General terms of sale, delivery and payment

Scope

1. These general terms of delivery and payment are applicable whenever the contracting parties have agreed to them in writing or by other means. Any terms of business of the partners which have not been expressly acknowledged by us shall be deemed to be invalid.

General terms

2. The contracting parties will immediately confirm any parole agreements in writing.

3. Orders only become binding through our confirmation.

4. The information and illustrations in the catalogues and brochures reflect the situation at the time of publishing. We reserve the right to carry out technical modifications and minor changes to shape and colour provided the technical and functional properties are equivalent and reasonable for the customer. Catalogues and brochures always remain our property and may not be placed at the disposal of third parties and rival companies without our express written consent. The texts and illustrations in our catalogues and brochures may only be copied and distributed – including in extract – with our express written consent. We retain all copyright claims should the case arise that this instruction is disregarded.

Long-term and call-off contracts, price adjustment

5. Unlimited contracts can be terminated with 3 months notice.

6. If a significant change in labour, material or energy costs occurs during long-term contracts (contracts with a life of 6 months and more and unlimited contracts), where significant means a change of at least 10%, each of the contracting parties is entitled to demand an adjustment of prices in consideration of these changes.

7. If no binding order quantity is agreed, our calculations will be based on the noncommittal order quantity expected by the partners for a certain period. If the partners purchase less than the target quantity, we are entitled to raise the unit price correspondingly. If they purchase more than the target amount, we will lower the unit price accordingly, provided the partners announce the additional demand at least 3 months before delivery.

8. In the case of call-off supply contracts we must be informed of binding quantities at least 1 month before the delivery date, unless otherwise agreed. Extra costs caused by a delayed call-up or subsequent amendments to the call-up time or quantities by our partners will be charged to them; our calculations are hereby decisive.

Confidentiality

9. Each contracting party will only use those documents (including samples, models and data) and knowledge which it acquires through the business relationship for the commonly pursued purposes and will keep these secret from third parties with the same diligence as corresponding own documents and knowledge if the other contracting party deems these to be confidential or has an obvious interest in them being kept secret. This obligation begins immediately in receipt of the documents or information for the first time and ends 36 months after termination of the business relationship.

10. The obligation does not apply to documents and knowledge which are generally known or which were already known to the contracting parties on receipt without them being obliged to secrecy, or which were then passed on by a third party authorised to forward the information or which were developed by the receiving contracting parties without using confidential documents or knowledge of the other contracting party.

Drawings and descriptions

11. If a contracting party provides drawings or other technical documents related to the goods to be delivered or their manufacture these shall remain the property of the providing contracting party. We are not obliged to check whether third party industrial property rights are violated by the manufacture and delivery of merchandise according to samples or drawings. The orderers alone shall bear all risks. They are obliged to intervene in all claims lodged against us on our request and to avert these from us. The orderers must reimburse all concomitant costs which are incurred.

Samples and production equipment

12. The manufacturing costs of samples and production equipment (tools, moulds, templates, etc.) will be charged separately to the delivered goods, unless otherwise agreed. This also applies to production equipment which has to be replaced due to wear.

13. The costs of the maintenance and correct storage as well as the risk of damage to or destruction of the production equipment will be borne by us.

14. If the partners postpone or terminates the co-operation during the manufacture of the samples or production equipment, they will be charged for all costs incurred up to that point in time.

15. The production equipment remains our property at least up until fulfilment of the delivery contract, even if it has been paid for by the partners. Afterwards the partners are entitled to demand surrender of the production equipment provided an agreement has been reached by mutual consent on the time of surrender and the partners have met all of their contractual obligations.

16. We will keep the production equipment free of charge for a period of three years after the last delivery to our partners. We will then write to our partners giving them 6 weeks to notify us of their further use. Our storage obligation ends if they do not reply within these 6 weeks or no new order is made; the production equipment then becomes our own property.

17. Purchaser-related production equipment may only be used by us for deliveries to third parties with the prior written consent of our partner.

Prices

18. Our prices are understood to be in Euro exclusive of value-added tax, packaging, freight, postage and insurance.

Terms of payment

19. All invoices are due within 30 days of the billing date. A 2 percent discount will be granted if paid within 8 days of the billing date, provided the partners are not in default with the settlement of debts.

20. If we have indisputably delivered certain faulty goods our partners are still obliged to pay for the faultless share unless the partial delivery is of no interest to them. As for the rest, the partners are only entitled to set off with unappealable or uncontested counterclaims.

21. If times for payment are exceeded we are entitled to charge accumulated interest at the rate which banks charge for current account advances, though at least 8 percent above the respective base interest rate.

22. If payments are defaulted we can suspend fulfilment of our obligations until receipt of payment following written notification.

23. Bills of exchange and cheques will only be accepted on agreement and only by way of discharge and on the assumption that they can be discounted. Discount charges will be charged from the invoice due date. A warranty for the prompt presentation of the bill of exchange and cheque and for notices of protest is excluded.

24. If following conclusion of the contract a substantial risk arises to our demand for payment on account of a significant deterioration in the partner’s financial circumstances we can demand payment in advance or a security within 2 weeks as of receipt of such knowledge and refuse fulfilment of our obligations until our demand is met. In the event of a refusal by the partners or upon expiry of the time to no avail we are entitled to terminate the contract or demand compensation on the grounds of nonfulfilment.

Delivery

25. Unless otherwise agreed, our deliveries are “ex works”. Decisive for compliance with the delivery date or delivery period is our notification of readiness for dispatch or collection.

26. The delivery period begins with the dispatch of our confirmation of order and is prolonged accordingly if the conditions of No. 54 are given.

27. Partial deliveries are admissible to a reasonable extent. These will be charged in a separate invoice.

28. Excess or short deliveries are permissible within a tolerance of 5 percent of the total quantity of goods ordered.

Dispatch and transfer of risk

29. Goods which have been reported as being ready for dispatch are to be accepted immediately by the partners. Otherwise we are entitled to dispatch these at our own choice or to store these at the expense and risk of the partners.

30. If no special agreement is reached, we will determine the means of transport and transport route.

31. The risk is transferred to the partners, even if we have assumed responsibility for delivery, when the goods are handed over to the railway company, carrier or haulage contractor or at the start of the storage period, though at the latest when the goods leave our works or stores.

Default of delivery

32. If we can foresee that the goods will not be able to be delivered within the delivery period, we will immediately inform the partners in writing, notifying them of the reasons and naming the probable time of delivery wherever possible.

33. If the delivery is delayed due to one of the circumstances named in No. 54 or due to the action or failure to act of the partners, an appropriate extension of the delivery period will be granted.

Reservation of ownership

34. We reserve ownership of the delivered goods until all claims from the business relationships with the partners have been settled.

35. The partners are entitled to sell these goods in their normal course of business provided they meet their obligations to us from the business relationships in due time. However, they may not pledge or give the conditional goods as security. They are obliged to safeguard our rights during a credited sale of the conditional goods.

36. If the partners default in payment we are entitled to demand surrender of the conditional goods at the partners’ costs, even if we do not terminate the contract, following an appropriate period of respite.

37. All claims and rights from the sale or possibly lease of goods on which we have ownership rights are assigned to us by the partners as security with immediate effect. We herewith accept this assignment.

38. Any working or processing of the conditional goods is carried out by the partner on our behalf. If the conditional goods is processed with other objects which do not belong to us, we acquire co-ownership of the new object in the ratio of the invoiced value of the conditional goods to the other processed objects at the time of processing. If our goods are joined with other movable articles to a uniform article and if the other article is regarded as the main article, the partners transfer proportionate co-ownership to us wherever they own the main article. The partners safeguard ownership or co-ownership on our behalf. As for the rest, the same applies to the article produced by processing or joining as for the conditional goods.

39. The partners will immediately inform us of levies upon the conditional goods, pledged accounts receivables or other securities by third parties and hand over all documents necessary for an intervention. This also applies to any other type of encroachments.

40. We will release the securities in our possession pursuant to the foregoing terms at the partners’ request provided the value of the goods delivered under reservation of ownership exceeds that of the secured claims by more than 20 percent.

Warranty

41. We warrant the faultless production of goods which we deliver in accordance with the agreed technical terms of delivery. If we have to deliver according to the drawings, specifications, samples, etc. of our partners, they will assume the risk for the suitability of the goods for their intended purpose. Decisive for the contractual condition of the goods is the time at which the risk is transferred pursuant to No. 31.

42. No warranty can be assumed for faults caused by unsuitable or incorrect use, faulty installation or starting by the partners or third parties, normal wear and tear, incorrect or negligent handling. Nor can any warranty be assumed for the consequences of careless modifications or repair work carried out without our consent by the partners or third parties.

43. The statutory warranty period shall apply unless otherwise agreed.

44. The partners must report obvious defects in writing immediately on receipt of the goods at their destination, hidden defects immediately on their discovery – though at the latest within 1 week after discovery of that defect and at the latest 1 month after the transfer of risk.

45. If acceptance of the goods or a prototype test is agreed, no complaints can be made about defects which could have been discovered by the partner during a careful acceptance or prototype test.

46. We must be given the opportunity to determine the notified defects. Rejected goods must be returned to us immediately on request; we will bear the costs of transportation if the complaint is justified. All warranty claims will be forfeited if the partners do not meet these obligations or if they modify the rejected goods without our consent.

47. In the even of a justified, prompt notification of a defect we will repair the rejected goods or deliver a faultless replacement at our own discretion. In the event of bulk supplies the partners will give us the opportunity to sort out the defective goods.

48. If we do not meet these warranty obligations or not in accordance with the contract within three months, the partners can fix a final deadline in writing by when we have to fulfil our obligations. On expiry of this period without effect the partners can demand a reduction of the price, terminate the contract or carry out the necessary repairs, or have these carried out by a third party, at our cost and risk. If the repairs are successfully carried out by the partners or a third party, all of the partners’ claims are settled through remuneration of the incurred costs.

Other claims, liability

49. Unless otherwise settled in the following, any additional and further claim on the part of the partners against us are excluded. This particularly applies to compensation claims from default, impossibility of performance, culpable violation of contractual accessory obligations, culpa in contrahendo and tort. We are thus not liable for damages not incurred on the delivered goods themselves. We are in particular not liable for lost profits or other pecuniary losses of the partners.

50. The aforementioned liability restrictions do not apply to intent, gross negligence of our legal representative or executives as well as for culpable violation of essential contractual obligations. In the case of culpable violation of essential contractual obligations we are only liable for contract-typical, reasonably foreseeable damages – apart from in the case of intent or gross negligence on the part of our legal representatives or executives.

51. Nor does the limitation of liability apply in cases where a liability exists according to the product liability law for personal and material damage to privately used objects due to defects in the delivered goods. Nor does it apply to the absence of warranted properties if and provided the intent of the assurance was to safeguard the partners against damages not incurred to the delivered goods.

52. Wherever our liability is excluded or restricted this also applies to the personal liability of our salaried staff, wage earners, employees, legal representatives and vicarious agents.

53. The statutory rulings on the onus of proof remain unaffected.

Force majeure

54. Force majeure, industrial disputes, civil unrest, governmental measures, failure of deliveries from our suppliers and other unforeseeable, inevitable and serious events release the contracting parties for the duration of the interruption and to the extent of their effect from their obligations. This also applies if these events occur at a time when the contracting partners affected are in default. The contracting partners agree to immediately provide all necessary information as far as reasonably possible and to adapt their obligations to the altered circumstances in good faith.

Place of delivery, place of jurisdiction and applicable law

55. Unless otherwise specified in the confirmation of order, place of delivery is our place of business.

56. Place of jurisdiction for all legal disputes, including those related to a bill of exchange and cheque case, is our place of business if the partner is a fully qualified merchant, a body corporate or a separate estate under public law. We are also entitled to institute legal action at the commercial domicile of the partner.

57. The law of the Federal Republic of Germany shall be exclusively applicable for the contractual relations. The United Nations Agreement from April 11, 1980 on contracts of sale of goods (CISG – “Vienna Purchase Law”) is not applicable.

Carl Friedrich Usbeck KG