UNIFYING OPERATIONS: Control Room Upgrade for Tobacco Manufacturing

1. GENERAL: These terms and conditions, together with those set forth in any written purchase order (“Purchase Order”) with DSI Innovations, LLC (“Seller”), shall apply to the Contract (as defined below) and shall constitute the sole terms and conditions governing the Contract.  These Terms and Conditions may not be modified or changed unless such modification or change is in writing signed by an authorized officer of Seller. If there is any conflict between these terms and conditions and the Purchase Order, these terms and conditions shall control.
2. OFFER: Buyer may offer to purchase goods from Seller by submitting a Purchase Order and these Terms and Conditions signed by Buyer to Seller.  Unless otherwise specified by the Seller in writing to Buyer, the terms of any Purchase Order submitted by Seller for Buyer’s consideration expire in thirty (30) days from the date of the Purchase Order.
3. ACCEPTANCE: The issuance of a Purchase Order and these Terms and Conditions by Buyer to Seller does not constitute a binding contract unless and until accepted, in writing, by Seller. The Purchase Order and these Terms and Conditions signed by Buyer and Seller shall constitute the Contract. These Terms and Conditions shall apply to the Contract regardless of whether they are specifically referenced in any Purchase Order.
4. PAYMENT TERMS
   1. See Pricing and Delivery section of proposal for billing and payment terms

Overdue invoices for Contracts covered by this section 4(b) are subject to late charges of 1.5% per month of the unpaid amount. Labor rates in Contracts covered by this section 4(b) for engineering, fabrication, and installation are those reflected in the Purchase Order.

1. For all Contracts, Buyer expressly grants to Seller a purchase money security interest in goods sold under the Contract in the amount of their purchase price. This security interest will be satisfied by Buyer’s timely payment in full. If Buyer defaults on any of its obligations, Seller shall have the right to repossess the goods sold under the Contract from Buyer without liability to Buyer. In such event, Buyer agrees to make the goods sold under the Contract available so as to enable Seller to repossess them without a breach of the peace. Seller may file the necessary paperwork to perfect its security interest at any time and Buyer shall cooperate fully to enable Seller to perfect its security interest.
2. All Contracts shall be on a fixed price basis as set forth in the Purchase Order and consistent with the scope of work in the Purchase Order. Additional materials will be invoiced at cost plus 15%, additional travel expenses will be billed at cost plus 5% (airfare, car rental, etc…), additional meals and lodging will be billed at $200 per diem, and mileage will be billed at $0.65 per mile.
3. For all Contracts, overdue invoices may lead to termination of the Contract by Seller.

5. DELIVERY AND SHIPPING: Seller shall deliver the goods as set forth in the Contract.  Buyer shall bear the cost of freight, insurance and any delivery costs.  Title and risk of loss shall remain with Seller until shipment, and passes to Buyer at the time of shipment to Buyer. All final freight charges are the responsibility of the Buyer and are not included in the Contract price terms unless expressly stated otherwise.  All freight is FOB origin.
6. LIMITED WARRANTY: Seller warrants, for the Warranty Period (as defined below), the products purchased pursuant to the Contract to be free of defects in design and workmanship according to the specifications agreed to in the accepted Contract, or in the designs approved by Seller, if applicable; provided, however, that the foregoing limited warranty shall only apply to the extent the products are used for the applications for which the products are designed, and provided, further, that ordinary wear and tear is excepted from the foregoing warranty.  For purposes hereof, the “Warranty Period” shall cover a period of one year from date of delivery. If Seller breaches the foregoing warranty, Buyer’s sole remedy is either: a) the “no charge” replacement or repair, at Seller’s sole discretion, of the products that fail during the Warranty Period and are covered by Seller’s warranty; or b) Seller’s return of the purchase price of each defective product which is covered by Seller’s warranty and returned to Seller within the warranty period and which Seller determines in its sole discretion to be defective in workmanship.  Replacement labor, if any, will be provided according to Seller’s published rates.  Seller shall also pass on to Buyer, as permitted, any component manufacturer’s warranties as the sole and exclusive warranty as to such warranted components, and there is no Seller’s warranty for such warranted components. All claims for breach of warranty must be received by Seller no later than thirty (30) days after the expiration of this limited warranty. THE LIMITED WARRANTY IN THIS SECTION IS THE ONLY WARRANTY GIVEN BY SELLER, AND BUYER RECEIVES NO OTHER WARRANTY EITHER EXPRESS OR IMPLIED. ALL WARRANTIES OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE OR USE, AND ALL IMPLIED WARRANTIES OF TITLE FOR ANY CONSIGNED OR BUYER SUPPLIED MATERIALS, ARE EXPRESSLY DISCLAIMED AND EXCLUDED. THERE ARE NO WARRANTIES WHICH EXTEND BEYOND THE DESCRIPTION ON THE FACE HEREOF.
7. TAXES, LICENSING, PERMITS, OR FREIGHT – Buyer shall be responsible for any local, state, or federal taxes (including but not limited to sales and use tax) permits or licenses required with respect to the Contract. No taxes are included in the Contract price terms unless expressly stated otherwise. 
8. REGULATIONS: Buyer has the responsibility to ensure that its specifications meet applicable regulatory requirements and to effectively communicate those requirements to Seller.
9. EXCUSABLE DELAY- Seller shall not be in breach of its obligations under the Contract, or liable for damages arising from delays in delivery or failure to perform due to causes beyond the Seller’s reasonable control, including, without limitation, acts of God, acts of third parties, judicial action and strikes or other labor disputes.  Seller shall notify Buyer in writing of the cause of such delay within ten (10) days from the date that the Seller becomes aware of the delay.  Following such notice, to the extent applicable, Seller will provide a description of work-around plans, alternative sources or other means the Seller could utilize to prevent or minimize any delay in the performance of the obligation; provided, however, that Seller shall not be liable if it is unable to provide alternate sources for the products or for any liability caused by such delay.  In the event of an excusable delay, the Buyer and Seller shall agree on any reasonable delay to the completion of the Contract.
10. INEXCUSABLE DELAY-Should Buyer require Seller to delay delivery of the goods greater than thirty (30) days from the delivery date specified in the Contract, Buyer shall pay Seller a storage fee of 5% of the Contract price per month for storage of the goods. Additionally, should Buyer require Seller to delay delivery of the goods greater than thirty (30) days from the delivery date specified in the Contract, Seller may terminate the Contract as permitted under Section 24(a).
11. LIMITED LIABILITY: Except as otherwise stated in the Contract, Seller shall not be liable to Buyer for any special, indirect, incidental or consequential damages, lost profits, punitive damages, attorneys’ fees, costs or expenses arising out of or in connection with the Contract or with claims brought by third parties, or any indemnifications granted by either Buyer or Seller in connection with the Contract.
12. INSURANCE – If Seller performs any labor on Buyer’s premises under the Contract, Seller agrees to have Seller’s employees covered by Workers’ Compensation in statutory limits as well as employees’ automobiles covered by liability and property damage insurance.  Single occurrence liability insurance will be carried for the duration of the job in the amount of   $1,000,000.  A certificate of insurance will be forwarded to Buyer prior to the start of work.
13. JOB SITE – If Seller performs any labor on Buyer’s premises under the Contract, Buyer shall provide, at no charge, work and job site conditions for the Seller that are conducive to the Contract’s success.  This includes the provision of labor and services for adequate unloading and storing of materials and equipment; a protected storage area adjacent to the work site; a clean work site uncluttered with unnecessary equipment, materials, or other debris; reasonable access to required areas and personnel, especially during off-shift hours; uninterrupted scheduling; necessary facility improvements outside the scope of work; necessary utilities, including electrical power; and coordination of freight and carriers. Buyer is responsible for all damage, liability and demurrage that results from the failure of the Buyer to provide the above resources, labor, and services.  Seller agrees to clean the premises of waste materials or debris resulting from the Seller’s or Seller’s subcontractors work efforts, leaving the area broom clean at the completion of the work.  It is understood that waste and shipping materials may be disposed of on site.  Pricing does not include provision or permits for off-site carting and dumping of waste materials, which shall be at Buyer’s sole cost and expense.
14. WORK WEEK – If Seller performs any labor on Buyer’s premises under the Contract, field work is normally based on a forty (40) hour week, Monday through Friday, unless otherwise specified in the Contract.  Standard work week hours are 9:00 a.m. – 5:00 p.m.  Seller reserves the right to supervise the orderly execution of the work.  Any overtime incurred at the request of Buyer, or caused as a result of Buyer’s negligence in notifying Seller of schedule changes, will be paid by Buyer in addition to the purchase price in the Purchase Order. 
15. WORK SCOPE ADDITIONS – If following any accepted Contract, Buyer wishes to request additions to or amendments of the work scope of a Contract, Buyer shall do so in writing to Seller.  Seller will provide a change order proposal with respect to the requested change and advise Buyer of the cost.  A change order shall be effective only if in writing and signed by both Seller and Buyer. Buyer assumes all responsibility for unseen delays that result from change orders and will hold Seller harmless from damages for such delays. 
16. DEBUG/RUN-OFF.  Buyer acknowledges that during any debugging or run-off phase by Seller with respect to goods purchased under a Contract, Buyer may provide to Seller certain specifications of its equipment and/or parts (including, without limitation, a pallet, container or parts) (the “Buyer Provided Products”) in furtherance of such debugging or run-off (whether at Buyer’s or Seller’s place of business).  Buyer shall be responsible for all costs and expenses incurred with respect to (i) the shipment of Buyer Provided Products to Seller and (ii) the return of the Buyer Provided Products to Buyer, as applicable. If the parties agree, Seller will dispose of the Buyer Provided Products, but such shall be at Buyer’s cost and expense.  Buyer further acknowledges and agrees that Buyer Provided Products may be damaged during the debugging or run-off process and/or the related shipment of Buyer Provided Products to and from Seller, and Buyer expressly acknowledges and agrees that Seller is not responsible or liable for any such damages, all of which shall be borne by and at the risk of Buyer.
17. ENTIRE AGREEMENT. These Terms and Conditions, together with the Purchase Order(s), constitute the Contract and cover the entire agreement between Buyer and Seller and may not be amended unless in writing by Buyer and Seller. 
18. ENFORCEABILITY.  If any one or more provisions of the Contract shall be found to be illegal or unenforceable in any respect, the validity, legality and enforceability of the remaining provisions shall not in any way be affected or impaired thereby.
19. WAIVER: Seller’s failure to exercise, in whole or in part, or delay in exercising any right under the Contract, shall not preclude Seller’s future exercise of the same right or the exercise of any other right under the Contract.
20. AUTHORITY: Buyer warrants that it has the unqualified right to enter into the Contract and that it has the right to perform all obligations under the Contract. Any individual signing the Contract on behalf of Buyer warrants that he or she has the authority to do so on behalf of Buyer.
21. INDEPENDENT CONTRACTORS.  Nothing in the Contract shall be construed to create any partnership, joint venture or agency relationship of any kind.  Except as expressly set forth in the Contract, neither party has any authority under the Contract to assume or create any obligations on behalf of or in the name of the other party, or to bind the other party to any contract, agreement or undertaking with any third party.
22. NON-LICENSING. The parties understand that except as otherwise stated in the Contract, the terms and conditions of the Contract shall not be considered in any way as a grant of any license whatsoever under either party’s present or future trademarks, trade secrets, patents, patent applications, or other proprietary rights, nor is any such license granted by implication or otherwise.
23. Buyer shall defend, at Buyer’s expense, all claims against Seller for infringement or alleged infringement of present or future trademarks, trade secrets, patents, patent applications, or other proprietary rights for the goods furnished under this Contract.
24. 1. Uncured breach by either party: If either party breaches a material provision of this Contract and the breach is not cured within a reasonable period of time after receipt of written notice from the other party specifying the nature of the breach, the non-breaching party may terminate this Contract by written notice to the party in breach.
    2. Payment breach: Notwithstanding the foregoing, if Buyer fails to comply with the payment terms of this Contract and fails to cure its noncompliance within ten (10) days of written notice by Seller, Seller may terminate this Contract.
    3. Financial Insecurity of Buyer: Notwithstanding the foregoing, if Buyer’s financial condition gives Seller reasonable grounds for insecurity concerning Buyer’s ability to perform its obligations under the Contract, Seller may in its sole discretion: i) terminate this Contract on written notice to Buyer; ii) require full or partial payment in advance and suspend any further deliveries or continuance of any work to be performed by Seller until such payment has been received; or iii) make all shipments to Buyer C.O.D.
    4. Immediate termination by Seller: Notwithstanding the foregoing, Seller may immediately terminate this Contact: a) upon Buyer’s filing for bankruptcy; b) upon the appointment of a receiver for Buyer; or c) Buyer ceases to conduct business.
25. NOTICES. Any notice required or permitted to be given hereunder by either party hereunder shall be in writing and shall be deemed given on the date received if delivered personally or five (5) days after the date postmarked if sent by registered or certified U.S. mail, return receipt requested, postage prepaid to the addresses set forth in the Purchase Order, or to such other address as the parties may from time to time designate in writing.
26. ASSIGNMENT. Except as set forth in these Terms and Conditions, Buyer may not assign a Contract or these Terms and Conditions, or any right hereunder, without the prior written consent of Seller.
27. GOVERNING LAW; VENUE.  The Contract shall be governed by the law of the State of North Carolina without reference to its conflicts of law principles, provided, however, that the provisions of the 1980 United Nations Convention on Contracts for the International Sale of Goods are excluded in their entirety.  The Parties agree that the State courts of North Carolina shall be and have sole jurisdiction over any disputes which arise under the Contract, and that venue shall be proper and shall lie exclusively in the Superior Court of Forsyth County, North Carolina.  Buyer expressly waives any defense of lack of personal jurisdiction or improper venue to any action brought by Seller in the Superior Court of Forsyth County, North Carolina.