General sales terms and conditions

1. In the SALES CONTRACT, the following definitions apply:
SELLER means Shanghai Nanhua Electronics Co., Ltd. and its legal successors and assigns.
DELIVERY DATE means the date(s) specified in the SALES CONTRACT for delivery of the COMMODITIES.
FORCE MAJEURE has the meaning given to it in Clause 10 (Force Majeure).
COMMODITIES means the goods and services to be supplied under the SALES CONTRACT. Where appropriate, references to the COMMODMES shall be to parts or sections of the COMMODITES.
PRICE means the price, or where more than one price is stated, the aggregate of prices, stated in the SALES CONTRACT for the supply and delivery of the COMMODITIES.
SALES CONTRACT means the contract between the SELLER and the BUYER for the supply of the COMMODITIES, which comprises these General Terms and Conditions, the attachments, requisitions, drawings, specifications and other documents included and/or referred to in the SALES CONTRACT, together with the BUYER's unconditional written acceptance of the SALES CONTRACT, and any subsequent written amendments to the original SALES CONTRACT.
SALES CONTRACT AMENDMENT means a document, signed by both parties, that formally records the details of any amendment to the SALES CONTRACT made under Clause 5 (Variations)and agreed between the BUYER and the SELLER, including but not limited to, changes to the specification, quantity, DELIVERY DATE(S) and/or PRICE
BUYER means the firm, company or other corporate entity (including its successors and/or permitted assigns) contracted by the SALES CONTRACT to purchase the COMMODITIES from the SELLER.

2. The SALES CONTRACT constitutes the entire agreement between the BUYER and the SELLER with respect to the supply of the COMMODITIES and supersedes all previous negotiations, representations and/or agreements between the parties, both written and oral. In particular, all standard or other sales terms submitted by the BUYER, whether prior to or after the date of the SALES CONTRACT, shall be overridden and excluded unless they have been accepted by the SELLER and expressly incorporated into the SALES CONTRACT.
No amendment to the SALES CONTRACT shall be effective unless recorded in a SALES CONTRACT AMENDMENT.

3. The headings in the terms and conditions are included only for ease of reference and shall neither be part of, nor be taken into consideration in the interpretation of the SALES CONTRACT.

4. Throughout the SALES CONTRACT, unless stated otherwise:
Reference to days means calendar days unless the term working days is used.
Words in the singular include the plural, and vice versa. The words he and his may be read as she and hers.
All references to clause numbers are to those of these General Terms and Conditions of Sale and Supply.

5. Whenever the consent of either the BUYER or the SELLER is requred under the SALES CONTRACT, it shall not be unreasonably withheld.

1. The BUYER shall, immediately upon its receipt of the COMMODITIES, inspect whether the quantity, specifications and appearance of COMMODMES comply with the provisions of this Contract and sign certificate of receipt. BUYER shall file any claim in respect of quantity or other aspects of the COMMODIT within FIVE (5) days upon its receipt of the COMMODMTES.

2. SELLER shall provide remedies as laid down in Clause 9 below for such claims at the latest within SEVEN (7) days upon receipt of BUYER 's claim.

1. The SALES CONTRACT documents are to be taken as being mutualy explanatory of one another.

2. Subject to any decision or ruling on the matter by the BUYER under sub-clause 3.3, if differing standards relating to the same matter appear or are referred to within the SALES CONTRACT, the most stringent of the standards shall apply.

3. Without prejudice to sub-clauses 3.1 and 3.2, if the SELLER becomes aware of any discrepancy, contradiction or ambiguity in the SALES CONTRACT documents, it shall notify the BUYER accordingly and request decision or ruling on the matter. Unless agreed otherwise, the BUYER shall provide the SELLER with a decision or ruling within five (5) working days.

4. Should normal engineering or manufacturing practice require any item of work, equipment or material which has not been specified in the SALES CONTRACT, but is required to be performed or provided for ensuring the proper functioning of the COMMODITIES, a SALES CONTRACT AMENDMENT shall be executed by the Partles.

5. SELLER reserves the property rights and copyrights to pictures, drawings calculations and other documents; these shall not be made available to third parties. This shall apply, above all, to such written documents which are designated as "confidential" : before passing on any such documents to third parties, the customer must obtain our express written approval.

1. In consideration of the satisfactory supply, delivery and warranty of the COMMODITIES, the BUYER shall pay the PRICE, together with any amendments to the PRICE made under the clause 5 to the SELLER, in accordance with the terms and/or schedule of payments set forth in the SALES

2. Unless stated otherwise in the order confirmation, PRICE is for COMMODITIES delivered "ex works" and is exclusive of packing; packing and shipping charges, if any, will be charged separately.

3. PRICE is exclusive of Value Added Tax (VAT); for domestic sales, VAT will be shown separately in the invoice at the statutory rate applicable on the day of invoicing.

4. All expenses connected to the delivery such as transport insurance, loading and conveyance, customs duties and VAT shall be borne by the BUYER unless agreed otherwise.

5. Cash discounts must be specifically agreed in writing.

6. Unless agreed otherwise, PRICE becomes due upon receipt of the invoice and is payable without discount within thirty 30 days.

7. In the event of delay in payment, interest shall be charged from the due date at the rate of 1% on top of the Bank of China s base rate.

8. Subject to Clause 5 (Variations), and unless otherwise stated elsewhere in the SALES CONTRACT or SALES CONTRACT AMENDMENT, the SELLER agrees that the PRICE stated in the SALES CONTRACT is fixed and will not be subject to adjustment and/or escalation.

9. BUYER may set off counterclaims only if non-appealable, uncontested or recognised by SELLER in writing. A right of retention may be exercised by BUYER only if its counterclaim concerns the same contractual relationship. The BUYER is not entitled to set off payment against any claims which the BUYER considers to have against the SELLER in respect of any other sales or service.

1. SELLER reserves the right to make customary changes to the supply quantity and condition of the GOOD. Such changes must be accepted by BUYER if they are immaterial and if BUYER can be reasonably expected to accept them.

2. The BUYER may, at any time, give proposed variations to the specifications, quantity or delivery of the COMMODITIES, and/or vary the terms of the SALES CONTRACT in any other way. Instructions to the SELLER covering proposed variations must be issued by the BUYER's designated representative in writing and confirmed by the SELLER. If, for practical reasons, it is necessary for the BUYER's designated representative to give any such instruction orally, the instruction shall be effective only if it is confirmed in writing by the BUYER's designated representative within twenty-four (24) hours of being given.

3. Before reaching the amendment of SALES CONTRACT, SELLER will not carry out the proposed variation given by the BUYER. The results, losses, damages, liability and any other delay thereof shall be undertaken by the BUYER.

4. SELLER shall only be liable for the cost directly caused by SELLER, including the costs caused by any owner, third party or BUYER.

1. The DELIVERY DATE shall be agreed by the SELLER and the BUYER in the SALES CONTRACT within the delivery periods which will begin only when all technical questions have been sorted out.

2. Unless otherwise agreed, the COMMODITIES shall be delivered ex works in accordance with the ICC Terms of Trade for International Contracts (INCOTERMS 2000) as specified in the SALES CONTRACT.

3. Fulfilment of SELLER's delivery obligation shall be conditional on the timely and proper fulfilment of the BUYER's obligations

4. At BUYER 's request, the COMMODITIES will be shipped to another place of destination at its cost. Risk shall pass to BUYER upon handing over of the Commodities to BUYER or, in case of shipment, upon handing over to the carrier. If the BUYER so requests, SELLER will take out a transport insurance for the delivery, the cost of such insurance to be borne by the BUYER.

5. If the BUYER should wish a later delivery date than that contractually agreed upon and SELLER consent to such postponement, the BUYER shall be charged the cost incurred by storage-in the event of storage at our factory no less than 2% of the net value of the SALES CONTRACT for each month, within one month calculated as one month. SELLER are also entitled, after a reasonable time limit set by SELLER has passed to no avail, to dispose otherwise of the delivery goods and to deliver to the BUYER with an appropriately extended time limit.

1. If there is a delay in delivery and the BUYER grants SELLER a fair and reasonable period of grace with an explicit written declaration that he will decline acceptance after the period of grace, and if SELLER are in default in not complying with the period of grace, the BUYER is entitled to rescind the contract.

2. In the event of delivery ex works, the BUYER is obliged to request delivery of the delivery goods upon being notified that they are ready for despatch, or in the event of agreed delivery to the designated place to accept it upon delivery. If the BUYER should fail to comply with this obligation, he is required to bear the additional costs incurred (e.g. storage and maintenance costs). Once a reasonable time limit set by the SELLER has passed to no avail, SELLER may rescind the Contract and dispose of the delivery goods otherwise and claim damages notwithstanding any other claims SELLER might have, and the results, losses, damages and liability thereof shall be undertaken by the BUYER. The risk of accidental loss or fortuitous deterioration in the delivery goods is transferred to the BUYER at the moment the BUYER is in delay with the acceptance of the delivery.

1. BUYER shall, immediately upon its receipt of the COMMODITIES, inspect whether the quantity, specifications and appearance of COMMODITIES comply with the provisions of this Contract and sign a certificate of receipt. BUYER shall file any claim in respect of quantity or other aspects of the COMMODITIES within 5 days upon its receipt of the COMMODITIES. SELLER shall provide remedies as laid down in Clause 9 below for such claims at the latest within 7 days upon receipt of BUYER's claim.

2. Any special acceptance procedures must be agreed to by SELLER's authorized representative in writing and maybe subject to additional charges.

1. SELLER warrants that the COMMODITIES are free of defects in material and workmanship and substantially conform to product specifications.

2. The warranty period for the COMMODITIES is one year from the date of delivery.

3. If any of the COMMODITIES are proven to be defective in material or workmanship during the warranty period, SELLER's entire liability and exclusive remedy will, at SELLER's sole option, be either: (a) repair, (b) replacement of the defective or non- conforming COMMODITIES, or(c) refund of the purpose price for the defective or non-conforming COMMODITIES if repair or replacement cannot be accomplished, within a reasonable time after written notification of the defect or non-conformity and return of the defective or non-conforming COMMODITIES to SELLER.

4. The warranties under this Clause apply only to normal use of the COMMODITIES and shall be void if SELLER determines the defects of the COMMODITIES were caused by BUYER's negligence, misuse or accident; or by unauthorized repair, alteration or installation of the COMMODITIES.

5. In case of any defects or non-conformity of the COMMODITIES due to reasons not attributable to SELLER, SELLER may upon written request of BUYER, repair or replace such COMMODITIES the cost of BUYER.

6. The warranties under this Clause are made in lieu of all warranties, expressed or implied, including the implied warranties of merchantability and fitness for purpose. In no event (other than for willful misconduct or gross negligence on the part of the SELLER) will SELLER be liable for any loss or damage, direct, incidental, or consequential, arising out of the use or the inability to use the COMMODITIES.

7. The SELLER is not liable for any kind of additional compensation apart from that expressly mentioned in this Contract and in any event-as far as legally permissible-every liability of the SELLER for all kind of indirect or consequential damages (e.g. loss of profit, loss of use, etc.) is expressly excluded.

1. The SELLER shall not be held responsible for any delay in delivery or non-delivery of the COMMODITIES due to the case of Force Majeure such as war, serious flood fire, strike, typhoon, storm, earthquake or other occumrences which are beyond the control of the party affected and which will be recognized in accordance with international practice as being cases of Force Majeure, the time for implementing his Contract shall be extended by a period equivalent to the effect of those occurrences upon agreement of both parties.

2. The affected party shall not be liable for any delay or failure in performing any of its obligations due to the event of Force Majeure. Neither party shall lodge claims for any losses thus incurred. However if the Force Majeure extends for a period of more than 10 weeks the BUYER may in its discretion cancel this Contract.

1. SELLER retains full title of all delivery goods until the BUYER has discharged all our payment claims arising from the business relationship with the BUYER (reserved goods). In case of an open account, all the reserved goods serve as guaranty for any outstanding amounts.

2. Provided the BUYER uses the reserved goods at his own factories, he is not permitted to resell, pledge or transfer ownership by way of security of all or parts of the reserved goods without SELLER's express prior consent in writing, as long as the retention of title exists.

3. If a BUYER has acquired reserved goods for the purpose of resale, he is permitted to do so in the normal course of business. Whenever reserved goods are resold, the BUYER assigns to SELLER already now his entire future claims against his buyer arising from such resale. SELLER hereby accepts this assignment. The BUYER shall be authorised to collect any receivables. The SELLER are also entitled to do so; although SELLER shall not do so until the BUYER fails to comply with his payment obligations or if there is deterioration in his financial position which jeopardises his payment obligations. This is the case, for instance, if the BUYER applies for insolvency proceedings. In this event the BUYER is required to provide SELLER upon first demand with all information and documents necessary for collection.

4. In the event the BUYER becomes insolvent or is threatened with insolvency actions the BUYER shall immediately inform SELLER of the relevant circumstances and the whereabouts of the goods so as to enable re-possession of the goods by SELLER.

5. In case the BUYER is in delay with the payment of the purchase price, SELLER are entitled to take possession of the reserved goods after a reasonable period of grace set by SELLER has passed to no avail. If the reserved goods should be in the possession of a third party, the BUYER is obliged upon first demand to communicate the whereabouts of the reserved goods and agrees that SELLER take possession of the reserved goods in this case.

6. If SELLER should assert SELLER's right of title to the reserved goods, take possession of them or pledge them, this shall not be deemed as a rescission of the Contract unless SELLER have explicitly declared such rescission.

1. As far as any plastic patterns or profiles are to be delivered requiring the manufacture of patterns and/or tools, SELLER will remain the owner of the patterns and tools manufactured by SELLER or by third parties instructed by SELLER. Such patterns and tools will be kept by SELLER free of charge for possible follow-up orders for two years since the last delivery of the plastics applied for manufacturing the patterns or tools. After expiry of this period, SELLER will be obliged to keep the patterns and tools only if this is agreed and only against payment. SELLER will inform the BUYER with at least one month's written notice of the expiry of such period

2. If it is agreed that the BUYER will become the owner of the patterns and/or tools, ownership thereto shall pass to the customer after payment of the price shown in the order for such patterns or tools. If no price is specified, ownership to the patterns or tools will pass to the BUYER upon payment of the total compensation indicated in the order for the plastics to be manufactured with these patterns or tools. If it is agreed after placing of the order that ownership to the patterns or tools shall pass to the BUYER, the BUYER will acquire ownership to such patterns or tools upon payment of the compensation specified in such agreement. In place of SELLER handing over the patterns or tools to the BUYER, they will be held by SELLER for the BUYER in accordance with the Clause 12.1. During such holding period, SELLER may only act as possessor of the patterns and tools. SELLER will designate the patterns and tools as third-party property and, at the BUYER 's request, will insure them at its cost.

3. The patterns and tools referred to in the Clause 12.1 and 12.2 above will be used solely for performing the orders of the BUYER.

4. Any changes to patterns or tools which are requested by the BUYER after placing of the order by providing SELLER with new information or change requests must be compensated by the BUYER separately. Such additional compensation will be determined in the written agreement regarding the performance of such changes.

1. The BUYER shall keep confidential and, except as required for the proper performance of its obligations under the SALES CONTRACT, not disclose to others or use business or technical information which is: disclosed to the BUYER by the SELLER, oracquired or generated by the BUYER in the course of performance of its obligations under the SALES CONTRACT. The obligations of sub-clause 13.1 shall not apply to information in the public domain other than through the act or omission of the BUYER or information which the BUYER owns or acquired lawfully from others and which may be freely disclosed without breach of any undertaking relating to confidentiality.

2. If the BUYER enters into a separate non-disclosur agreement and/or any licensing agreement with the SELLER covering the supply and/or use of the COMMODITIES, such agreement(s) shall overrule and take precedence over the provisions of sub-clause 13.1. A copy of any such separate agreement shall be deemed to be incorporated into the SALES CONTRACT, whether or not appended to it.

3. Except as required for the proper performance of its obligations under the SALES CONTRACT, the BUYER shall neither copy nor make abstracts of documents relating to the SALES CONTRACT for itself or on behalf of third parties.

4. The BUYER shall not make any internal or extemal publicity announcements regarding the SALES CONTRACT or his activities relating to it without the SELLER's prior written consent.

5. No photograph of any of the SELLER's existing or new installations, equipment or other property may be taken or published without the relevant party's prior written consent.

6. The confidentiality obligations under Clause 13 shall also apply to the SELLER, irrespective it is stipulated for the BUYER literally.

1. The formation of the SALES CONTRACT its validity, interpretation, execution and settlement of the disputes shall be governed by the laws of People's Republic of China.

1. None of the terms and conditions of the SALES CONTRACT shall be considered to be waived by either party unless a waiver is given in writing by one party to the other and signed by the authorised representatives of both parties.
No failure by either party to exercise any of its rights under the SALES CONTRACT shall constitute a waiver of those rights nor shall the failure excuse the other party from full performance of any of its obligations under the SALES CONTRACT.

2. The parties agree that if any competent tribunal determines that any part of a provision of the SALES CONTRACT is inoperative, invalid, illegal or otherwise unenforceable by operation of any relevant enactment or rule of law, it shall be deleted from the SALES CONTRACT. The remaining provisions of the SALES CONTRACT shall be enforceable as if the inoperative, invalid, illegal or otherwise unenforceable part had not been included.

1. The BUYER and the SELLER shall endeavor to settle any dispute or difference between them in connection with, or arising out of, the SALES CONTRACT by friendly consultations. Consultations shall begin immediately upon one Party delivering to the other Party a written request for such consultation.

2. If within 30 (thirty) days following the date on which the request is given, the dispute cannot be settled through consultation, the dispute shall be submitted to arbitration in Shanghai pursuant to the then effective arbitration rules and under the auspices of the China International Economic and Trade Arbitration Committee(CIETAC) Shanghai Branch upon the request of any Party with notice to the other Party.

3. The language of arbitration shall be Chinese.

4. The tribunal shall consist of three arbitrators Each Party shall select one arbitrator. The presiding arbitrator shall be selected by agreement of the two party-selected arbitrators or, failing agreement within ten days after the appointment of the two party-selected arbitrators.

5. The arbitration award shall be final and binding on the Parties, and the Parties agree to be bound thereby and to act accordingly. The costs of arbitration and the costs of enforcing the arbitral award (including witness expenses and reasonable attorneys' fees) shall be borne by the losing Party, unless otherwise determined by the arbitral award.

6. Despite any unresolved dispute or difference between the parties arising out of or in connection with the SALES CONTRACT or its performance, either party shall at all times proceed with the performance of its other indisputable obligations under the SALES CONTRACT unless the other party agrees otherwise in writing.