General Terms And Conditions Of Sales

PREAMBLE
1.
This document contains a list of conditions which shall govern all supplies of goods and services by Flenco Fluid System S.r.l. to any Purchaser. The General Terms and Conditions for the Supply of Products and Services are an integral part of every contract for the supply of products and services.
These General Terms shall apply when the parties agree In Writing or otherwise thereto. Any modifications of or deviations from them must be agreed In Writing.

DEFINITIONS
2.
In these General Conditions the following terms shall have the meanings hereunder assigned to them:
– “Contract”: the agreement In Writing between the parties concerning supply of the Product and all appendices, including agreed amendments and additions In Writing to the said documents;
– “Gross Negligence”: an act or omission implying either a failure to pay due regard to serious consequences, which a conscientious contracting party would normally foresee as likely to ensue, or a deliberate disregard of the consequences of such an act or omission;
– “In Writing”: communication by document signed by both parties or by letter, fax, electronic mail and by such other means as are agreed by the parties;
– “the Product”: the object(s) to be supplied under the Contract, including software and documentation.

PRODUCT INFORMATION
3.
All information and data contained in general product documentation shall be binding only to the extent
that they are by reference In Writing expressly included in the Contract.

DRAWINGS AND TECHNICAL INFORMATION
4.
All drawings and technical documents relating to the Product or its manufacture submitted by one party to the other, prior or subsequent to the formation of the Contract, shall remain the property of the submitting party.
Drawings, technical documents or other technical information received by one party shall not, without the consent of the other party, be used for any other purpose than that for which they were provided. They may not, without the consent of the submitting party, otherwise be used or copied, reproduced, transmitted or communicated to a third party.

5.
The Supplier shall, not later than at the date of delivery, provide free of charge information and drawings which are necessary to permit the Purchaser to install, commission, operate and maintain the Product. Such information and drawings shall be supplied in the number of copies agreed upon or at least one copy of each. The Supplier shall not be obliged to provide manufacturing drawings for the Product or for spare parts.
ACCEPTANCE TESTS

6.
Acceptance tests provided for in the Contract shall, unless otherwise agreed, be carried out at the place of manufacture during normal working hours.
If the Contract does not specify the technical requirements, the tests shall be carried out in accordance with general practice in the appropriate branch of industry concerned in the country of manufacture.

7.
The Supplier shall notify the Purchaser In Writing of the acceptance tests in sufficient time to permit the Purchaser to be represented at the tests. If the Purchaser is not represented, the test report shall be sent to the Purchaser and shall be accepted as accurate.

8.
If the acceptance tests show the Product not to be in accordance with the Contract, the Supplier shall without delay remedy any deficiencies in order to ensure that the Product complies with the Contract. New tests shall then be carried out at the Purchaser’s request, unless the deficiency was insignificant.

9.
The Supplier shall bear all costs for acceptance tests carried out at the place of manufacture. The Purchaser shall however bear all travelling and living expenses for his representatives in connection with such tests.

DELIVERY. PASSING OF RISK
10.
Any agreed trade term shall be construed in accordance with the INCOTERMS® in force at the formation of the Contract.
If no trade term has been specifically agreed, the delivery shall be Free Carrier (FCA) at the place named by the Supplier.
If, in the case of delivery Free Carrier, the Supplier, at the request of the Purchaser, undertakes to send the Product to its destination, the risk will pass not later than when the Product is handed over to the first carrier.
Partial delivery shall not be permitted, unless otherwise agreed.

TIME FOR DELIVERY. DELAY
11.
If the parties, instead of specifying the date for delivery have specified a period of time within which delivery shall take place, such period shall start to run as soon as the Contract is entered into and all agreed preconditions to be fulfilled by the Purchaser have been satisfied, such as official formalities, payments due at the formation of the Contract and securities.

12.
If the Supplier anticipates that he will not be able to deliver the Product at the time for delivery, he shall forthwith notify the Purchaser thereof In Writing, stating the reason and, if possible the time when delivery can be expected.

13.
If delay in delivery is caused by any of the circumstances mentioned in Clause 39, by an act or omission on the part of the Purchaser, including suspension under Clause 20, or any other circumstances attributable to the Purchaser, the Supplier shall be entitled to extend the time for delivery by a period which is necessary having regard to all the circumstances of the case.
This provision shall apply regardless of whether the reason for the delay occurs before or after the agreed time for delivery.

14.
If the Product is not delivered at the time for delivery, the Purchaser shall be entitled to liquidated damages from the date on which delivery should have taken place.
The liquidated damages shall be payable at a rate of 0.2 per cent of the purchase price for each commenced week of delay, given three weeks of grace period. The liquidated damages shall not exceed 5 per cent of the purchase price.
If only part of the Product is delayed, the liquidated damages shall be calculated on that part of the purchase price which is attributable to such part of the Product as cannot in consequence of the delay be used as intended by the parties.
The liquidated damages shall become due at the Purchaser’s demand In Writing but not before delivery has been completed or the Contract is terminated under Clause 15.
The Purchaser shall forfeit his right to liquidated damages if he has not lodged a claim In Writing for such damages within one month after the time when delivery should have taken place.

15.
If the delay in delivery is such that the Purchaser is entitled to maximum liquidated damages under Clause 14 and if the Product is still not delivered, the Purchaser may In Writing demand delivery within a final reasonable period which shall not be less than one week.
If the Supplier does not deliver within such final period and this is not due to any circumstances which are attributable to the Purchaser, then the Purchaser may by notice In Writing to the Supplier terminate the Contract in respect of such part of the Product as cannot in consequence of the Supplier’s failure to
deliver be used as intended by the parties.

16.
If the Purchaser anticipates that he will be unable to accept delivery of the Product at the time for delivery, he shall forthwith notify the Supplier In Writing thereof, stating the reason and, if possible, the time when he will be able to accept delivery.
If the Purchaser fails to accept delivery at the time for delivery, he shall nevertheless pay any part of the purchase price which becomes due at the time for delivery, as if delivery had taken place at the time for delivery. The Supplier shall arrange for storage of the Product at the risk and expense of the Purchaser.
The Supplier shall also, if the Purchaser so requires, insure the Product at the Purchaser’s expense.

17.
Apart from circumstances mentioned in Clause 39, if the Purchaser terminates the Contract he will be charged of the following Cancellation Fees :
* FOR COMPLETE SYSTEMS :
– 15% OF PO/LOI VALUE FOR CANCELLATIONS FROM PO RECEPTION TILL 1 MONTH
– 30% OF PO/LOI VALUE FOR CANCELLATIONS AFTER 1 MONTH FROM PO RECEPTION
– 60% OF PO/LOI VALUE FOR CANCELLATIONS AFTER 2 MONTHS FROM PO RECEPTION
– 100% OF PO/LOI VALUE FOR CANCELLATIONS AFTER 3 MONTHS FROM PO RECEPTION
* FOR SPARES :
– 15% OF PO/LOI VALUE FOR CANCELLATIONS FROM PO RECEPTION TILL 1 WEEK
– 30% OF PO/LOI VALUE FOR CANCELLATIONS AFTER 1 WEEK FROM PO RECEPTION
– 60% OF PO/LOI VALUE FOR CANCELLATIONS AFTER 2 WEEKS FROM PO RECEPTION
– 100% OF PO/LOI VALUE FOR CANCELLATIONS AFTER 4 WEEKS FROM PO RECEPTION

PAYMENT
18.
Unless otherwise specified in the Contract, prices are stated net of VAT, of all duties, taxes and/or excise duty. In addition to the price indicated in the offer, the Purchaser shall pay the Supplier the VAT, all duties, taxes and/or excise duty applicable to the goods and/or services covered by the Sales Order.

19.
Unless otherwise specified in the Contract, payment shall be made in a single payment, by bank transfer to the current account held by Flenco Fluid System S.r.l., within thirty days from receipt of invoice.

20.
If the Purchaser fails to pay by the stipulated date, the Supplier shall be entitled to interest from the day on which payment was due and to compensation for recovery costs. The rate of interest shall be as agreed between the parties or otherwise 8 percentage points above the rate of the main refinancing facility of the European Central Bank. The compensation for recovery costs shall be 3 per cent of the amount for which interest for late payment becomes due.
In case of late payment and in case the Purchaser fails to give an agreed security by the stipulated date the Supplier may, after having notified the Purchaser In Writing, suspend his performance of the Contract until he receives payment or, where appropriate, until the Purchaser gives the agreed security.

RETENTION OF TITLE
21.
The Product shall remain the property of the Supplier until paid for in full to the extent that such retention of title is valid under the relevant law.
The Purchaser shall at the request of the Supplier assist him in taking any measures necessary to protect the Supplier’s title to the Product.
The retention of title shall not affect the passing of risk under Clause 10.

LIABILITY FOR DEFECTS
22.
Pursuant to the provisions of Clauses 23-37, the Supplier shall remedy any defect or nonconformity (hereinafter termed defect(s)) resulting from faulty design, materials or workmanship.

23.
The Supplier shall not be liable for defects arising out of materials provided or a design stipulated or specified by the Purchaser.

24.
The Supplier shall only be liable for defects which appear under the conditions of operation provided for in the Contract and under proper use of the Product.

25.
The Supplier shall not be liable for defects caused by circumstances, which arise after the risk has passed to the Purchaser, e.g. defects due to faulty maintenance, incorrect installation or faulty repair by the Purchaser or to alterations carried out without the Supplier’s consent In Writing. The Supplier shall neither be liable for normal wear and tear nor for deterioration.

26.
The Supplier’s liability shall be limited to defects which appear within a period of one year from delivery. If the use of the Product exceeds that which is agreed, this period shall be reduced proportionately.

27.
When a defect in a part of the Product has been remedied, the Supplier shall be liable for defects in the repaired or replaced part under the same terms and conditions as those applicable to the original Product for a period of one year. For the remaining parts of the Product the period mentioned in Clause 27 shall be extended only by a period equal to the period during which and to the extent that the Product could not be used as a result of the defect.

28.
The Purchaser shall without undue delay notify the Supplier In Writing of any defect which appears. Such notice shall under no circumstances be given later than two weeks after the expiry of the period given in Clause 26 or the extended period(s) under Clause 27, where applicable.
The notice shall contain a description of the defect.
If the Purchaser fails to notify the Supplier In Writing of a defect within the time limits set forth in the first paragraph of this Clause, he shall lose his right to have the defect remedied.
Where the defect is such that it may cause damage, the Purchaser shall immediately inform the Supplier In Writing. The Purchaser shall bear the risk of damage to the Product resulting from his failure so to notify. The Purchaser shall take reasonable measures to minimise damage and shall in that respect comply with instructions of the Supplier.

29.
On receipt of the notice under Clause 28 the Supplier shall at his own cost remedy the defect without undue delay, as stipulated in Clauses 22-37. The time for remedial work shall be chosen in order not to interfere unnecessarily with the Purchaser’s activities.
Repair shall be carried out at the place where the Product is located unless the Supplier deems it more appropriate that the Product is sent to him or a destination specified by him.
If the defect can be remedied by replacement or repair of a defective part and if dismantling and re-installation of the part do not require special knowledge, the Supplier may demand that the defective part is sent to him or a destination specified by him. In such case the Supplier shall have fulfilled his obligations in respect of the defect when he delivers a duly repaired part or a part in replacement to the Purchaser.

30.
The Purchaser shall at his own expense provide access to the Product and arrange for any intervention in equipment other than the Product, to the extent that this is necessary to remedy the defect.

31.
Unless otherwise agreed, the Purchaser shall bear any additional costs which the Supplier incurs for remedying the defect caused by the Product being located in a place other than the destination stated at the formation of the Contract for the Supplier’s delivery to the Purchaser or – if no destination has been
stated – the place of delivery.

34.
Defective parts which have been replaced shall be made available to the Supplier and shall be his property.

35.
If the Purchaser has given such notice as mentioned in Clause 28 and no defect is found for which the Supplier is liable, the Supplier shall be entitled to compensation for the costs he incurs as a result of the notice.

36.
Notwithstanding the provisions of Clauses 22-35 the Supplier shall not be liable for defects in any part of the Product for more than one year from the end of the liability period referred to in Clause 26 or from the end of any other liability period agreed upon by the parties

37.
Save as stipulated in Clauses 23-36, the Supplier shall not be liable for defects. This applies to any loss the defect may cause including loss of production, loss of profit and other indirect loss.
This limitation of the Supplier’s liability shall not apply if he has been guilty of Gross Negligence.

ALLOCATION OF LIABILITY FOR DAMAGE CAUSED BY THE PRODUCT
38.
The Supplier shall not be liable for any damage to property caused by the Product after it has been delivered and whilst it is in the possession of the Purchaser. Nor shall the Supplier be liable for any damage to products manufactured by the Purchaser or to products of which the Purchaser’s products form a part.
If the Supplier incurs liability towards any third party for such damage to property as described in the preceding paragraph, the Purchaser shall indemnify, defend and hold the Supplier harmless.
If a claim for damage as described in this Clause is lodged by a third party against one of the parties, the latter party shall forthwith inform the other party thereof In Writing.
The Supplier and the Purchaser shall be mutually obliged to let themselves be summoned to the court or arbitral tribunal examining claims for damages lodged against one of them on the basis of damage allegedly caused by the Product. The liability between the Supplier and the Purchaser shall however be settled in accordance with Clause 46.
The limitation of the Supplier’s liability in the first paragraph of this Clause shall not apply where the Supplier has been guilty of Gross Negligence.

FORCE MAJEURE
39.
Either party shall be entitled to suspend performance of his obligations under the Contract to the extent that such performance is impeded or made unreasonably onerous by Force Majeure, meaning any of the following circumstances: industrial disputes and any other circumstance beyond the control of the parties such as fire, war, extensive military mobilization, insurrection, requisition, seizure, embargo, restrictions in the use of power, currency and export restrictions, epidemics, natural disasters, extreme natural events, terrorist acts and defects or delays in deliveries by sub-contractors caused by any such circumstance referred to in this Clause.
A circumstance referred to in this Clause whether occurring prior to or after the formation of the Contract shall give a right to suspension only if its effect on the performance of the Contract could not be foreseen at the time of the formation of the Contract.

40.
The party claiming to be affected by Force Majeure shall notify the other party In Writing without delay on the intervention and on the cessation of such circumstance. If a party fails to give such notice, the other party shall be entitled to compensation for any additional costs which he incurs and which he could have avoided had he received such notice.
If Force Majeure prevents the Purchaser from fulfilling his obligations, he shall compensate the Supplier for expenses incurred in securing and protecting the Product.

41.
Regardless of what might otherwise follow from these General Conditions, either party shall be entitled to terminate the Contract by notice In Writing to the other party if performance of the Contract is suspended under Clause 39 for more than six months.

CONSEQUENTIAL LOSSES
42.
Save as otherwise stated in these General Conditions there shall be no liability for either party towards the other party for loss of production, loss of profit, loss of use, loss of contracts or for any other consequential or indirect loss whatsoever.

PATENTS
43.
The Purchaser shall indemnify and hold harmless the Supplier of any recourse, legal action or claim against the Supplier, about the use of patents used by the Supplier at the Purchaser’s request in the performance of Work covered by the sales order and the related process.

ASSIGNMENT OF THE CONTRACT
44.
The Purchaser is expressly forbidden to sell and/or transfer the contract and/or any rights arising
from the contract, unless with the prior written consent of the Supplier.

PROCESSING OF PERSONAL DATA
45.
Purchaser and Supplier data subject to privacy protection given to the other Party in connection with the execution of the contract will be treated in accordance with Italian law 196/03 solely to comply with obligations under the contract.

DISPUTES AND APPLICABLE LAW
46.
All disputes arising out of or in connection with the Contract shall be finally settled under the Rules of Arbitration of the Chamber of Commerce of Turin (Italy) by one or more arbitrators appointed in accordance with the said Rules.

47.
The Contract shall be governed by the substantive law of the Supplier’s country.