GENERAL TERMS AND CONDITIONS

General Terms and Conditions of Delivery
for Products and Services of the Electrical Industry
for use in business transactions with companies

Non-binding condition recommendation of the German Eletrical and Electronic Manufacturers’ Association (ZVEI) e.V.
– Stand Januar 2002 –

I. General Provisions

1.
The scope of deliveries or services (hereinafter: deliveries) shall be determined by the written declarations of both parties. However, the Purchaser’s general terms and conditions of business shall only apply to the extent that the supplier or service provider (hereinafter: Supplier) has expressly agreed to them in writing.

2.
The Supplier reserves its ownership and copyright exploitation rights to cost estimates, drawings and other documents (hereinafter referred to as “Documents”) without restriction. The Documents may only be made accessible to third parties with the prior consent of the Supplier and, if the order is not placed with the Supplier, must be returned to the Supplier immediately upon request. Sentences 1 and 2 shall apply mutatis mutandis to documents of the Purchaser; these may, however, be made accessible to third parties to whom the Supplier has permissibly transferred Supplies.

3.
The Purchaser shall have the non-exclusive right to use standard software with the agreed performance features in unchanged form on the agreed equipment. The Purchaser may make two backup copies without express agreement.

4.
Partial deliveries are permissible insofar as they are reasonable for the customer.

II. prices and terms of payment

1.
The prices are ex works excluding packaging plus the applicable statutory value added tax.

2.
If the Supplier has undertaken the installation or assembly and unless otherwise agreed, the Purchaser shall bear, in addition to the agreed remuneration, all necessary ancillary costs such as travel expenses, costs for the transport of tools and personal luggage as well as allowances.

3.
Payments shall be made free Supplier’s paying agent.

4.
The Purchaser may only set off such claims as are undisputed or have been legally established.

Ill. Retention of title

1.
The objects of the deliveries (reserved goods) shall remain the property of the supplier until all claims to which the supplier is entitled against the purchaser from the business relationship have been fulfilled. If the value of all security interests to which the Supplier is entitled exceeds the amount of all secured claims by more than 20%, the Supplier shall release a corresponding part of the security interests at the request of the Purchaser.

2.
During the existence of the reservation of title, the Purchaser is prohibited from pledging or transferring ownership by way of security and resale is only permitted to resellers in the ordinary course of business and only on condition that the reseller receives payment from its customer or makes the reservation that ownership is not transferred to the customer until the latter has fulfilled its payment obligations.

3.
In the event of seizure, confiscation or other dispositions or interventions by third parties, the Purchaser shall notify the Supplier without delay.

4.
In the event of breaches of duty by the Purchaser, in particular in the event of default in payment, the Supplier shall be entitled to rescind the contract and take back the Retained Goods after the unsuccessful expiry of a reasonable period of grace granted to the Purchaser; the statutory provisions on the dispensability of setting a period of grace shall remain unaffected. The Purchaser shall be obliged to surrender the goods.

IV. Deadlines for delivery and delay

1.
Compliance with time limits for deliveries shall be conditional upon the timely receipt of all documents to be provided by the Purchaser, necessary approvals and releases, in particular of plans, as well as compliance with the agreed terms of payment and other obligations by the Purchaser. If these prerequisites are not fulfilled in time, the deadlines shall be extended accordingly; this shall not apply if the Supplier is responsible for the delay.

2.
If non-compliance with the deadlines is due to force majeure, e.g. mobilisation, war, riot, or similar events, e.g. strike, lockout, the deadlines shall be extended accordingly.

3.
If the Supplier is in default, the Purchaser may – provided that it can credibly demonstrate that it has suffered a loss as a result – claim compensation for each full week of default of 0.5% each, but in no case more than a total of 5% of the price of that part of the Supplies which, owing to the default, could not be put to the intended use.

4.
The Purchaser’s claims for damages due to delayed Supplies as well as claims for damages in lieu of performance exceeding the limits specified in Clause 3 shall be excluded in all cases of delayed Supplies, even upon expiry of a time set to the Supplier to effect the Supplies. This shall not apply in cases of mandatory liability based on intent, gross negligence or injury to life, body or health. The Purchaser may withdraw from the contract within the scope of the statutory provisions only if the Supplier is responsible for the delay in delivery. A change in the burden of proof to the detriment of the Purchaser is not associated with the above provisions.

5.
At the Supplier’s request, the Purchaser is obliged to declare within a reasonable period of time whether it withdraws from the contract due to the delay in delivery or insists on delivery.

6.
If dispatch or delivery is delayed at the request of the Purchaser by more than one month after notification of readiness for dispatch, the Purchaser may be charged storage costs amounting to 0.5% of the price of the items of the Supplies for each month commenced, but not exceeding a total of 5%. The contracting parties shall be at liberty to prove higher or lower storage costs.

V. Risk transfer

Even in the case of carriage paid delivery, the risk shall pass to the Purchaser as follows:
a)
in the case of deliveries without installation or assembly, when they have been dispatched or collected. At the request and expense of the Purchaser, deliveries shall be insured by the Supplier against the usual transport risks.

b)
in the case of delivery with installation or assembly on the day of takeover in the own company or, if agreed, after faultless trial operation.

2.
If the dispatch, the delivery, the start, the performance of the assembly or erection, the taking over in the own works or the trial run is delayed for reasons for which the Purchaser is responsible or if the Purchaser is in default of acceptance for other reasons, the risk shall pass to the Purchaser.

Vl. installation and assembly

Unless otherwise agreed in writing, the following provisions shall apply to installation and assembly:

1.
The Purchaser shall take over at its own expense and provide in good time:
a)
all earthworks, construction work and other ancillary work outside the trade, including the skilled and unskilled labour, building materials and tools required for this purpose

b)
the commodities and materials required for assembly and commissioning, such as scaffolding, lifting gear and other devices, fuels and lubricants,

c)
energy and water at the point of use, including connections, heating and lighting,

d)
sufficiently large, suitable, dry and lockable rooms at the assembly site for the storage of machine parts, apparatus, materials, tools, etc. and adequate working and recreation rooms for the assembly personnel, including sanitary facilities appropriate to the circumstances; furthermore, the Purchaser shall take the same measures to protect the property of the Supplier and the assembly personnel on the site as it would take to protect its own property,

e)
protective clothing and protective devices required as a result of special circumstances at the assembly site.

2.
Prior to the start of the installation work, the customer shall provide the necessary information on the location of concealed electricity, gas and water lines or similar installations as well as the required structural data without being requested to do so.

3.
Prior to the start of assembly or erection, the materials and objects required for the commencement of the work must be available at the assembly or erection site and all preparatory work must have progressed to such an extent that assembly or erection can be commenced as agreed and carried out without interruption. Access roads and the installation or assembly site must be levelled and cleared.

4.
If assembly, erection or commissioning is delayed due to circumstances for which the Supplier is not responsible, the Purchaser shall bear the reasonable costs incurred for idle times and any additional travelling of the Supplier or the erection personnel.

5.
The Purchaser shall immediately certify to the Supplier on a weekly basis the duration of the working hours of the erection personnel and the completion of the erection, assembly or commissioning.

6.
If the Supplier demands acceptance of the delivery after completion, the Purchaser shall carry this out within two weeks. If this does not occur, acceptance shall be deemed to have taken place. Acceptance shall also be deemed to have taken place if the delivery has been put into use – if applicable after completion of an agreed test phase.

VII. Receipt

The Purchaser may not refuse to accept deliveries due to insignificant defects

VIII. Material defects

The supplier is liable for material defects as follows:
1.
All parts or services which show a material defect within the limitation period – irrespective of the period of operation – shall, at the Supplier’s discretion, be repaired, replaced or provided again free of charge, provided that the cause of the defect already existed at the time of the transfer of risk.

2.
Claims for material defects shall become statute-barred after 12 months. This shall not apply insofar as the law pursuant to §§ 438 para. 1 no. 2 (buildings and things used for a building), 479 para. 1 (claims under a right of recourse) and 634a para. 1 no. 2 (defects of a building) of the German Civil Code (BGB) prescribes longer periods as well as in cases of injury to life, body or health, in the event of a wilful or grossly negligent breach of duty by the Supplier and in the event of fraudulent concealment of a defect. The statutory provisions on suspension of expiry, suspension and recommencement of time limits shall remain unaffected.

3.
The Purchaser shall immediately notify the Supplier in writing of any material defects.

4.
In the event of notices of defects, payments by the customer may be withheld to an extent that is in reasonable proportion to the material defects that have occurred. The Purchaser may withhold payments only if a notice of defect is asserted and there can be no doubt as to its justification. If the notice of defect is unjustified, the Supplier shall be entitled to demand reimbursement of the expenses incurred by it from the Purchaser.

5.
The supplier shall first be given the opportunity to remedy the defect within a reasonable period of time.v

6.
If the supplementary performance fails, the customer may – irrespective of any claims for damages pursuant to Art. XI – withdraw from the contract or reduce the remuneration.

7.
Claims for defects shall not exist in the case of only insignificant deviation from the agreed quality, in the case of only insignificant impairment of usability, in the case of natural wear and tear or damage arising after the transfer of risk as a result of incorrect or negligent handling, excessive stress, unsuitable operating materials, defective construction work, unsuitable building ground or as a result of particular external influences which are not foreseen in the contract, as well as in the case of non-reproducible software errors. If the purchaser or third parties carry out improper modifications or repair work, there shall also be no claims for defects for these and the resulting consequences.

8.
The Purchaser shall have no claim with respect to expenses incurred in the course of supplementary performance, including costs of travel, transport, labour, and material, to the extent that expenses are increased because the subject-matter of the Supplies has subsequently been brought to another location than the Purchaser’s branch office, unless doing so complies with the normal use of the Supplies.

9.
The Purchaser’s right of recourse against the Supplier pursuant to Sec. 478 BGB (recourse of the entrepreneur) shall only exist to the extent that the Purchaser has not concluded any agreements with its customers exceeding the scope of the statutory provisions governing claims based on Defects. Furthermore, No. 8 shall apply mutatis mutandis to the scope of the Purchaser’s right of recourse against the Supplier pursuant to Sec. 478 para. 2 BGB.

10.
In all other respects, claims for damages shall be governed by Art. XI (Other claims for damages). Further claims or claims other than those regulated in this Art. VIII against the Supplier and its vicarious agents on account of a material defect are excluded.

IX. Industrial property rights and copyrights

1.
Unless otherwise agreed, the Supplier shall be obliged to provide the Supplies free from third parties’ industrial property rights and copyrights (hereinafter referred to as “IPR”) only in the country of the place of delivery. If a third party asserts a justified claim against the Purchaser based on an infringement of an IPR by the Supplies made by the Supplier and used in conformity with the contract, the Supplier shall be liable to the Purchaser within the time period stipulated in Art. VIII No. 2 as follows:

a)
The Supplier shall, at its option and expense, either obtain a right to use the product, modify the product in such a way that the property right is not infringed, or replace the product. If this is not possible for the Supplier under reasonable conditions, the Purchaser shall be entitled to the statutory rights of rescission or reduction.

b)
The Supplier’s obligation to pay damages shall be governed by Art XI.

c)
The aforementioned obligations of the Supplier shall only exist insofar as the Purchaser immediately notifies the Supplier in writing of the claims asserted by the third party, does not acknowledge an infringement and all defensive measures and settlement negotiations remain reserved for the Supplier. If the Purchaser ceases to use the Supplies for reasons of mitigation of damages or for other good cause, it shall be obliged to notify the third party that such cessation of use does not constitute an acknowledgement of an infringement of an IPR.

2.
Claims of the purchaser are excluded insofar as he is responsible for the infringement of property rights.

3.
Claims of the Purchaser shall also be excluded if the infringement of the IPR is caused by specifications made by the Purchaser, by an application not foreseeable by the Supplier or by the Supplies being modified by the Purchaser or being used together with products not provided by the Supplier.

4.
In the event of infringements of property rights, the claims of the Purchaser set out in No. 1 a) shall otherwise be governed by the provisions of Art. VIII No. 4, 5 and 9 shall apply mutatis mutandis.

5.
In the event of other defects of title, the provisions of Art. VIII shall apply accordingly.

6.
Further claims or claims other than those regulated in this Art. IX against the Supplier and its vicarious agents on account of a defect in title are excluded.

X. Impossibility; adjustment of the contract

1.
If delivery is impossible, the Purchaser shall be entitled to claim damages, unless the Supplier is not responsible for the impossibility. However, the Purchaser’s claim for damages shall be limited to 10 % of the value of that part of the Supplies which, owing to the impossibility, cannot be put to the intended use. This limitation shall not apply in cases of mandatory liability based on intent, gross negligence or injury to life, body or health; this does not imply a change in the burden of proof to the detriment of the Purchaser. The right of the customer to withdraw from the contract remains unaffected.

2.
If unforeseen events within the meaning of Art. IV No. 2 significantly change the economic significance or the content of the delivery or have a significant effect on the Supplier’s business, the contract shall be adjusted appropriately in good faith. If this is not economically justifiable, the supplier shall have the right to withdraw from the contract. If the Supplier intends to exercise this right of withdrawal, it shall notify the Purchaser thereof without undue delay after having become aware of the consequences of the event, even if an extension of the delivery period had initially been agreed with the Purchaser.

XI. Other claims for damages

1.
Claims for damages and reimbursement of expenses of the Purchaser (hereinafter: claims for damages), irrespective of the legal grounds, in particular due to breach of duties arising from the contractual obligation and from tort, shall be excluded.

2.
This shall not apply in cases of mandatory liability, e.g. under the Product Liability Act, in cases of intent, gross negligence, injury to life, body or health, or breach of fundamental contractual obligations. However, the claim for damages for the breach of essential contractual obligations shall be limited to the foreseeable damage typical for the contract, unless there is intent or gross negligence or liability for injury to life, body or health. A change in the burden of proof to the detriment of the customer is not associated with the above provisions.

3.
Insofar as the Purchaser is entitled to claim damages under this Art. XI, they shall become statute-barred upon expiry of the limitation period applicable to claims for material defects pursuant to Art. VIII No. 2 In the case of claims for damages under the Product Liability Act, the statutory limitation provisions shall apply.

XII. Jurisdiction and applicable law

1.
If the Purchaser is a merchant, the sole place of jurisdiction for all disputes arising directly or indirectly from the contractual relationship shall be the Supplier’s registered office. However, the Supplier shall also be entitled to bring an action at the Purchaser’s place of business.

2.
The legal relations in connection with this contract shall be governed by German substantive law to the exclusion of the United Nations Convention on Contracts for the International Sale of Goods (CISG).

XIII. Binding nature of the contract

The contract shall remain binding in its remaining parts even if individual provisions are legally invalid. This shall not apply if adherence to the contract would represent an unreasonable hardship for one party.