GENERAL TERMS & CONDITIONS OF INSPECTION SERVICES

I.

GENERAL

Quality Defender Inspection Services, a business division operated by Elecimport China, a corporation duly established and registered in accordance with the laws of the People’s Republic of China with registered office in 812-813 Tomson Commercial Building, 710 Dongfang Road, Shanghai, China, hereinafter referred to as the “Company” carries out services in accordance with these general terms and conditions.

The Company may perform services for entities or individuals issuing instructions, hereinafter referred to as the “Customer”, and if required under the terms of this General Terms and Conditions will provide Customer with Reports of Findings.

Unless otherwise agreed in writing, offers or services and all resulting contractual relationships shall be governed by these General Terms and Conditions of Inspection Services.  

The written form as herewith agreed between the Customer and the Company according to these General Terms & Conditions for the preparation and communication of documents within the scope of the contractual relationships (i.e. offer, acceptance, side agreement, addendum) is also met in case of electronic data transfer. Transfer via internet per unencrypted email or other digital transmission technology or per fax is sufficient.

The Customer’s general terms and conditions or condition of purchase as well as oral side agreements shall only be binding upon prior written approval by the Company.

II.

DEFINITIONS

2.1 Affiliates: As used in this General Terms & Conditions, the term “Affiliate” shall mean any entity which owns or controls, is owned or controlled by, or is under common ownership or control with, the Company or the Customer.

2.2 Supplier: As used in this General Terms & Conditions, the term “Supplier” shall mean a person or a company that supplies the Customer with products or materials.

2.3 Man-day: As used in this General Terms & Conditions, the term “Man-day” shall be defined as the time that one of our highly trained staff is assigned for the services, for up to 11 hours per day. The Company undertakes, for the highest level of integrity, the Customer will never be billed more than the actual amount of the services provided.

2.4 Man-day Rate: The “Man-day Rate” refers to the Service Fee per the aforementioned Man-day, which shall be expressly agreed between the Customer and the Company in writing. The normal business service day is Monday through Friday, excluding public holidays subject to local custom. Any request from the Customer for performance of services on Saturdays, Sundays, or public holidays shall be charged at one and a half (1.5) times of the standard or the agreed Man-day Rate.

2.5 Inspection Protocol: As used in this General Terms & Conditions, the term “Inspection Protocol” shall be defined as a checklist created by the Company based on the information provided by Customer as an instruction for the inspector to refer to during services.

2.6 Deliverable: The term “deliverable” shall be defined as Reports of Findings from the results of services provided by the Company to Customer.

III.

SERVICE PROCEDURES, OPTIONS AND GUIDELINES

3.1 Service Procedures

The inspection services provided by Company consist of the following procedures unless otherwise specified in writing:

3.11 Scheduling

Liaising locally with the Suppliers per Customer’s instruction to schedule inspection dates.

3.12 Preparation

Preparing Inspection Protocols in order to perform services for the products manufactured by Customer’s Suppliers based on instructions, specifications and other technical and packaging information provided by the Customer. 

3.13 Performance

Performing the appropriate type of services per the instructions of the Customer and issuing Deliverables to the Customer by e-mails or other electronic means of transmission within maximum 2 working days as from the completion of the services requested by the Customer.

3.2 Service Options

The Company carries out services include, but not limited to the following:

l Loading or Discharge Superintendence

l Quantitative Inspection

l Quality Inspection

² Initial Production Inspection

² During Production Inspection

² Pre-shipment Inspection

l Supplier Compliance Audit

l Laboratory Analytical Services

3.3 Guidelines for Inspection Services

3.3.1 Sampling Plan

The Customer acknowledges that unless otherwise specified, Sampling Plan of Normal Level II of ANSI/ASQ Z1.4-2003 (or the equivalent standards MIL-STD-105E,  ISO 2859, BS 6001, DIN 40.080, NFX 06-021 / 022) is the accepted method of deciding sampling size by Customer for the inspection services. This Sampling Plan is based on the mathematical theory of probability and offers the advantage of clearly defining the number of samples to be drawn for inspection from a given lot or consignment and the maximum number of defective samples allowed in the sample size.

3.3.2 Defect Classification

The Customer acknowledges that defects detected during the services shall be classified within 3 categories – “Critical”, “Major” and “Minor” with respective definition as below: -

Critical: A defect that is likely to result in a hazardous or unsafe condition for an individual using the product or that is contravening mandatory regulations.

Major: A defect that is likely to result in failure, reducing the usability of the product and obvious appearance defects affecting the salability of the product.

Minor: A defect that does not reduce the usability of the product, but is nevertheless a workmanship or a visible defect beyond the defined quality standards.

3.3.3 Acceptable Quality Level (AQL)

The Customer acknowledges the following AQL methods shall be applied by the Company for the services unless otherwise specifically instructed by the Customer in writing prior to commence of the services:

3.3.4 Reports of Findings

The Customer acknowledges that the information stated in the Reports of Findings (Deliverables) is derived from the results of inspection or testing procedures carried out in accordance with the instructions of the Customer, and/or the Company’s assessment of such results on the basis of any technical standards, trade customs or practice, or other circumstances which should in our professional opinion be taken into account.

Reports of Findings issued further to the randomly picked samples contain the Company’s opinion on those samples only and do not express any opinion upon the lot from which the samples were drawn.

3.3.5 Obligations of Customer

The Customer will:

(1) Ensure that sufficient information, instructions and documents are given in due time (and, in any event not later than 48 hours prior to the desired intervention) to enable the required services to be performed;

(2) Procure all necessary access for the Company’s representatives to the premises where the services are to be performed and take all necessary measures to eliminate or remedy any obstacles to, or interruptions in, the performance of the services;

(3) Supply, if required, any special equipment and personnel necessary for the performance of the services;

(4) Ensure that all necessary measures are taken for safety and security of working conditions, sites and installations during the performances of services and will not rely, in this respect, on the Company’s advice whether required or not;

(5) Inform Company in advance of any know hazards or dangers, actual or potential, associated with any order or samples or testing including, for example, presence or risk of radiation, toxic or noxious or explosive elements or materials, environmental pollution or poisons;  

3.3.6 Conditions of Inspection Services Taking Place

In order to carry out the services in an accurate and timely manner, Customer agrees that:

(1) For Initial Production Inspections (IPI), the Company’s inspection team will only evaluate maximum the first 200 units produced to ensure compliance with necessary criteria and the Customer’s technical and packaging specification.

(2) For During Production Inspections (DPI), the inspections only take place after a minimum of 20 percent, but no more than 40 percent, of finished goods are produced to ensure consistent quality in the manufacturing process.

(3) For Pre-Shipment Inspections (PSI), the inspections only take place at the 100 percent production mark with a minimum of 80 percent of goods packed and seated in shipping cartons for verification of the Customer’s specifications. 

(4) For any Services that cannot be performed due to the production levels that are incomplete or less than the aforementioned percentage or quantities after the arrival of the Company’s representative at the Supplier’s premises, the originally agreed Man-day Fee of one full Man-day Rate shall still be charged to the Customer.

(5) For any Services that cannot be performed after the Company’s representative arrives at the Supplier’s premises due to the circumstance that is out of the Company’s control, including but not limited to the Suppliers’ refusal to give the inspector access to the Supplier’s premises, products and relevant test equipment, the originally agreed Man-day Fee of one full Man-day Rate shall still be charged to the Customer.

3.3.7 Cancellations and Rescheduling

The Customer agrees that the Company must be notified at least one (1) working day prior to the requested Service date should there be any cancellation or rescheduling of the service dates. The originally agreed Man-day Fee of one full Man-day Rate shall be charged to Customer for any failures to make such a timely notification of cancellations or rescheduling.

3.4 Deliverables

The Customer acknowledges that the results obtained on site are provisional and subject to the confirmation by an official Report of Findings sent through e-mail or other electronic means of transmission in the following maximum two working days after the completion of the inspection.

No other party than the Customer shall be entitled to give instructions to the Company, particularly on the scope of the services and the delivery of Report of Findings, unless so authorized by the Customer.

IV.

SERVICE FEES

Customer acknowledges that:

4.1  The definitions of Man-day and Man-day Rate in the aforementioned clause 2.3 and 2.4 are accepted.  

4.2  The Man-day Rate is subject to change with the service locations, service scopes and complexity of the services. The final Man-day rate shall be expressly agreed to between the Company and Customer. Fees or Man-day Rate not established between the Company and Customer at the time the order is placed or a contract is negotiated shall be at the Company’s current standard rates (which are subject to change) and all applicable taxes shall be payable by the Customer.  

 Services Fees = [Man-days spent for fulfillment of the Services] x [Man-day Rate]

4.3  Any reference to a specific time in this General Terms and Conditions or in a following contract between the Company and Customer shall refer to GMT+8 Beijing Time.

V.

INVOICING AND PAYMENT

Payment is expected upon booking prior to the performance of the services. In the event that a monthly payment account is contracted between the Company and the Customer, the payments of the Service Fees are to be made by Customer to Company on a monthly basis in accordance with the following rules:

5.1 Within five working days as from the last day of a calendar month, the Company shall submit to Customer an invoice for the foregoing calendar month containing a detailed calculation of Man-day counts, Man-day Rate and the Suppliers’ names or Purchase Order numbers of the corresponding Service Fees.

5.2 Failing Customer to contest the invoices within three working days as from submission, the invoices will be deemed as approved by the Customer.

5.3 Unless a shorter period is established in the invoices, Customer will promptly pay not later than 14 days from the relevant invoice date or within such other period as may be established by the Company in the invoice (the “Due Date”) all Service Fees due to the Company.

5.4 A daily late payment penalty shall be imposed on total amount of the accrued overdue at a rate of 0.05% per day (or such other rate as may be established in the invoice), payable from the Due Date up to and including the date payment is actually received.

5.5 Company may elect to bring action for the collection of due Service Fees in any court having competent jurisdiction. Customer shall indemnify Company for its costs, including reasonable attorney’s fees and disbursements incurred to collect any sums due to the Company.

5.6 Customer shall not be to entitled to retain or defer payment of any sums due to the Company on account of any dispute, counter claim or set off which it may allege against the Company.

5.7 In the event any unforeseen problems or expenses arise in the course of carrying out the services the Company shall endeavor to inform Customer and shall be entitled to charge additional fees to cover extra time and cost necessarily incurred to complete the services.

5.8 All payments shall be made by Customer in USD or CNY/RMB by cash remittance or wire transfer unless otherwise specified in writing.

VI.

LIABILITY

The Customer acknowledges that:

6.1 The Company is neither an insurer nor a guarantor and disclaims all liability in such capacity. Customers seeking a guarantee against loss or damage should obtain appropriate insurance.

6.2 Reports of Findings are issued on the basis of information, documents and/or samples provided by, or on behalf of, Customer and solely for the benefit of Customer who is responsible for acting as it sees fit on the basis of such Reports of Findings. Neither the Company nor any of its officers, employees, agents or subcontractors shall be liable to Customer nor any third party for any actions taken or not taken on the basis of such Reports of Findings nor for any incorrect results arising from unclear, erroneous incomplete, misleading or false information provided to the Company.

6.3 The Company shall not be liable for any delayed, partial or total non-performance of the services arising directly or indirectly from any event outside of the Company’s control including failure by the Customer or its Supplier to comply with any of its obligations.

6.4 In the event of Company being held liable in respect of any claim for loss, damage or expense of whatsoever nature and however arising, the liability of the Company shall in no circumstances exceed a total aggregate sum equal to 3 times the amount of the service fees paid in respect of the specific services which gives rise to such claim or US$ 2,000 (or its equivalence in local currency), whichever is the lesser.

6.5 The Company shall have no liability for any indirect or consequential loss including without limitation loss of profits, loss of business, loss of opportunity, loss of goodwill and cost of product recall. It shall further have no liability for any loss, damage or expenses arising from the claims of any third party (including, without limitation, product liability claims) that may be incurred by the Customer.

6.6 In the event of any claim, Customer must give written notice to the Company within 30 days of discovery of the facts alleged to justify such claim and, in any case, the Company shall be discharged from all liability for all claims for loss, damage or expense unless suit is brought within one year from the date of performance by the Company of the service which gives rise to the claim or the date when the service should have been completed in the event of alleged nonperformance.

6.7 Customer shall guarantee, hold harmless and indemnify the Company and its Affiliates, officers, employees, agents or subcontractors against all claims (actual or threatened) by any third party for loss, damage or expense of whatsoever nature including all legal expenses and related costs and howsoever arising relating to the performance or non-performance, of any services.

VII.

PROVISION OF SERVICES

7.1 The Company shall use its best efforts and to exercise due care and skill in the performance of its services. Company will provide such services in accordance with Customer’s specific instructions or, in the absence of such instructions, the following shall apply:

(1) The terms of any standard order form or standard specification sheet of the Company; and/or

(2) Any relevant regulatory guidelines, trade custom, usage or practice; and/or

(3) Such methods as the Company shall consider appropriate on technical, operational and/or financial grounds.

7.2 The Customer agrees that in the event that a requested service or part of the service is out of the own resources of the Company, the Company may delegate the services to an agent or subcontractor. Customer authorizes Company to disclose all information necessary for such performance to the agent or subcontractor.  

7.3 Should Customer request that the Company witness any third party intervention, Customer agrees that the Company’s sole responsibility is to be present at the time of the third party’s intervention and to forward the results, or confirm the occurrence, of the intervention. Customer agrees that the Company is not responsible for the condition or calibration of apparatus, instruments and measuring devices used, the analysis methods applied, the qualifications, actions or omissions of the third party personnel or the analysis results.

7.4 Reports of Findings issued by the Company will reflect the facts as recorded by it at the time of its intervention only and within the limits of the instructions received or, in the absence of such instructions, within the limits of the alternative parameters applied as provided for in clause 7.1. The Company is under no obligation to refer to, or report upon, any facts or circumstances which are outside the specific instructions received or alternative parameters applied.

VIII.

INTELLECTUAL PROPERTY RIGHTS

8.1 The Company reserves all rights to the data obtained in the course of the service provision and to the Reports of Findings created.

8.2 The Customer may use the Reports of Findings created in the context of the contractual relationship including all table, testing data and other details, only after full payment of the service fees has been rendered and only for the contractually agreed purpose.

8.3 Any publication or public communication of the Reports of Findings or extracts thereof, particularly via the Internet or for advertising purposes, and any other disclosure to third parties, is permissible only with the prior written consent of the Company.

8.4 The Company reserves its rights related to all and any inspection methods and/or test procedures as well as to all and any instrument and/or equipment that the Company develops independently or generally uses, unless such inspection methods and/or test procedures as well as instrument and/or equipment have been developed within the conduction of the Services for the Customer exclusively according to a written agreement.

8.5 Both parties’ undertaking under this Article VIII shall survive in any case the termination of the services, the reasons for such a termination being irrelevant.

IX.

CONFIDENTIALITY

Both parties, or any of their affiliates shall keep strictly confidential all and any business and trade secrets (Confidential Information) obtained from the other party within the Contractual Relationships, not to disclose them to any third parties without the prior written approval of the other party and not to use them without permission for own purposes.

The Company and the Customers undertake to use their best endeavors to ensure that such Confidential Information are protected against theft or unauthorized access by any third parties. For the purpose of this General Terms & Conditions, Confidential Information means (i) all information relating to the execution, content and performance of the requested services; and (ii) all trade, legal, accounting, financial and organizational information relating to any of the Parties and/or its Affiliates which becomes known to the Parties as a result of entering into a Contract and/or its performance.

Unless otherwise instructed by Customer, the Customer is the sole and exclusive Party to receive the Deliverables from the Company.

The Company and the Customer undertake not to hire nor try to hire or make any offer to hire any employees from the other Party or its Affiliates prior to the termination of such employee’s work contract. 

The Customer accepts, that unencrypted messages sent via internet may – through or without intervention of third parties – be lost, modified or falsified. Conventional e-mails are not protected against any third party’s access, and the Company therefore assumes no responsibility for the confidentiality and the integrity of e-mails that have left the Company’s sphere of responsibility.

The Company assumes no liability either for data security during the transmission via internet nor for data security while in the Customer’s sphere of responsibility. Malware appearing in connection with the electronic transfer of data and resulting possible damage for the Customer are herewith likewise excluded.   

Both parties’ undertaking under this Article IX shall survive in any case the termination of the services, the reasons for such a termination being irrelevant.

X.

SUSPENSION OR TERMINATION

10.1  Ordinary Termination

Should a monthly account is contracted, either Party may at any time and in its sole discretion terminate provision of the services by serving a prior termination notice of one month to the other party provided all due Service Fees are fully paid off.

10.2  Extraordinary Termination

The Company shall be entitled to immediately and without liability either suspend or terminate provision of the services in the event of:

(i) Failure by the Customer to comply with any of its obligations as the aforementioned clauses 3.3.5 and 3.3.6, and such failure is not remedied within 10 days that notice of such failure has been notified to Customer; or

(ii) Any suspension of payment, arrangement with creditors, bankruptcy, insolvency, receivership or cessation of business by Customer.

XI.

FORCE MAJEURE

Neither Party shall be liable in damages, or shall be subject to termination of a written agreement by the other party, for any delay or default in performing any obligation here-under if that delay or default is due to any cause beyond the reasonable control and without fault or negligence of that Party.

XII.

GOVERNING LAW, JURISDICTION AND DISPUTE RESOLUTION

Unless specifically agreed otherwise, all disputes arising out or in connection with Contractual Relationship(s) here-under shall be governed by the substantive laws of the People’s Republic of China exclusive of any rules with respect to conflicts of laws and be finally settled under the Rules of Arbitration of the International Chamber of Commerce by one or more arbitrators appointed in accordance with the said rules. The exclusive place of jurisdiction or arbitration for all these disputes shall be Shanghai, as far as the Customer is a merchant, a legal entity under public law or a special fund under public law. The Company is, however, also entitled to sue the Customer at Customer’s place of general jurisdiction.

XIII.

LANGUAGE

These General Terms and Conditions have been drafted in English. Unless otherwise expressly agreed in writing, all the Reports of Findings are written in English. In case of any discrepancies between the English and other language versions, the English version shall prevail for all purposes.