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Terms and Conditions

I. Conditions for the Delivery of IT Equipment and Application Programs

§ 1 Scope of Delivery

1.1 The IT equipment (hardware and system software) and the application programs shall operate as described in their product description and more detailed in their user documentation.

In respect of hardware or software which – defined in the contract as third party products – are needed for the use of the application programs, Contractor only warrants that these fulfill the requirements that the entire system can be used productively. Contractor does not warrant that these comply with the product description of their manufacturers nor that they are free of other errors.

The products shall embody all legal and other related to their use.

1.2 The programs shall be delivered in a machine-readable format (object code). If Contractor's programs have interfaces for interoperability with other programs, Contractor shall, at Client's request, provide required information to use such interfaces, subject to reimbursement of expenses. Client may disclose such information to other contractors as necessary.

1.3 The user documentation for the application programs shall be delivered stored on machine- readable media and one printed set. The user documentation for hardware and system software, if not delivered by the respective manufacturer, shall only be delivered at Client’s request subject to additional payment. The format will be determined by the respective manufacturer (stored on machine-readable media or printed).

1.4 Until payment has been made in full the hardware and the media containing the programs shall remain Contractor's property and shall not be pledged nor assigned as a collateral security.

§ 2 Right to Use the Programs

2.1 Contractor grants to Client the right to use the acquired programs to the extent agreed in the contract. Client may use the programs for its own purposes and for the purposes of Client's group of companies.

2.2 The license fee is determined by the extent of the right of use, in particular by the size of the equipment and/or the maximum number of simultaneously active users. If Client wants to extend the agreed maximum, Client shall pay an additional charge. Such extension of the use shall be agreed on in advance.

2.3 Client agrees to use the application programs only on IT equipment that Contractor has declared to be compatible with these programs. Client shall inform Contractor of any modification of the used equipment without delay.

2.4 Client may transfer the right to use the programs in machine-readable format (object code, not source code) to another user if Client confirms to discontinue the use of the programs and the new user, before receiving the media, accepts in writing towards Contractor to take over all obligations to protect the programs and to comply with the agreed restrictions of the right to use.

§ 3 Performance

3.1 At Client's request, Contractor shall install all products. Client shall timely establish the conditions for the installation of the products, in particular install the local network as needed. Contractor shall check before starting the installation of the products whether or not the network works properly. Client shall confirm the successful installation of the programs in writing.

3.2 At Client’s request, Contractor shall support Client in the implementation of the application programs.

3.3 Client shall test the application programs before using them productively.

3.4 All support (including specifically installation, consultancy, brief or extended training, acceptance test support) shall be reimbursed separately on the basis of time consumed, unless otherwise agreed.

3.5 Client shall ensure that competent personnel are available prior to installation. At least one of Client’s employees must be trained for each application program. Contractor must enable the productive use of these programs only after the agreed training has been completed.

3.6 Each party shall name a project manager. Both shall have the authority to make the necessary decisions or shall obtain authorization for them in a timely manner. The Contractor’s project manager shall put decisions in writing. The Client’s project manager shall provide all required information. The Contractor’s project manager shall contact the Client’s project manager as is required to ensure the proper performance of the mutual obligations.

§ 4 Client's Responsibilities for Software Protection

4.1 Client acknowledges that the programs and the related documentation - including future versions - are copyrighted, and represent confidential information and trade secrets proprietary to Contractor or to Contractor’s supplier. Client shall take all necessary steps to misuse of the programs including the related documentation.

If programs are delivered in source-code, Client shall make them available to any third party only with Contractor's permission. Client’s obligation is permanent. The permission may not be unreasonably withheld, but it need not be given to enable Client to obtain maintenance from a third party.

4.2 Client may copy the programs only for back-up purposes, for replacement or – if source-code has been delivered - in order to search for defects. Client shall attach to every media containing a copy of a program the same copyright and proprietary notices as are attached to the media delivered by Contractor.

Client may make copies of the user documentation for internal purposes.

II. Conditions for Client Specific Programming (Application Programs)

§ 5 Scope

5.1 Client may use the modifications and extensions of the standard programs to the same extent as Client is entitled to use the related standard programs. The use of individual programs that can be used independently of the standard programs is allowed for own purposes and for the purposes of Client's group of companies without limitations.

5.2 Modified standard programs shall be delivered only in object-code. Extensions to standard programs or individual programs shall, at Client's request, be delivered in source-code also. Documentation related to the source-code shall only be delivered, if expressly agreed upon.

5.3 A user documentation shall be delivered; the user documentation for modifications need not be integrated into the user documentation of the related standard programs.

§ 6 Performance

6.1 If it is necessary to detail Client's requirements listed in the contract or requested pursuant to § 7, Contractor shall develop a detailed specification with Client's assistance and shall submit it to Client for approval. Client shall respond in writing within 14 days. Unless otherwise agreed this performance shall be paid for according to time consumed.

6.2 The approved detailed specification is the decisive basis for the realization of the programming. In the course of the realization of the programming, the detailed specification may be further detailed with Client's assistance.

6.3 In addition § 3 shall apply accordingly.

§ 7 Change Requests

7.1 If Client requests Contractor to undertake any modification of the agreed requirements, including any addition to it, and if the requested modification is reasonable and acceptable, Contractor must agree. If the realization of such a request results in any burden on Contractor's side, Contractor is entitled to an appropriate adaptation of the terms of the contract, in particular to the extension of time for the completion of the programming and/or to additional compensation.

7.2 Modifications and resulting adaptations of the terms of the contract must be confirmed in writing by both parties. If Client gives a request for a modification orally, Contractor may request Client to give it in writing or may confirm it in writing. The wording of such confirmation shall be deemed to express Client's requirement correctly unless Client objects in writing without delay.

7.3 Contractor shall submit its request for adaptations of the contract without delay. Client shall notify Contractor without delay if Client refuses the requested adaptation.

III. Conditions for the Maintenance of the Products

§ 8 Maintenance of the Hardware

8.1 Basic maintenance of the hardware comprises subject to a comprehensive charge

– the preventative maintenance, as defined by the manufacturer of the hardware,

– repairs (in respect of the period of warranty for the delivery of the hardware insofar as repairs are not covered by such warranty),

– support by telephone related to the handling of the hardware during Contractor's normal business hours and

– the transfer of technical improvements of the hardware as realized by the manufacturer insofar as Contractor deems them necessary.

Maintenance shall be rendered as from installation.

8.2 The obligation to repair the hardware applies to all malfunctions with result from the nature of the hardware.

The obligation to repair the hardware does not refer to those malfunctions which are caused by reasons out of Contractor's control such as wrong use of the hardware or modifications or maintenance not carried out by Contractor.

8.3 All other performances carried out at Client's request shall be charged in addition, in particular but not limited to

– repairs according to § 8.2 para 2;

– the delivery and installation of ribbons, toner, batteries and printer heads or printer drums.

8.4 Spare parts are either new or equivalent to new parts. Replaced parts shall become Contractor's property.

8.5 Client shall be responsible that the conditions for the use of the hardware (air-condition, power supply or dust protection) meet the requirements of the manufacturer.

8.6 At Contractor's request, Client shall deliver defective equipment safely packed and reinstall it after its return. Contractor will name a carrier.

8.7 If maintenance is carried out at Client's place, the applicable insurance regulations request that Client or a third party retained by Client shall be at the installation site during the work.

§ 9 Maintenance of the Programs

9.1 Basic maintenance comprises delivery of new versions of the programs, the correction of deficiencies (insofar as not covered by Contractor’s liability out of the delivery) and support by telephone related to the handling of the programs.

9.2 Deficiencies are deviations from the quality which the current version of the programs is designed to have or must have for ordinary use.

9.3 Only the current and the immediately previous version of a program shall be supported (telephone support; correction of deficiencies). The support for the immediately previous version shall end six months after the release of the new version; but the support shall be continued, if the use of the new version is not acceptable to Client, provided that Contractor is capable of doing so; Contractor shall be entitled to reimbursement of its additional expenses (including the expenses for keeping the necessary maintenance environment).

9.4 The correction of deficiencies as an agreed service shall be done according to the terms of § 16.

9.5 Contractor shall render telephone support during its normal business hours, but may do so only in contact with those of Client’s personnel who have been named as responsible and trained accordingly.

9.6 All other services shall be charged in addition.

§ 10 Further Development of the Programs under Maintenance

10.1 Contractor shall deliver any new version, together with one set of the related documentation after the release of such version stored on media. This does not apply to amendments which Contractor offers separately as new products. Client agrees to implement new versions immediately. Client shall test new versions before using them productively.

10.2 If a supplier of such system software needed for the operation of the programs for which the supplier offers maintenance releases a new version of the system software, Contractor shall test whether or not it is compatible with the application programs, and if this is the case, declare it as compatible (see § 2.3). If this is not the case, Contractor shall adapt the programs within a reasonable period of time so that they are compatible with the new version of the system software. Such period shall commence with the release of the new version and its availability to Contractor.

10.3 With respect to system software for which its supplier does not offer new versions under a maintenance contract, but offers new generations from time to time for sale, the following shall apply: If the suppliers makes enhancements of the old generation (e. g. service packs) available, Contractor shall proceed in accordance with § 10.2.

If the supplier offers a new generation for sale, Contractor will adapt the application programs to such new generation taking into consideration the needs of all of his clients. If Contractor does so, Contractor shall only be obligated to further develop the application programs on this basis (see also § 10.4 para 2).

10.4 Client shall ensure that its equipment, in particular its system software and other programs which Client has not purchased from Contractor but from third suppliers or from Contractor but without a maintenance agreement, always meets the technical level which the application programs may require pursuant to § 10.2 and § 10.3. Contractor shall in a timely manner inform Client of which technical level is required as from which date.

However, Contractor must ensure that Client can use the old generation of the system software for at least three years, unless otherwise agreed. If necessary, Contractor shall further develop the application programs on the basis of the old generation of the system software until this period is elapsed; but Contractor is only obligated to keep the application programs operational. This period shall commence with the release of each new generation of the system software; but if it is necessary that Contractor makes the application programs compatible with a new generation of the system software, the period shall commence with the release of such compatible version of the application programs.

10.5 Contractor is obligated to further develop its programs, if alterations of legal provisions or other provisions with which the programs must comply require such adaptation.

If the adaptation requires major redevelopment of the programs, the comprehensive charge does not cover the delivery of the new version. In this event, Contractor is entitled to an appropriate additional compensation taking into account the number of clients that need and order such redevelopment.

10.6 If a new version of the programs is not compatible with the old one, Contractor shall make available migration tools insofar as technically and at acceptable costs to Contractor feasible. With respect to third party programs Contractor is only obligated to pass such migration tools that it’s supplier has made available to him.

§ 11 Charges and Payments

11.1 The comprehensive monthly charge for the maintenance of the programs shall be dependent on the agreed extent of the right to use the programs (see § 2.2). If the right to use is extended, the charge shall be adjusted accordingly.

11.2 The comprehensive charges without deductions shall be paid annually in advance. Alternatively, Client may pay it pro rata half-yearly with a surcharge of 5 % or calendar quarterly with a surcharge of 8 %.

11.3 Contractor may increase the comprehensive monthly charges in accordance with its new price list for new maintenance agreements percentage in accordance with the required percentage for new maintenance agreements with effect from the next calendar year. Contractor shall notify increases three months in advance. Decreases shall become effective immediately.

11.4 The maintenance agreements shall run for an indefinite period of time. They may be terminated as to the end of a contract year (but not before the end of an agreed minimum period) by giving three month's notice in writing.

Contractor is entitled to terminate the maintenance agreement before the end of the fifth full calendar year only for the purpose of requiring modified conditions due to adverse circumstances, and in particular in the event that the supplier of the system software needed restricts its maintenance services.

Contractor is entitled to terminate the maintenance agreement before the end of the fifth full calendar year only for the purpose of adapting the maintenance services to new technical conditions, and in particular to the situation that the supplier of the system software needed for the operation of the programs restricts the maintenance thereof.

§ 12 Maintenance of the Client Specific Programming

12.1 As long as there is an agreement on basic maintenance of the standard programs, Contractor shall render maintenance for the programming performed for Client subject to remuneration on the basis of costs. The correction of defects shall be free of charge during the warranty period for the delivery.

12.2 If maintenance is agreed subject to a comprehensive charge, Contractor shall render the same services as for the standard programs. The comprehensive charge shall cover also the transfer of modifications/extensions onto new versions of the standard programs, and if needed the adaptation of Client’s individual programs to new versions. Client is entitled to terminate the maintenance pursuant to § 11.4 regardless of the termination of the maintenance of the standard programs.

IV. Final Conditions

§ 13 Charges and Payments

13.1 Prices for hardware are ex factory. Accessories, such as media, signal amplifier, data cables or power supply cables, are only included in the price as stated in the contract. If Contractor connects such equipment with the central processing unit which is not placed near this unit, such work shall be charged in addition.

13.2 If one of Contractor's suppliers increases or decreases his list price with effect to Contractor, Contractor may or must pass such change to Client. Increases are not allowed for those deliveries which shall take place within four month after conclusion of the contract. If the increase exceeds 10 p.c., Client is entitled to rescind the contract within thirty days after receipt of the demand for the increase.

13.3 If it is agreed to remunerate Contractor on the basis of costs incurred, daily rates (8 hours), travel expenses and incidental expenses shall be paid in accordance with Contractor's current standard rates (price list), unless other rates are agreed on.

Travel time shall be counted as 50 % of working time. Contractor may submit invoices on a monthly basis.

13.4 Payments for the products shall be billed after the installation if carried out by Contractor, otherwise after delivery.

13.5 Payments without deductions shall be made immediately after invoicing. Client is entitled to question invoices on the basis of costs incurred only within one month after receipt. Contractor shall remind Client thereof in the invoices.

13.6 Mehrwertsteuer (Value Added Tax) shall be added to all prices according to statute.

13.7 If payments are delayed, Client is not allowed to use the programs.

§ 14 Contractor's Claims, Contractor's Delay

14.1 In the event of any circumstances for which Contractor is not responsible, and which adversely affect the performance of the contractual obligations, including strike and lock-out, Contractor is entitled to an appropriate adaptation of the terms of the contract, in particular to an appropriate extension of the delivery date. If the cause is attributable to Client and results in additional efforts to Contractor, Contractor is also entitled to additional compensation.

14.2 If Contractor's delay exceeds 30 days, Client is entitled for every subsequent week to a penalty of 1/2 % of the value of that part of the works that cannot be used according to the purposes of the contract, but the penalty shall be limited to 5 % of the total contract value. If Contractor is in delay with the delivery of a new version of a program under the maintenance agreement (see § 10), the penalty shall be calculated on the basis of 50 % of the license fee paid.

§ 15 Tele-Support

15.1 Client shall enable Contractor to carry out tele-support (tele diagnosis and tele corrections, transfer of new versions) to the greatest extent technically possible. In concert with Contractor, Client shall provide a telecommunication connection at its own expenses so that the edp-systems can be connected. Client shall pay for communication costs, unless otherwise agreed.

15.2 For security and privacy purposes access to Client’s edp-system by Contractor shall be controlled by a security procedure established by Client. Client shall release the connection. Contractor shall inform Client of the modifications performed.

15.3 If Client does not enable Contractor to perform tele-support, Client shall reimburse Contractor resulting additional costs, in any case travel time and additional costs for the correction of defects or deficiencies.

15.4 If data are transferred to Contractor for their restoration or for the search of defects, Contractor shall establish all technical and organizational measures in its organization equivalent to those Client has to establish for security and privacy pursuant to the Data Protection Act applicable to Client. At Client’s request, details shall be agreed on separately.

§ 16 Removal of Defects

16.1 If Client finds in the course of correct use of the programs what it believes to be a defect in a product, Client shall provide Contractor with reasonably specific information as to the nature of the defect and the conditions under which it occurs, in writing, if so requested by Contractor.

Client is only entitled to raise claims if Client can reproduce the defect or demonstrate it either directly or by using computer output.

Upon request, Client shall give all necessary support to Contractor, and in particular provide a copy of the relevant program being used when the defect appeared. Client shall provide testing time on Client's edp-system and install corrections delivered by Contractor.

16.2 Contractor shall, within a reasonable period of time and at no cost to Client, remove the defect at its discretion either by replacing the defective product or by correction of defects (subsequent performance). If a defect substantially restricts the use of an application program, Contractor shall provide a workaround (temporary solution), if needed so that the defect is not substantial any longer. Contractor may deliver the correction of other defects in a new version as soon as adequate subject to a reasonable policy of further development. With respect of these defects, Contractor shall develop workarounds insofar as these are technically and at acceptable costs to Contractor feasible.

With respect to programs which are defined as third party programs Contractor can only use its best endeavours to obtain and transfer corrective measures and, if appropriate, provide workarounds.

16.3 The obligation to remove defects (subsequent performance) is expressly excluded for those products which Client modifies or manipulates in any other way unless Client proves, when reporting a defect, that the defect did not result from any such modification or manipulation.

16.4 Contractor is entitled to reimbursement of costs if Client reports what it believes to be a defect without being able to prove it to be so (Client's claim for support pursuant to § 9 shall not be affected).

§ 17 Contractor's Liability

The legal provisions shall apply with the following amendments:

17.1 Defects shall be removed according to § 16.

17.2 In respect of any claim which is based on normal negligence Contractor - including any person engaged in performing any obligation under this contract - shall be liable for damages only if Contractor breaches a basic obligation of contract.

In this event Contractor's liability shall be restricted per case of damage to the higher of the following amounts: the contract value (without VAT) or Euro 100.000. Liability for lost profit is excluded. If an obligation under maintenance (part III) is violated, the yearly charge for either the hardware or the software (depending of the kind of the defect) of the year in which the damage occurs shall be taken as the contract value. At the conclusion of the contract Client may claim for a higher liability, but Contractor may require a surcharge for the aggravated risk.

The restrictions shall not apply to the extent to which damages are covered and actually paid under Contractor's business liability insurance. Contractor agrees to uphold the coverage of this insurance as given at the conclusion of the contract.

Claims concerning personal injury or claims concerning damage to tangible property based on product liability shall remain unaffected.

17.3 If Client is entitled to rescind the contract and/or claim for damages, Contractor is entitled to set a period within which Client must declare whether or not Client still requests primary or subsequent performance. If Client does not request primary or subsequent performance timely, Client cannot claim for it any longer.

17.4 The period of warranty (the limitation period for claims based on defects) shall be 12 months. The extension of the right to use the programs (§ 2.2) shall not result in a new period of warranty.

§ 18 Confidentiality

18.1 Contractor shall keep confidential Client's trade and business secrets, and all other information designated in writing as confidential by Client, obtained under or in connection with this contract. Contractor shall have no obligation with respect to any information that is already in its possession, is independently developed or becomes publicly known through no wrongful act of Contractor. This obligation shall survive the contract in the case of its rescission.

18.2 Contractor is not obligated to keep confidential any ideas, concepts, know-how or techniques related to the development of software.

18.3 Contractor shall require its employees to adhere to the obligations stipulated in § 18.1.

18.4 Contractor may enter Client's name into its list of customers together with a short description of the Contractor's performance. All other references that Client is Contractor's customer are subject to Client’s prior approval.

§ 19 General Matters

19.1 The contract shall constitute the entire agreement between the parties and shall not be altered, amended or cancelled, except in writing and with the consent and signature of all parties concerned.

19.2 The parties, if they are merchants, hereby submit to the jurisdiction of Contractor's main place of business.

19.3 This contract shall conform with and be governed by the laws of the Federal Republic of Germany. The United Nations Convention on Contracts for the International Sale of Goods (which has been incorporated into German law for customers in a foreign country) shall not apply to foreign clients.

Version: 2002-04-08