GENERAL CONDITIONS

FOR THE SUPPLY OF PRODUCTS AND SERVICES

OF THE ELECTRICAL AND ELECTRONICS INDUSTRY *

for commercial transactions

I. GENERAL

1.

The scope of deliveries and/or services (hereinafter referred to as

,,Supplies") shall be determined by the written declarations of both Parties.

General terms and conditions of the Purchaser shall apply only if and when

expressly accepted by the supplier or the provider of services (hereinafter

referred to as ,,Supplier") in writing.

2.

The Supplier herewith reserves any industrial property rights and/or copy-

rights pertaining to its cost estimates, drawings and other documents (here-

inafter referred to as ,,Documents"). The Documents shall not be made

accessible to third parties without the Suppliers prior consent and shall,

upon request, be returned without undue delay to the Supplier if the con-

tract is not awarded to the Supplier. 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 may rightfully transfer

Supplies.

3.

The Purchaser shall have the non-exclusive right to use standard software,

provided that it remains unchanged, is used within the agreed performance

parameters, and on the agreed equipment. The Purchaser may make one

back-up copy without express agreement.

4.

Partial Supplies shall be allowed, unless they are unreasonable to accept for

the Purchaser.

II. PRICES AND TERMS OF PAYMENT

1.

Prices shall be ex works and exclude packaging; value added tax shall be

added at the then applicable rate.

2.

If the Supplier is also responsible for assembly or erection and unless oth-

erwise agreed, the Purchaser shall pay the agreed remuneration and any

incidental costs required, e. g. travel costs, costs for the transport of tools

and equipment, and personal luggage as well as allowances.

3.

Payments shall be made free Suppliers paying office.

4.

The Purchaser may set off only those claims that are undisputed or against

which no legal recourse is possible.

III. RETENTION OF TITLE

1.

Items pertaining to the Supplies ("Retained Goods") shall remain the prop-

erty of the Supplier until each and every claim the Supplier has against the

Purchaser on account of the business connection has been fulfilled. If the

combined value of the security interests of the Supplier exceeds the value

of all secured claims by more than 20 %, the Supplier shall release a corre-

sponding part of the security interest if so requested by the Purchaser.

2.

For the duration of the retention of title, the Purchaser may not pledge the

Retained Goods or use them as security, and resale shall be possible only

for resellers in the ordinary course of their business and only on condition

that the reseller receives payment from its customer or makes the transfer

of property to the customer dependent upon the customer fulfilling its obli-

gation to effect payment.

3.

The Purchaser shall inform the Supplier forthwith of any seizure or other act

of intervention by third parties.

4.

Where the Purchaser fails to fulfil its duties, including failure to make pay-

ments due, the Supplier shall be entitled to cancel the contract and take

back the Retained Goods in the case of continued failure following expiry of

a reasonable time set by the Supplier; the statutory provisions that a time

limit is not needed remain unaffected. The Purchaser shall be obliged to sur-

render the Retained Goods.

IV. TIME FOR SUPPLIES; DELAY

1.

Times set for Supplies can only be observed if all Documents to be supplied

by the Purchaser, necessary permits and releases, especially concerning

plans, are received in time and if agreed terms of payment and other obli-

gations of the Purchaser are fulfilled. Unless these conditions are fulfilled in

time, times set shall be extended appropriately; this shall not apply where

the Supplier is responsible for the delay.

2.

If non-observance of the times set is due to force majeure such as mobi-

lization, war, rebellion or similar events, e. g. strike or lockout, such time

shall be extended accordingly.

3.

If the Supplier is responsible for the delay (hereinafter referred to as ,,Delay")

and the Purchaser demonstrably suffered a loss therefrom, the Purchaser

may claim a compensation as liquidated damages of 0.5 % for every com-

pleted week of Delay, but in no case more than a total of 5 % of the price of

that part of the Supplies which because of the Delay could not be put to the

intended use.

4.

Purchasers claims for damages due to delayed Supplies as well as claims

for damages in lieu of performance exceeding the limits specified in No. 3

above 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 due to

injury of life, body or health. Cancellation of the contract by the Purchaser

based on statute shall be limited to cases where the Supplier is responsible

for the delay. The above provisions do not imply a change in the burden of

proof to the detriment of the Purchaser.

5.

At the Suppliers request the Purchaser shall declare within a reasonable

period of time whether the Purchaser cancels the contract due to the

delayed Supplies or insists on the Supplies to be carried out.

6.

If dispatch or shipment is delayed at the Purchasers request by more than

one month after notice of the readiness for dispatch was given, the

Purchaser may be charged, for every month commenced, storage costs of

0.5 % of the price of the items of the Supplies, but in no case more than a

total of 5 %. The parties to the contract may prove that higher or, as the case

may be, lower storage costs have been incurred.

V. TRANSFER OF RISK

1.

Even where delivery has been agreed freight free, the risk shall pass to the

Purchaser as follows:

a) if the Supplies do not include assembly or erection, at the time when the

Supplies are shipped or picked up by the carrier. Upon request of the

Purchaser, the Supplier shall insure the Supplies against the usual risks

of transport at the expense of the Purchaser;

b) if the Supplies include assembly or erection, at the day of taking over in

the own works or, if so agreed, after a fault-free trial run.

2.

The risk shall pass to the Purchaser if dispatch, shipping, the start or per-

formance of 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 has otherwise failed to accept the Supplies.

VI. ASSEMBLY AND ERECTION

Unless otherwise agreed in writing, assembly/erection shall be subject to the

following provisions:

1.

The Purchaser shall provide at its own expense and in good time:

a) all earth and construction work and other ancillary work outside the

scope of the Supplier, including the necessary skilled and unskilled

labour, construction materials and tools,

b) the equipment and materials necessary for assembly and commissioning

such as scaffolds, lifting equipment and other devices as well as fuels

and lubricants,

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

lighting,

d) suitable dry and lockable rooms of sufficient size adjacent to the site for

the storage of machine parts, apparatus, materials, tools, etc. and ade-

quate working and recreation rooms for the erection personnel, including

sanitary facilities as are appropriate in the specific circumstances.

Furthermore, the Purchaser shall take all measures it would take for the

protection of its own possessions to protect the possessions of the

Supplier and of the erection personnel at the site,

e) protective clothing and protective devices needed due to particular con-

ditions prevailing on the specific site.

2.

Before the erection work starts, the Purchaser shall make available of its

own accord any information required concerning the location of concealed

electric power, gas and water lines or of similar installations as well as the

necessary structural data.

3.

Prior to assembly or erection, the materials and equipment necessary for the

work to start must be available on the site of assembly/erection and any

preparatory work must have advanced to such a degree that assembly/erec-

tion can be started as agreed and carried out without interruption. Access

roads and the assembly/erection site itself must be level and clear.

4.

If assembly, erection or commissioning is delayed due to circumstances for

which the Supplier is not responsible, the Purchaser shall bear the reason-

able costs incurred for idle times and any additional travelling of the Supplier

or the erection personnel.

5.

The Purchaser shall attest to the hours worked by the erection personnel

towards the Supplier at weekly intervals and the Purchaser shall immediate-

ly confirm in writing if assembly, erection or commissioning has been com-

pleted.

6.

If, after completion, the Supplier demands acceptance of the Supplies, the

Purchaser shall comply therewith within a period of two weeks. In default

thereof, acceptance is deemed to have taken place. Acceptance is also

deemed to have been effected if the Supplies are put to use, after comple-

tion of an agreed test phase, if any.

VII. RECEIVING OF SUPPLIES

The Purchaser shall not refuse to receive Supplies due to minor defects.

VIII. DEFECTS AS TO QUALITY

The Supplier shall be liable for defects as to quality (,,Sachmängel", hereinafter

referred to as ,,Defects",) as follows:

1.

All parts or services where a Defect becomes apparent within the limitation

period shall, at the discretion of the Supplier, be repaired, replaced or pro-

vided again free of charge irrespective of the hours of operation elapsed,

provided that the reason for the Defect had already existed at the time when

the risk passed.

2.

Claims based on Defects are subject to a limitation period of 12 months.

This provision shall not apply where longer periods are prescribed by law

according to Sec. 438 para. 1 No. 2 (buildings and things used for a build-

ing), Sec. 479 para. 1 (right of recourse), and Sec. 634a para. 1 No. 2

(defects of a building) German Civil Code (,,BGB"), as well as in cases of

injury of life, body or health, or where the Supplier intentionally or grossly

negligently fails to fulfil its obligation or fraudulently conceals a Defect. The

legal provisions regarding suspension of expiration (,,Ablaufhemmung"),

suspension (,,Hemmung") and recommencement of limitation periods

remain unaffected.

3.

The Purchaser shall notify Defects to the Supplier in writing and without

undue delay.

4.

In the case of notification of a Defect, the Purchaser may withhold payments

to a reasonable extent taking into account the Defect occurred. The

Purchaser, however, may withhold payments only if the subject-matter of the

notification of the Defect occurred is justified beyond doubt. Unjustified noti-

fications of Defect shall entitle the Supplier to have its expenses reimbursed

by the Purchaser.

5.

The Supplier shall first be given the opportunity to supplement its perfor-

mance (,,Nacherfüllung") within a reasonable period of time.

6.

If supplementary performance is unsuccessful, the Purchaser shall be enti-

tled to cancel the contract or reduce the remuneration, irrespective of any

claims for damages it may have according to Art. XI.

7.

There shall be no claims based on Defect in cases of insignificant deviations

from the agreed quality, of only minor impairment of usefulness, of natural

wear and tear or damage arising after the transfer of risk from faulty or neg-

ligent handling, excessive strain, unsuitable equipment, defective workman-

ship, inappropriate foundation soil or from particular external influences not

assumed under the contract, or from non-reproducible software errors.

Claims based on defects attributable to improper modifications or repair

work carried out by the Purchaser or third parties and the consequences

thereof shall be likewise excluded.

8.

The Purchaser shall have no claim with respect to expenses incurred in the

course of supplementary performance, including costs of travel and trans-

port, labour, and material, to the extent that expenses are increased

because the subject-matter of the Supplies was subsequently brought to

another location than the Purchasers branch office, unless doing so com-

plies with the intended use of the Supplies.

9.

The Purchasers right of recourse against the Supplier pursuant to Sec. 478

BGB is limited to cases where the Purchaser has not concluded an agree-

ment with its customers exceeding the scope of the statutory provisions

governing claims based on Defects. Moreover, No. 8 above shall apply

mutatis mutandis to the scope of the right of recourse the Purchaser has

against the Supplier pursuant to Sec. 478 para. 2 BGB.

10. Furthermore, the provisions of Art. XI (Other Claims for Damages) shall apply

in respect of claims of damages. Any other claims of the Purchaser against

the Supplier or its agents or any such claims exceeding the claims provided

for in this Art. VIII, based on a Defect, shall be excluded.

IX. INDUSTRIAL PROPERTY RIGHTS AND COPYRIGHT;

DEFECTS IN TITLE

1.

Unless otherwise agreed, the Supplier shall provide the Supplies free from

third parties industrial property rights and copyrights (hereinafter referred to

as ,,IPR") with respect to the country of the place of destination. If a third

party asserts a justified claim against the Purchaser based on an infringe-

ment of an IPR with respect to the Supplies made by the Supplier and then

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 choose whether to acquire, at its own expense, the

right to use the IPR with respect to the Supplies concerned or whether to

modify the Supplies such that they no longer infringe the IPR or replace

them. If this would be unreasonable to demand from the Supplier, the

Purchaser may cancel the contract or reduce the remuneration pursuant

to the appli-cable statutory provisions.

b) The Suppliers liability to pay damages shall be governed by Art. XI.

c) The above obligations of the Supplier shall only apply if the Purchaser

(i) immediately notifies the Supplier of any such claim asserted by the third

party in writing, (ii) does not concede the existence of an infringement and

(iii) leaves any protective measures and settlement negotiations to the dis-

cretion of the Supplier. If the Purchaser stops using the Supplies in order

to reduce the damage or for other good reason, it shall be obliged to point

out to the third party that no acknowledgement of the alleged infringe-

ment may be inferred from the fact that the use has been discontinued.

2.

Claims of the Purchaser shall be excluded if it is itself responsible for the

infringement of an IPR.

3.

Claims of the Purchaser shall also be excluded if the infringement of the IPR

is caused by specifications made by the Purchaser, to a type of use not fore-

seeable by the Supplier or to the Supplies being modified by the Purchaser

or being used together with products not provided by the Supplier.

4.

In addition, with respect to claims by the Purchaser pursuant to No. 1 a)

above, Art. VIII Nos. 4, 5, and 9 shall apply mutatis mutandis in the event of

an infringement of an IPR.

5.

Where other defects in title occur, Art. VIII shall apply mutatis mutandis.

6.

Any other claims of the Purchaser against the Supplier or its agents or any

such claims exceeding the claims provided for in this Art. IX, based on a

defect in title, shall be excluded.

X. IMPOSSIBILITY OF PERFORMANCE; ADAPTATION OF CONTRACT

1.

To the extent that Supplies are impossible to be carried out, the Purchaser

shall be entitled to claim damages, unless the Supplier is not responsible for

the impossibility. The Purchasers claim for damages shall, however, be lim-

ited to an amount of 10 % of the value of the part of the Supplies which,

owing to the impossibility, cannot be put to the intended use. This limitation

shall not apply in the case of mandatory liability based on intent, gross neg-

ligence or injury of 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 Purchaser

to cancel the contract shall remain unaffected.

2.

Where unforeseeable events within the meaning of Art. IV No. 2 substantial-

ly change the economic importance or the contents of the Supplies or con-

siderably affect the Suppliers business, the contract shall be adapted ta-

king into account the principles of reasonableness and good faith. Where

doing so is economically unreasonable, the Supplier shall have the right to

cancel the contract. If the Supplier intends to exercise its right to cancel the

contract, it shall notify the Purchaser thereof without undue delay after hav-

ing realised the repercussions of the event; this shall also apply even where

an extension of the delivery period had previously been agreed with the

Purchaser.

XI. OTHER CLAIMS FOR DAMAGES

1.

Any claims for damages and reimbursement of expenses the Purchaser may

have (hereinafter referred to as ,,Claims for Damages"), based on whatever

legal reason, including infringement of duties arising in connection with the

contract or tort, shall be excluded.

2.

The above shall not apply in the case of mandatory liability, e. g. under the

German Product Liability Act (,,Produkthaftungsgesetz"), in the case of

intent, gross negligence, injury of life, body or health, or breach of a condi-

tion which goes to the root of the contract (,,wesentliche Vertragspflichten").

However, Claims for Damages arising from a breach of a condition which

goes to the root of the contract shall be limited to the foreseeable damage

which is intrinsic to the contract, unless caused by intent or gross negli-

gence or based on liability for injury of life, body or health. The above provi-

sion does not imply a change in the burden of proof to the detriment of the

Purchaser.

3.

To the extent that the Purchaser has a valid Claim for Damages according

to this Art. XI, it shall be time-barred upon expiration of the limitation period

applicable to Defects pursuant to Art. VIII No. 2. In the case of claims for

damages under the German Product Liability Act, the statutory provisions

governing limitation periods shall apply.

XII. VENUE AND APPLICABLE LAW

1.

If the Purchaser is a businessperson, sole venue for all disputes arising

directly or indirectly out of the contract shall be the Suppliers place of busi-

ness. However, the Supplier may also bring an action at the Purchasers

place of business.

2.

Legal relations existing 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. SEVERABILITY CLAUSE

The legal invalidity of one or more provisions of this contract shall in no way

affect the validity of the remaining provisions. This shall not apply if it would be

unreasonable for one of the parties to continue the contract.