General Terms and Conditions of Sale

1. Scope

Any and all our supplies shall exclusively be subject to these General Terms and Conditions of Sale. Unless expressly agreed in writing we shall not accept Purchasers conflicting or deviating terms of purchase. These General Terms and Conditions of Sale shall not apply where supplies and services shall be made in full knowledge of and without reservation to such conflicting or deviating terms of Purchase. Where Purchaser’s terms of purchase shall be agreed in writing these General Terms and Conditions of Sale shall apply subsidiary.

2. Offer and Related Documents

2.1 Unless otherwise stated in our written order confirmation all our offers shall be made without engagement and shall be subject to change without notice. Any documents related to such offer, such as preliminary cost estimates, drawings, measures and weights shall be appropriate information only and we retain all titles and proprietary rights to any of such documents. Such document shall not be made public or available to any third Party. The fore-going shall apply in particular to any such written documents marked “Confidential”.

2.2 Where the purchase order may be qualified as a firm and binding order we shall be free to issue an order acceptance within 1 week after receipt of the order. Any purchase orders shall only be deemed accepted when confirmed in writing.

3. Scope of supplies and Services

3.1 The scope of supplies and services shall exclusively be governed by our written order confirmation.

3.2 Any supplies shall be made in accordance with the recognized state-of-the-art and in accordance with our engineering data and the in-house factory standards of our manufacturing factories. It complies with the standards of our manufacturing factories. It complies with the standards of our valid for lifts at the time of submission of offer.

3.3 The approval documents necessary for inspection of the machinery of the installation by notified bodies as well as operating instructions shall be delivered. Construction drawings shall not be included in the scope of supplies and services.

3.4 The Purchaser shall be responsible to obtain knowledge of all applicable statutory requirements related to the operation of elevators, escalators, passenger conveyors and conveying systems and their respective components, We shall not take into account any instructions imposed by the licensing authorities unless we shall be informed in due time and confirm such instructions in writing.

3.5 Partial deliveries shall be permitted and may be invoiced separately.

4. Period for Supplies and Services

4.1 The period for supplies and rendering services shall commence on the date of our order confirmation. However, not before clarification and approval of all details related to the manufacturing of such supplies and services by the Purchaser and our receipt of information by an international first class bank that a letter of credit has been opened. Should the Purchaser fail to comply with his obligations under this or other contract, the period for supplies and services shall be deemed to have been met, if the goods have left our plant prior to its expiry or if notice has been given in writing that the goods are ready for shipment.

4.2 The period for supplies and services shall be reasonably extended in the event of Force Majeure or other unforeseeable circumstances beyond our direct control, irrespective of whether such circumstances shall occur in our plant or at our supplier’s plant. We shall not be liable for circumstances, even we shall inform the purchase as soon as possible of begin and end of said circumstances. If supply or delivery shall be rendered permanently impossible or unreasonable due to Force Majeure or other unforeseeable events we shall finally be relieved of our delivery obligations.

4.3 Should delivery be delayed due to reasons attributed to grant us a reasonable additional grace period and threaten refusal of offer. Should such additional period of time have ineffectively expired the Purchaser shall be entitled to cancel that part of the contract which is in delay. Any further liability on our part should be excluded, subject to section 9 hereunder unless a time bargain is concerned.

5. Shipment and Risk

5.1 Unless otherwise agreed the Purchaser shall decide on the forwarding agent or carrier. On delivery of the goods at the destination agree upon (receiving room of Purchaser) the risk passes to Purchaser, even in the case of partial deliveries of delivery of additional services (INCOTERMS 2000). Should transport to the site of erection also be part of the order confirmation the Purchaser shall see to it that the necessary space and technical pre-conditions are guaranteed.

5.2 Passing of the risk for spare parts or partial deliveries shall take place ex-works (“EXW” acc. to INCOTERMS 2000) Packaging materials for transportation and all other types of packaging materials in accordance with the packaging instructions cannot be returned to us except for pallets .The Purchaser is obligated to dispose the packaging material at his own expense.

6. Price and Terms of Payment

6.1 Our prices shall be net sale prices excluding any statutory VAT levied at the time of delivery and shall be charged “freight free to agreed place of destination” (CPT- INCOTERMS 2000) including packing at the list prices valid at the date of delivery.

6.2 All payment including agreed pre-payments shall be paid into one of our bank accounts net without any deductions and free for charges immediately on receipt of invoice or notice to pay. The Purchaser’s payment obligations are complied with as soon as the total invoiced amount is credited to one of our bank accounts. Discount deduction is subject to special written agreement.

6.3 Where the Purchaser should fail to comply with his payment obligations in due time and subject to further rights, the Purchaser shall be liable to pay interest for delayed payment in the amount of 3% per year. Should we be able to provide evidence of actual additional damages we shall be entitled to claim such damages.

In case of delayed payments and after written advance notice to the Purchaser we further reserve the right to suspend contractual works and/or to refuse further deliveries as well as to effect and perform open supplies and services only against advance payment or securities. We may further prohibit any resale or processing of the delivered goods and require the return thereof at Purchaser’s expense. At any time we shall be entitled to the usual securities for our claims even if such claims should be conditional or deferred only.

6.4 The Purchaser may offset or retain rights only in so far as his counterclaims shall be undisputed or accepted by us in writing.

7. Retention of title

7.1 Title to all our delivered goods shall be retained (conditional goods) until each and every existing or future claim of us, irrespective of the legal grounds thereof, which originates from the purchased goods and in particular the respective balance claims shall be duly satisfied. Until then and immediately after passing of the risk the Purchaser shall be responsible to handle the delivered goods with due care, to take out insurance cover against fire, theft and water damage and to have performed at his own expense any appropriate maintenance and inspections. The same applies to partial claims already performed.

7.2 In the event that the Purchaser should combine conditional goods with movable items we shall acquire joint ownership in the new item at the same ratio of the invoice value of the conditional goods calculated against the invoice value of other items. Where our ownership should cease due to combination of our conditional goods with a real estate or a building we shall be entitled, to any resulting claims against the owner of the real conditional goods calculated against the invoice value of the other items. Where our ownership should cease due to combination of our conditional goods with a real estate or a building we shall be entitled, to any resulting claims against the owner of the real estate or building apart from our other contractual or statutory rights against the Purchaser.

7.3 The Purchaser shall only be entitled to resell the conditional goods in the normal course of business and only if he is not in default with his payment obligations, provided however, that any claims originating from such resale shall not be entitled to any other disposal of the conditional goods.

Any claims of the Purchaser originating from the resale of conditional goods or from their use within a contract for or a contract for work and materials shall automatically be transferred to us upon coming into force of this contract. Until revoked at any time the Purchaser shall be entitled to collect claims originating from the resale or use according to the foregoing subsection. In no event shall the Purchaser shall immediately inform his customers of the assignment to us and shall immediately inform his customers of the assignments to us and shall provide us with all information and documents required for the collection.

7.4 We shall be entitled to take back the conditional goods if the Purchaser fails to comply in time with any of his contractual obligations, in the event of suspension of payments, petition for bankruptcy or application for composition over the Purchaser’s assets or in the even that we entertain reasonable doubts concerning Purchaser’s solvency or financial standings. Taking reponssession of the conditional goods shall not imply our canceling the contract unless expressly declared so in writing.

7.5 Upon Purchaser’s request we undertake to release our securities to the extent that the realized value of our securities shall exceed the secured claims by more than 20%. We shall be absolutely free to decide which of the securities shall be released.

7.6 In the event of attachment or other interference by third Parties the Purchaser shall immediately inform such third Party of our ownership rights, inform us without delay in writing and provide and appropriate information and documents.

8. Warranty

8.1 We warrant that our delivered goods shall be free from defects in material or workmanship at the time of passing of the risk which significantly reduce the value or fitness of the goods and, if appropriate, that the goods shall enjoy any written expressively assured characteristics or guaranteed qualities. In the event of trade-off our warranty only covers new components delivered by us. Technical data, specifications and quality specifications furnished by us shall, however, not constitute representations or assured characteristics unless expressly confirmed as such in writing.

8.2 In the event of a proven warranty obligation under subsection 8.1.of which the Purchaser has immediately informed us in writing, we shall at our option, either repair or replace the defective item within a reasonable time period. Replace the defective item within a reasonable time period. Replace items shall become our property. In the event of elimination of warranty defects we shall only pay the costs incurred for any additionally arising costs except for any additionally arising costs caused by taking the defective item to a place other than the place of delivery performance. We assume the same warranty obligation for replaced items or for repairs as for the originally delivered goods, however, in no case shall the warranty period exceed 6 months after expiry of the warranty period for the defective item.

Should within such additional period of time as granted by the Purchaser in writing our attempts to repair the defective items fail, the Purchaser shall be entitled either to cancel the contract or to claim a reasonable price reduction.

8.3 The warranty period for components and spare parts shall be 12 months after passing of risk.

8.4 Any warranty obligation shall be subject to an evidence of orderly erection and installation. Our warranty obligation shall be excluded in case of alteration of the delivered goods, improper performance or erection, installation, maintenance, repair works, use or if the delivered goods shall be subjected to environmental conditions not in compliance with our erection conditions, by the Purchaser or any third Party, unless the Purchaser proves that these circumstances did not cause the warranty obligation, we shall charge the costs for control and repair at our then current list prices.

8.5 Subject to section 9 hereunder any further rights of the Purchaser than those stipulated in above subsections 8.1 to 8.4 shall be excluded.

9. Liability

9.1 The Customer shall have no claim for damages against us based on whatever reason.

The above shall not apply in the case of mandatory liability, in the case of intent, gross negligence, loss of life, bodily injury of damage to health, or breach of essential contractual obligations. Essential for the contract is an obligation that principally enables the duly execution of the contract and on its compliance the Customer ay basically rely on; respectively an obligation that in case it is broken infringes such rights of the Customer that the contract according to its contract according to its content and purpose downright has to grant him. However, claims for damages arising from a breach of an essential contractual obligation shall be limited to the foreseeable damage which is intrinsic to the contract, unless it was caused by intent or gross negligence or it is based on liability for loss of life, bodily injury or damage to health. The above provision does not imply a change in the burden of proof to the detriment of the Customer.

10. Rescission

Should the Purchaser cancel the contract without being entitled to do so he shall be liable to pay cancellation charges in the amount of 8% (plus the then current statutory VAT, if any) of the agreed net order value or such higher costs as we may provide evidence for.

11. Final provisions

11.1 In the event of any clause of these General Terms and Conditions for Sale being legally invalid the remainder of such Conditions shall in no way be affected.

11.2 Any amendment to the originally executed contract as well as a revocation of the written form shall only be valid of made in writing.

11.3 This contract shall exclusively be governed by and construed in accordance with the substantive law in force.

11.4 All disputes arising from the execution of, or in connection with this Contract shall be settled through friendly negotiation. In case no settlement can be reached through negotiation, the case shall then be submitted to the Foreign Economic and Trade Arbitration Commission of the China Council for the Promotion of International Trade, Beijing.

The arbitration award is final and binding upon both Parties. Arbitration fee shall be borne by the losing Party.

During the arbitration, the agreement shall be observed and enforced by all Parties except for the matters in dispute.

SEPAC-INTERNATIONAL CO., LTD.