General Terms & Conditions

of CYREN GmbH

hereinafter “CYREN

(Version: 08/2010)

Please notice:
The German version shall govern and control in all cases, in particular for purposes of interpretation of these General Terms & Conditions.

1. Master terms for all transactions with CYREN involving goods and services to be provided by CYREN

1.1 Scope of application

The following terms shall apply for all contracts, bids, deliveries, and other performances by CYREN, including those
occurring in the future. Supplemental terms for special services provided by CYREN shall take precedence over these terms.
The general terms & conditions of the contracting party (“Client”) shall not apply.

1.2 Bid and order

Bids by CYREN are non-binding. Contracts shall be effective only uponwritten confirmation by CYREN or shall come into effect by executionof the order. All agreements, amendments, and supplements must be madein writing. This shall also apply for the cancellation or amendment of this written form clause.

1.3 Scope of performance

1.3.1 The contractual scope of the goods and services offered byCYREN can be found in the respective service specifications as well asany written agreements signed with Client, particularly the order form.The need of CYREN employees or material on site shall require an explicit agreement.

1.3.2 Client must accept partial deliveries of goods and servicesunless the acceptance of partial deliveries of goods and services is unreasonable.

1.4 Payment and Offset

1.4.1 The prices for the goods/services to be provided by CYRENshall be based upon the current price lists of CYREN, the orderconfirmation, or the purchase order form. In each case the applicable statutory VAT must be paid in addition to all specified prices.

1.4.2 In the case of services, Client's obligation to make paymentshall begin on the day that the service is provided by CYREN. If aprice designated for the entire month is payable for only one portionof a given calendar month, then the monthly price shall be invoiced proportionally.

1.4.3 Invoices for the goods/services to be provided by CYREN shallbe issued on the date stipulated in the contract. Payment shall be dueten days after receipt of invoice. The invoice amount must be paid tothe account specified in the invoice. The date of the credit to the account of CYREN shall be determinative for the timeliness of payment.

1.4.4 CYREN shall have the right to withdraw the payable amountsfrom Client's bank account by means of direct debiting. Client must provide CYREN with a corresponding debit authorization.

1.4.5 If Client has any objections to the content of an invoice fromCYREN, then it must raise these objections in writing within one month after receipt of the invoice.

1.4.6 Client shall be entitled to use any counterclaims for offsetonly if they are uncontested or non-appealable. Client shall have aright of retention only if this involves claims arising from the same contractual relationship.

1.5 Default, Withholding of goods and services

1.5.1 In the event of default by Client, CYREN may demand intereston arrears in the amount of eight percentage points above theapplicable base interest rate, as well as compensation for any additional extensive damages.

1.5.2 CYREN shall have the right to withhold goods and services ifClient is in default with a significant amount of payment and fails topay the amount in arrears despite being advised of withholding ofperformance. This shall apply mutatis mutandis if and insofar as Clientacts in gross contravention of the contract. Client’s obligation to pay the contractually stipulated prices shall remain unaffected thereby.

1.6 Duties and obligations of Client

1.6.1 Client shall be responsible for putting the goods/services ofCYREN into operation. CYREN is prepared to offer support to Client inthis regard. All support services (including, but not limited to,preparation for use, installation and demonstration of operationalreadiness, instruction, training, or consulting) shall be separatelyagreed upon and charged based upon actual expenses. If CYREN performsinstallations or set-up, then Client shall confirm the successful completion of such work in writing.

1.6.2 Client shall appoint a contact person, who is authorized tomake decisions or have decisions made without undue delay. The contactperson shall be available to CYREN for providing necessaryinformation. CYREN shall make use of the contact person if and whenthis is required for the provision of services. Client shall also appoint a backup contact person.

1.6.3 Client shall ensure that competent operational personnel isavailable if necessary the date the goods and/or services will become operational.

1.6.4 Client must follow the operating instructions included in the documentation.

1.6.5 The rights to use services and other tasks provided by CYRENshall be restricted to Client itself, its employees and consultantsperforming their respective duties for Client as well as wholly-ownedsubsidiaries of Client. Client must ensure that only the aforementionedauthorized users have access to the network and other services ofCYREN. In particular, forwarding categorization results to thirdparties by Client is prohibited. Passwords must be kept secret and mustbe changed if it is determined or suspected that unauthorized third parties have acquired knowledge about them.

1.6.6 If necessary Client must also pay remuneration as compensationfor damages incurred through authorized or unauthorized use by thirdparties of services provided by CYREN if Client is is to be made responsible for such use.

1.6.7 Client must refrain from any misuse - and any illegal use inparticular -of the services and other tasks provided by CYREN. Clientmust indemnify CYREN against all claims based upon violation ofstatutory provisions or infringements of third-party rights through theuse of the services and access granted to Client and must also bear thecosts incurred by CYREN in connection with the allegation or assertionof such an infringement of rights. Other rights and claims of CYREN remain reserved.

1.6.8 In the event of a disruption of services or the existence ofmaterial defects or defects in title Client agrees to support CYREN to a reasonable extent in the remedy of such disruptions or defects.

1.7 Liability for material defects and defects in title, Compensation for damages

1.7.1 CYREN shall be liable pursuant to the standards of the statutory provisions for damages due to contractual violations and tort in conjunction with such violations, insofar as these can be imputed to willful misconduct or gross negligence on the part of CYREN; also for personal injury for which CYREN is responsible as well as liability arising from the assumption of a guarantee and pursuant to the provisions of the Product Liability Act. The existence of an assumption of guarantee shall require an explicit agreement; the use of the term warranty or a reference to DIN or other standards is intended only for description of the performance and does not represent a guarantee.

1.7.2 CYREN shall also be liable for negligent violation of material contractual duties. Unless a case as described in 1.7.1 exists, however, compensatory damages for such negligent violation shall be limited to compensation for the damages that are foreseeable and typical of this type of contract. The maximum amount of such compensation shall generally be two monthly remuneration payments for the service from which the claim results. Liability shall be precluded for consequential damages of any kind, particularly for interruption of operations, loss of sales, or other lost profit, unless a case of liability specified in this Item or in Item 1.7.1 exists.

1.7.3 CYREN shall not be liable for third-party content located in the network or transmitted via services and in particular shall not be responsible for its completeness or accuracy or for losses or damages incurred through the use of such content. Liability pursuant to the preceding Item 1.7.1 shall remain unaffected.

1.7.4 The foregoing liability arrangements shall also apply for the benefit of the statutory representatives, servants and vicarious agents of CYREN.

1.7.5 The residual technical risk in the use of networks and computers that remains despite the precautionary measures taken by both contracting parties (including, but not limited to: virus attacks, unauthorized access to customer data by other users of the CYREN network or the Internet) shall be borne by Client unless CYREN has culpably violated a traffic safety duty that lies within its sphere of responsibility.

1.7.6 Complaints involving incomplete and defective goods and services must be reported to CYREN without undue delay after such defects are discovered. CYREN’s liability for material defects and defects in title shall initially be limited to repair. Should the repair prove unsuccessful after a reasonable of number of attempts within an appropriate period of time, Client shall have the right to reduce the remuneration or to withdraw from the contract and/or to assert claims for compensatory damages in accordance with the foregoing provisions.

1.8 Availability and disruptions of performance of services

1.8.1 CYREN shall make its services (involving telecommunications and Internet services) available 24 hours per day and seven days per week and shall make every effort to prevent any type of disruption. Should downtimes, bottlenecks or transmission disruptions nevertheless occur, CYREN shall be liable for such disruptions only in the event of willful misconduct or gross negligence.

1.8.2 CYREN shall remedy as quickly as possible any disruptions of performance or defects reported by Client. If it is determined, however, that the cause of the disruption or the defect lies within the Client’s sphere of responsibility and if Client has been culpably erroneous in causing these circumstances then Client must bear the costs and expenses incurred to remedy this disruption or defect.

1.8.3 CYREN shall at times make use of the services of other companies to provide its goods and services. Thus partial services, particularly for telecommunications services, are provided by national or international carriers (vendors of network and line capacities). CYREN shall not be liable for disruptions arising from these services with the proviso of liability pursuant to Items 1.7.1 and 1.7.2.

1.8.4 Temporary restrictions or interruptions of telecommunications and Internet services could also occur in cases of force majeure, legal labor disputes, government orders, technical modifications of systems and transmission networks or associated systems and facilities (i.e. here: improvements or adjustments to technical developments insofar as these are reasonable for the customer in each case), in the event of repair and maintenance work and in the event of risks to the system.

1.9 Term of contract and termination of services

1.9.1 Contracts for the use of CYREN services (involving telecommunications and Internet services) shall be signed with a minimum term of one year. This term shall begin on the date upon which CYREN makes the respective service available to Client.

1.9.2 The contract for the use of CYREN services shall be renewed each year for an additional year unless the contract is terminated with a period of notice of three months effective at the end of the stipulated minimum term of contract or at the end of the renewed term.

1.9.3 The right to termination for good cause shall remain unaffected for both contracting parties. Good cause shall include in particular:actions by Client in contravention of law and its contractual duties related to the use of services; as long as Client continues the actions in contravention of law and its contractual duties despite warning; the misuse of network access or services with the intent of disrupting or overloading the technical equipment, as long as Client continues the misuse of network access or services despite warning;If Client has submitted an affidavit pursuant to § 807 of the German Code of Civil Procedure (ZPO), compulsory enforcement is executed on its assets, insolvency proceedings on Client’s assets are requested by Client or are commenced upon request of a third party or the commencement of insolvency proceedings involving Client’s assets are rejected due to lack of assets.

1.9.4 Notice of termination must be given in writing in order to be valid.

1.10 Miscellaneous provisions

1.10.1 Transferring rights and duties from Clients contract to a third party requires the written consent of CYREN.

1.10.2 In addition the "Agreement regarding Data Protection and Data Security in Contractual Arrangements according to § 11 BDSG", which can be accessed at http://www.eleven.de/privacy.html shall apply.

1.10.3 CYREN shall comply with the laws on data protection and shall maintain confidentiality when handling and processing personal data of which it acquires knowledge. Employees of CYREN in charge of handling and processing personal data are committed to compliance with data privacy regulations pursuant to § 5 of the Federal Data Protection Act (BDSG).

1.10.4 If the customer has not objected to such usage CYREN may process and use the customer’s personal data on file (“Bestandsdaten”) (the terms “customer” and “personal data on file” here have exactly the meaning as in the Telecommunications Data Protection Ordinance (“Telekommunikationsdienstunternehmen-Datenschutzverordnung”)) to the extent that this is required for advising the customer, for advertising, for market research, for its own purposes and for the necessary configuration of its telecommunications services.

1.10.5 The exclusive legal venue for all disputes arising directly or indirectly from the contractual relationship of the parties, of which these terms are a part, is Berlin. CYREN reserves the right, however, to also file suit against Client in Client’s statutory venue.

1.10.6 Should a provision of the contract, of which these terms are a part, be or become ineffective, this shall not affect the validity of the remaining provisions. If the contract, of which these terms are a part, possesses a matter as to which the contract is silent, the contract shall be supplemented by an arrangement between the parties that would have been made had the parties been aware of this matter when signing the contract.

1.10.7 The contractual relationships between the parties shall be governed by German law. The provisions of the UN Convention on Contracts for the International Sale of Goods shall be precluded.

2 Additional provisions for deliveries (purchase)

2.1 Purchase prices are always stated exclusive of costs for packaging and shipping.

2.2 CYREN shall ship the purchased item to Client at Client's risk and expense. CYREN may have the purchased item shipped to Client from any European location. CYREN shall have discretion in selecting the mode and means of transport.

2.3 Purchased items delivered by CYREN shall become the property of Client only when complete payment has been made for such items.

2.4 Client must examine the purchased item within two weeks after delivery with regard to its completeness and proper functioning and must send a written complaint to CYREN in the event of any defects. Defects that cannot be identified within the scope of this proper examination must be reported in writing within one week after their discovery.

2.5 In the event of legitimate and timely reporting of defects CYREN shall provide warranty service exclusively in the form of the repair or replacement of the defective purchased item at its discretion. In the event of failure to repair or supply a replacement Client may at its discretion withdraw from the purchase agreement and/or assert claims for compensatory damages pursuant to Item 1.7 or reduce the purchase price.

2.6 The statutory period of limitation for claims of defects shall be one year from the statutory beginning of the period of limitation. The one-year period of limitation shall not apply if and insofar as one of the cases of liability specified in Item 1.7.1 exists. Following expiration of the period of limitation for claims of defects, the remedy of defects demanded by Client shall be charged based upon actual expenses unless a maintenance agreement is signed.

2.7 In other respects the provisions pursuant to Item 1. of these terms shall apply.

3 Additional provisions for work services

3.1 In the event of work services provided by CYREN, Client may refuse acceptance only if a significant defect exists. If the work services are accepted despite an insignificant defect to which Client has raised objection, CYREN shall remedy this defect to the extent designated by the statutory provisions on material defects and defects in title.

3.2 In other respects, the provisions pursuant to Item 2. of these terms shall apply.

4 Additional provisions for software

4.1 Client may make copies of the supplied software only to the extent that this is necessary for use of the program. Necessary copying includes the installation of the program from the original data medium onto Client's hard drive, as well as loading into the working memory of Client's hardware.

4.2 Client shall have the right to create one backup copy of the supplied software.

4.3 Client shall not have the right to make copies of supplied documentation (e.g. user manual). If documentation is supplied in digital form, Client may create only one backup copy in addition to the working copy.

4.4 The software may be installed on Client's hardware only in the number of copies corresponding to the number of purchased copies or number of purchased licenses and may be used only to the extent covered by the purchased licenses.

4.5 Client acknowledges that the software together with its documentation and other documents, even in future versions, is protected by copyright and that these are trade secrets of CYREN. Client shall refrain from completely or partially decompiling software products.

4.6 For each case of misuse of the software, Client shall pay a contractual penalty in the amount of the software purchase price. Client shall also be liable for its employees. CYREN reserves the right to assert any further damages.

4.7 In other respects, Items 3. and 2. of these terms shall apply for software specially developed for Client, and Item 2. of these terms shall apply accordingly for standardized software supplied to Client.