TERMS AND CONDITIONS OF BUSINESS

for MICHELBACH GmbH LUMI-Systems / Zirndorf

I. Scope of Application
1. The supplies, services and offers of Michelbach GmbH are subject to these terms and conditions. These apply to all future deliveries, services and offers, even if they are not expressly agreed on. These terms and conditions are applicable at the latest upon receipt of the goods or services. Contrary terms and conditions of the contractor are hereby expressly excluded.

2. Deviations from these terms and conditions shall only be effective if confirmed in writing by Michelbach GmbH. The UN contract law is expressly excluded.

II. Prices
1. Michelbach GmbH is bound to honour the quoted prices for a period of 30 days. The prices are inclusive of packaging and domestic shipping.  The type of shipping used shall be determined at the discretion of Michelbach GmbH. Installation, adjustment and commissioning are not included and are to be provided by the contract partner, unless otherwise agreed.

2. Should there be changes to the listed prices, the listed prices on the day of delivery are valid.

3. Should the contracting party not  have taken over the agreed quantities within the agreed period, the guaranteed quantity discount will no longer be valid for the entire order.

III. Payment
1. Invoices are payable within 10 days from date of invoice. The right of retention for the contracting partner is not permissible.The contracting party can at best only offset undisputed or legally established counterclaims.

2. If the contractor is in default of payment, or falls into arreas, Michelbach GmbH has the right to charge interest at the rate of 8 percent above the base rate.

3. Should, after the closing of the contract, a significant deterioration in the assets or financial conditions of the contract partner, cast doubt on the customer’s ability or, credit worthiness become known, then Michelbach GmbH retains the right to withhold the delivery or service unless such time as the contract partner offers suitable guarantees or sureties.

IV. Delivery deadlines
1. Stated delivery dates are binding. Partial deliveries are permitted and are considered separate transactions.

2. Delivery and performance delays due to force majeure or incidents and/or occurances, for which we are not responsible and, which make delivery significantly more difficult or impossible, will entitle Michelbach GmbH, to adjust the delivery/performance deadlines for the duration of the hindrance in addition to an appropriate start time. Force majeure is taken especially into consideration for material procurement difficulties, operational disturbances, strikes, lack of transportation, regulations from authories, etc., also if they affect suppliers, sub-suppliers and sub-contractors of Michelbach GmbH.

V. Limitation of Liability
1. The assignment of these claims is excluded. Unless otherwise stated below, further claims of the contract partner- for whatever reasons - are excluded.

2. Damage claims by the contract partner including infringement of a contractual obligation, arising from negligence during contract negotiations and, which are excluded from non-contractual liability, are excluded, unless the damage is either:
a) an intentional or grossly negligent breach of duty by ourselves, a legal representative or an agent or,
b) the breach of an essential contractual obligation or,
c) a defect fraudulently concealed

3. The compensation is not excluded, if this involves the loss of life, body or health.

4. If in violation of an obligation for the execution of a contractual commitment, we are not liable for damages not foreseeable when the contract was concluded and signed. Liability under the German Product Liability Act remains unaffected.

5. Even in case of impossibility or delay in delivery / performance due to negligence caused by Michelbach GmbH or any of its agents, liability is excluded. Claims for damages for late delivery / service contract shall be limited to 5% of the value of the goods and services affected. Any further claims of any kind are excluded.

VI. Retention of title
1. The goods remain the property of Michelbach GmbH until such time as full settlement of all claims on the contract partner have been settled.

2. The contract partner may neither pledge the goods nor assign them as security. The contract partner is entitled to resell the goods in the ordinary course of business, unless he already had a claim on his contract partner in advance to effectively assign with a third party, or has agreed to a prohibition of assignment with a contract partner.

3. In the case of a combination or integral mixing of the reserved goods with other items, of these goods not belonging to us, we will acquire joint ownership of the new items in proportion to the value of the goods (final invoice amount including VAT) and other related items at the time of the connection. If the items of the contract partner are to be seen as the main item as a result of the connection, the contract partner and we agree that a proportion of these items is to be transferred to us. The transfer will be hereby accepted.

4. The contractor shall now, with immediate effect, assign to us all future claims from a resale of our goods to the value of our goods (final invoice amount including VAT) with priority over the remainder of his claims to secure our claims.  Should the contract partner sell of our products, together with goods not belonging to us, or create, manufacture or combine our products, or integrate our goods to a property, or install our goods on a property, or connect our goods with external, movable items, so that he can lay a claim, which covers his standard scope of service, he assigns as collateral security for our claims, to the value of the goods (final invoice amount including VAT), this claim having priority over the remainder of his claims.  The assignment is hereby adopted. The contract partner is authorized, subject to revocation, to collect the receivables assigned to the contract partner. With the cessation of payments, the right to resell or installation of the reserved goods ceases and entitles us to collect the assigned claim.

5. The contractor may neither assign his claims to his own contract partners or contractors to the amount of our claim (invoice amount including VAT), pledge or agree to a prohibition of assignment.

6. At the request of the contract partner, we will release our total security, should  the value exceed 10% of our claim (invoice amount including VAT).

7. In the case of access by third parties to the assigned goods, the contract party shall indicate the property of Michelbach and notify Michelbach GmbH immediately. Costs and losses are to be borne by the contract partner.

VII. Transfer of risk
1. The risk, also with carriage paid deliveries, is carried over to the contracting party as soon as the goods have left  the premises of Michelbach GmbH.. If the dispatch is delayed for whatever reason due to the contracting party, the risk of the confirmation to deliver, passes over to the contracting party.

2. At the written request of the contractor, the goods shall be insured at his expense, and after appropriate advance payment against breakage, transport and fire damage.

3. Shipping regulations are observed by Michelbach GmbH, the company, Michelbach GmbH, however, assumes no liability for the cost effective shipping method.

VIII. Guarantee
1. In deviation from the statutory obligation Michelbach GmbH grants a guarantee period of 12 months, especially for faulty design, poor materials, poor workmanship, which make the equipment unusable or significantly affect its usefulness. The warranty period begins when installation of the system with the putting into use by the contracting party. This does not apply if there is construction work within the meaning of § § 438 I No. 2, 634 a No. 2 BGB is, in these cases, the statutory warranty period is valid.

2. The determination of the defects must be made promptly and in writing to Michelbach GmbH. By the infringement of the obligation to examine and give notice of defects, Michelbach GmbH is released from any warranty. This does not apply where construction work is the subject matter.

3. The warranty includes the option of Michelbach GmbH to offer repair or replacement. During the warranty period, the contracting party can either rescind the contract or demand a replacement for failure to repair. The right of rescission does not apply if construction work is the subject matter hereof.

4. If the contractor, or third party, without prior consent of Michelbach GmbH makes inappropriate changes or repairs, the liability for the consequences arising therefrom shall be repealed.

5. Michelbach GmbH expressly points out that for the functioning of the system, maintenance is required and the closing of a maintenance contract is offered.

IX. Copyright and intellectual property rights
The copyright and intellectual property rights belong solely to Michelbach GmbH.
Provided pictures, diagrams or other documents remains the property of Michelbach Ltd. Reproduction is permitted only with permission of Michelbach GmbH, and must clearly indicate the source of evidence.

X. Return of Goods
The contracting party, is, only with the express written consent of Michelbach GmbH, entitled to return the goods if duly and appropriately delivered. In this case, Michelbach GmbH is entitled to claim a processing fee of at least 10% of the final invoice. The contractor has the opportunity to prove minor damage. The same applies in the case that Michelbach GmbH releases itself from the contracting party for whatever reason.

XI. Place of Performance
Jurisdiction and Severability of fulfillment and jurisdiction is Nuremberg, unless the contractor is a consumer according to § 13 BGB. The ineffectiveness of individual provisions shall not affect the validity of the remaining provisions.

XII. Severability Clause
If any of these Terms and Conditions are determined to be illegal, invalid or otherwise unenforceable by reason of the laws of any state or country in which these Terms and Conditions are intended to be effective, then to the extent and within the jurisdiction which that Term or Condition is illegal, invalid or unenforceable, it shall be severed and deleted from this clause and the remaining terms and conditions shall survive, remain in full force and effect and continue to be binding and enforceable.

Zirndorf, June 2007