Terms and conditions of commercial sale of Philips GmbH

1. Offer, confirmation or agreement


These terms and conditions of commercial sale of Philips GmbH (the "Terms and Conditions") apply to and form an integral part of all quotations and offers made by Philips GmbH ("Philips"), all ac- ceptances, acknowledgements and confirmations by Philips of any orders by Buyer and any agree- ments ("Agreement(s)") regarding the sale by Philips and purchase by Buyer of goods and services ("Products"), also for future business transactions, unless and to the extent Philips explicitly agrees to otherwise in writing.


Any terms and conditions set forth in any document or documents issued by Buyer either before or after issuance of any document by Philips setting forth or referring to these Terms and Conditions are hereby explicitly rejected and disregarded by Philips, and any such terms shall be wholly inapplicable to any sale made by Philips to Buyer and shall not be binding in any way on Philips.


Philips' offers are open for acceptance within the period stated by Philips in the offer or, when no period is stated, within thirty (30) days from the date of the offer, but any offer may be withdrawn or revoked by Philips at any time prior to the receipt by Philips of Buyer's acceptance thereof.

2. Pricing


Prices in any offer, confirmation or Agreement are in Euros, based on delivery Ex-Works (INCO- TERMS latest version) Philips' manufacturing facility or other facility designated by Philips, unless agreed otherwise in writing between Buyer and Philips and do not include any taxes, duties or similar levies, now or hereafter enacted, applicable to the Products or any other expenses. Philips will add taxes, duties and similar levies to the sales price where Philips is required or enabled by law to pay or collect them and these will be paid by Buyer together with the price.

3. Payment


(a) Unless agreed otherwise between Philips and Buyer in writing, Philips may invoice Buyer for the price of the Products delivered upon delivery of the Products in accordance with the applicable IN- COTERM. Net payment is due within thirty (30) days of date of invoice unless agreed otherwise be- tween Philips and Buyer in writing. All payments shall be made to the designated Philips address. If deliveries are made in installments, each installment may be separately invoiced and shall be paid for when due. No discount is allowed for early payment unless agreed to in writing by Philips.


(b) All deliveries of Products agreed to by Philips shall at all times be subject to credit approval of Philips. If, in Philips' judgment, Buyer's financial condition at any time does not justify production or delivery of Products on the above payment terms, Philips may require full or partial payment in ad- vance or other payment terms as a condition to delivery, and Philips may suspend, delay or cancel any credit, delivery or any other performance by Philips.


(c) In the event of any default by Buyer in the payment of any fees or charges due, or any other default by Buyer, Philips shall have the right to refuse performance and/or delivery of any Products until payments are brought current and Philips may suspend, delay or cancel any credit, delivery or any other performance by Philips without any liability towards the Buyer. Such right shall be in addition to, and not in lieu of, any other rights and remedies available under the Agreement or at law.

4. Delivery and quantities


(a) Products shall be delivered Ex-Works (INCOTERMS latest version) as designated by Philips, unless otherwise agreed in writing. Delivery dates communicated or acknowledged by Philips are ap- proximate only, and Philips shall not be liable for, nor shall Philips be in breach of its obligations to Buyer, for any delivery made within a reasonable time before or after the communicated delivery date. Philips agrees to use commercially reasonable efforts to meet the delivery dates communicated or acknowledged by it on the condition that Buyer provides all necessary order and delivery information sufficiently prior to the such delivery date.


(b) Buyer will give Philips written notice of failure to deliver and thirty (30) days within which to cure. If Philips does not deliver within such thirty (30) day period, Buyer may cancel the affected and undelivered portions of the Agreement, provided that Philips is responsible for the delay. Buyer's claim to damages due to failure to delivery and delay as well as claims for damages in lieu of perfor- mance shall be governed by the provisions set out in Section 10.


(c) Risk of loss in or damage to the Products shall pass to Buyer upon Philips' delivery in accordance with the applicable INCOTERMS.


(d) If Buyer fails to take delivery of Products ordered, then Philips may deliver the Products in con- signment at Buyer's cost.


(e) In the event Philips' production is curtailed for any reason, Philips shall have the right to allocate its available production and Products, at its sole discretion, among its various customers and as a re- sult may sell and deliver to Buyer fewer Products than specified in the Agreement, as the case may be, without being responsible or liable to Buyer for any damage resulting therefrom. Philips will notify Buyer of any such event without delay. Buyer's obligation for payment shall be reduced in accordance with the reduced delivery.

5. Force majeure


Philips shall not be liable for any failure or delay in performance if:
(i) such failure or delay results from interruptions in the Product manufacturing process, however, this shall not apply in cases of gross negligence or intent; or
(ii) such failure or delay is caused by Force Majeure as defined below and/or by (case) law.


In case of such a failure as set forth above, the performance of the relevant part(s) of the Agreement will be suspended for the period such failure continues, without Philips being responsible or liable to Buyer for any damage resulting therefrom.


The expression "Force Majeure" shall mean and include any circumstances or occurrences beyond Philips' reasonable control - whether or not foreseeable at the time of the Agreement - as a result of which Philips cannot reasonably be required to execute its obligations including force majeure and/or default by one of Philips' suppliers. In the event that the Force Majeure extends for a period of three (3) consecutive months (or in the event that the delay is reasonably expected by Philips to extend for a period of three (3) consecutive months), Philips shall be entitled to cancel all or any part of the Agreement without any liability towards Buyer.

6. Retention of title


(a) Products shall remain Philips' property until the payment of all claims in respect of the business relationship with the Buyer, including any future claims. The retention of title shall also extend to any Products delivered by way of exchange.


(b) If the Products under retention of title should be processed, mixed or combined in the meaning of sections 947, 948 and 950 of the German Civil Code (BGB) with other items that do not belong to Philips, Philips shall have a right to co-ownership of the new item in the same ratio as that between the value of the Products under retention of title, including VAT, and the value of the other items pro- cessed or combined at the time of processing or combination. Buyer shall store the item on behalf of Philips free of charge.


(c) Until further notice Buyer is authorized to dispose of the Products under retention of title within the framework of its ordinary business operations. For this event Buyer hereby assigns to Philips his claims from a resale of the Products under retention of title (the resale price including VAT) – includ- ing the corresponding claims from bills of exchange and together with all ancillary claims. If Buyer should sell the Products under retention of title together with Products that do not belong to Philips at a total price the assignment shall only apply to the sum which Philips has charged Buyer for the Prod- ucts under retention of title which have been sold.


(d) If Buyer's claims from the resale form part of the balance in a current account, Buyer hereby as- signs to Philips his claims against his own customer in respect of the claims in the current account. The assignment shall apply to the resale price including VAT.


(e) Until further notice Buyer shall be entitled to collect the claims that have been assigned to Philips. Any assignment or pledging of such a claim shall only be permissible with Philips' written consent. If Buyer defaults on payment or fails to comply with his obligations in respect of the retention of title, Buyer shall, on Philips' request, provide the debtors with written notification of the assignment, sup- ply Philips with all information, submit and send Philips the documents and transfer any bills of ex- change. If necessary, Buyer must grant Philips access to the relevant documents.


(f) On the occurrence of the circumstances set out in Section 6 (e) sentence 3 Buyer must grant Philips access to the Products under retention of title which are still in his possession and send Philips an ex- act list of the Products. Buyer must separate these from other Products and return them to Philips after Philips has withdrawn from the contract.


(g) If the value of this security exceeds the sum of Philips' claim by more than 20%, Philips shall at Philips' option and upon Buyer's request release the security.


(h) Buyer must immediately notify Philips in writing if any third parties should seize the Products under retention of title or take possession of the claims assigned to Philips and must give Philips every possible support in the intervention.


(i) The costs for complying with the said duty to co-operate in enforcing all rights in respect of the retention of title and for all arrangements made for the maintenance and storage of the Products shall be borne by Buyer.


(j) In case of insolvency proceedings over Buyer's property Philips is entitled to withdraw from the contract provided the Products under retention of title have not been fully paid.

7. Rights in software, documentation and intellectual property


Subject to the provisions set forth herein, the sale by Philips of any goods implies the non-exclusive and non-transferable limited license to Buyer under any of Philips' and/or its affiliates' intellectual property rights ("Philips' IPR") used in the goods to use and resell the goods as sold by Philips to Buyer.


To the extent that software and/or documentation is embedded in or delivered with any goods sold by Philips to Buyer, the sale of such goods shall not constitute the transfer of ownership rights or title in such software and/or documentation to Buyer, but, subject to the provisions set forth herein, shall only imply a non-exclusive and non-transferable license to Buyer under Philips IPR used in the software to use such software and/or documentation in conjunction with and as embedded in or delivered with the goods as supplied by Philips in the territory to Buyer.


Notwithstanding anything to the contrary herein, these Terms and Conditions shall not be construed as conferring any right, license or immunity, either directly or by implication, estoppel or otherwise to Buyer or any third party under any Philips IPR or intellectual property rights of any third party other than explicitly granted under these Terms and Conditions.


Buyer shall not: (a) modify, adapt, alter, translate, or create derivative works from any software resid- ing in or provided by Philips in conjunction with any goods; (b) assign, sublicense, lease, rent, loan, transfer, disclose, or otherwise make available such software; (c) merge or incorporate such software with or into any other software; or (d) reverse assemble, decompile, disassemble, or otherwise attempt to derive the source code for such software without written authorization from Philips except as ex- plicitly allowed under applicable law. Buyer shall reproduce, without any amendments or changes thereto, any proprietary rights legends of Philips and/or its affiliates or its third party suppliers in any software or documentation provided by Philips.


If and to the extent copyright in the software is owned by third parties, the license terms of these third parties shall apply instead of the present Terms and Conditions to such third party software. Philips will notify Buyer accordingly and will provide them upon request by Buyer.

8. Defects / non-compliance ("sachmangelhaftung")


(a) Philips warrants that under normal use in accordance with the applicable user manual the Products (excluding any software that is not embedded in or delivered with any goods by Philips or software which is subject to copyright owned by a third party) shall, at the time of delivery, be free from de- fects in material or workmanship and shall substantially conform to Philips' specifications for such Product, or such other specifications as Philips has agreed to in writing, as applicable.


If the Product is defective and/or is not substantially conforming with the specifications, Philips shall have the duty, but also the right, to - at Philips' option - either replace or repair the Product free of charge within a reasonable period of time. The non-conforming or defective Products shall become Philips' property as soon as they have been replaced or credited. If replacement or repair fails, Buyer may cancel the Agreement or reduce the purchase price accordingly.


(b) Claims for damages shall be governed by Section 10.


(c) Buyer may ship Products returned under warranty to Philips' designated facility only in conform- ance with Philips' then current return material authorization policy. Where a warranty claim is justi- fied, Philips will pay for freight expenses. Buyer shall pay for returned Products that are not found to be defective or non-conforming together with the freight, testing and handling costs associated there- with.


(d) Notwithstanding the foregoing, Philips shall have no obligations under warranty if the alleged de- fect or non-conformance is found to have occurred as a result of environmental or stress testing, mis- use, use other than as set forth in the applicable user manual, neglect, improper installation or acci- dent, or as a result of improper repair, alteration, modification, storage, transportation or improper handling or if the usability is impaired only slightly.


(e) Subject to the applicable mandatory law, the express warranty granted above shall extend directly to Buyer only and not to Buyer's customers, agents or representatives. Philips does not give any war- ranty of fitness for a particular purpose, merchantability, or non-infringement of intellectual property rights.


(f) Warranty claims and rights according to Section 8 (a) are subject to a statute of limitations 12 months after delivery. This does not apply if the Act pursuant to §§ 438 para 1 no 2 (buildings and building matters), 479 para 1 (right of recourse) and 634a para 1 no 2 (building defects) of the German Civil Code prescribes longer periods or in the case of intent, gross negligence, non-compliance with a guarantee, or a fraudulent concealment of the defect.


(g) Buyer's right of recourse according to §§ 478 ff German Civil Code shall be limited to cases where Buyer has not agreed with its customers to extend or exceed the scope of the statutory provisions governing claims on defects and non-compliance.


(h) Exceeding claims or claims and rights of the Buyer in connection with defective or non- conforming Products other than regulated in this Section 8 shall be excluded.

9. Intellectual property rights indemnity


(a) Philips, at its sole expense, shall: (i) defend any legal proceeding brought by a third party against Buyer to the extent that the proceeding includes a claim that any Product as furnished by Philips under an Agreement directly infringes the claimant's patent, copyright, trademark, or trade secret at the time of delivery; and (ii) hold Buyer harmless against damages and costs awarded by final judgment in such proceeding to the extent directly and solely attributable to such infringement.


(b) Philips shall have no obligation or liability to Buyer under Section 9 (a)
(1) if Philips is not: (i) promptly notified in writing of any such claim; (ii) given the sole right to con- trol and direct the investigation, preparation, defense and settlement of such claim, including the se- lection of counsel; and (iii) given full reasonable assistance and cooperation by Buyer in such investi- gation, preparation, settlement and defense;
(2) if the claim is made after a period of 2 years from the date of delivery of the Product;
(3) to the extent that any such claim arises from: (i) modification of the Product if the claim of in- fringement would have been avoided by use of the unmodified Product; or (ii) design, specifications or instructions furnished by Buyer;
(4) to the extent the claim is based directly or indirectly upon the quantity or value of products manu- factured by means of the Product or upon the frequency of use or the amount of use of the Product irrespective of whether such claim alleges that the Product as such, or its use, infringes or contributes to the infringement of any intellectual property rights of the claimant;
(5) for unauthorized use or distribution of the Product or use beyond the specifications of the Product; (6) to the extent any such claim arises from Buyer's manufacture, use, sale, offer for sale, importation or other disposition or promotion of the Product after Philips' notice to Buyer that Buyer should cease any such activity, provided such notice shall only be given if the Product is, or in Philips' opinion is likely to become, the subject of such a claim of infringement;
(7) to the extent the claim is based on any prototypes, or Open Source Software, or software provided by Buyer or any of its designees to Philips and/or its affiliates;
(8) to the extent any such claim arises from any infringement or alleged infringement of third party's intellectual property rights covering a standard set by a standard setting body and/or agreed between at least two companies,
(9) for infringement of any third party's intellectual property rights covering the manufacture, testing or application of any assembly, circuit, combination, method or process in which the Product may have been used, or
(10) for infringement of any third party's intellectual property rights with respect to which Philips or any of its affiliates has informed Buyer, or has published (in a datasheet or other specifications con- cerning the Product or elsewhere) a statement, that a separate license has to be obtained.
For such claims of infringements referred to in this Section 8(b), Buyer shall indemnify Philips and its affiliates against and hold them harmless from any damages or costs arising from or connected with such claims and shall reimburse all costs incurred by Philips and its affiliates in defending any claim, demand, suit or proceeding for such infringement, provided Philips gives Buyer prompt notice in writ- ing of any such suit or proceeding for infringement.


(c) If any Product is, or in Philipsẍ opinion is likely to become, the subject of a claim of infringement as referred to under 9 (a) above or if Philips receives from a third party claiming infringement of third party IPR in relation to any of the Products, Philips shall have the right, at its sole option, to: (i) pro- cure for Buyer the right to continue to use or sell the Product; (ii) provide replacement with a non- infringing product, or (iii) modify the Product in such a way as to make the modified Product non- infringing. If any such remedies fail, Buyer may cancel the Agreement or reduce the purchase price


(d) Claims and rights according to Section 9 (c) are subject to a statute of limitations according to Sec- tion 8 (f).


(e) Subject to the exclusions and limitations set forth in Section 10 of the Terms and Conditions, the foregoing states Philips' entire liability and obligation to Buyer and Buyer's sole remedy with respect to any actual or alleged infringement of any intellectual property rights or any other proprietary rights of any kind.

10. Limitation of liability


(a) Any claims for damages, compensation and/or reimbursement of expenses or costs of the Buyer (hereinafter referred to as "Claims for Damages"), regardless of the legal grounds and especially due to a breach of contract, warranty, delay, tort and/or infringement of duties arising in connection with the Agreement, shall be excluded. In case of failure of delivery or delay, any Claims for Damages shall be excluded even if Buyer had set a deadline that has expired.


(b) The exclusions set forth above shall not apply in the event of mandatory liability, including but not limited to liability under the Product Liability Act ("Produkthaftungsgesetz"), in cases of gross negli- gence or intent, injury to life, body or health, or breach of contractual obligations material to the con- tract ("wesentliche Vertragspflichten"). However, Claims for Damages due to breach of material con- tractual obligations shall be limited to the foreseeable damage which is typical for the contracts, unless caused by gross negligence or intent or based on liability for injury of life, body or health. The forego- ing provisions shall not imply any change in the burden of proof to Buyer's disadvantage.


(c) To the extent that Buyer is entitled to Claims for Damages according to this Section 10, any such Claim for Damages shall be subject to statute of limitation of time pursuant to the limitation of time period set out in Section 8 (f), except in cases of in cases of gross negligence or intent, injury to life, body or health. In the event of Claims for Damages based on the Product Liability Act, the statutory provisions governing the limitations of time period shall apply.

11. Confidentiality


Buyer acknowledges that all technical, commercial and financial data disclosed to Buyer by Philips and/or its affiliates is the confidential information of Philips and/or its affiliates. Buyer shall not dis- close any such confidential information to any third party and shall not use any such confidential in- formation for any purpose other than as agreed by the parties and in conformance with the purchase transaction contemplated herein.

12. Export/import controls


Buyer understands that certain transactions of Philips are subject to export control laws and regula- tions, including but not limited to the UN, EU and the USA export control laws and regulations ("Ex- port Regulations"), which prohibit export or diversion of certain products and technology to certain countries. Any and all obligations of Philips to export, re-export or transfer Products as well as any technical assistance, training, investments, financial assistance, financing and brokering will be sub- ject in all respects to such Export Regulations and will from time to time govern the license and deliv- ery of Products and technology abroad by persons subject to the jurisdiction of the relevant authorities responsible for such Export Regulations. If the delivery of products, services and/or documentation is subject to the granting of an export or import license by certain governmental authorities or otherwise restricted or prohibited due to export/import control regulations, Philips may suspend its obligations and the Buyer's/end-user's rights until such license is granted or for the duration of such restrictions or prohibitions. Furthermore, Philips may even terminate the relevant order in all cases without incurring any liability towards the Buyer or end-user. Buyer warrants that it will comply in all respects with the export, re-export and transfer restrictions set forth in such Export Regulations or in export licenses (if any) for every Product supplied to Buyer. Buyer accepts the responsibility to impose all export control restrictions to any third party if the items are transferred or re-exported to third parties. Buyer shall take all actions that may be reasonably necessary to ensure that no customer/purchaser or end-user contravenes such Export Regulations. Buyer shall indemnify Philips against any and all direct, indi- rect and punitive damages, loss, costs (including attorney's fees and costs) and other liability arising from claims resulting from Buyer's or its customers' breach or non-compliance with this article. Buyer acknowledges that the obligations contained in this Agreement shall survive the termination of any agreement of other arrangement under which the products, software or technology was provided to Buyer. In addition, in the event of any conflict in the terms provided in this Agreement with any other document entered into between Buyer and Philips, Buyer understands that the terms of this Agreement shall control and be binding upon Buyer..

13. Anti bribery


Buyer agrees that it now and in future shall comply with national law on prevention of bribery, as well as any other law transforming from ratification of the OECD Convention on Combating Bribery of Foreign Public Officials in International Business Transactions (including the US Foreign Corrupt Practices Act). In general, the law makes it illegal to bribe or make a corrupt payment to an Official for the purpose of obtaining or retaining business, directing business to any person, or securing any improper advantage.


Buyer's failure to comply with any provision of this section is grounds for immediate termination of any Agreement by Philips (or its respective affiliate(s)), without Philips' incurring any liability to- wards Buyer. In the event of such termination, (i) Philips shall be under no obligation to supply any Product to Buyer, (ii) Buyer shall be responsible for and indemnify Philips for any damages, claims, penalties or other losses (including attorneys' fees) that may be asserted against or incurred by Philips as a result of Buyer's breach of this section; and (iii) Philips shall be entitled to any other remedies available at law or in equity. The terms and conditions of this section shall survive any expiration or termination of this Agreement.


Philips will only do business with those companies that respect the law and adhere to ethical standards and principles. Should Philips receive any information to the contrary, Philips will inform and Buyer agrees to cooperate and provide whatever information is necessary to allow Philips to decide whether there is any basis to any allegation received and whether the Agreement should continue. Such infor- mation includes, but is not limited to, books, records, documents, or other files.

14. Data protection/schufa


Personal data of Buyer will be treated in compliance with the effective provisions of the laws on data protection. Philips is the controller. Philips or any other service provider commissioned by Philips will store and process personal data, particularly address and order data, for the execution of the business transactions. Storage and processing will only take place insofar as it is necessary for the execution of the business transactions. Buyer agrees to that Philips provides the SCHUFA Holding AG (Postfach 5640 Hannover) and other credit agencies with data to perform solvency check and credit assessment. Philips will use data Buyer has given in the course of initiation and execution of business transactions. Buyer may revoke its consent with effect for the future. Philips may provide to the SCHUFA infor- mation and data concerning Buyer's behavior that is not according to the contract. Philips will transfer such data only if such a transfer is admissible after balancing all relevant interests. The SCHUFA storages and transfers data for solvency checks and credit assessments within the EU: Buyer can re- quire information from the SCHUFA about all stored date concerning Buyer.

15. Assignment and setoff


Buyer shall not assign any rights or obligations under the Agreement without the prior written consent of Philips. Buyer shall have no right to withhold or reduce any payments or to offset existing and future claims against any payments due for Products sold under the Agreement or under any other agreement that Buyer may have with Philips or any of its affiliates may have and agrees to pay the amounts hereunder regardless of any claimed offset which may be asserted by Buyer or on its behalf. However, Buyer shall have the right to offset claims that are undisputed by Philips or which have been established through a non-appealable judgment.

16. Governing law and jurisdiction


All offers, confirmations and Agreements are governed by and construed in accordance with the laws of Germany. All disputes arising out of or in connection with any Agreement shall first be attempted by Buyer and Philips to be settled through consultation and negotiation in good faith in a spirit of mu- tual cooperation. All disputes which cannot be resolved amicably shall be submitted to the exclusive jurisdiction of the courts of Hamburg (Germany), provided that Philips shall always be permitted to bring any action or proceedings against Buyer in any other court of competent jurisdiction. The United Nations Convention on Contracts for the International Sale of Goods shall not apply to any offer, con- firmation or Agreement. Nothing in this Section 14 shall be construed or interpreted as a limitation on either Philips' or Buyer's right under applicable law for injunctive or other equitable relief or to take any action to safeguard its possibility to have recourse on the other party.

17. Breach and termination


Without prejudice to any rights or remedies Philips may have under the Agreement or at law, Philips may, by written notice to Buyer, cancel or terminate with immediate effect the Agreement or any part thereof without any liability whatsoever, if:


(a) Buyer violates or breaches any of the provisions of the Agreement;
(b) any proceedings in insolvency, bankruptcy (including reorganization) liquidation or winding up are instituted against Buyer, whether filed or instituted by Buyer, voluntary or involuntary, a trustee or receiver is appointed over Buyer, or any assignment is made for the benefit of creditors of Buyer
(c) the control or ownership of Buyer changes.


Upon occurrence of any of the events referred to above, all payments to be made by Buyer under the Agreement shall become immediately due and payable.
In the event of cancellation, termination or expiration of an Agreement the terms and conditions des- tined to survive such cancellation, termination or expiration shall so survive.

18. Miscellaneous


(a) In the event that any provision(s) of these Terms and Conditions shall be held invalid or unenforceable by a court of competent jurisdiction or by any future legislative or administrative action, such holding or action shall not negate the validity or enforceability of any other provisions thereof. In the event that any provision of these Terms and Conditions shall finally be determined to be unlawful or unenforceable, such provision shall be deemed severed from these Terms and Conditions, but every other provision shall remain in full force and effect, and in substitution for any such provision held unlawful or unenforceable, there shall be substituted a provision of similar import reflecting the original intent of the clause to the extent permissible under applicable law.


(b) The failure on the part of either party to exercise, or any delay in exercising, any right or remedy arising from the Agreement shall not operate as a waiver thereof; nor shall any single or partial exercise of any right or remedy arising there from preclude any other or future exercise thereof or the exercise of any other right or remedy arising from the Agreement or from any related document or by law.


December 2013

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