General Terms and Conditions of 5 POINT AG

§ 1 Business Objective and Scope of the Terms

(1) The business objective of 5 POINT AG (hereinafter referred to as Developer) is the production of customer specific individual software including all pertinent services such as consulting, installation, client training, update development, etc. The Developer renders said services exclusively on the basis of these General Terms and Conditions. Contradicting terms and conditions of the buyer (hereinafter referred to as Customer) shall not be effective unless they are expressly accepted by the Developer in writing. In particular failure of the Developer to respond to contradicting provisions shall not be construed as the Developer’s agreement with same. Upon execution of the written purchase order, the Customer accepts the GTC of the Developer.

§ 2 Contractual Foundation, Software Specification and Specifications of Duties

(1) The development agreement shall be based on the written individual agreement executed under application of these GTC. All relevant master data for the order shall be defined in this agreement and shall at the very least stipulated the type and scope of the contractual services to be rendered, in particular which ancillary services are to be provided in addition to the development services; along with the remuneration and, for fixed transactions the respective production deadlines. In the event of conflict between these Terms and Conditions and the individual agreement these Terms and Conditions shall take priority unless the deviations are identified as intended provisions exempt from these GTC in said agreement.

(2) The technical foundation for each development order shall be the respective Specifications of Duties, which shall be compiled by the customer. Said Specifications of Duties shall be accepted by both parties by way of signature and shall become an integral part of the agreement. In the event that the parties should be unable to arrive at an agreement on the contents of said Specifications of Duties, both parties shall have the right to terminate the agreement extraordinarily; any entitlement to damage compensation shall be excluded in this case. Any possible contributions to the compilation of these Specifications of Duties made by the Developer shall be remunerated separately.

(3) Any other technical descriptions besides the Specification of Duties shall also be accepted by the parties by way of signature in regards to their contents and shall be integrated into the agreement. In the event of conflict between various development documents the Specification of Duties shall take priority, unless the deviation is expressly identified as intended.

(4) Each contracting party shall undertake to appoint at least one competent individual upon execution of the agreement. Said individual shall have the authority to act as an agent of the appointing party in regards to this contractual relationship and all related decisions to be made. Decisions concerning critical additions/modifications or other changes of the respective agreement by other individuals than those stipulated in the agreement or the legal agents of the contracting parties shall not be binding.

§ 3 Default

(1) In the event that a fixed deadline has been agreed upon for the production of the software and the Developer fails to comply with same, the Customer shall initially be required to notify the Developer in writing. The Customer’s rescission from the agreement shall be permitted only if upon sending notification the Customer has set a reasonable remedial deadline for completion for the Developer and completion has not occurred within this deadline. The remedial period must be no less than 4 weeks. Rescission shall be excluded if the fact that the deadline has been exceeded is a consequence of post contract change requests made by the Customer.

§ 4 Installation and Training

(1) The agreement on the development of individual software pursuant to the Specifications of Duties shall not encompass the installation of the software on data processing equipment of the Customer. In the event that the Developer should be required to also install the software at the Customer’s end, this shall be commissioned separately and shall be subject to separate compensation as agreed upon.

(2) Upon installation of the program, the Developer shall, at the Customer’s request, also train the latter in the application of the software. Said training shall also be subject to separate compensation as agreed upon.

§ 5 Changes

(1) The Developer shall be under no obligation to factor in change requests of the Customer in terms of the scope of functions, program structure, screen design or other characteristics of the contract software if they deviate from the original contents of the agreement, in particular if they do not correspond with the Specifications of Duties or any other service descriptions the software production was based upon.

(2) It shall be at the Developer’s complete discretion to consider requested changes against payment of reasonable additional compensation. Such additional compensation shall be calculated on the basis of the required additional time expended as well as the general compensation rate calculated by the Developer for the overall production. The Developer shall be under no obligation to disclose Developer’s calculation; however, the Developer shall be required to verifiably justify the amount of additional compensation charged. The hourly/daily compensation rate for training pursuant to § 4 of this agreement shall not be significantly exceeded. 

§ 6 Contribution Obligations

(1) The Customer shall be required to make reasonable contributions to the production of the program. This contribution obligation shall in particular comprise the provision of EDP technical and project organizational information required for the development (hardware and operating systems, organization plans) as well as, if applicable, information on the hardware on which the program is to be utilized later. During required test runs and acceptance tests, the customer shall be personally present by way of representation by the agent stipulated in the agreement to make judgments and decisions concerning deficiencies, function expansions as well as changes to the program structure. The Customer shall also provide any required test data, if applicable.

(2) In the event that the Developer should present to the customer drafts, program test versions and the like, these shall be diligently checked by the Customer. Any errors detectable at the time and/or change requests shall be communicated right then and there.

(3) In the event that the Customer should fail to perform such checks and/or fail to claim defects, the warranty obligation of the Developer shall be null and void for these errors.

(4) All documents and materials that are provided by one contracting party to the other for performance under the agreement shall be treated with utmost care and shall be copied only within the scope of development work; they shall not be made accessible to any third parties. They shall be returned to the other contracting party along with all duplicates as soon as they are no longer required for the production of the program.

§ 7 Source Code Transfer and Further Utilization

(1) The Developer shall deliver a single copy of the runenabled program on a data medium along with all user documentation. In the event that the Customer should desire to obtain additional copies of the program and/or user documentation, separate reasonable compensation shall be required. The initial package shall also include the source code the software is based upon in the programming language stipulated in the Specifications of Duties. In the event that the Specifications of Duties should fail to stipulate such a language, the standard higher programming language is to be used. The source code shall not only comprise the program code, but also documentation describing and explaining the former. Its minimum scope shall be such that comprehension of the structure and work processes of the program is possible after a reasonable time of orientation. Respective documentation may be partially included in the source code (comment lines), however, it may not be limited to same, but must be available in a congruent written format allowing the comprehension of the big picture.

(2) For all currently known utilization modes, the Developer shall grant the Customer a simple, transferable, irrevocable and unlimited license for use. Usage-adequate edits, modifications and changes pursuant to §§ 23, 39 UrhG (German Copyright Statute) shall be permitted only with the written consent of the Developer. The Customer shall be responsible for committing third parties, to whom the Customer transfers the license to use, accordingly.

§ 8 Warranty

(1) The Developer warrants that the software and all of its components do not have any inherent defects that would significant hamper its normal or contractually presumed use. The Customer accepts the fact that not every functional error in the program operation is the equivalent of a critical deficiency, given that based on the latest status of technology, completely error-free software is impossible to develop.

(2) Deficiencies pursuant to the above provision shall be remedied by the Developer within a warranty period of six months after the date of acceptance pursuant to § 11 of these Terms and Conditions upon respective notification by the Customer by way of repair. Deficiencies shall be eliminated within a reasonable period of time taking into account both parties’ interests. In the event that remedial actions should fail a total of three times, the Customer shall have the right, at Customer’s discretion, to either rescind from the agreement or demand a reduction of compensation to be paid to the Developer.

(3) In the event that the Customer should make changes of any kind to the contract software, this shall void the Developer’s warranty. 

§ 9 Liability

(1) The Developer shall be liable only for acts of intent and gross neglect. In the event of damages to the customer caused intentionally, liability shall be governed by applicable statutory provisions, in the event of damages caused by gross neglect, Developer’s liability shall be limited to three times the compensation to be paid in each case and to such damages that have to be typically expected within the scope of software provision; any liability for indirect and direct consequential damages, in particular lost profits, shall be excluded.

(2) Liability for data loss shall be limited to typical recovery expenses which would have been incurred had backup copies been made on a riskcompliant regular basis. 

§ 10 Compensation

(1) Sales/value added tax shall be billed in addition to the price unless it is expressly included in the price according to the quotation/individual agreement. Compensation shall be due for payment upon issuance of the invoice and shall be payable immediately.

(2) Any setting off of payables against receivables of the Developer for compensation and reimbursement of expenses shall be permitted only for undisputed amounts or those adjudged by a court of law. 

§ 11 Application of DIN Standards

(1) In the event that in the course of performing under this contractual relationship between the contracting parties disputes should arise as to the contents of EDP-technical terms and symbols, quality requirements, format require-ments and the like, compliance with the DIN Standards effective at the time of contract execution shall be deemed agreed upon.

(2) If a DIIN Standard should be changed after the execution of the agreement albeit prior to the completion of the program, the Developer shall be required to take into account the new Standard to the maximum extent reasonably. Developer shall not be required to perform major changes in the programming or comprehensive program modification, if same can only be achieved through the expenditure of considerable amounts of extra time or money. 

§ 12 Acceptance

(1) Upon completion of the development work the Customer shall be required to install the software within two weeks to allow the performance of an acceptance test. In the event that the Customer should fail to perform the installation within this time period, the software shall be deemed accepted. This shall not pertain to cases where the installation is to be performed by the Developer.

(2) Upon installation of the program the Developer shall verify the presence of warranted properties and of the key program functions through adequate acceptance tests. Upon request of the Customer, test data provided by the Customer shall be utilized for the acceptance test, and a reasonable amount of additional tests shall be performed the Customer may deem necessary to test the program based on practical realities. The performance of such additional tests shall be subject to payment of additional compensation by the Customer based on respective agreements.

(3) If the software has passed the acceptance tests, the Customer shall be required to make a written acceptance declaration upon Developer’s request. Any minor defects, if any, shall be documented in this acceptance declaration. Acceptance shall not be denied due to minor defects. The Developer shall have the option to set a reasonable deadline for the making of an acceptance declaration. Upon expiration of same, the software shall be deemed accepted. 

§ 13 Employee

(1) During a current business relationship and for twelve consecutive months after termination of the last contract between 5 Point AG and the client, it is prohibited to close an employment contract or to enter into an agreement with a current employee (freelance or permanent) of 5 Point AG. This also applies for former employees if the employment with 5 Point AG or the last contract between 5 Point AG and the freelancer has been terminated less than six months ago. When in doubt the client is obliged to obtain clarification on this from 5 Point AG.

(2) In the event of contempt against this regulation the client will be held liable for a contractual penalty amounting to € 50.000,- irrespective the right of proof and assertion of higher financial lost on the part of 5 Point AG.

§ 14 Miscellaneous

(1) All changes, addition to and detailed specifications concerning these Terms and Conditions, including this clause or any respective individual contract agreements, including those in technical documents as well as special warranties and covenants shall be made in writing.

(2) In the event that one of the provisions contained in these Terms and Conditions should be ineffective, this shall not affect the effectiveness of the remaining provisions. Such an ineffective provision shall be superseded by a provision that meets the economical intent of the original provision as closely as possible. In the event that the parties should be unable to arrive at an agreement on such a provision, an arbitrator nominated by the Lawyer’s Chamber at Frankfort/Main shall be commissioned to propose a provision which shall be binding upon both parties.

(3) Any and all litigation in references to these Terms and Conditions and any agreements made based on same shall be governed solely by the laws of the Federal Republic of Germany under exclusion of the UN Convention on Contracts for the International Sale of Goods (CISG).

(4) The place of fulfillment for any and all obligations arising from the respective contractual relationship shall be Darmstadt, Germany. The sole place of jurisdiction for any litigation concerning these Terms and Conditions and any agreements entered into hereunder shall be Darmstadt, Germany.

Darmstadt, dated May 3rd, 2007
5 POINT AG