I. Opening provisions

  1. The sale and purchase of goods is governed by a Purchase Order (hereinafter referred to as the "PO"). These General Sales Conditions and Delivery Terms (hereinafter referred to as the "GSCDT") form an appendix to the PO.
  2. The GSCDT are binding and apply to the contractual relationship based on the PO unless the PO rules otherwise. Other issues, not negotiated or stipulated in the PO and/or GSCDT are fully governed by Act No 513/1991 coll, of the Czech Commercial Code, in the wording of later alterations, amendments and connected legal regulations (hereinafter referred to as the "Commercial Code").
  3. The PO and any alterations and/or amendments must be made in writing and signed by authorised representatives of both contractual parties hereof.
  4. Upon signing the PO any obligations from previous negotiations and/or correspondence (declared intents) relating to the scope of the PO, expire.
  5. These GSCDT are obligatory for any and all Purchasers to which ALFUN a.s. (hereinafter referred to as the "Vendor"), deliver their goods based on a PO.

II. Basic Contractual Terms

  1. The Vendor undertakes to deliver the goods, while the Purchaser undertakes to take the goods and pay for the delivered goods respecting quantity, price and delivery terms as stated in the PO.
  2. The Purchaser is obliged to return the confirmed PO draft, although no later than within the validity term of the PO; otherwise they shall send a counterproposal. In the case whereby the Vendor will not received the abovementioned, the PO draft is void and the Vendor will not be bound by its contents forthwith.
  3. Confirmed PO drafts shall be sent to Vendor by mail or facsimile.
  4. The Purchaser declares hereto, that the company he or she represents is not financially restrained and he or she has no knowledge of any forthcoming legal proceedings to be taken against the company and that the company is not the subject of a bankruptcy petition. Any change of address, collection details and tax data will be declared to the Vendor without unnecessary delay.
  5. Pricing information is considered confidential under § 271 of the Commercial Code.
  6. The Vendor is not obliged to deliver the goods to the Purchaser under the terms stated in the PO, if, on the day of the PO's performance the Purchaser has an outstanding debt to the Vendor. If Purchaser settles the outstanding debt, the Vendor undertakes to complete the PO performance respecting debt settlement. The delivery term may be extended by a term equal to the period from the originally agreed delivery date and the date the outstanding debt was settled. In case that on request of the Vendor the credit insurance refuses to provide the sufficient insurance limit for insurance of the claims against the Purchaser, the Vendor can withdraw from the PO
  7. The Purchaser is obliged to take care of the goods until payment is made and protect the goods against damage and/or theft. Should the Purchaser fail to perform its obligations stated in the PO and/or GSCDT, the Purchaser will be obliged to pay a contractual penalty in the amount of 30 % of the price for the goods, represented by the PO.
  8. The Vendor’s right of loss compensation is not affected by settlement of contractual penalties.
  9. Legal relationships arising in connection with this Contract are governed by legislation of the Czech Republic. In the case of a dispute arising between the Contractual Parties hereof in connection with the PO performance, the Parties herein must attempt to resolve such a dispute amicably. If it is impossible, any of the Contractual Parties herein is entitled submit a proposal to resolve such dispute to the Arbitration Court of the Economic Chamber of the Czech Republic and Agrarian Chamber of the Czech Republic in Prague in accordance with Act No. 216/1994 coll, through one arbitrator appointed by the Chairman of the said Arbitration Court. The venue of the Arbitration Court will be in Olomouc in the building of District Economic Chamber.
  10. In the case that during the Arbitration proceedings before the above mentioned Arbitration Court findings will resolve the said dispute amicably, the Arbiter’s findings approving such reconciliation need not to be reasoned. The Contractual Parties in such a case will settle, except of the proceedings costs, in compliance with the Rules and costs of the above mentioned Arbitration Court in addition to Legal costs. The Contractual Parties herein must co-operate fully during any Arbitration proceedings, they must be helpful during resolution of disputes, giving explanation concerning the evidence, basic documentation, etc. The Arbitration Court findings must be acknowledged without reservation and executed voluntarily. Should any Contractual Party refuse to execute the Arbitrators findings the other Party will reserves the right to submit claim to commence execution proceedings.

III. Price and Payment Terms

  1. The price for the subject of the performance is negotiated within the PO. If not otherwise negotiated in PO, the price is quoted as EXW Vendor’s head office in accordance with INCOTERMS 2000, including transport packing. The Vendor will issue the tax document (hereinafter referred to as the "Commercial invoice") based on the actual delivered quantity of goods.
  2. To calculate the price the most decisive data concerns the quantity at the moment of taking over of the goods by the forwarding company and/or carrier. The Purchaser must settle the purchase price as per the terms negotiated in PO.
  3. The Purchaser will pay the purchase price based on the Commercial Invoice issued by the Vendor. The Payment date is stated in the PO. The payment date will be deemed as the day the due payment is credited to the Vendor bank account. Bank charges connected with settlement of the purchase price are born by the Purchaser. Failure to pay the purchase price by the due date as stated in the PO constitutes serious breach of contract.
  4. If the PO stipulates settlement by advanced payment, the Purchaser shall pay the purchase price based on a pro-forma commercial invoice, issued by Vendor. The Payment date is stated in the PO. The payment date will be deemed as the day the due payment is credited to the Vendor bank account. Bank charges connected with settlement of the purchase price are born by the Purchaser. Failure to pay the purchase price by the due date as stated in the PO constitutes serious breach of contract.
  5. If an advance payment has been negotiated, the Vendor is not obliged to deliver the goods to the Purchaser until the payment of negotiated price has been credited to the Vendor’s account.
  6. If a bank guarantee, letter of credit, bill of exchange, etc has been negotiated in PO, the Vendor is not obliged to deliver the goods to the Purchaser until the submission of the complete and necessary documents. Such failure to deliver the goods is not considered breach of the PO by the Vendor.
  7. In the case of delayed payment the Vendor is entitled to impose delay interest in the amount of 0.05 % of the overdue sum for each day of delay. This does not affect any other claims by the Vendor including the contractual penalty claim as well as loss compensation. The Purchaser is not entitled to delay payment or a part thereof for the purpose of including mutual claims including compensation for any claim or claims made. i.e. including claims resulting from loss, theft, and/or damage of the goods occurring after the transfer of the rights to the goods to the Purchaser.

IV. Delivery of the Goods

  1. Delivery of goods is made road transport based on the requirements and instructions of the Purchaser as stated in the PO.
  2. The Purchaser is entitled to organise the transport themselves, bearing all the costs, in this case the Purchaser must inform the Vendor. In such a case, the Purchaser is obliged to take the goods over no later than 7 calendar days following receipt of the advice from the Vendor that the goods are prepared for despatch. If the Purchaser fails to take the goods over after receiving the advice from the Vendor within the said period and at the location as stated in the PO, the Vendor is entitled to withdraw from the contract, sell the goods to a third party and/or require settlement of the loss arising from the delay in taking over the goods unless they require the Purchaser to complete performance of the PO.
  3. The Vendor reserves the right to deliver the goods with a weight allowance of 10%. Pertinent others allowances will be negotiated in the PO.
  4. After delivery term expiration in accordance with the PO, the Vendor has the right to deliver the goods to the Purchaser within the subsequent 40 days, unless the Purchaser delivers a deed in writing no later than the 5th day following expiration of the initial delivery term applying for an appropriate additional period of 20 days from delivery of the said deed. At this point they notify their intent to withdraw from the contract, if it is not done by the Vendor during this period. The Purchaser may withdraw from the PO by deed in writing, delivered to the Vendor after expiration of the appropriate period unless the Vendor had not met the said PO.
  5. The Vendor reserves the right to retain any and all deliveries of goods to a Purchaser after notification to the Purchaser in writing within the complete settlement of all due Purchaser’s obligations on behalf the Vendor. This Vendor’s act will not be considered as delay in delivery of the goods and does not establish the Purchaser’s right of contractual claims, compensation for loss and/or withdrawal from the PO. In case of failing to settle the Purchaser’s due obligations after a repeated call, the Vendor retains the right to withdraw all concluded POs.

V. Retention of Title

  1. The Vendor holds title to the goods as specified in the PO until the point at which complete settlement of the purchase price and any due installments due to the Vendor have been made.
  2. In the case whereby the Purchaser delays the purchase price settlement whilst handling goods owned by the Vendor, the Vendor retains the following rights:
    1. Free entry of the Vendor’s representative into Purchaser’s premises as well as the right of access to any data concerning the handling of the said goods.
    2. Any Purchaser’s revenues, arisen for them within settlement of any and all Vendor’s receivables as a result of unauthorised handling of the goods. In this case the Purchaser’s debtor must perform their obligations on behalf of Vendor directly and the Purchaser has the right to require the settlement from a debtor on the Vendor’s account only.

VI. Purchase Order Withdrawal and/or Cancellation

  1. In the case of PO withdrawal at the Purchaser’s request and/or as a result of failing to perform the PO terms. The Purchaser must pay the Vendor 10 % of the price of the goods in accordance with the PO in the case of non-manufactured goods and 65% of the value for goods having being manufactured following such withdrawal.
  2. In the case of groundless PO withdrawal by the Vendor, the Purchaser has the right for compensation of documented additional costs arising from a result of said withdrawal up to a maximum sum of 30 % of the value of the goods involved in such withdrawal.

VII. Goods Defects and Claims

  1. The Purchaser’s right resulting from defects of goods expires, if the features of said defects are not notified to the Vendor in writing within the below stated periods:
    1. Visual defects found during the acceptance procedure immediately and defects of quantity – within the period of 7 days from delivery of the goods to the place of destination (as stated in the PO)
    2. Other defects – immediately after finding a defect, but not later than 30 days from delivering the goods to the destination (as stated in the PO).
  2. Defects must be notified by the Purchaser to the Vendor in writing within the periods as stipulated in article 1 hereof. Together with the notification of defects the Purchaser must submit documentation within the said period from which the claim can be qualified along with a completed claim protocol. The Purchaser’s rights arising from such claims expire upon failure to comply with the documentation requirements.
  3. In the case of discovering quantity differences and/or damage of goods during haulage, the Purchaser must submit to the Vendor the original commercial deed concerning taking over of the goods the contractual carrier.
  4. Damaged and claimed goods must be stored separately, in their original state and the said goods must not be used and/or resold before completion of the claim procedure without the Vendor’s prior approval in writing .
  5. In the case of acknowledging a claim, the Vendor may, based on the consent of the Contractual Parties proceed as follows:
    1. To replace defective material during an appropriate period,
    2. To perform an additional delivery under the initial terms and conditions,
    3. To require return of the defective goods followed by refund of the purchase price,
    4. To reduce the price

VIII. Closing Provisions

  1. The Vendor has the right of full damage settlement arising through the failing of the PO, except of the contractual penalty claim as per these GSCDT. The Contractual Party, which failed in a duty stated in the PO, must make settlement to the other contractual Party, however, up to a maximum amount equal to the value of the goods.
  2. A contractual Party herein does not assume responsibility for arising losses, if they give evidence that the failure to meet a duty was due to a result of unforeseen and unavoidable circumstances of an extraordinary nature which was impossible to predict during the period of opening the PO and which had been impossible to prevent (hereinafter referred to as "Force Majeure").
  3. “Force Majeure” circumstances are confirmed within the scope of international contracts and agreements by the appropriate Chambers of Commerce.
  4. “Force Majeure” circumstances are represented specifically as follows:
    1. Declared and/or undeclared war, civil war, insurgency and/or revolution, pirate acts, and sabotages,
    2. Natural disasters,
    3. Explosions, fires, damage of machines, manufacturing and/or other facilities,
    4. Any boycott, strike, and embargo, occupation of plants and their branches, taking place in Vendor’s, manufacturer’s, and/or their subsuppliers’ plant(s),
    5. Intervention(s) of state authorities.
  5. The Contractual Party herein, which suffered a “Force Majeure” loss, must notify this fact and its results to the other contractual Party hereof without unnecessary delay after they were informed of it themselves otherwise they will assume the full scope of responsibility for loss caused.
  6. Responsibility for suspension will be effective during a period of “Force Majeure” and for its duration only. If the “Force Majeure” prevents the Vendor meeting the PO terms, the Vendor retains the right to extend the delivery term of the goods appropriately.
  7. “Force Majeure” circumstances release the appropriate Party herein from the duty to settle the loss, penalties and/or other contractual sanctions hereof, excluding to pay the interest on the debt to the other Party hereof, for the period of existence of the reason for their payment.
  8. If the “Force Majeure” circumstances last over three months, any contractual Party hereof has the right to withdraw the PO, specifically its part, without following claims.
  9. As for a PO being concluded before entering the GSCDT into validity, the stipulations of GSCDT hereof regarding sanctions for failing in the delivery performance will not be applied.
  10. The above mentioned GSCDT herein, being verified by Public Notary, are available at the Vendor’s website www.alfun.cz. Undersigning the PO represents an expression of consent with the wording of these GSCDT.

In Bruntál, May 21st 2010

Podpis Václav Jízdný 

Ing. Václav Jízdný
Chairman of the board