General Terms and Conditions of Steganos GmbH

Edition: March 2007

1 Subject matter of contract

These terms and conditions apply only if a contractual relation is entered into between Steganos and the customer through a contract of sale, e.g. the customer has acquired the software directly from Steganos or from the salesperson as a representative of Steganos. In the case of discrepancies, individually reached agreements have priority as long as they occurred in writing or are confirmed by Steganos.

2 Supply and Assumption of Risk

(1) Once transportation has begun, the customer assumes the risk. In the case of damage in transit, Steganos will assign the claims for insurance benefits to which the customer is entitled.

(2) Steganos has to supply only machine-readable and simple documentation.

3 Terms of payment

(1) Should the customer delay payment, Steganos may calculate interest at a value of 3% over the respective bank rate of the German Federal Bank. The customer reserves the right to establish that Steganos incurred no or only minor loss.

(2) The customer is entitled to an offsetting of claims only if his/her counterclaim is undisputed or valid. Rights of retention on the part of the customer are ruled out insofar as they are not based on the same contractual relationship.

(3) The software supplied by Steganos remains the property of Steganos until payment is complete.

4 Warranty

(1) The existence of errors conforms only to the software specifications and descriptions by Steganos. Special requirements, requests and ideas on the part of the customer become an integral part of the contract only with an express written agreement.

(2) Steganos is entitled to effectuate the warranty by reworking, exchanging the software or supplying an update. The customer has to accept a circumvention solution until the error is eliminated in one of the following regular updates. Should Steganos not be in the position to eliminate the error by reworking or exchanging or supplying an update within a reasonable period in due consideration of the circumvention possibility, then the customer is entitled to a reduction in payment (abatement) or rescission of purchase (redhibition). Three error recovery attempts within a period of three months regarding the same defect are not considered unreasonable unless special circumstances exist, which make it infeasible for the customer to accept a further attempt at a correction of faults.

(3) Due to the well-known faultiness of the Windows operating systems and the variety of hardware being used, the irregularities arising from use of the software will not necessarily be founded in the software. Therefore, legal evidence applies so that the customer must prove unconditionally that irregularities that arise are based on errors in the software and that these were already present upon delivery. This applies particularly if the customer used the software improperly, in an unsuitable installation environment or not according to the recommendations of the appropriate installation environment, exposed it to improper external actions or made unauthorized changes to the software or hardware or operating system programs.

(4) In the case of the rescission of the contract, the customer is to surrender or destroy ? allowed or not allowed ? any copies produced of the software and documentation and to assure Steganos on oath that all copies have been surrendered or destroyed.

5 Use of Software

(1) The customer?s rights and restrictions of use conform to 69a ff of the German copyright law. Use of the software is however limited to the number of computers, for which a license was granted in the license document, and in the manner (network or separate installation for each PC), which is specified in the license document. During preparation of backup copies, the customer is obligated to reproduce and attach to the copy concerned the trademarks or copyright notices from Steganos.

(2) The resale of the software is permissible in principle, provided that the customer does not keep any software and/or materials for him/herself and that any copies produced be destroyed or transferred to the buyer. Upon request, the customer is to make Steganos known to the buyer.

(3) In a departure from Section 5.2, the resale or the passing on of the software supplied to public authorities, universities and public schools as software delivered in a version specifically for public authorities and schools is only permitted to other authorities, universities or public schools. In all other respects, Section 5.2 applies.

6 Third-party claims

(1) In the case where the customer informs Steganos as soon as possible of judicial measures directed against him/her by a third party due to alleged patent rights infringement through the software and/or its use and Steganos relinquishes exclusive control over the defense and all negotiations with respect to a settlement or a conclusion of the legal case, Steganos will arrange the legal defense at its own expense and will release the customer regarding any claims for damages and costs arising from this measure. Section 7 applies.

(2) Upon issuing a provisional order against the customer, Steganos will acquire of its own choosing and at its own expense either the right of continued use of the software or will exchange the software and/or change it in such a manner that it no longer fulfills the facts of the case of injury.  Should this not be possible with a reasonable expenditure at the sole discretion of Steganos, then Steganos will return the purchase price/compensation to the customer for the return of the software.

(3) The liability of Steganos due to compliance with the terms stipulated in this section is limited to the amount the customer paid for the software in question. The limitation of liability is however excluded should Steganos have acted deliberately or negligently or breached cardinal obligations.

7 Limitations of liability

(1) Steganos is liable for defects in warranted characteristics, for deliberate acts and gross negligence as well as breach of cardinal obligations.

(2) Furthermore, the liability of Steganos to the customer is limited to ? 5,000.- per claim.

(3) In addition, Steganos is only liable to the extent, to which the damage at the time concerned was foreseeable and to the typically foreseeable extent.

(4) Steganos is not liable for the loss of data if the customer has not backed up his/her data daily as well as prior to interventions in the system and taken other reasonable measures.

(5) The preceding limitations of liability do not apply if Steganos is liable according to the Product Liability Act.

8 Statute of Limitations

(1) Customer claims against the warranty and/or for compensation of damages fall under the statute of limitations after the expiration of six months from delivery of the software.

9 Other General Terms and Conditions

(1) Insofar as the software contains copyright protected material from other manufacturers and these manufacturers require the undertaking of their own regulations, in particular General Terms and Conditions, then these software regulations are attached and will be agreed upon between Steganos and the customer as a contract in favor of the manufacturer named in that regulation. Those regulations hereby enjoy priority regarding the software of the other manufacturer. Regarding the legal position of Steganos, those regulations are however solely supplementary to the existing General Terms and Conditions of Steganos.

(2) Should the terms of those other regulations be ineffective, then regardless of the priorities governed in Section 9.1, the corresponding terms in the existing General Terms and Conditions that come closest to the ineffective regulations will apply.

10 Final Provisions

(1) The customer?s General Terms and Conditions do not apply.

(2) Changes and additional agreements must occur in writing; this also concerns this written form requirement.

(3) Should a term in these conditions be or become invalid, ineffective or unexecutable, the parties undertake to replace these by a condition which, insofar as is possible, comes closest in legal terms to the economic purpose of the agreement.

(4) German law applies with the exception of international codifications such as CISG or UNCITRAL. Place of fulfillment and area of jurisdiction for legal disputes is Frankfurt a.M. unless a special area of legal jurisdiction ? e.g. for enforcement proceedings ? is designated.