Terms of Sales

The specification, quantity, price and delivery date of the products to be sold by the Seller to the Buyer (hereinafter referred to as the “Products”) are stated in the sales quotation/order (hereinafter referred to as the “Sales Order”) signed/sealed by the Seller and the Buyer.

The manufacturer’s quality standard, quality acceptance standard and packaging requirement are in line with the Seller’s worldwide standard. On the condition that the Products’ quality meets the Buyer’s requirements, the Seller is entitled to modify the Products’ configuration and adjust the approximation of the Products’ volume and weight.

Unless otherwise specified, the purchase price stipulated in the Sales Order (hereinafter referred to as the “Purchase Price”) shall

(a) include the costs of the packaging of the Products;

(b) include the transportation cost within China mainland;

(c) not include the costs of installation, assembly and any related on-site service and/or maintenance of the Products;

(c) not include the costs of instructing and training the Buyer and/or its employees in the use of the Products.

5.1 If not otherwise stipulated in the Sales Order, the Purchase Price shall be remitted in full to the following bank accounts of the Seller before shipment:

5.2 The Buyer shall not unless otherwise agreed in writing by the Seller, be entitled to set off any claims allegedly owed by the Seller to the Buyer against the payment of the Purchase Price stipulated in the Sales Order.

Where the Buyer fails to pay the Purchase Price in accordance with the Sales Order, the Seller may, without prejudice to the rights that it has under the law for breach of contract by the Buyer,

(a) suspend or cancel any further deliveries of the Products until and unless such payment has been made, and

(b) claim interest at the rate of 2 of one thousand per day on the delayed payment from the due date until the date of receipt of the Seller’s payment.

7.1 The Products shall be delivered according to the stipulations in the Sales Order.

If the Sales Order does not contain any terms of delivery the Products shall be delivered FOB China Port (INCOTERMS 2000).

7.2 In case the Seller pays the freight according to the delivery terms stipulated in the Sales Order, the Seller has the right to choose carrier and transport route.

After the Seller has received full payment of the Purchase Price, it shall send to the Buyer by courier the following documents or send soft copy of relevant documents by email to allow the Buyer to take possession of the Products at the port of destination.

If other than in the circumstances of Force Majeure as defined herein, the Buyer fails to take delivery of the Products at the place and time stipulated in the Sales Order, it shall nevertheless be liable for the payments due and payable pursuant to the Sales Order. The Seller may arrange for the Products to be stored at the risk and the cost of the Buyer and shall subsequently inform the Buyer in writing to accept delivery of the Products within 14 days of issuance of the notice. If the Buyer fails to do so, the Seller shall be entitled to terminate the Sales Order and claim against the Buyer for any loss or damage suffered as a result of the failure of the Buyer to accept the delivery.

10.1 The Seller represents that

1.it is the legal owner of the Products sold under the Sales Order;

2.it has the legal right to transfer the ownership in the Products to the Buyer.

10.2 In the case of Products which have been manufactured according to the individual specifications of the Buyer, the Buyer represents and warrants that the information, materials, design, and specifications supplied by the Buyer to the Seller for the purpose of the manufacturing of the Products do not infringe any intellectual right of any third party.

10.3 A party shall be in breach of contract if any representation or warranty given by this party is not true and accurate or is misleading.

11.1 The Buyer shall keep confidential any technical or marketing information, e.g. drawings or specifications, or any information of a confidential nature, including but not limited to trade secrets and information of commercial value, which the Buyer may acquire from the Seller. This obligation does not apply if such information is public knowledge or already known to the Buyer at the time of disclosure or subsequently becomes public knowledge other than by breach of contract or subsequently comes lawfully into the possession of the Buyer from a third party. The above confidentiality obligation shall be extended to the representatives, agents, and employees of the Buyer and shall remain in force and effect indefinitely.

11.2 In the case of Products which have been manufactured according to the individual specifications of the Buyer, the Buyer shall assist and provide technical support to the Seller in the manufacturing of the Products by providing all necessary and relevant information and materials as and when requested by the Seller free of charge.

11.3 The Buyer shall not be allowed to re-sell, transfer, assign or pledge any of the Products for the purpose of providing security as long as full and final payment of the Purchase Price has not been made.

11.4 The Buyer shall be allowed, to re-sell the Products only under their original trade names and in their original presentation and undamaged sealed packaging, including original instructions as issued by the Seller without any modification, unless such modification has been expressly approved in writing by the Seller.

12.1 The right of ownership in the Products shall, despite their delivery to the Buyer, continue to vest in the Seller until and unless full and final payment of the Purchase Price under the Sales Order has been made by the Buyer to the Seller.

12.2 Despite the fact that the right of ownership in the Products does not pass to the Buyer upon delivery, the risk of any damage, loss, destruction or deterioration of the Products shall pass to the Buyer at the time of delivery.

Within 14 days after the arrival of the Products at the port of destination, the Buyer shall inspect the packaging, the quantity, the quality and specifications of the Products and shall remit a written notice to the Seller of any non-conformity, defects, discrepancies or irregularities thereto. The aforesaid written notice must include the following contents: contract number, delivery time and place, name and quantity of the Products which are considered not to be consistent with the Sales Order, the reason why the Buyer considers the Products to be not in accordance with the Sales Order, the Buyer’s inspection method, result and documentation, and information required by the Seller on a case by case basis.

Save for the defects covered by the product warranty as provided for in these Standard Sales Terms, if the Buyer fails to conduct such inspection and fails to raise any claims regarding the quantity, quality or specifications of the Products within the above time limit of 14 days, the Products shall be deemed to be in conformity with the Sales Order and the Buyer shall be deemed to have accepted the Products and the Seller shall not be liable for any claims raised thereafter. The Seller shall at his choice either replace the defective Products with new Products free of defects or make up the Products in short, repair the defective Products or reduce the Purchase Price. Any transportation costs arising in connection with a replacement of defective Products or makeup of Products in short shall be borne by the Seller.

14.1 The Seller agrees to provide the Buyer with a product warranty period of 6 months commencing from the date of delivery if the Products are proven to have defects. The warranty shall only be in effect, if the respective defective Products are returned to the Seller with carriage paid by the Buyer and the warranty claim is made immediately after discovery of the defect.

14.2 In the case of branded goods supplied to the Seller and bought-in components of the Seller etc., the Buyer shall only be entitled to the benefit of such warranty as may be given by the supplier to the Seller and any other rights in law which the Seller may have against the supplier or the manufacturer of such goods and components.

14.3 The Buyer’s remedies in respect of any claim under the foregoing express warranty or against any manufacturer or supplier as aforesaid or any claim under any condition or warranty implied by law or any other claim in respect of the Products shall in relation to goods of the Seller’s manufacture be limited to repair, replacement or refund of the purchase price of the defective goods at the choice of the Seller and any condition and warranty implied by law shall cease to apply after the expiry of the warranty period stated above and in all others cases be limited for the enforcement of the above-mentioned liabilities of the respective supplier against the Seller.

14.4 The Seller shall not in any circumstances be liable for any damages, compensation, costs, expenses, losses or other liabilities, whether direct, indirect or consequential and any other remedy which would otherwise be available except to the extend that such exclusion is legally forbidden under the governing law of these Standard Sales Terms.

15.1 The Seller shall not be liable for

1.the normal wear and tear of the Products;

2.any defect which is due to causes arising after the risk has passed to the Buyer;

3.any defect resulting from the negligence and/or fault on the part of the Buyer in maintaining, repairing or from the alteration or modification of the Products without the consent of the Seller

15.2 The Seller shall not be liable for any defects caused as a result of the Buyer’s refusal and/or

unwillingness to provide the necessary and relevant information and materials as required under Article 11.2 of these Standard Sales Terms for Products which have been manufactured according to the individual specifications of the Buyer.

15.3 The Buyer shall indemnify and hold the Seller harmless from and against any liabilities, claims, demands and expenses, including lawyers’ fees, for any damage or injuries resulting from any Products resold by the Buyer without giving appropriate instructions or warnings or from its failure to make any recall of the Products if required.

All taxes, fees and other charges due in connection with the transactions provided for in the Sales Order and which are levied by the relevant authorities shall be borne by the Seller and the Buyer according to the relevant legal stipulations unless otherwise stipulated in the Sales Order.

17.1 If either party cannot perform its obligations stipulated in the Sales Order due to reasons which are directly and exclusively attributable to an event of force majeure, it shall notify the other party by facsimile transmission or e-mail without undue delay of the occurrence of such an event and within 14 days thereafter.

17.2 Force majeure shall mean any of the following events: earthquake, storm, flood, fire or other acts of nature, epidemic, war, riot, public disturbance, strike or lock-outs, government and legislative actions or any other event beyond the control of the parties, where its occurrence is not preventable and unavoidable.

17.3 If an event of force majeure occurs, neither party shall be responsible for any damage, increased costs or losses which the other Party may sustain by reason of such failure or delay of performance. The party claiming force majeure shall adopt measures to minimize or remove the effects of force majeure and within the shortest time possible attempt to resume the performance of obligations affected by the event of force majeure. If the consequences of such an event cannot be remedied within 3 months from the occurrence, the parties shall through consultations decide whether to modify or terminate the Sales Order according to the effect of the event of force majeure on the performance of the Sales Order.

18.1 These Standard Sales Terms, as well as the Sales Order, shall be governed by the laws of the People’s Republic of China.

18.2 Any dispute arising out of or in connection with these Standard Sales Terms as well as any Sales Order, which cannot be resolved amicably by the parties within 30 days after the dispute has arisen, shall be finally submitted for arbitration to the China International Economic and Trade Arbitration Commission (hereinafter referred to as “CIETEC”), Shanghai Sub-Commission, acting on the basis of its Rules of Arbitration. The arbitration shall be held in Shanghai. The arbitration proceedings shall be conducted in the English language.

18.3 If an event of force majeure occurs, neither party shall be responsible for any damage, increased costs or losses which the other Party may sustain by reason of such failure or delay of performance. The party claiming force majeure shall adopt measures to minimize or remove the effects of force majeure and within the shortest time possible attempt to resume the performance of obligations affected by the event of force majeure. If the consequences of such an event cannot be remedied within 3 months from the occurrence, the parties shall through consultations decide whether to modify or terminate the Sales Order according to the effect of the event of force majeure on the performance of the Sales Order.

18.3 The arbitration tribunal shall consist of three arbitrators. The Seller and the Buyer shall each appoint one arbitrator and the third arbitrator, who is to act as chairman, shall be appointed by the two first-mentioned arbitrators. If a party fails to appoint its arbitrator within one month after receipt of the notice of arbitration issued by the arbitration tribunal, or if the two first-mentioned arbitrators cannot come to an agreement on the chairman within one month after they have been appointed, the respective arbitrator or chairman shall be appointed by the President of the CIETAC, Shanghai Sub-Commission.

18.4 The arbitration award shall be final and binding for the parties. The arbitration fee shall be borne by the losing party except as otherwise awarded by the arbitration tribunal. During the arbitration proceedings the parties shall continue to perform their contractual obligations except for the obligations which are in dispute.

19.1 These Standard Sales Terms shall to the greatest extent possible be interpreted in such a manner as to comply with the applicable laws, but if any provision hereof is, notwithstanding such interpretation, determined to be or to become invalid or enforceable or if there is an omission, the remaining provisions of these Standard Sales Terms shall remain to be binding upon the parties. The parties hereto agree to replace any such invalid or unenforceable provision by a valid one which comes as close as possible to the original purpose and intent of the invalid or unenforceable provision. In the event of an omission a provision that corresponds with the intention and purpose of what would have been agreed between the parties if the matter has been considered at the outset shall be deemed to have been agreed.

19.2 Any modifications and/or amendments to these Standard Sales Terms shall be made in writing and signed by both parties. Any waiver of any term or condition hereof shall be in writing and signed by the party waiving its rights and shall be deemed to refer only to the specific waiver indicated therein.

19.3 These Standard Sales Terms are made in both English and Chinese language. Both language versions shall be equally authentic. In case of discrepancies between the two language versions, the English language version shall prevail.

19.4 These Standard Sales Terms shall form an integral part of every Sales Order concluded between the Buyer and the Seller.