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General Terms of Sale and Delivery of Pieron GmbH, Bocholt, Schlavenhorst 41

1. Applicability

These business terms and conditions apply to all our deliveries, services and offers to business people, legal entities under public law and special estates under public law. Our deliveries are carried out exclusively under to the conditions spelled out here below. These shall therefore also apply to all future business relations, even if they are not expressly agreed upon again. Once the goods or services have been received, then these regulations shall be deemed to have been accepted. Counter-arguments by the customer based on his business or purchase terms and conditions are hereby expressly countered.

2. Offer, tender documents, orders and end of contract

All our offers are non-binding. Orders shall only become binding after our order confirmation has been issued.

We reserve ownership and copyrights on all documents, most especially drawings, samples, data media, documentations and illustrations given to the customer. They may not be used for other purposes than those stipulated in the contract and should not be made accessible to third parties without our express consent, and are immediately to be given back to us free of charge when the contract is completed or as soon as the contractual purpose is fulfilled; this applies particularly to such documents and information which are described as confidential. We are authorized to reclaim the documents any time, if the issue of confidentiality is not guaranteed.

Contracts signed shall only become effective after we have confirmed the order in writing. The same applies to any additions, amendments or supplementary agreements made. The extent of mutual obligations depends on our order confirmation. As long as there is no other stipulation made by the customer, allowances usually obtaining in the industry as well as the applicable DIN standards respectively shall apply.

3. Samples and production materials

The production costs for samples production materials (tools, gauges, stencils, etc.) are billed differently from the goods to be delivered, as long as nothing contrary has been agreed upon. This also applies to the production materials to be replaced as a result of wear and tear.

The costs of maintenance and proper storage, as well as the risk of damage or destruction of production materials are borne by us.

If the customer decides to break off the working relationship during the time of producing the samples or the production materials, or if he terminates it, all production costs that have arisen up that point shall be borne by him.

The customer is authorized to demand the return of production materials if a consensual regulation was put in place during the time of issuance and the customer has fulfilled all his contractual obligations.

We shall keep the production materials safely free of charge for three years after the last delivery to the customer. Thereafter we shall request our customer in writing to express his position within 6 weeks regarding the continued use of the same. Our obligation to keep the said materials safely ends if after the 6 weeks no statement has been issued or no new order has been submitted.

Consumer-related production materials may be used for deliveries to third parties only with prior written consent by our customer.

4. Long-term and Call-off contracts, Price Adjustment

Should a substantial change in wage, material or energy costs arise in long-term contracts (contracts with a running time of more than 24 months), then each contractual partner has the right to demand an appropriate adjustment of the price taking into consideration all these factors.

If an obligatory order quantity is not agreed upon, then we shall base our calculation on the non-binding order quantity (targeted quantity) which is expected by the partner over a definite period of time. If the partner takes less than the targeted quantity, then we shall have the right to include the remaining stock in the bill, and if he takes more than the targeted quantity, then we shall reduce the unit price accordingly, provided the partner announced his additional demand at least 3 months before delivery.

In the case of delivery dates with the date marked „On-Call“, we are authorized to produce the quantity ordered. The customer commits himself to accept the goods produced within 24 months and to pay the purchase price billed. The bill is considered due for payment even when the customer does not accept the goods.

5. Prices

Prices are in Euros (€) ex Bocholt factory, excluding the statutory value added tax (VAT), freight and packaging costs, shipment and quality assurance costs. These particular costs are computed separately.

As long as there is no other stipulation to the contrary, we shall feel bound by the prices contained in our catalogs for 90 days from the date indicated therein. Otherwise the valid prices are those indicated in the order confirmation plus the respective statutory VAT. Additional deliveries and services are billed separately.

Any subsequent reduction in the ordered quantity or unit number for agreed partial-delivery as well as reduction of call-offs will attract an increase in the unit prices for the parts already produced.

6. Terms of payment

Our invoices are due for payment within 10 days from the date of invoicing with 2% cash discount from the net goods value, and a net amount within 30 days after the date of invoicing. For purposes of the cash discount deduction, the date of entry of the invoice amount onto our account shall count. Costs of equipment are due for payment without any deductions within 30 days from the date of invoicing.

In case of delay in payment, we are authorized to demand interest amounting to at least 8 percentage points above the standard interest rate as lump sum compensation, starting from the respective time in question. In times of delay in payment we can suspend fulfillment of our obligations after informing the partner in writing, until such a time as payments are received.

Bills of exchange and checks shall only be accepted upon agreement and only as a conditional payment, provided they are discountable. Discount expenses are calculated right from the due date of the billed amount. We rule out any liability for timely presentation of the bill of exchange and check, and for issuing a bill protest.

If any information comes to our knowledge questioning the credit worthiness of the customer, most especially if a check is not honored or if his payments are suspended, or if we come across any other information questioning the customer’s credit worthiness, then we shall have the right to demand immediate payment of the whole outstanding amount, even if checks were received. In such cases, we shall furthermore feel obliged to demand advance payments or sureties.

The same applies to accrued costs for services and goods which are in the process of being manufactured as well as those that have been finished but have not yet been delivered. In such a case we shall only need to deliver outstanding goods and services against cash payment or production of sureties, and we can withdraw from the contract after provision of an adequate extension and demand compensation for non-fulfillment of contractual obligations. The customer is only entitled to a setoff, retention or reduction, if the counter-claims were found to be legally binding, even if complaints about defects or counter-claims have been raised.

7. Packaging

We shall calculate the packaging material at its net cost price, and the packaging will not be taken back. Packaging will be of the type usually used in the industry.

8. Delivery period

Delivery dates or deadlines which can be agreed upon in a binding or non-binding manner should be made in writing.

Compliance with our delivery and service obligations presupposes that the buyer/customer shall fulfill his obligations in a timely and proper manner.

The countdown for agreed delivery deadlines shall begin with the sending of our order confirmation, but in any case not before all details or provisions have been clarified and all other prerequisites that are to be fulfilled by the customer have been met.

We shall not be held liable for delays in the delivery of goods and services caused by natural disasters and other events which substantially make it difficult or impossible for us to make delivery not just temporarily – this includes most especially strikes, lockouts, official decrees, etc. – even if these events were to occur to our suppliers or their sub-contractors, and even where delivery deadlines and dates were agreed upon as binding. Such events give us justification to postpone delivery of goods or services respectively by the length of time that the hindrance shall take plus an appropriate start-up period, or to withdraw from the contract completely or partially with regard to the part of the contract that has not yet been fulfilled.

Natural disasters, industrial actions, disturbances, official decrees, failure of delivery by our suppliers and other unforeseeable, unavoidable and serious events free the contractual parties from their service obligations for the duration of the disturbances and the extent of their effect. This also applies in cases where the said events occur at the time when the affected contractual partner is lagging behind in terms of delivery, unless the delay was caused by him intentionally or as a result of gross negligence. The contractual parties are obliged to immediately give the required information within reasonable limits and to adapt their obligations to the changed conditions in good faith.

In case of incapacitations occurring on our part after completion of the contractual obligations, the customer shall not have any right to claim compensation, so long as we have proved that it was impossible to render the service. The customer is authorized to withdraw from the contract only if it can be proved that we are responsible for not keeping to the delivery dates and that he tried without success to give us an appropriate extension.

9. Inspection and acceptance of deliveries

The usual inspection of products comprises the random checking of measurements. The costs for this exercise are included in the unit price. Type, extent and costs of additional inspections and the inspection method to be used have to be agreed upon in writing.

10. Shipment and transfer of risks

Goods reported as being ready for shipment have to be taken by the customer immediately. Failure to do so will mean that we have the right to ship them in a manner of our choice or to store them at the cost and risk of the partner.

If there is no special agreement, we shall choose the means of transport and transport route.

The risk is passed on to the customer with effect from the time when the goods are handed over to the railway network, the freight forwarder or to the hauler, or at the time the storage process begins, but in any case not later than the date when goods leave the factory or the store, and to be more precise even when we have taken over the delivery of the goods.

If the products are ready for shipping and the shipment or acceptance of the goods delays for reasons which are not of our making but rather which lie within the customer’s area of responsibility, the risk passes over to the customer at the time of receiving notice of readiness of shipment.

11. Partial deliveries, surplus and short deliveries

We have the right to make partial deliveries. Surplus and short deliveries of up to 10% of the ordered quantity are regarded as proper fulfillment of the contractual obligation and are taken into account in the invoice.

For contracts with ongoing delivery, we need to be informed of the release quantities and their delivery dates already at the time of placing the order, if possible. However, we have the right to produce the entire quantity stipulated in the contract at our discretion, if there are no agreements made expressly to the contrary. Subsequent changes to the ordered products can only be considered if we have not yet manufactured them. If the sub-division or call-off is not done in a timely manner, we shall be justified to withdraw from that part of the contract which has not yet been fulfilled, after fruitless attempts to set up new deadlines have been made, and to demand compensation for damages arising out of that.

12. Reservation of ownership

The delivered products shall remain our property until complete payment of all claims from the business relationship, including all demands for outstanding balance from the current account between the customer and us. The adjustment of individual claims in a current account as well as the establishment and recognition of the balances do not affect the reservation of ownership. Payment shall only be deemed effected on receipt of the counter-value by us. If we accept bills of exchange as means of payment, then our reservation of ownership shall continue until it is certain that no further action can be taken against us due to these bills of exchange.

The customer is authorized to sell off goods that are still in our ownership (reserved goods) through normal business channels, as long as he is not in arrears. This does not apply if there is an assignment prohibition with regard to the customer of the person making the order: He is not permitted to distrain or transfer ownership as security.

Furthermore, the customer shall transfer to us right away the full amount of claims arising from the resale or any other legal source (insurance, unauthorized transactions) relating to the reserved goods (including all balance claims from the current account) for purposes of security. We shall accept this transfer. The customer shall, until a lawful revocation is issued by us any time, remain entitled to collect the claims transferred to us for safekeeping when the time is due. After revocation of the preauthorized payment mandate the customer must immediately commit to us all information about the claims transferred which is required for withdrawal, and he must inform the debtors about the transfer.

Any possible processing and fabrication of the reserved goods shall be undertaken by the customer for us as manufacturer in accordance with Section § 950 of the German Civil Code (BGB), without us incurring any charges from it. If the products are processed or mixed with other products which are not ours, we shall be entitled to the co-owned share of the new product arising out of that process, which is equivalent to the proportion of the value of our products to the rest of the processed products at the time of processing or mixing. If our right of ownership expires through processing or mixing, then the customer shall right away transfer to us his legitimate ownership rights on the new product which is equivalent to the invoice value of the reserved goods, and he shall keep them safely for us free of charge. If the products delivered under reservation are further sold together with other goods, no matter in which state they are in, then the advance assignment agreed to in paragraph 2 shall only go as high as our invoice value of the reserved goods sold respectively.

In the case of third parties gaining access to the reserved goods or to the already transferred claims, most especially in the case of enforcement measures, the customer must inform us immediately and hand over documents required for an intervention.

As long as the third party is not in position to refund to us the judicial and extra-judicial costs incurred in connection with this case, then the customer shall be held liable for this. If the securities entitled to us in accordance with provisions set out above should exceed the claim to be secured by 20%, then we shall release fully paid deliveries on individual basis upon request by the customer, as and when we choose to do so.

13. Complaints/Material defects

Complaints regarding weight and quantity must be communicated to us in writing immediately after receipt of our delivery.

The composition of the products is based exclusively on the technical terms of delivery agreed upon. If our deliveries are to be made according to our customer’s drawings, specifications, samples, etc., then the customer shall assume responsibility for the suitability of the products for the planned use. The point in time at which the risk is transferred is the decisive time for determining whether the state of the goods is as stipulated in the contract.

We are as less answerable for material defects arising from unsuitable or improper use, faulty assembly or operation by the customer or third parties, usual wear and tear, incorrect or careless handling, as for the consequences of alterations or maintenance work carried out improperly and without our consent by the customer or third parties. The same applies to defects which reduce the value or functionality of the product only insignificantly.

The customer obliges himself to inform us of any defects immediately, in any case not later than one week after receipt of the delivered goods. Defects which cannot be discovered within this deadline even after factory inspection must be brought to our attention in writing immediately after discovery, but in any case not later than 12 months after transfer of risk, otherwise the goods shall be deemed to have been approved even with regard to this material defect.

Inspection of the items delivered by us must be done in accordance with the customer’s drawing specifications and/or the appropriate DIN-Standards. We should be given an opportunity to ascertain the reported defect. Queried goods must be sent back to us immediately upon request; we shall assume responsibility for transport costs if the complaint is justified. If the customer does not comply with these obligations or undertakes alterations on goods that are already queried without our consent, then he shall lose any possible claims on those material defects. For legitimate complaints made in due time, we shall make improvements on the queried products at our discretion or deliver replacements that are free of defects.

14. Other claims, Liability

As long as there are no other stipulations hereafter, all further claims by the customer against us are ruled out.

This applies most especially to compensation claims due to violation of duties in respect of contractual obligations and due to unauthorized actions. We shall therefore not be held liable for damages which did not arise on the delivered products themselves. Above all, we shall not be liable for the customer’s loss of profit or any other pecuniary losses incurred by him.

The following liability limitations do not apply in the case of willful intent, gross negligence on the part of our legal agents or executives, as well as cases of culpable violation of fundamental contractual obligations. In cases of culpable violation of fundamental contractual obligations, we shall only carry liability – except in cases of willful intent or gross negligence on the part of our legal agents or executives – for contractually typical and reasonably foreseeable damages, but in any case not higher than the invoice amount of the concrete order upon which the claim is based.

Furthermore, the limitation on liability does not apply in cases where according to the product liability law, liability is imposed in respect of defects on delivered goods for personal or material damages on privately used items. It also doesn’t apply in the case of injury to life, body or health, and when there are no guaranteed properties, if and as long as the assurance aimed at indemnifying the partner against damages which do not occur on the delivered products themselves.

As long as our liability is excepted or limited, this will also apply in the case of personal liability of our employees, workers, members of staff, legal agents and subcontractors. The legal regulations regarding burden of proof remain unaffected by these.

15. Violation of patents and other rights of third parties

The customer is obliged to examine by himself any possible infringements of industrial property rights and if necessary, to draw our attention to the fact that the order refers to parts that are effectively protected by industrial property rights. He shall assume every liability for claims asserted for this reason by a person authorized by us, and he shall exempt us from such liability.

16. Confidentiality

Each contractual partner shall use all documents (that includes even samples, models and data) and information attained by him through the business partnership only for the common contractual purpose, and he shall keep them confidential from third parties with the same amount of care as he would his own documents and information of the same value, if the other contractual partner labels them as confidential or has obvious interest in their remaining confidential. This obligation starts from the moment the documents or information are received for the first time and ends 36 months after the end of the business partnership.

The confidentiality obligation does not apply to documents and information which are generally known to be public knowledge or which were already known to the contractual partner at the time of receiving them without him being obliged to maintain secrecy, or those that are afterwards transmitted by a partner authorized to disclose them, or those developed by the receiving contractual partner without using the documents or information of the other contractual partner that are subject to confidentiality.

17. Drawings and descriptions

If a contractual partner puts drawings or technical documents about products to be delivered or about their manufacture at the disposal of the other partner, these shall remain property of the providing party.

18. Limitation period

The guarantee shall end at the lapse of 12 months after transfer of risks.

This is the limitation period for claims due to defects, as long as these have not already been exempted by these terms and conditions.

The legal limitation period applies to compensation claims due to defects and for claims from unauthorized actions.

All other claims by the customer due to material defects, most especially for subsequent delivery, replacement of used items during self-repair works, rescission, reduction and replacement of futile expenditures, shall expire within one year.

A hindrance to the limitation of the customer’s claims during negotiations only becomes effective if we have entered into negotiations in writing. The hindrance ends 3 months after our last written statement.

19. Place of fulfillment, place of jurisdiction, applicable law and partial invalidity

For these particular business relationships and all other legal dealings between us and the customer, the law of the Federal Republic of Germany shall apply. Provisions of the UN-Sales Law shall not apply.

For all legal disputes, even those involving check or bill of exchange processes, our business headquarters in Bocholt shall be the place of jurisdiction. However, we are also authorized to sue the customer at any other legally recognized place of jurisdiction. The ineffectiveness of provisions in these contractual terms and conditions, or in any other regulation agreed upon between the parties, doe not have any influence on the effectiveness of the rest of the provisions of this general terms and conditions.

With regard to provisions otherwise agreed upon between the parties, the said parties are obliged to replace the invalid provisions with provisions that resemble as closely as possible the purpose of the invalid provision.

Status: March 2007