised handling, are excluded. This does apply to cases opposed by compelling liability stipulations, e.g. in accordance with product liability legislation, in cases of deliberate intent, gross negligence, the acceptance of a guarantee for the properties of a material item, due to a deliberate failure to disclose the presence of a defect or due to the violation of key contractual obligations. Compensation claims in relation to damages and expenditure associated with the violation of key contractual obligations are however limited to the extent of damage typical for and to be expected from this type of contract, except in cases of deliberate intent or gross negligence. (3) To the extent that a customer is entitled to damage-related and expenditure-related compensation claims in accordance with the provisions of section 12 of this TCB, those claims shall be subject to the applicable statute of limitations for compensation claims defined in section 10 (2) of this TCB. This does not apply to deliberate intent, gross negligence, fatality, physical injury or harm to health nor to any intentional concealment of a defect, nor to claims associated with product liability legislation.

Section 13 Assignment (1) Any assignment by the customer requires the written consent of EMIS. An assignment by the customer does not impact upon EMIS until EMIS has received written notification to this effect. (2) For any such assignment to be valid, the new creditor is obliged to issue the following written statement, in accordance with section 13 (1) of this TCB: “I recognise that fulfillment of receivables can only be claimed upon the basis of contractual provisions, that objections can be lodged against me in accordance with section 404 BGB that were applicable to the previous creditors at the time of the assignment, that off-setting with counter-claims is permitted within the limits defined in section 406 BGB and that any further assignment undertaken by myself is not effective on the customer”. (3) Assignments from several orders must be notified separately to EMIS by customers for each of those orders.

Section 14 Applicable Law and Jurisdiction (1) On the contract, exclusively German Law is provided for, excluding all other reference standards. Application of the United Nations Convention on the International Sale of Goods is excluded. (2) Lübbenau is the place of execution. Provided that the customer is a business entity as defined in Germany's HGB, the court of jurisdiction for all disputes arising from this contract between EMIS and Lübbenau is Lübbenau. EMIS is also entitled to press charges against the customer at the court of law with jurisdiction over the customer's head office location.

Section 15 Relationship between the TCB of EMIS to the "General Terms & Conditions of Delivery for Products and Services from the Electrical Industry" (1) To the extent that the General Terms & Conditions of Business of EMIS and the General Terms & Conditions for Products and Services for the Electrical Industry contain divergent provisions, the EMIS General Terms & Conditions of Business shall have priority. (2) In addition to these General Terms & Conditions of Business of EMIS, the General Terms & Conditions for Products and Services for the Electrical Industry shall also apply.

§16 Severability clause / Requirement for the written form / Side-agreements (1) In the event of individual provisions of this TCB ceasing to be applicable or proving to be impossible to enforce, this shall not affect the validity of the remaining provisions. Ineffective provisions, or provisions that cannot be enforced, shall be replaced on a mutually agreed basis with effective provisions, or with ones that can be enforced, and these replacement provisions shall reflect as closely as possible the business purpose of the ineffective or unenforceable provisions they replace. (2) To be valid, changes and additions to these General Terms & Conditions of Business must be made in writing. This also applies to the provision governing the written form. No verbal side-agreements exist.

In June 2006 EMIS Electrics GmbH

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