LAP Laser Applications China Co., Ltd.

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BASIC SALES CONTRACT
CODE OF CONDUCT FOR SALES PARTNERS OF LAP

This Basic Sales Contract (the “Contract”) is made on ______ (the “Effective Date”) by and between:

(A)     LAP Laser Applications China Co., Ltd., a company incorporated under the laws of the People’s Republic of China (the “PRC”), with its business address at East Area 4/F, Building 10, Lujiazui Software Park, No. 61 Lane 91 E-shan Road., Pudong New District, Shanghai. (“LAP” or “Party A”);

(B)     [_______], a company incorporated under the laws of [the PRC], with its business address at [______]. (“Customer” or “Party B”). 

(each a “Party” and collectively the “Parties”).

Whereas:

A. Party A is a wholly foreign-owned entity of LAP GMBH LASER APPLIKATIONEN in China. It is engaged in the business of sale and distribution of positioning lasers, laser and photoelectrical measurement systems and laser projection systems as well as relevant accessories in the PRC; and

B. Subject to the terms and conditions of this Contract hereinafter specified, the Customer desires to purchase, and LAP desires to supply to the Customer, LAP’s products.

In consideration of the mutual agreement contained in this Contract, the Parties hereby agree as follows:

1. Scope / Applicability

1.1 
All terms and conditions of this Contract shall be applicable to all individual sales contracts between the Parties (“Individual Sales Contracts”).

1.2
This Contract shall apply in place of any conditions of purchase of the Customer, even if such conditions of purchase stipulate that acceptance of an order is deemed to be the unconditional recognition of its conditions of purchase, or LAP delivers, after the Customer has indicated the applicability of its general terms and conditions of purchase, unless LAP has expressly waived the applicability of this Contract.

1.3
Specifications, quantity, price, delivery terms, delivery time, validity time and payment terms pertaining to a specific order shall be specified in the Individual Sales Contract.

1.4
Any Individual Sales Contracts shall be deemed to be incorporated in this Contract and construed as a part of this Contract. To the extent there is a conflict between the provisions of this Agreement and any of the Individual Sales Contracts, the Individual Sales Contract will prevail. 

2. Information / Consultancy / Characteristics of the Products and Services

2.1
Information and explanations regarding LAP’s products and services shall be provided solely on the basis of its experience to date. Values specified in this context shall be deemed average values of LAP’s products.

2.2
Any information about LAP’s products and services, especially illustrations, drawings, measurements, performance and equipment data or performance characteristics, and other data, especially technical data must be regarded as approximate average values. Specifications without tolerances as included in catalogues and/or brochures are subject to deviations and changes which are customary in the industry and/or differences and changes for production reasons, especially due to tolerances of raw materials and/or technical developments.

2.3
If LAP provides operating instructions, these shall be drawn up with the care customary in the industry but do not release the Customer from the obligation to inspect the products carefully regarding its suitability for the purpose intended by the Customer.

2.4
LAP will only assume the obligation to provide advice if a separate written consultancy agreement has been duly concluded between the Parties.

2.5
Reference to standards, similar technical regulations and technical information, descriptions and illustrations of the delivery item in quotations and brochures on LAP’s website and in LAP’s advertising shall only represent a characteristic of LAP’s products when LAP has expressly declared the condition to be a “characteristic of the product”; these are otherwise non-binding, general specifications of performance.

2.6
LAP shall only be deemed to have given a guarantee if it has designated a characteristic and/or the outcome of performance as “guaranteed by law”.

2.7
Subject to Clause 11, LAP shall assume no liability for the usability of LAP’s products or services for the Customer’s intended purpose other than liability prescribed by law unless LAP has agreed otherwise in writing with the Customer.

3. Specimens / Demo Equipment / Documents and Data Provided / Samples / Estimates of Cost 

3.1
Properties of specimens or samples shall only become an integral part of the Contract if expressly agreed in writing by the Parties. The Customer is not authorised to use and pass on specimens or samples.

3.2
LAP shall retain all title and copyright to samples, illustrations, drawings, data, estimates of cost and other documents about its products and services. The Customer undertakes not to disclose the above-mentioned samples, illustrations, drawings, data, estimates of cost and/or other documents (“Proprietary Items”) to third parties unless LAP gives its express written consent. These samples and/or documents shall be returned to LAP on request unless an order based on them has been placed with LAP. This Clause 3.2 shall apply to the Customer’s proprietary items.

3.3
LAP may, however, disclose the Proprietary Items to third parties, to whom LAP is permitted to make deliveries and / or provide services under the contract or whom it uses as agents. If LAP’s Proprietary Items are not returned within 7 calendar days of receipt of its request, LAP shall have the right at its option, as an alternative to requesting their return, to invoice them to the Customer based on LAP’s current price lists valid at the time for such goods and items.

4. Conclusion of Contract / Scope of Delivery and Service / Procurement Risk and Guarantee 

4.1
LAP’s quotations and price lists are subject to change unless they are expressly designated as binding or contain binding commitments. They are merely invitations to treat or requests to the Customer for orders.

The Customer shall be bound by its order as an offer to contract for 14 calendar days after LAP’s receipt of the order unless the Customer expects to receive LAP’s acceptance on a regular basis at a later date.

4.2
An Individual Sales Contract is created only when LAP confirms the Customer’s order in writing (including by telefax or email). Where delivery is made or a service provided within the period by which the Customer is bound by the order, LAP’s confirmation can be replaced by LAP’s invoice.

4.3
If the delivery item includes software, the Customer shall have a non-exclusive, irrevocable right to use it in unchanged form, without restriction in time and place, but solely in connec­tion with the use of the delivery item in which the software is implemented or for which it is intended, and in the case of third-party software only within the scope of the licensing terms of the third-party software producer and/or provider.

4.4
In the event of call orders or acceptance delays caused by the Customer, LAP has the right to procure and import the equipment of the entire order immediately. After the order is placed, no change requests from the Customer can therefore be considered unless this was expressly agreed in writing.

4.5
The Customer must notify LAP in writing in due time prior to conclusion of the contract of any special requirements of LAP’s products. Such notice shall not, however, extend LAP’s contractual obligations and liability.

4.6.
Assumption of a procurement risk or a procurement guarantee does not lie solely in LAP’s obligation to deliver an object which is only defined by its type.

4.7
LAP shall only assume a procurement risk by virtue of a separate written agreement stating “we assume the procurement risk...”.

4.8
If acceptance of the products or their shipment or the acceptance of LAP’s service is delayed for any reason for which the Customer is responsible, LAP has the right, after setting an extension of time of 14 days which has expired, at LAP’s option to request immediate payment of the purchase price and/or payment of the remuneration under the Contract, or to rescind the Contract or refuse performance and make a claim for all damages, losses, liabilities, costs and expenses (including legal fees on an indemnity basis) (collectively referred to as “Damages”) suffered thereby instead of full performance. The time limit must be given in writing. LAP shall not be required to refer again to LAP’s rights under this Clause 4.8.

In the event LAP claims Damages as stipulated above, the Damages to be paid shall amount to 30 % of the net delivery price in the case of sales contracts, or 30 % of the agreed net remuneration in the case of service contracts. This shall not affect any right of either party to prove a different amount of damage or that no damage was incurred.

4.9
If shipment is delayed at the Customer’s request or for reasons for which the Customer is responsible, LAP shall be authorised to store the goods, beginning on expiry of the period set in the notice in writing that the goods are ready for shipment, and to invoice the costs incurred for this at 2% of the net invoice amount of the stored goods for each full week or part thereof. This shall be without prejudice to, and shall not affect, LAP’s assertion of any other rights or remedies.

Furthermore, LAP has the right, after the foregoing time limit expires, to dispose of the contract goods otherwise, and to deliver to the Customer again after a reasonable time.

4.10
If an order or call for delivery is delayed by the Customer, LAP has the right to postpone the delivery by the same period of time as the Customer is behind schedule plus a scheduling period of 4 working days at the place of LAP’s head office in Lueneburg, Germany.

4.11
Unless otherwise expressly agreed in writing or LAP is subject to different statutory provisions, e.g. in the case of medical devices, LAP shall only be required to provide user information for LAP’s products and a product label in English.

5. Delivery / Packaging / Installation and Assembly

5.1
Binding delivery dates and periods must be agreed expressly and in writing as binding. LAP shall use LAP’s reasonable endeavours to meet delivery dates and periods that are not binding or an estimate.

5.2
Delivery and/or service periods shall begin with the Customer‘s receipt of LAP’s order confirmation but not before all details about the performance of the order are clarified and all other requirements to be fulfilled by the Customer are met, in particular advance payments or securities agreed are paid or provided in full. This shall apply to delivery dates and/or service dates. If the Customer requests changes after placing the order, a new, reasonable delivery and/or service period shall begin when LAP confirm the change.

5.3
Deliveries may be made and/or services provided prior to expiry of the time of delivery/service. The date of delivery shall be deemed the date on which the products arrive at the place agreed by the Parties.

5.4
The Customer’s interest in LAP’s performance shall lapse for lack of any other written agreement only if LAP fails to deliver material parts or deliver with delay.

5.5
If LAP defaults in delivery, the Customer must first give LAP a reasonable cure period or extension of time of at least 14 days, to perform the contract. If this elapses in vain, damage claims for breach of contract, for whatever reason, shall exist only as stipulated in Clause 5.7 and Clause 11.

5.6
LAP shall not be in default as long as the Customer is in default in fulfilling any of its obligations towards LAP, which shall also include obligations of the Customer under other contracts.

5.7
If the Customer incurs damage as a result of LAP’s default, the Customer shall have the right, to the exclusion of any further claims, to request compensation for default. It shall amount to 0.5% for each full week of default or part thereof but subject to a maximum aggregate of 5% of the net value of the complete delivery and/or complete service which, as a result of the default, is not delivered by LAP in due time or according to the contract. Any further compensation from LAP for damages due to delay shall be excluded. This shall not apply in the case of compulsory statutory basis for liability.

5.8
Unless otherwise agreed, LAP shall take back packaging only by reason of and within the scope of LAP’s legal obligation.

5.9
Unless otherwise agreed, the following provisions shall apply to installation and assembly:

(a) The Customer shall bear the costs of the following and provide the following in due time:
     (I) all excavation work, construction work and other auxiliary work which is outside LAP’s  industry including the provision of skilled and unskilled workers, building materials and tools required to do so;
     (II) the requisites and materials required for assembly and start-up such as scaffolding, lifting gear and other devices, fuel and lubricants;
     (III) energy and water at the place of use including connections, heating and lighting;
     (IV) sufficiently large, suitable, dry and lockable rooms at the assembly site to store machine parts, apparatus, materials, tools etc. and suitable work and recreation rooms for the assembly personnel including sanitary installations which are appropriate to the circum­stances; furthermore, the Customer must take all measures to protect LAP’s tools and LAP’s property and assembly personnel on the building site that the Customer takes to protect its own employees and property; and
     (V) protective clothing, equipment and safeguards that are required given the special circum­stances of the assembly site.

Before assembly work begins, the Customer shall, without being asked to do so, provide in writing the necessary information about the position of concealed electricity lines, gas and water pipes or similar installations and the necessary static data.

Before the installation or assembly begins, the equipment and items required to start work must be at the installation or assembly site, and all preliminary work prior to commencement of assembly must have progressed so that the installation or assembly can begin as agreed and can be performed without interruption. Access roads and the place of installation or assembly must be levelled and cleared.

(b) If the installation, assembly or start-up is delayed for reasons beyond LAP’s control, the Customer shall bear the costs for the waiting time and additional travel required of LAP’s assembly personnel.

(c) Every week the Customer shall certify to LAP immediately the duration of LAP’s assembly personnel’s working time and the termination or completion (as the case may be) of the installation, assembly or start-up.

(d) If LAP requests acceptance of the delivery, the Customer shall carry this out immediately upon completion. If the Customer fails to do so, acceptance shall be deemed carried out. Accept­ance shall also be deemed carried out and completed when the delivery item is being used commercially, if applicable after an agreed test period has ended. In any event, the final acceptance of the products should be no later than 3 months after the delivery; otherwise the products shall be deemed as accepted by the Customer.

6. Force majeure / Delivery subject to punctual delivery to LAP on the part of LAP’s sub­contractors 

6.1
If LAP does not receive a delivery or service from LAP’s sub-contractors to allow LAP to provide LAP’s delivery or service which is due from LAP under the Contract, despite due and proper stocking in terms of quantity and quality under LAP’s delivery or service agreement with the Customer, for reasons for which LAP are not responsible, or it is incorrect or not in due time, or events of force majeure occur of significant duration (i.e. of longer than 14 calendar days), LAP shall notify the Customer in writing in due time. In such case, LAP has the right to postpone the delivery for the duration of the obstruction or event, or to rescind the contract in whole or in part for that part of the contract not yet fulfilled if LAP has met LAP’s foregoing duty to provide information and has not assumed a procurement risk. Events of force majeure shall be deemed to be any cause affecting the performance of the Contract arising from or attributable to the acts, events, omissions or accidents beyond the control of the party to perform and, without limit­ing the generality thereof, shall include strikes, lock-outs, official intervention, war, riot, power shortages and shortages of raw materials, transport bottlenecks through no fault of LAP’s own, company obstructions not due to LAP e.g. fire, water and damage to machinery and any other obstructions which, when considered objectively, were not caused by LAP’s negligence.

6.2
If a delivery and or service date or delivery and/or service period is agreed with binding force and the agreed delivery or service date or the agreed delivery and/or service period is exceeded due to events stated in Clause 6.1, the Customer has the right, after a reasonable extension of time has elapsed without success, to rescind the contract for that part of the contract not yet fulfilled. The Customer shall have no further claims, especially claims for damages, in such case.

6.3
The above Clause 6.2 shall apply accordingly if, for the reasons stated in Clause 6.1, also without contractual agreement of a fixed delivery and/or service date, the Customer cannot be objectively expected to adhere further to the contract.

7. Shipment / Passing of Risk

7.1
Unless otherwise agreed in writing, delivery term will be stated in the Individual Sales Contract.

7.2
Unless otherwise agreed, LAP reserves the right to choose the route and means of transport where shipment is agreed, or if no collection date is agreed, the right to choose the above-mentioned obligation to be performed at the place of business of the provider where the provider must dispatch the goods or remit the money to the recipient. LAP shall, however, endeavour to take the Customer’s requirements into account with respect to the route and type of shipment. Any additional expenses as a result, as well as where delivery freight paid is agreed, shall, like the transport and insurance costs, be borne by the Customer.

If shipment is delayed at the Customer’s request or due to the Customer’s fault, LAP shall store the goods at the Customer’s expense and risk. In this case, notice that the goods are ready for shipment shall be deemed equivalent to shipment.

7.3
The risk of accidental loss or accidental deterioration shall pass to the Customer when the products are delivered to the destination or designated party agreed by the Parties. The foregoing shall also apply if an agreed partial delivery is carried out.

The risk of accidental loss or accidental deterioration shall pass to the Customer in the case of deliveries made by LAP in connection with an installation or assembly when the deliveries enter the Customer’s premises.

7.4
If delivery is delayed because LAP asserts LAP’s right of retention due to the Customer‘s default in payment in whole or in part or due to another reason for which the Customer is responsible, the risk shall pass to the Customer at the latest as of the date on which the notice is sent to the Customer stating that the delivery is ready for shipment and/or the service can be performed.

8. Notice of Defects / Breach of Contract due to Material Defects / Warranty

8.1
The Customer must give LAP notice of material defects no later than 7 days after delivery. Notice of latent material defects must be given to LAP immediately after they are discovered but at the latest within the limitation period in respect of warranty according to Clause 8.6. A notice of defects that fails to comply with requirements of time shall, subject to applicable law, exclude any claim by the Customer for breach of contract due to material defects.

8.2
The transport operator must also be notified of any material defects on delivery, and the recording of defects in writing must be arranged by the transport operator. Failure to have the transport operator arrange the recording of defects in due time shall exclude any claim by the Customer for breach of contract due to material defects. This shall not apply in the case of compulsory statutory basis for liability.

If defects in quantity and weight were already ascertainable upon delivery according to the foregoing duties to inspect, the Customer must make a complaint about the defects to the transport operator upon receipt of the products, and have this complaint certified by the transport operator. Claims based on the wrong quantity being delivered shall not be made in the case of only a slight deviation from the agreed quantity, where to do so would be unreason­able on the part of the Customer. Failure to give notice of defects in due time to the transport operator shall also exclude any claim by the Customer arising from breach of contract due to material defects. This shall not apply in the case of compulsory statutory basis for liability.

8.3
When handling, processing, combining or mixing with other goods begins, the products delivered shall be deemed accepted by the Customer. This shall also apply if the products are shipped on from their original destination.

Before any of the above activities begin, the Customer shall be solely responsible for clarifying through appropriate checks in terms of scope and method, whether the delivered products are suitable for the purposes intended by the Customer.

8.4
The Customer must give notice in writing immediately of any other breach, setting a reasonable time limit for remedy (which period shall not be less than 60 days), before asserting any further rights.

8.5
If, by way of exception, the breach does not relate to the performance of work by LAP, the Contract may not be rescinded if the breach is immaterial.

8.6
LAP shall provide a warranty for material defects, unless otherwise expressly agreed in writing, for a period of 12 months, starting from the date the products are delivered (or deemed delivered) to the Customer. This shall not apply to damage claims for any fraudulent act or where a longer period is stipulated by applicable law.

8.7
The Customer‘s sole remedy for the failure of LAP’s products to conform to specifications or for breach of the warranties provided herein shall be limited to either: (a) rectification or replace­ment of the defective or non-conforming product (at LAP’s discretion); or (b) after two unsuc­cessful attempts to rectify the defect, a reduction of price or cancellation of the contract and reasonable compensation for damages or losses incurred by the Customer.

8.8
If the Customer or a third party rectifies a defect incorrectly, LAP shall not be liable for the resulting consequences. This shall also apply to any modifications of the delivery item undertaken without LAP’s prior consent.

8.9
Further claims by the Customer for or in connection with defects or consequential damage caused by a defect, for whatever reason, shall exist only subject to the provisions of Clause 8.10 and Clause 11.

8.10
Damage claims of the Customer against LAP due to a material defect of goods delivered by LAP shall be excluded. This shall not apply in the case of compulsory statutory basis for liability.

8.11
LAP’s warranty (claims for breach of contract due to defective performance in the case of mate­rial defects) and liability arising herefrom shall be excluded if defects and damages connected therewith cannot be proven to be due to defective material, defective design or defective performance or defective instructions on use. Warranty and liability arising herefrom shall be excluded in particular with respect to the consequences of incorrect use or exceptional wear and tear of the products, excessive use or inappropriate storage conditions, for example, the consequences of chemical, electromagnetic, mechanical or electrolytic influences that do not correspond with expected average standard influences. This shall not apply in the case of compulsory statutory basis for liability.

8.12
LAP shall not provide a warranty for parts which are subject to wear and tear when products are used incorrectly and/or have to be regularly exchanged by the Customer to maintain their proper function or are otherwise subject to normal use or wear and tear, and LAP shall not provide a warranty for consumables whose ‘best before’ date is limited or has expired, where malfunction is caused by wear and tear or because the ‘best before’ date has expired. This shall also apply to products where the defect occurred after the ‘best before’ date expired if the defect is due to expiry of the “best before” date.

8.13
Claims by the Customer for expenses required for subsequent performance, in particular transport, travel, labour and material costs shall be excluded if the expenses increase because the delivery item has been transferred subsequently to a location other than the Customer’s premises unless in doing so this complies with its intended use.

8.14
Claims based on defects shall not be made in the case of only a minor deviation from the agreed or customary condition or usefulness.

8.15
Notification of breach of contract in the form of material defects shall only be valid when given in writing.

9. Prices / Payment Terms / Objection of Uncertainty 

9.1
Unless otherwise agreed in the Individual Sales Contract, all prices are on principle quoted net in RMB and exclude packaging, freight, transportation insurance costs, duties, levies and value added or other taxes at the applicable rate or relocation fees.

9.2
If LAP has agreed to perform the installation or assembly and unless otherwise agreed, the Customer shall bear, apart from the agreed remuneration, all necessary ancillary costs such as travel expenses, costs for transporting hand tools and personal luggage and daily allowances.

9.3
Services that are not an integral part of the agreed scope of delivery shall be charged, unless otherwise agreed, on the basis of LAP’s respectively valid general price lists.

9.4
LAP can, at LAP’s reasonable discretion, increase the remuneration payable unilaterally and reasonably where material procurement costs, wage and ancillary wage costs as well as energy costs and costs due to environmental charges are increased, if more than 3 months elapses between conclusion of the contract and delivery.

9.5
If, according to the Contract, LAP should bear the freight charges by way of exception, the Customer shall bear any additional costs arising from increases in freight rates after the Contract was concluded.

9.6
Unless otherwise agreed, LAP’s invoices shall be paid before the delivery of products is arranged, without deduction of any kind.

9.7
If the Customer fails to make payment, the Customer shall be in default, also without notice, within 31 calendar days of receipt of the invoice in the case of an obligation to dispatch and in the case of an obligation to be performed at the place of business of the recipient, and within 31 calendar days after the Customer’s receipt of LAP’s notice that the goods are ready for delivery.

9.8
Once in default, default interest shall be charged at the rate of 2% per month or the maximum rate allowed by law, whichever is lower, from the due date up to the date of actual payment (before as well as after judgment). LAP reserves the right to claim damages in excess of this.

9.9
The date payment is received by LAP or credited to LAP’s account at the place of payment specified by LAP shall be deemed the payment date.

9.10
The Customer’s default in payment shall cause all claims for payment under the business relationship with the Customer to become due immediately. Regardless of any agreements to defer payments, agreements on the term of bills of exchange or payment by instalment, in such event all the Customer’s liabilities due to LAP shall become due for payment immediately.

9.11
If payment terms are not met or circumstances known or recognisable that, in LAP’s proper commercial judgment, give rise to doubt about the Customer’s creditworthiness, also includ­ing such facts that existed when the contract was concluded but which were unknown to LAP or could not have been known to us, LAP has the right, without prejudice to LAP’s other rights and remedies in such cases, to cease further work on current orders or delivery, and to request advance payments or the provision of appropriate, customary securities, e.g. in the form of a bank guarantee issued by a bank acceptable to us, for deliveries still outstanding, and, after expiry of a reasonable period of time to provide such securities is unsuccessful, to rescind the contract, irrespective of other rights. The Customer shall be obliged to reimburse LAP for all damages incurred by the non-performance of the contract.

9.12
The Customer shall have a right of retention or right of set-off only with respect to those counter-claims that are not disputed or have been awarded by final judgment.

9.13
The Customer can only exercise a right of retention if its counter-claim relates to the same contractual relationship.

LAP shall only accept bills of exchange offered as an exception by way of express agreement in writing. LAP shall make discount charges from the due date of the invoice until the maturity date of the bill of exchange as well as charge costs for the bill of exchange. The customer must bear interest and the costs for the discounting or redemption of bills of exchange. With regard to bills of exchange and cheques, the date of their redemption shall be deemed the payment date. In the event of LAP’s bank refusing to discount a bill of exchange or in the event of reasonable doubt that a bill of exchange shall be discounted during the term of the bill of exchange, LAP shall be entitled to request immediate payment in cash while the bill of exchange is taken back.

9.14
If the Customer fails to return bank guarantees and/or guarantees received from LAP in due time, the customer shall reimburse LAP for all costs and charges incurred by LAP as a result as of the date of default in returning the guarantees until all our claims under the business relationship with the customer, including claims arising in the future from contracts concluded at a later date, are paid. This shall also apply to any balance in our favour when any or all claims by LAP are incorporated in a current account and the balance has been established.

10. Retention of title / Right of lien 

10.1
No matter what delivery term is agreed in the Individual Sales Contract, LAP retain title to all equipment and goods LAP delivers (hereinafter referred to collectively as ("goods subject to retention of title") until all LAP’s claims under the business relationship with the Customer, including claims arising in the future from contracts concluded at a later date, are paid.  This shall also apply to any balance in LAP’s favor when any or all claims by LAP are incorporated in a current account and the balance has been established.

10.2
The Customer must insure the goods subject to retention of title adequately, in particular against fire and theft. Claims against the insurance arising from a case of damage relating to goods subject to retention of title shall be and are hereby assigned to LAP to the full value of the goods subject to retention of title.

10.3
The Customer is authorised to resell the delivered products in the normal course of business. The Customer is not permitted to make other disposals, especially pledging or granting of equitable lien. If the goods subject to retention of title are not paid for immediately by third party buyers when resold, the Customer shall be obliged to resell under retention of title only. Authorisation to resell the goods subject to retention of title shall not apply a priori if the Customer suspends payment or defaults in payment to us.

10.4
The Customer hereby assigns to LAP all claims including securities and ancillary rights that accrue against the end user or third parties from or in connection with the resale of goods subject to retention of title. The Customer may not reach an agreement with its purchasers that excludes or impairs LAP’s rights in any way or nullifies the claim‘s assignment in advance. When the goods subject to retention of title are sold with other items, the claim against third party buyers amount­ing to the delivery price agreed between LAP and the Customer shall be deemed assigned unless the amounts applicable to the individual goods can be determined from the invoice.

10.5
The Customer shall be entitled to collect claims assigned to LAP until revoked by LAP, such revoca­tion to be made at LAP’s discretion at any time and from time to time. At LAP’s request, the Customer shall be obliged to give LAP the information and documents in full required to collect assigned claims, and unless LAP does so, notify its buyers immediately of the assignment.

10.6
If the Customer incorporates claims from the resale of goods subject to retention of title in a current account relationship with its buyers, the Customer shall assign to LAP any recognised closing balance in its favour in the amount which corresponds to the total amount of the claim from the resale of LAP’s goods subject to retention of title, such claim being transferred to the current account relationship.

10.7
The Customer must notify LAP immediately if the Customer has already assigned claims to third parties from the resale of products delivered or to be delivered by us, especially due to real or unreal factoring arrangements, or other agreements which can impair LAP’s current or future security interests according to Clause 10. In the case of unreal factoring, LAP shall be authorised to rescind the contract and request the products already delivered to be handed over. This shall also apply to real factoring if, according to the contract with the factor, the Customer is not free to dispose of the purchase price of the claim.

10.8
In the event of the Customer‘s breach of the contract, especially in the case of default in pay­ment, LAP shall be authorised, after rescinding the contract, to take back all goods subject to retention of title. The Customer shall be obliged in this case to hand over the goods subject to retention of title automatically. LAP may at any time during normal business hours enter the Customer‘s business premises to determine the stock of the goods delivered by us. Taking back the goods subject to retention of title shall only amount to a rescission of the contract if LAP expressly states this in writing or this is prescribed by applicable law. The Customer must notify LAP immediately in writing of any third-party access to goods subject to retention of title or any claim assigned to us.

10.9
If the value of securities existing for LAP according to the foregoing provisions exceeds the secured claims as a whole by more than 20%, LAP may at LAP’s option release part of the securities.

10.10
LAP handles and processes the goods subject to retention of title as manufacturers without obligation on LAP’s part. If the goods subject to retention of title are processed or connected inseparably with other items that do not belong to us, LAP shall acquire co-ownership in the new article in the ratio of the invoice value for LAP’s goods to the invoice values for the other processed or connected items. If LAP’s goods are connected with other movable items into an article that is deemed the principal article, the Customer shall immediately assign co-ownership thereof to LAP in the same ratio. The Customer shall hold such ownership or co-ownership free of charge in trust on LAP’s behalf. Rights of co-ownership accordingly arising shall be deemed goods subject to retention of title. The Customer shall be obliged at any time at LAP’s request to provide LAP with the information required to assert LAP’s ownership or co-ownership rights.

11. Exclusion / Limitation of Liability

11.1
LAP shall not be liable for any claims by the Customer for damages or reimbursement of expenses, for whatever legal reason, whether in contract, tort or otherwise (including negli­gence or breach of statutory duty).

11.2
The above exclusion of liability shall not apply if statutory liability is obligatory, and in the case of intentional or grossly negligent breach by LAP and intentional or grossly negligent breach by LAP’s representatives or agents; or in the event of injury to life, limb or health, also caused by LAP’s representatives or agents.

11.3
Any further liability shall be excluded and without derogating from the generality of the forego­ing, LAP shall not under any circumstance be liable to anyone for indirect, incidental, special, consequential, punitive or exemplary damages of any kind, including, but not limited to, any lost profits, goodwill, business and/or savings, however caused, whether for breach or repu­diation of contract, tort, breach of warranty, negligence, or otherwise, whether or not LAP was advised of the possibility of such loss or damages.

11.4
Exclusion and limitation of liability according to Clause 11.1 to 11.4 above and Clause 11.6 below shall apply to the same extent for the benefit of LAP’s employees and agents as well as LAP’s sub-contractors.

11.5
Claims by the Customer for damages may only be asserted within a period of two years from the date that the right to claim damages accrues.

11.6
There is no connection between the reversal of the burden of proof and the foregoing stipulations.

12. Dispute Resolution/ Governing Law

12.1
Any disputes, differences or questions arising out of or in connection with this Contract shall, at first instance, be resolved through friendly negotiations.

12.2
Any dispute arising from or in connection with this Contract shall be submitted to the Shanghai International Arbitration Center (“SHIAC”) for arbitration which shall be conducted in accordance with the SHIAC's arbitration rules in effect at the time of applying for arbitration. The number of arbitrators shall be three (3) ("Tribunal"). The Parties shall each appoint one (1) arbitrator and the third arbitrator, who shall act as the presiding arbitrator, shall be jointly appointed by the Parties within fifteen (15) days from the date of the respondent's receipt of the notice of arbitration, failing which the third arbitrator shall be appointed by the chairman of SHIAC.

12.3
The place of arbitration shall be Shanghai. The arbitration language shall be Chinese. All the arbitration awards may be enforced by a court having jurisdiction on the same way as judgments of such court are enforced. The costs of arbitration shall be borne by the dispute Parties as determined by the arbitration tribunal in the award. The Parties hereby agree that any notice in the process of such arbitration shall be deemed as sufficiently and effectively served if delivered to the addresses set out in this Contract (or such other address duly provided by the receiving Party to the other Party).

12.4
This Contract shall be governed by and construed in accordance with the laws of PRC, without regard to principles of conflict of laws and in particular to the exclusion of the UN Convention on Contracts for the International Sale of Goods (CISG).

13. Property rights 

13.1
Unless otherwise agreed, LAP shall be obliged only to deliver goods in the PRC that are exempt from third-party intellectual property rights and copyrights. If a third party raises justified claims on account of infringement of intellectual property rights by products delivered by LAP to the Customer, LAP shall be liable to the Customer within the time limit specified in Clause 8.6. as follows:

(a) LAP shall first at its option try to obtain a right of use at LAP’s expense for the deliveries in question or change the delivery item while complying with the characteristics agreed under the contract so that the intellectual property right is not infringed, or exchange the deliveries. If LAP cannot do so on reasonable conditions, the Customer shall be entitled to its legal rights which shall be defined on the basis of this Contract.

(b) The Customer shall, in the event of infringement of intellectual property rights by LAP’s delivery items, only be entitled to rights if it gives LAP written notification immediately about the claims asserted by third parties, does not admit any infringement and all defensive measures and settlement negotiations to avert the claims are reserved for us.

If the Customer stops using the products for the purposes of minimising or mitigating damage or other good cause, the Customer shall be obliged to advise the third party that cessation of use is not deemed to be an acknowledgement of an intellectual property right infringement.

If an appeal is filed by third parties against the Customer for infringement of intellectual property rights resulting from the use of products delivered by us, the Customer undertakes to notify LAP immediately in writing and give LAP the opportunity to participate in any legal dispute. The customer must support LAP in every way in conducting such a legal dispute. The customer must not take any action which could impair LAP’s legal position.

13.2
The Customer shall have no claims if it is responsible for infringement of an intellectual property right. The Customer shall also have no claims if the infringement of the intellectual property right is due to the Customer’s special instructions, an application which LAP could not foresee or the fact that the products are modified by the Customer or used with products LAP did not deliver.

14. Export Control / Product Approval

14.1
In the absence of any other contractual agreements with the Customer, the delivered goods are intended for placement on the market for the first time within PRC (first country of delivery).

14.2
The export of certain goods may be subject to approval from the relevant authorities (e.g. because of their nature or intended purpose or final destination). The customer itself is obliged to comply strictly with all relevant export regulations and embargos for these goods.

Furthermore, the Customer shall be obliged, if the goods are transferred to a country which is different country than the first country of delivery agreed with us, to obtain the required national product approvals or product registrations and to ensure that the specifications set out in the applicable laws of the country in question regarding the provision of user information in the national language are complied with.

14.3
The customer shall in particular check and ensure that:

(a) the goods delivered are not intended for are not intended for use in armaments, nuclear facilities or weapon technology;

(b) no companies or persons specified on the US Denied Persons List (DPL) are supplied with original US goods, US software and US technology;

(c) no companies or persons specified on the US Warning List, US Entity List or US Spe­cially Designated Nationals List are supplied with US certificates of origin without relevant approval;

(d) no companies or persons are supplied who are specified on the List of Specially Designated Terrorists, Foreign Terrorist Organizations, Specially Designated Global Terrorists or the EU Terror List;

(e) no military recipients are supplied with the products delivered by us;

(f) no recipients are supplied that violate other export control regulations;

(g) all notices, orders and regulations of the competent authorities of the respective country of origin of the delivery are complied with.

14.4
Goods delivered by LAP may only be accessed and used if the above-mentioned checks and assurances have been carried out and complied with. Otherwise LAP shall not be obliged to perform any of LAP’s obligations hereunder.

14.5
Where goods delivered by LAP are passed on to third parties, the Customer undertakes to oblige such third parties in the same way as specified in Clause 14.1-14.6, and to notify them of the need to comply with these provisions.

14.6
The Customer shall indemnity LAP against all damages resulting from breach of the foregoing duties set out in Clause 14.1 – 14.5.

15. Insolvency Proceedings / Incoterms / Written Form / Severability Clause

15.1
If the Customer (i) becomes bankrupt or insolvent, (ii) makes an assignment or composition for the benefit or of creditors, (iii) becomes subject to an administrative order, (iv) an encumbrances takes possession of, or a receiver is appointed in respect of, any of its assets, or (v) the Customer‘s suspension of payment which is not due to rights of retention or other rights under this Contract, shall entitle LAP to rescind the contract at any time or make delivery of the delivery item or LAP’s service dependent on the prior fulfillment of the payment obligation. If the delivery item was already delivered, the consideration shall be due immediately in the above-mentioned cases. LAP is also entitled to reclaim the delivery item in the above-mentioned cases and to retain them until the purchase price is paid in full.

15.2
If trade terms were agreed in writing according to the International Commercial Terms (INCOTERMS), INCOTERMS 2010 shall apply.

15.3
All agreements, collateral agreements, assurances and contract amendments shall only be valid when given in writing. Verbal contract amendments or modifications shall be invalid. For the purposes of this Contract, the words “written” and “in writing” include any means of visible reproduction.

15.4
If any current or future provision of the contract or this Contract is or shall become invalid/void or unenforceable in whole or in part for any reason, this (i) shall not invalidate/void or render unenforceable such provisions in any other jurisdiction; (ii) are hereby waived or amended to the extent necessary to achieve the same economic effect for this Contract to be enforceable in such jurisdiction; and (iii) the rest of this Contract shall remain in full force and effect.

16. Confidentiality 

16.1
For the purposes of this Contract, “Confidential Information” shall mean (a) all non-public information relating to the business, operations or affairs of a Party (the “Disclosing Party”), including all financial and accounting information, and information relating to a Party’s customers, clients, suppliers, plans and market opportunities, made available to the other Party (the “Receiving Party”) at any time, and (b) all technical information, data, know-how, operating procedures, trade secrets, marketing information, software, and any other information provided by or on behalf of the Disclosing Party to the Receiving Party.

16.2
Except as expressly permitted in this Contract, the Receiving Party shall, not disclose or make available, or cause to be disclosed or made available, the Disclosing Party’s Confidential Information to any third parties and agrees to protect and keep the Disclosing Party’s Confidential Information confidential with the same degree of precaution and safeguards utilized in treating its own confidential information of like importance.

17. Bank Account and Invoice 

17.1
LAP’s bank account details are set out below:
Name: LAP Laser Applications China Co., Ltd.
Bank: Bank of Communications, Shanghai Dongfang Road Sub-branch
Bank account: 310066658018010082057

17.2
Information of VAT Special Invoice of the Customer is set out below:
Name:
Address:
Telephone:
Taxpayer's registration number:
Bank:
Bank account:

17.3
The Parties shall notify the other party in writing of any change on the above account information in a timely manner.

17.4
LAP shall provide the VAT invoice (Fa Piao) within two weeks after the payment has been duly made by the Customer.

18. Notice

18.1
Any notice or other communication given or to be given pursuant to this Contract shall be in writing sent or delivered to the recipient at the address set out below or such other address as the addressee may by three days’ prior written notice specify to the other Party:

to LAP:
Address: East Area 4/F, Building 10, Lujiazui Software Park, No. 61 Lane 91 E-shan Rd., Pudong New District, Shanghai.
Telephone: (021) 50478881
For the attention of:

to the Customer:
Address:
Telephone:
For the attention of:

18.2
Both Parties hereto may deliver documents by email upon prior written agreement of both Parties.

19. Assignment

This Contract shall be binding on and shall ensure for the benefit of the successors and permitted assigns of the Parties but shall not be assigned by any Party without the written consent of the other Party.

20. Term / Termination

20.1
This Agreement shall come into effect on the Effective Date and shall continue in full force and effect for a period of one year. The term of this Agreement will automatically renew for a successive additional period of one (1) year each unless earlier terminated in accordance with this Agreement or either Buyer or Seller gives the other advance written notice of termination no later than sixty (60) days prior to the proposed effective date of termination.

20.2
This Contract can only be terminated in accordance with the terms expressly stated in this Agreement, unless otherwise agreed between the Parties in writing.

21. Miscellaneous

21.1
The Customer hereby agrees and undertakes that it will abide by the Code of Conduct for Sales Partners of LAP, a copy of which can be found at www.lap-laser.com/terms-cn. LAP has the right to revise it at its own discretion from time to time and the Customer shall abide by the most current version of this Code of Conduct for Sales Partners.

21.2
This Agreement is drafted in both the English and Chinese languages. In the case of conflict between the English and Chinese versions, the Chinese language version shall prevail.

21.2
This Contract is executed in two (2) counterparts having the force of originals and each party shall keep one (1) counterpart.

March 2020

This Code of Conduct defines the basic requirements of LAP GmbH Laser Applikationen, its subsidiaries and affiliated companies, including but not limited to LAP Laser Applications China Co., Ltd. (“LAP”), placed on its sales partners concerning their responsibilities towards their stakeholders and the environment.

LAP reserves the right to reasonably change the requirements of this Code of Conduct due to changes of the LAP Compliance Program. In such event LAP expects the sales partner to accept those reasonable changes.

The sales partner declares herewith:

Legal Compliance

• to comply with the laws of the applicable legal system(s).

Prohibition of corruption and bribery

• to tolerate no form of and not to engage in any form of corruption or bribery, including any payment or other form of benefit conferred on any government official for the purpose of influencing decision making in violation of law.

Fair competition and anti-trust laws

• to act in accordance with national and international competition laws and not to participate in price fixing, market or customer allocation, market sharing or bid rigging with competitors.

Respect for the basic human rights of employees

• to promote equal opportunities for and treatment of its employees irrespective of skin color, race, nationality, social background, disabilities, sexual orientation, political or religious conviction, sex or age;
• to respect the personal dignity, privacy and rights of each individual;
• to refuse to employ or make anyone work against his will;
• to refuse to tolerate any unacceptable treatment of employees, such as mental cruelty, sexual harassment or discrimination;
• to prohibit behavior including gestures, language and physical contact, that is sexual, coercive, threatening, abusive or exploitative;
• to provide fair remuneration and to guarantee the applicable national statutory minimum wage;
• to comply with the maximum number of working hours laid down in the applicable laws. This applies for countries where sales partner´s employees work for it;
• to recognize, as far as legally possible, the right of free association of employees and to neither favor nor discriminate against members of employee organizations or trade unions.

Prohibition of child labor

• to employ no employees under the age of 15

Health and safety of employees

• to take responsibility for the health and safety in the work environment of its employees;
• to control hazards and take the best reasonably possible precautionary measures against accidents and occupational diseases;
• to provide training and ensure that employees are educated in health and safety issues;
• to set up and use an occupational health & safety management system

Environmental protection

• to act in accordance with the applicable statutory and international standards regarding environmental protection;
• to minimize environmental pollution and make continuous improvements in environmental protection;
• to set up and use a reasonable environmental management system

Supply Chain

• to use reasonable efforts to promote among its suppliers and sales partners compliance with this Code of Conduct
• to comply with the principles of nondiscrimination with regard to selection and treatment of suppliers and sales partners.