Sales Contract

Between

Elektror Airsystems (Beijing) Co., Ltd.
Room 1703, Building 2, No.32 Xizhimen North Street,
Haidian District, Beijing, 100082

hereinafter referred to as “ELEKTROR”

and

[Name of Purchaser]

[Address of Purchaser]

- hereinafter referred to as “Purchaser” –

(hereinafter: each a “Party” and together the “Parties”)

Recitals

ELEKTROR is a member of the worldwide Elektror Group, the leading manufacturer and supplier of industrial fans, industrial blowers and side channel blowers. Purchaser is [          ].

ELEKTROR has expressed a desire to sell products to Purchaser and Purchaser has expressed an interest in purchasing those products.

Therefore, ELEKTROR and Purchaser have concluded the following terms and conditions to be agreed upon.

1. Subject Matter, Application of this Contract
   1. Subject to the terms and conditions below, ELEKTROR agrees to sell, and Purchaser agrees to purchase, the products and parts as set forth in Appendix I:[Title of the Document] (hereafter referred to as “Contract Products” or “Goods”).
   2. Contract Products purchased under this Contract are intended exclusively for use by traders/businesses. Should the Contract Products procured are for resale to an individual consumer or a trader/business, who, in turns, supplies consumers with the Contract Products, ELEKTROR shall be notified by Purchaser prior to conclusion of this Contract.
   3. The contractual relationship between ELEKTROR and Purchaser shall be exclusively governed by this Contract. Any conflicting or deviating clauses of the Purchaser shall not be accepted by ELEKTROR unless it has expressively agreed to their validity in writing. The following provisions shall apply even if ELEKTROR makes the delivery to Purchaser without reservation, in full awareness of conflicting or deviating clauses of Purchaser.
   4. The terms and conditions of this Contract shall supersede all other terms and conditions, including but not limited to terms and conditions included in or alluded to in any quotation or order form issued by ELEKTROR or Purchaser. Purchaser further represents to ELEKTROR and confirms that it is not signing this Contract in reliance upon any representation of ELEKTROR or its representative.
2. Price
   1. The price of the Contract Products and the terms of delivery are set forth in Appendix I of this Contract.
   2. On arrangement of a delivery period of more than 6 months, ELEKTROR is entitled to pass on cost increases that have occurred in the meantime for procurement or delivery or personnel (wages and ancillary wage costs) to Purchaser by increasing the relevant prices affected to the necessary extent for compensating these cost changes. Purchaser shall only be entitled to terminate this Contract or refuse the delivery, if the price increase exceeds the increase of general cost in a considerable manner
3. Terms of Payment, Off-set Entitlement
   1. Subject to the Parties’ mutual agreement, Purchaser shall pay the purchase price as stated in Appendix I and any associated costs in accordance with one of the two options below: 
      1. Full payment in advance: Purchaser shall pay the purchase price in full at least 7 days prior to the agreed date of delivery. ELEKTROR shall not be liable for delay in delivery should Purchaser fails to meet its payment obligation.
      2. Payment by [ 2 ] instalments:
         1. [ 50 %] of the contract value as down payment is payable by [Option A]: 10 days after signing of this Contract; OR [Option B]: [DD ][MM ], [YYYY ]; and
         2. [ 50 %] of the contract value is payable within 10 days after the Notice for Collection is issued by ELEKTROR to Purchaser. Whether or not Purchaser collects the delivered Goods will not in any way affect its obligation of payment within agreed timeframe.
   2. The Parties acknowledge that the time limit for payment is of utmost importance. Should Purchaser fail to make the payment or any of the instalments within the given timeframe prescribed in Art.3.1, ELEKTROR shall be entitled to charge 0.2‰ per day as penalty interest for the deferred payment to Purchaser, and such penalty charge shall not affect ELEKTROR’s entitlement to take the measures set forth below:
      1. Termination of this Contract in accordance with Art.10.3 of this Contract;
      2. Suspend any further delivery of the Contract Products to Purchaser (if any); or
      3. Seek any other rights or remedial measures by law.
   3. Purchaser may only set off claims with the counterclaims that are legally binding, undisputed or recognized by ELEKTROR. Besides, Purchaser shall only authorized to exercise a retention right when its counterclaim is based on the same contractual relationship.
4. Delivery
   1. ELEKTROR shall deliver the Contract Products including associated parts and documents by no later than [DD][MM],[YYYY] / [Option:] by the agreed date as set forth in the Appendix I, provided that all technical issues have been clarified and payments or other obligations of Purchaser have been made and/or fulfilled in due time. If this is not the case, the period of delivery shall be extended in a reasonable manner.
   2. Unless stipulated otherwise in the Appendix I, the delivery term of “ex works” shall be deemed to have been agreed upon. Purchaser shall collect the Goods immediately upon receipt of the Notice for Collection issued by ELEKTROR. ELEKTROR’s delivery obligation shall be taken as completed when the Contract Products are positioned ex works ready for collection and the Notice for Collection is issued.
   3. Until the time of delivery, ELEKTROR reserves the right to carry out technical changes that are customary in the trade, particularly improvements, provided that these only cause negligible changes to the quality and Purchaser is not impaired to an unreasonable extent.
   4. Part deliveries and part services are admissible if they are not unreasonable for the Purchaser.
   5. Claims for damages by Purchaser because of delay in delivery are excluded, except for cases of intent or gross negligence by ELEKTROR.
   6. In the event that Purchaser delays the acceptance of the delivery or fails to collect the Contract Products in due time, ELEKTROR shall be entitled to take the measures set forth below, and such action shall not influence the exercise by ELEKTROR of any other rights or remedial measures:
      1. Store the Contract Products until they are accepted or collected, and claim from Purchaser all expenses arising from the storage and insurance of the Contract Products; or
      2. Sell the Contract Products if they are still not accepted or collected 15 days after being delivered or the Notice for Collection is issued, and additionally charge minimum of 10% of the contract value as the resale cost. Any proceeds from the resale shall be used to reimburse the amount Purchaser should have paid for the Goods, as well as the cost for storage, insurance and other extra costs, etc. incurred by ELEKTROR. In case the proceeds are insufficient to cover the aforementioned purchase price, costs and/or other losses of ELEKTROR, Purchaser shall pay the difference to ELEKTROR.
5. Transfer of Risk, Transfer of Ownership/Title
   1. In case the parties have agreed on the delivery terms “ex works”, the risk of damage to or losses of the Contract Products shall be transferred to Purchaser when ELEKTROR notifies Purchaser that the Contract Products are ready for collection. In other cases, the aforementioned risk shall be transferred to Purchaser once the Contract Products are delivered to the first carrier.
   2. ELEKTROR remains the owner of the delivery until Purchaser has paid full payment for the Contract Products to ELEKTROR.
   3. Purchaser may not mortgage, dispose or by any other means create encumbrance on those Contract Products over which ELEKTROR still holds title. In the event that the Purchaser breaches this provision, it shall immediately pay all amounts that it owes ELEKTROR, regardless of whether a corresponding invoice has been issued or the time period prescribed under Art. 3.1 has passed, and such action shall not influence ELEKTROR’s right to take other remedial measures.
6. Warranty
   1. ELEKTROR warrants that the Contract Products are free from defects in design, material, workmanship and performance. The warranty on materials and processing of the Contract Products expires at the end of 12 months after delivery. Unless ELEKTROR agrees to otherwise in writing, this warranty does not apply to purchase of used products.
   2. ELEKTROR’s representation or description regarding characteristics of Contract Products that are contained in its public statements, such as catalogues, brochures, circulars, advertisements, illustrations, advertising and price lists shall only comprise the quality specification of the products, insofar as they have become an integral part of this Contract.
   3. Purchaser is obliged to check the Contract Products after receipt within an appropriate time period but within 5 working days at the latest. If no objection or claim is raised within the aforementioned inspection period, the delivery is to be seen as approved.
   4. Subject to ELEKTROR’s verification, if any defects were identified on the Contract Products, ELEKTROR is entitled to repair, or to replace during the term of the warranty at its own option.
   5. Defective material of any warranty claim confirmed by ELEKTROR shall either be returned to ELEKTROR upon its request; or scraped by Purchaser at its own cost if so instructed by ELEKTROR. Should a return be ordered, Purchaser shall make sure that the defective material is properly packed and protected from further damage, while ELEKTROR shall bear the returning cost. All other return shipment is only possible at the expenses and risks of Purchaser.
   6. Should the rectification measures taken by ELEKTROR in accordance with above Art.6.4 fail, Purchaser may request reduction of the purchase price in a reasonable manner. ELEKTROR is also entitled to refund the purchase price against redemption of the deficient product if a new production is disproportionate because of economic reasons.
   7. For the avoidance of any doubt, any repair, rework or replacement by ELEKTROR under this warranty do not lead to a prolongation or interruption of the term of warranty.
   8. Faults which are attributable to normal wear or tear, inappropriate use or non-observance of operation, service or maintenance instructions are excluded from the warranty. The warranty expires if Purchaser or third parties change or repair the products without prior written approval of ELEKTROR.
   9. The warranty provided under this provision is complete and final. All other liabilities or obligations are excluded. For the avoidance of any doubt, ELEKTROR shall not be liable for any other direct, indirect, special, incidental or consequential damages (including losses of profit) incurred by Purchaser relating to the Contract Products.
7. Intellectual Property
   1. Purchaser must properly use and shall not change the brand names, trademarks, designs and logos of ELEKTROR on the Contract Products or their original packaging. Purchaser shall not take any action that may adversely affect ELEKTROR’s rights to, interests in or title to the name, brand names, trademarks, designs and logos of the ELEKTROR, and the Purchaser shall not gain any title to or interests in such name, brand names, trademarks, designs and logos.
   2. ELEKTROR retains the copyrights to all the documents handed over to Purchaser in particular, illustrations, diagrams and calculations. They shall not be used for other purposes than those laid down in this Contract nor made accessible to third parties without prior written consent of ELEKTROR. When the contractual purpose of use has been fulfilled or upon the termination of this Contract for whatever reasons, these documents must be returned to ELEKTROR immediately free of charge.
   3. Purchaser shall promptly notify ELEKTROR of any infringement of its intellectual property rights (including, but not limited to, any patent, copyright, design or trademark) and/or of any claim that import, sale or use of the Contract Products infringes upon any third person’s rights, of which the Purchaser may become aware or reasonably suspect. At the request of the ELEKTROR, Purchaser is obliged to take such actions in respect of the alleged infringement or claim as ELEKTROR requests.
   4. Where Contract Products are manufactured according to Purchaser’s specifications, and these manufacturing specifications result in a claim by a third-party for damages due to infringement of intellectual property rights (including, but not limited to, any patent, copyright, design or trademark), then Purchaser shall compensate ELEKTROR for any costs, expenses or other losses resulting from the claim.
   5. Purchaser’s obligations under this provision shall remain in force during the term of this Contract and for a period of 3 years after expiration or termination of this Contract, regardless of the reasons for the termination.
8. Confidentiality
   1. “Confidential Information” refers to, in relation to a Party, any information which is specified by that Party as confidential, or which the other ought reasonably to regard as confidential. Confidential Information includes, but is not limited to technical or trade secret, customer data and all information and materials relating to the Party's business in any way which comes into the possession, or knowledge of the other, but shall not include any such information or materials which:
      1. was in the receiving Party’s possession prior to receipt from the other Party;
      2. now is or later becomes publicly known through no breach of the confidentiality obligations of the receiving Party; or
      3. was received by a Party in good faith from a third party not subject to a confidentiality obligation.
   2. Neither Party, and/or its employees, agents or contractors, may in any circumstances give access to nor disclose the other Party’s Confidential Information to any person, without obtaining that Party’s prior written consent. However, in case ELEKTROR engages a sub-contractor or a third party for the performance of this Contract, it shall be authorised to pass on Purchaser’s data to such engaged third party, to the extent necessary for the attainment of the contractual objective.
   3. The Parties’ confidentiality obligations remain binding during the term of this Contract and 3 years after the expiration or termination of this Contract.
9. Force Majeure
   1. The Parties shall not be liable for any non-performance or any delay in performance of their respective obligations under the present Agreement, whenever the cause of such failed, incorrect or delayed performance arises from force majeure, beyond the control and/or the sphere of influence of same parties, for instance including but not limited to accidents, fires, explosions, floods, labour problems (including logouts, general strikes, strikes, wildcat strikes and slowdowns), sabotage, public disorder, wars, acts of terrorism, insurrections or civil war, sieges, restrictions imposed by public authorities, embargoes, inability to obtain power, material, labor equipment or transportation, as well as any other unpredictable events. For the avoidance of any doubt, failure to obtain an export license (if applicable) by the ELEKTROR issued by the Chinese government for the purpose of this Contract shall be regarded as force majeure.
   2. The Parties shall inform each other without undue delay of the occurrence and the anticipated duration of force majeure.
   3. Should the causes of force majeure last for longer than 6 months, either Party is entitled to terminate this Contract by issuing a written notice to the other Party.
10. Term and Termination
    1. This Contract shall come into full force and effect from the date of being signed by the authorized representatives of both parties and sealed with the official seal or contract seal of both parties.
    2. This Contract will expire after both Parties have duly performed their contractual obligations.
    3. ELEKTROR is entitled to terminate this Contract by issuing a written notice to Purchaser with immediate effect if:
       1. Purchaser ceases to carry on its business or goes into liquidation, or is dissolved or struck off; or
       2. Purchaser is unable to pay its debts as they mature, or is the subject of any bankruptcy proceedings, or is under the risk of bankruptcy; or
       3. Purchaser fails to meet its payment obligation under this Contract; or
       4. Purchaser is in breach of any provision of this Contract and fails to remedy such breach (where it is capable of being remedied) within 10 days of notice from ELEKTROR specifying such breach; or
       5. Purchaser is in breach of any provision of this Contract and such breach is incapable of being remedied.
    4. Upon termination of this Contract for whatever reasons, all amounts owed by Purchaser to ELEKTROR shall become immediately due and payable.
    5. Termination of this Contract shall be without prejudice to any rights of either Party which may have accrued up to the date of such a termination and the right to terminate this Contract is not intended to be exclusive but shall be in addition to every other remedies or rights including the right to recover damages.
11. Applicable Law, Dispute Resolution
    1. This Contract shall be exclusively governed by the laws of PRC. If there is no clear regulation in the laws of PRC, the relevant international practices shall be observed.
    2. If there is any dispute between the Parties arising from or in relation to the provisions of this Contract, i.e., any dispute in which there is an allegation between the Parties of a breach of this Contract, or any dispute concerning the interpretation of the terms of this Contract, one Party shall be obliged to negotiate in good faith with the other Party to resolve such a dispute.
    3. In the event the Parties are unable, after such good faith negotiations, to resolve the dispute within 30 days, or within any mutually agreed extension thereof, any dispute arising from or in connection with this Contract shall be submitted to China International Economic and Trade Arbitration Commission (CIETAC) in Beijing for arbitration which shall be conducted in accordance with the CIETAC's arbitration rules in effect at the time of applying for arbitration. The arbitration place shall be Beijing. The arbitral award is final and binding upon both Parties. The arbitration fee shall be borne by the losing Party; where it is otherwise provided in the arbitration award, the award shall prevail.
12. General Provisions
    1. This Contract shall supersede all other oral or written agreements or understandings previously concluded between the Parties regarding the subject matter of this Contract.
    2. If any individual provision of the present Agreement is or becomes invalid, the Parties shall replace the deleted provision with a valid provision that reflects the purpose of the deleted provision. The remaining provisions shall remain in full force and effect.
    3. Any amendments or supplements to this Contract shall be made in writing, which shall also apply to any change of the aforesaid written form requirement clause.
    4. This Contract is written in two languages of Chinese and English, in case of any conflicts or discrepancy, the Chinese version shall prevail.
    5. This Contract shall be signed in two counterparts. Each Party shall keep one of such counterparts.