GTC

§ 1 Application

1.1 MHP renders consulting and support services in the areas of IT services, eBusiness, and project management, development and customizing services (hereinafter referred to as the “Services“). The present General Terms and Conditions (hereinafter collectively referred to as “GTC“) govern the provision of services rendered by MHP in IT and eBusiness projects under a contract for services. With regard to contracts for work and services, the Specific Terms and Conditions for Contracts for Work and Services (hereinafter referred to as “STC – Work/Services“) shall govern.

1.2 MHP will perform its Services subject to the present GTC only, and in the case of contracts for work and services, additionally subject to the STC – Work/Services. The terms and conditions of Customer shall not apply, including cases where MHP does not expressly object to them and performs the agreement.

1.3 The present GTC, as amended, shall also apply to all future business transactions between MHP and Customer, including cases where MHP does not expressly refer to them.

1.4 MHP will use the present GTC only in business transactions with enterprises in the course of its ordinary business.

§ 2 Conclusion of Contract, Scope of Services, and Quality

2.1 MHP quotations are subject to change and are not binding, unless they are expressly referred to as binding or they are submitted for a limited time period. The parties are deemed to have entered into a contract for Services, when a purchase order is signed, when a purchase order is confirmed by MHP in writing, or when MHP performs the contract.

2.2 As a rule, the scope, kind, and quality of Services to be rendered by MHP are governed by the contract concluded between the parties, and unless provided otherwise, the project documentation and other exhibits referred to as binding, and, with regard to contracts for work and services, the performance specifications (cf. § 1 STC – Work/Services). Any other records shall only be binding when confirmed as such by MHP in writing.

2.3 MHP shall render the Services with the contractually agreed quality and based on the state-of-the-art at the time of the execution of the contract. Customer shall submit its requirements in writing.

2.4 MHP has the right to take minutes of discussions regarding a more precise definition, or modifications or amendments of contract details, in particular, regarding the subject matter. The minutes become binding for both parties when MHP provides them to Customer and Customer fails to object to them in writing within one (1) week, stating reasons for its objections. MHP shall draw Customer’s attention to this effect in each individual case.

2.5 Information and representations in product and project descriptions, documentation, etc. do not constitute a guarantee or warranty on the part of MHP regarding the quality of work results, projects, or Services, unless MHP states this intention expressly and in writing.

2.6 To the extent that MHP performs development tasks based on the requirements and specifications of Customer, or if MHP integrates computer programs or other components supplied by third parties or by Customer into development tasks, or customizes its own development results to be used with the components provided or specified by Customer, MHP does not assume any liability for the technical and legal properties of such components not provided by MHP. In particular, Customer shall hold MHP harmless and indemnify MHP for damage claims that third parties may assert against MHP for the violation of third party patents, copyrights, trademarks, or other industrial property rights.

2.7 MHP reserves the right to retain subcontractors in the performance of Services.

§ 3 Cooperation of Customer

3.1 Customer shall provide MHP with all information required for the performance of the contract in a timely manner, shall inspect the work results promptly, and shall immediately notify MHP of any faults and defects in writing, giving a detailed description of their effect. This obligation shall only apply to the extent that Customer is able to detect and identify defects. In no case, however, does MHP waive its right to invoke the defense that the inspection and notice of defect occurred too late.

3.2 To the extent required or appropriate in the performance of the contract, Customer shall assist MHP free of charge in the performance of the contract by providing, in a timely manner and to the extent necessary, staff, facilities, the relevant IT environment, telecommunication devices, and data, among others, and by cooperating with MHP with regard to specifications, tests, acceptance tests, etc. Customer shall designate a contact person for MHP that is authorized to make and receive all statements and information required in the performance of the contract.

3.3 Customer shall thoroughly test all work results, development results, and customized items for their freedom from defects and their usability in a specific application situation prior to their operative use. Customer shall save its data in accordance with the state of the art, review programs, perform failure diagnosis, and take all other reasonable precautions.

3.4 In the event of software deployment projects, the provision of Services by MHP is subject to the condition precedent that the infrastructure and software operate – individually and in combination – trouble-free, and that, in particular, the network meets the requirements of the various manufacturers of the software to be used and allows for unrestricted operation.

3.5 If Customer fails to meet its cooperation duties, MHP has the right to withhold Services; other rights that MHP may have are not affected hereby. If MHP performs the contract anyway, Customer will be charged for the additional expenses incurred by MHP based on the then valid price list. The same applies to additional time and expenses incurred by MHP due to the fact that work must be repeated because of inaccurate, incomplete or subsequently rectified information provided by Customer.

§ 4 Performance Dates, Delays

4.1 Periods for supply and services will be extended by such period of time during which MHP is unable to perform the Services due to circumstances beyond the control of MHP (e.g., labor unrest, force majeure, failure of employees, hardware, or supply by suppliers, for which MHP is not responsible) plus a reasonable period of time for the resumption of Services. The same applies to any period of time during which MHP waits for information, cooperation, or a decision of Customer pertaining to a supplementary quotation.

4.2 Except with regard to payment obligations, MHP shall not be deemed to be in default, unless a written reminder has been sent. Reminders, notices of defect, and communication with regard to deadlines must be in writing to be effective. Deadlines and periods for Services and subsequent performance specified by Customer must be of a reasonable duration, generally no less than 10 working days.

4.3 In the event that Customer is responsible for a delay or default in the performance of a project or contract, MHP will charge Customer for additional expenses incurred based on the then valid price list.

§ 5 Compensation, Payment Terms, Set Off

5.1 The compensation for the Services rendered is subject to the contract for Services entered between the parties or the order confirmation issued by MHP. To the extent that the parties to the contract have not provided otherwise, the compensation will be determined based on actual expenses at daily rates in accordance with the then valid MHP price list.

5.2 Unless provided otherwise, the daily rates cover a daily working time of eight (8) hours. Customer will be charged for excess work rendered on any one working day on a pro-rated basis. For work rendered during the weekend and on public holidays as well as at night (after 8 p.m.) a 50 % supplement will be charged. Customer will be charged a rate of 50% of the agreed upon daily rate for the respective employee(s) for the time during which MHP employees travel to and from Customer’s site and to other sites, in the event that MHP performs services at other sites upon the customer’s request. Out-of-pocket expenses, travel expenses, and lodging will be invoiced separately. Car travel will be invoiced based on the then valid price list, while public transport trips (1st class railway, business class air travel) and lodging will be invoiced based on the actual expenses incurred, and food at a flat rate in accordance with the then valid statutory maximum rates.

5.3 Customer will be invoiced for Services rendered on a monthly basis (with the exception of fixed prices, as agreed between the parties). Unless agreed otherwise, 1/3 of a fixed price will generally be invoiced after the conclusion of the contract, 1/3 after the first agreed milestone has been achieved, and 1/3 after completion of the entire Service. Payments are due within 14 (fourteen) days after the date of invoice with no deductions. Compliance with this provision shall be deemed to have occurred on the day that MHP may dispose of the contract amount.

5.4 All amounts indicated are net amounts, exclusive of the then valid statutory value added tax and any other charges and customs charges.

5.5 MHP has the right to claim compensation for delayed payments in the form of 10% interest above the ECB basic interest rate. MHP is free to prove that it has suffered higher damages, and Customer may attempt to prove lower damages (not, however, lower than the statutory interest rate for delayed payments). In the event that Customer is in default with a payment for more than two (2) weeks, MHP has the right to withhold all other supplies and services until full payment has been received. MHP will notify Customer hereof in writing prior to suspending supplies and services.

5.6 Customer shall not set-off claims unless they are undisputed or have been finally adjudicated and result from the same individual contract / purchase order. Customer’s right to withhold payments or to invoke the defense that the contract has not been performed only exists in cases governed by this particular contract and only in the event that MHP itself has committed a gross breach of contract or MHP has already received a certain portion of compensation for a defective supply or service that matches the value of a supply or service, or in the event that the counter- claim of Customer has been finally adjudicated or is undisputed.

§ 6 Copyright and Rights to Use

6.1 MHP grants Customer the non-exclusive right, not restricted as to time and territory, to use the work results created on behalf of Customer (evaluations, planning and concept documents, in particular, software, including parameterizations, and related documentation, reports, drawings, etc.) for its internal business purposes, within its own business operations, and subject to the agreed scope of use. The scope of the rights to use granted for the work results, in particular, software obtained from third parties, is primarily governed by the Terms of Use that MHP will make available to Customer. All work results created by MHP and also all work results obtained from third parties are subject to the terms and conditions set forth in the following paragraphs.

6.2 Customer has the right to load software into the RAM and on hard disks of such type and number of computers within a defined network, as agreed in the contract, and use the software at the designated number and type of work places. Within the scope of the contractual use, Customer has the right to reproduce the software, to make the necessary backup copies, to mark them as such, and to use the accompanying documentation. The renting, transfer to or use by third parties, time-sharing, use to provide online services (ASP) and data center computing, or any other use of the software by third parties, whether with or without compensation, is not permitted, unless the prior written consent of MHP has been obtained. Customer will receive software, unless otherwise agreed, as an executable file (machine-readable) only.

6.3 All other kinds of use, in particular, the translation, alteration, arrangement, other reworking, and the distribution of the software and other work results require the prior written consent of MHP. The copyright notices, other proprietary notices, serial numbers, and other identification marks contained in the software and other work results shall not be modified or obliterated.

6.4 Customer shall not transfer the software and other work results to third parties except with the prior written consent of MHP. MHP will grant this permission, provided, however, that prior to such transfer, Customer assures MHP in writing that Customer will refrain from any further use of the software and the other work results, and that Customer has not retained any copies thereof, and after the third party has sent a written notice to MHP by which it agrees to be bound by the terms and conditions governing the use and transfer to third parties. Customer shall provide the original data storage media, documentation, and other records to such third party.

6.5 The parties to the contract are free to expressly designate particular pieces of software code that have been created individually on behalf of Customer, and other work results as “exclusive material” by mutual arrangement. In this case, Customer is granted the exclusive, transferable, and irrevocable right to use and ownership title and right, not restricted as to time, territory, or subject matter. In this case, Customer has the right to reproduce, translate, rework, and disseminate the software and other work results, to provide them to third parties for distribution, to demonstrate them, exploit them economically, and to publish reports about such software and other work results. In this event, Customer will receive the source code, including development documentation and all other records, in copy or original. MHP is free, however, to develop material, software, and work results and to provide them to third parties for their use that are similar to the exclusive material supplied to Customer. In addition, the terms and conditions of use set forth in this paragraph shall apply to any work results, mutates mutandis, that have not been marked as “exclusive material”.

6.6 In the event that MHP supplies Customer with software that has been created by third parties, the kind of scope of rights to use granted to Customer will be subject to the license terms and terms and conditions of use stipulated by such third parties.

6.7 MHP will grant Customer the rights to use indicated above, subject to the condition precedent that full payment of all outstanding amounts has been received. MHP may revoke the rights granted for cause. Cause shall exist, in particular, when Customer fails to make a material payment and is in default for more than one (1) month, violates the above terms of use, or breaches the duty of confidentiality set forth in § 9 and does not immediately cure such breach of contract following a written notice in which MHP threatens to revoke all rights granted, or, in case of imminent danger, also without such notice. In the event that the rights are revoked, Customer shall surrender the original of the software and other work results and any copies thereof, if any, and delete all programs that have been stored. Upon request by MHP, Customer shall confirm in writing that the software, work results, and any copies thereof were surrendered or deleted.

6.8 Except in the event that exclusive rights to use have been granted, Customer shall immediately notify MHP in writing when third parties attempt to access the software and work results; Customer shall inform third parties that MHP is the owner of all rights and that Customer has only been granted a conditional and restricted right to use, if appropriate.

§ 7 Warranty/Defects

7.1 The following terms and conditions governing claims based on defects/warranty apply to all MHP Services that are performed under a purchase agreement or a contract for work and services. In the event that the Services are subject to the law governing contracts for services, MHP may request the application of the following terms and conditions to work results that have been clearly defined and may be delimited.

7.2 Defects within the meaning of this warranty are only reproduceable defects that are caused by the poor quality of MHP Services, including services that MHP obtained from subcontractors, or by defects in the program modules developed by and supplied by MHP. Therefore, an impaired function resulting from hardware defects, defects in standard software, environmental conditions, inappropriate use, defective data, etc. is not considered a defect. MHP advises Customer that even minor alterations of the Software may result in major, unforeseeable interruptions of the respective programs and other programs. Therefore, Customer is expressly warned not to alter or modify the programs on its own; Customer will have to assume the sole responsibility for such interventions.

7.3 Customer shall promptly inspect all Services performed by MHP and notify MHP of any defect(s) in writing, giving a detailed description of the defect. Customer’s project manager will take, to the extent he/she may be reasonably expected to do so, all necessary steps to identify, delimit, and document defects. This includes the drafting of error reports, the preparation of system logs, memory dumps, and the provision of the input/output data affected, of interim and test results, and other records that may help to explain the defect. In the event that warranty claims are asserted, Customer will provide MHP with all available information and assist MHP in the removal of the defect.

7.4 MHP has the right to initially discharge its warranty obligations by subsequent performance. In the discretion of MHP, subsequent performance will take place by providing a new version of the program or documentation, or by showing Customer a workaround to avoid the effects of the defect. It may not be possible to remove a defect entirely by way of subsequent performance. Customer will also accept a new program version in the event that this causes reasonable expenses for adjustments and customizing.

7.5 The parties agree on the following error categories:

category 1: The goods supplied or services rendered cannot be used. It is not possible to work around the error using organizational or other, commercially reasonable, aids.
category 2: The use of the goods supplied or service rendered is impaired, but basically possible. It is possible to work around the error with organizational or other, commercially reasonable, aids.
category 3: The error has no substantial effect on the functionality and usability of the goods supplied or service rendered. The use of the goods supplied or service rendered is not, or is only slightly impaired.

7.6 In the event that subsequent performance finally fails after more than two (2) attempts despite a reasonable grace period that had been granted in writing, Customer has the right, at its discretion, either to reduce the compensation or to rescind the agreement. Any other warranty claims are excluded, such as damages for expenses incurred in the removal of defects by third parties, shipment of new supplies, and reimbursement for the costs of this contract.

7.7 In the event that Customer is unable to identify the cause of the defect, MHP will investigate its cause. If MHP is able to show that the defect is not attributable to MHP, in particular, since inappropriate hardware was used, because the R/3 software is defective. or the defect was caused by Customer’s interventions, MHP has the right to claim compensation for its Services.

7.8 In the event that MHP violates its obligations, Customer may only claim damages in lieu of the full service and rescind the agreement if Customer has provided MHP with a specific notice regarding the breach demanding the breach to be cured, to the extent that the law prescribes a grace period to be granted by Customer during which a service is to be rendered or subsequent performance is to be attempted, and that this grace period is not dispensable in the specific case. In addition, in its writing in which the grace period has been granted, Customer must threaten to refuse acceptance of the MHP Service after the period has expired without success and/or to rescind the agreement. In the event that MHP responds to Customer’s request for removal of the defect with the intention to remove the defect, Customer shall, for the avoidance of doubts, bindingly declare within ten (10) working days after the expiration of the grace period granted whether it intends to continue the existing agreement.

7.9 In the event that third parties assert proprietary rights against Customer, Customer shall immediately notify MHP in writing. In its discretion and by prior arrangement with Customer, MHP shall either defend or satisfy the claims. MHP may replace the Services affected with comparable services complying with the term of the agreement, to the extent that Customer may be reasonably expected to accept this. Customer shall not acknowledge any third party claims on its own. MHP shall defend against third party claims at its own expense and shall hold harmless and indemnify Customer from any costs and damages related to the defense against the claim, provided, however, that the indemnity is limited by the terms and conditions set forth in § 8 (Liability) and that damages have not been caused by the conduct of Customer in violation of the contract.

7.10 The Statute of Limitations for Customer’s claims is:

1 year for defects as to quality;
1 year for legal defects, unless the legal defect is not caused by a right in rem of a third party based upon which such third party may claim the surrender of the equipment or software supplied, and
in all other cases, subject to statutory provisions.

If a defect as to quality or legal defect has been intentionally concealed or in case of intentional wrongdoing, malice or gross negligence, the statutory provisions governing the Statute of Limitations shall also apply.

§ 8 Liability

8.1 The following terms and conditions contained in par. 8.2 through 8.5 apply, irrespective of the legal cause, to Customer’s claim for damages and/or reimbursement for wasted expenditure.

8.2 MHP is liable for ordinary negligence, default, impossibility, and other forms of liability based on fault only to the extent that a duty has been violated, compliance with which is of material importance for the attainment of the purpose of the agreement (cardinal duty), as follows:

Liability is limited to damages foreseeable at the execution of the contract within the scope of the contract.
Liability for pecuniary damages is excluded.
Liability is limited to 50 % of the contract volume and a maximum of 150.000 EUR for each damage incident and for all damage incidents together to a maximum of 100 % of the contract total and a maximum of 500.000 EUR.
The aggregate claims from warranty and liability are cumulated up to a maximum of 100 % of the contract volume and a maximum of 500.000 EUR.

8.3 MHP is only fully liable for the gross negligence of its statutory representatives and/or executive officers and/or for intentional wrongdoing. The liability of MHP for the gross negligence of other employees and/or vicarious agents is limited to the scope and terms and conditions relating to ordinary negligence set forth in § 8.1. In deviation from the above terms and conditions, MHP is liable for damage due to default in performance resulting from gross negligence, and MHP shall be liable for up to 100 % of the contract volume and a maximum of 750.000 EUR.

8.4 Liability for data loss is limited to the expenses that are typically incurred in the restoration of data in cases where backup copies have been made at regular intervals by means which are determined based on the risk involved. In addition, § 254 BGB (German Civil Code) shall apply if Customer has failed to make sufficient backup copies.

8.5 Liability for death, injury, or bodily harm, pursuant to the Product Liability Act, for the absence of a warranted property or the absence of a guaranteed quality and/or based on guarantees within the meaning of § 443 BGB (German Civil Code) or § 639 BGB remains unaffected by the foregoing terms and conditions.

§ 9 Confidentiality, Storage

9.1 The parties agree to keep confidential all information and records they obtain from the other party or become aware of in the course of the performance of the contract. Confidential information shall not be disclosed to third parties not involved in the performance of the contract. The parties shall store and secure confidential information in such a manner that any misuse by third parties is precluded.

9.2 This duty of confidentiality does not extend to information and records that are in the public domain at the time of their disclosure, that were already known to the receiving party at the time of disclosure, or that were disclosed to such party by a third party not bound to any duty of confidentiality. The duty of confidentiality shall also apply beyond the termination of this contract.

§ 10 Term, Termination

10.1 Customer may terminate contracts for work and services at any time. In this case, the statutory provisions apply (§ 649 German Civil Code).

10.2 With regard to contracts for the performance of recurring obligations without a defined contract term, either party may, unless provided otherwise in the respective contract, terminate the contract by giving three (3) months written notice to take effect at the end of a month.

10.3 Either party may terminate the contract for cause. The notice of termination must be in writing to be effective. Cause shall exist, in particular, when

the other party suspends its payments, applies for insolvency proceedings or similar legal proceedings, or when such proceedings are instituted or the institution is declined for a lack of funds;
claims of the other party to the contract come under a lien, and the lien is not withdrawn within two (2) weeks.

Prior to the termination for cause, the non-defaulting party shall send a notice of default in which it threatens to terminate the contract unless the breach is cured within a stipulated period of time, except in cases where the nondefaulting party may not be reasonably expected to accept such delay.

§ 11 Mediation

11.1 The parties agree to submit all disputes arising out of the contract that they are unable to resolve to the mediation board of Deutsche Gesellschaft für Recht und Informatik e.V. (German Society for Law and Information Technology) (Schöne Aussicht 30, 61348 Bad Homburg, Germany), in order to resolve the controversy in whole or in part, temporarily or finally. The parties understand that the mediation procedure is fair and balanced, that the mediators are neutral, that the mediation does not result in a binding finding of facts, and that recourse to the national courts remains open.

11.2 In order to facilitate a mediation procedure, the parties mutually waive their defense that claims arising in connection with or out of the disputed matter have come under the statute of limitations. This waiver is valid for the term commencing with the application for mediation and ends one (1) month after the end of the mediation procedure. This waiver tolls the running of the statute of limitations.

§ 12 Final Provisions

12.1 Customer data that MHP obtains in connection with the contract may be stored by MHP for internal purposes.

12.2 Modifications and amendments of contract documents must be in writing to be effective. Any waiver of the written form requirement must be expressly agreed to in writing. The parties may comply with the written form requirement by transmitting documents via fax or e-mail. Exhibits form an integral part of the contract.

12.3 If any provision of the present Terms and Conditions or of the contract should be or become invalid, or if these documents should be incomplete, the other terms and conditions shall not be affected. The parties shall replace the invalid provision with such a provision that most closely and economically matches the meaning and purpose of the invalid provision and is legally valid. The same applies in the event of a gap in the contract.

12.4 All legal dealings between the parties are governed by German law, and the International Convention on the Sale of Goods is excluded. The place of performance and jurisdiction for all disputes arising out of or in connection with this contract Ludwigsburg, Germany. MHP reserves the right to bring action against Customer at the legal venue of Customer or at any other competent place of jurisdiction permissible under national or international law.