These standard terms and conditions (“these TC”) shall apply to all sales and deliveries of goods and services made by Empire Acoustical Systems, Inc. (“EAS”) to a purchaser (“Buyer”) of such goods and services, except those sales and deliveries for which additional or different TCs have been expressly agreed to in writing signed by EAS’s authorized representative or agent. Purchase orders often contain TCs, which state that such TCs prevail over any others. Likewise, sellers often use proposal and order confirmation forms containing the seller’s own TCs and rejecting any other TCs. Section 1, which follows, governs such differences.

1. INCONSISTENCIES. Any TCs which Buyer has sent to EAS are hereby expressly rejected to the extent they are inconsistent with these TCs. Buyer must separately notify EAS if any portion of these TCs is not acceptable. If, after receiving these TCs, Buyer sends differing TCs to EAS, EAS and Buyer shall consider Buyer’s sending such differing TCs as an oversight on Buyer’s part, and EAS and Buyer shall treat such differing TCs as a nullity unless, prior to EAS’s starting production of Buyer’s order, EAS has received Buyer’s notification by separate letter or facsimile rejecting all or part of EAS’s TCs or stating that Buyer insists on using Buyer’s TCs. Pre-printed or standardized forms containing Buyer’s TCs shall NOT suffice for such notification. If, after receiving these TCs, Buyer takes any action (other than the aforementioned notification) in furtherance of the contemplated transaction between Buyer and EAS, Buyer is deemed to have accepted these TCS. These TCs apply if EAS starts production of goods or renders services before receiving Buyer’s notification in response to Empire’s differing TCs as set forth above. Should EAS start production before receiving Buyer’s notification as set forth above, these TCs shall apply. Buyer’s TCs apply if EAS starts production or renders services after receiving such notification. Should EAS start production of goods or render services after receiving such notification, Buyer’s TCs shall apply, and those portions of EAS’s TCs, which are not inconsistent with Buyer’s TCs, shall also apply.

2. PAYMENT TERMS. Payment terms for goods shall be as follows: Upon order confirmation, fifty percent (50%) of the total amount due under the contract. Upon shipment (by depositing the goods with a carrier or as otherwise agreed to in writing, fifty percent (50%) or the total balance due. Past due amounts will accrue an interest charge of 1-1/2% per month (18% per annum).

3. SECURITY INTEREST. All material remains the property of EAS until paid for in full. If Buyer admits or asserts an inability to perform its obligations under the contract of sale, EAS may, immediately or at some later date, enter the Buyer’s premises or work site to recover possession of goods. Title to goods shipped shall pass to Buyer upon EAS’s tendering of the goods to Buyer. If the goods are not paid for in full upon shipment, EAS will retain a security interest in the goods and all accessions thereto, to secure payment and performance of Buyer’s obligations hereunder. Buyer shall promptly execute all documents as may be necessary and appropriate to perfect EAS’s security interest. Such goods shall not be converted into fixtures without the written consent of EAS. To the extent that any goods provided to Buyer have been incorporated into a structure or otherwise become fixtures, EAS may assert a material man’s lien and Buyer will consent thereto and shall execute all documents as may be necessary and appropriate to perfect such lien. At EAS’s request, Buyer shall affix appropriate notices to goods subject to EAS’s security interest. Buyer shall not move such goods to any other location without prior notification to EAS.

4. SPECIFICATIONS, CHANGES, VARIATIONS IN SIZE AND LENGTH. Specifications, if any, provided by Buyer shall be deemed suggestions, which EAS may use in formulating a sales proposal to Buyer. Specifications provided by EAS to Buyer, including but not limited to weights, dimensions, capacities, drawings, illustrations, power consumption levels, and processing times are all approximate unless specifically confirmed to be exact in writing signed by an authorized EAS representative. EAS reserves the right to change the specifications or otherwise modify, without notice, goods to be delivered to Buyer, so long as such changes are not detrimental to Buyer. If Buyer’s specifications include certified engineering drawings, EAS’s installation will comply with them. Buyer shall bear all costs associated with redeployment and adaptation of the installation should such drawings prove to be inadequate or inaccurate. Prior to EAS’s commencement of the installation, Buyer shall notify EAS of all applicable legal standards, in particular code requirements with which EAS must comply. Buyer shall bear the costs associated with compliance if compliance requires changes in EAS’s specifications.

NONCONFORMANCE’S FOUND BY BUYER.
The Buyer shall notify EAS of any defects or noncompliance, such as paint issues, incorrect panel dimensions, or damaged panels. The Buyer shall give EAS first opportunity to correct any nonconformance’s. Failure to do so will nullify EAS’s liability. EAS will make every effort to correct any nonconformance’s or make arrangements to correct the nonconformance.

5. INSPECTIONS, CERTIFICATIONS, ETC., AND RELATED MODIFICATIONS TO GOODS. Unless otherwise specified, Buyer shall be responsible for obtaining all approvals, certifications, and inspections (including but not limited to these required by governmental authorities) of goods or services supplies by EAS. Unless otherwise agreed to in writing, Buyer shall be responsible for paying the costs, if any, of such approvals, certifications, and inspections, and for the costs of any modifications or alterations to, or exchanges of goods supplied by EAS, which costs arise in the course of compliance in this regard.

6. WARRANTY FOR EQUIPMENT AND SERVICES. EAS warrants the goods it sells to be free of defects in materials or workmanship for a period of one year from delivery of goods, installation, or the timely installation if by others. At EAS we want our customers to be satisfied, and in these infrequent instances where warranty service is required, we will provide it professionally and as promptly as possible. EAS reserves the right to decline service, or to perform what would otherwise be warranty service until Buyer has fulfilled it obligations set forth herein. Buyer shall provide EAS with reasonable access to Buyer’s facility for such service and shall make available, at Buyer’s cost, any necessary or appropriate assistance. Buyer’s remedies shall be limited to a full refund of the cost to Buyer of the defective goods and for services rendered by EAS. IN NO CASE SHALL EAS BE LIABLE FOR INDIRECT, INCIDENTAL, CONSEQUENTIAL, OR SPECIAL DAMAGES.

7. DELIVERY. Delivery times specified, if any, are approximate. If not specified, delivery shall take place within a reasonable time. Time is not of the essence unless so acknowledged by EAS in writing. If time is of the essence, we will do everything possible to accommodate the Buyer.

8. FORCE MAJEURE. EAS shall not be liable for delay or non delivery resulting from any circumstances beyond its control.

9. DEFAULT. In the event that (a) any payment due EAS remains unpaid for thirty-one days after it becomes due; (b) Buyer makes an assignment for the benefit of creditors; (c) any proceeding in bankruptcy or for a wage earners plan, or any other proceeding under any insolvency law, is instituted by or against Buyer, or (d) Buyer admits or asserts an inability to perform its obligations under the contract of sale, EAS may, immediately or at some later date, enter the Buyer’s premises or work site to recover possession of goods already shipped, and as to goods which remain unshipped (if any), may treat the contract either as terminated or as being in full force and effect. EAS shall, in such case, notify Buyer regarding whether the contract is to be terminated or enforced. If the contract is deemed to be in full force and effect, EAS shall have the right to declare the entire unpaid balance as immediately due and payable. EAS’s failure to recover possession of goods shall not be deemed a waiver of its rights, which may exist relative to such goods. Should EAS recover possession of such goods, it may resell them at public or private sale in any manner whatsoever, and shall refund to Buyer, or apply to Buyer’s debt to EAS (as the case may be) any proceeds after expenses or recovering possession and re-selling (including reasonable attorney’s fees) the goods, and losses incurred as a result of re-selling the goods are deducted. Buyer’s failure to comply with any of its obligations under the contract of sale (including these TCs) shall constitute a breach for which EAS may recover from Buyer, in addition to any money still owed under the contract, and all expenses (including reasonable attorney’s fees) incurred by EAS in enforcing its rights.

10. LIMITATION ON BUYER’S CANCELLATION RIGHTS. Once a contract for sale of materials or goods is entered into, Buyer may cancel only upon payment to EAS of EAS’s costs theretofore incurred in preparation for performance, and in performance, of the contact.

11. APPLICABLE LAW, VENUE. The Laws of the State of Colorado shall govern these TCs. The UN Convention on the Sale of Goods does not apply.

12. ARBITRATION AND SETTLEMENT OF DISPUTES. EAS and Buyer shall attempt to resolve all disputes arising out of this Agreement in a spirit of cooperation without formal proceedings. Any dispute, which cannot be so resolved, other than requests for injunctive relief, shall be subject to arbitration upon written demand of either EAS or Buyer. Arbitration shall take place within forty-five days of the receipt of the written demand, in Trinidad, Colorado or at another location if EAS and Buyer so agree. The arbitration shall take place before an arbitration panel chosen as follows: EAS and Buyer shall each choose an arbitrator who has no affiliation with the party choosing him or her, and the two arbitrators shall choose a third arbitrator and determine the third arbitrator’s compensation. Each party shall have one veto over the choice of the third arbitrator. The three arbitrators shall schedule an informal proceeding, hear the arguments, and decide the matter by secret majority vote. Unless the arbitrators decide otherwise, each party shall pay the costs of its own arbitrator, and shall pay half of the other costs of the arbitration proceeding. Each party shall have the right to have the proceedings transcribed. The arbitrators shall not have the authority to award punitive damages or any other form of relief not contemplated in the contract. The majority of arbitrators shall render a written opinion setting forth the basis on which they arrived at the decision regarding each issue submitted to arbitration; the dissenting arbitrator, if any, shall not issue a dissenting opinion. Regarding each issue submitted to arbitration, the decision shall be final and binding only to the extent it is accompanied by a written explanation of the basis upon which it was arrived at. Judgment upon the award, if any, rendered by the arbitrators may be entered in any court having jurisdiction thereof.

13. SHIPPING & TAXES. These are not part of our quotations. All taxes are for the Buyer’s account. Shipping must be added to the total contract price.

14. MISCELLANEOUS. These TCs are exclusive and no other representation shall have any force or effect unless contained in writing signed by EAS and Buyer. The failure of either party to make full use of its rights under any portion of these TCs shall not constitute a waiver thereof and shall not be considered a course of dealing. The unenforceability of any provision of these TCs shall not render the remaining TCs invalid.