General Terms and Conditions of Sale and Supply

Section 1 Scope

The following General Terms and Conditions of Sale and Supply apply to all business with our customers or other buyers or purchasers (hereinafter referred to collectively as "Customers" or "Purchasers"), even if they are not specifically referred to in subsequent agreements. The inclusion of the customer's general conditions of purchase or other general terms and conditions is hereby expressly excluded. This also applies if the customer refers to their own terms and conditions, in particular when placing or confirming an order, unless these are expressly agreed in writing.

Section 2 Orders

(1) Our quotes are subject to change, meaning that they are binding but may be withdrawn at any time before receipt of the customer's notice of acceptance. An order from a customer represents a binding offer. We may at our discretion accept this offer within four weeks either by sending an order confirmation or by supplying the ordered goods to the customer within this same period. If we do not respond to an offer or order then no contract is deemed to exist.

(2) Any information or agreement given verbally on our part is only binding if and insofar as confirmed in writing by us or if confirmed by the supply of goods and invoice.

(3) We cannot be held to any written materials sent out by us (quotes, order conformations, invoices etc.) in the case of obvious errors including clerical or accounting errors. The customer undertakes to inform us of any such errors so that the written material can be corrected and reissued. This also applies in the case of missing documents.

(4) The order no., customer no. and invoice no. noted on our order confirmations and invoices must be provided with all payments by bank transfer or cheque and in all correspondence from the customer concerning the order.

Section 3 Samples, brochures, quality information

(1) Samples, models, branding, test pieces, packs, packaging, drawings, tools and designs or similar as well as finished and prefabricated products provided by us for inspection (hereinafter referred to as "samples") remain our property and may only be passed on to third parties with our express written permission. Samples of this type, not including short run or test products made specifically for the customer, may not be used for manufacturing or development of the customer's own products or the products of others. The use of our samples, models, test pieces and similar for advertising purposes is not permitted unless we have given our approval for such use.

(2) All samples are always non-binding inspection samples unless they are short run or test run products made specifically for the customer. Technical specifications are subject to written confirmation and may thus only be viewed as approximate. Even where certain characteristics have been confirmed they may still vary within normal tolerances.

(3) Information and images contained in brochures and catalogues do not constitute a description of the nature of the goods or a confirmation of their characteristics but are standard commercial approximations unless expressly described by us as being binding.

Section 4 Delivery deadlines and goods supplied

(1) The delivery periods and deadlines agreed are approximate in all cases unless a firm date is agreed in writing.

(2) The stated delivery period begins with the dispatch of the order confirmation, but in any case cannot begin before the customer has provided any documentation, approvals, permissions etc. as may be necessary, or before any agreed deposit has been received. The delivery period is deemed to have been met if notice is given that the goods are ready for collection or that goods to be delivered have left the factory before the end of the delivery period.

(3) The delivery period may be extended as appropriate in the case of measures resulting from industrial dispute, in particular strike and lock-out, as well as in the case of unforeseen circumstances over which we have no control. This also applies if such circumstances arise for our suppliers. For the duration of any circumstances as described above no action may be taken in the case of default even if we were already in default at the start of such circumstances. We will inform the customer of the start and end of any such circumstances as quickly as possible.

(4) Partial deliveries in reasonable quantities are permitted within the delivery period stated by us insofar as the customer does not stipulate otherwise with good cause at the time of ordering.

(5) We reserve the right to make changes to construction or design during the delivery period due to improvements in technology or to legal reasons insofar as the goods to be delivered are not substantially altered and the alterations are not unreasonable for the customer.

(6) GELBAU is not obliged to retain spare parts, documentation or services. This does not affect the conditions of the statutory warranty covering defects. GELBAU is not obliged to provide certification. Unilateral changes to the scope of supply and services by the customer are not binding on GELBAU.

Section 5 Cancellation, cancellation costs

The customer has no right of cancellation of the contract beyond the right granted in law unless expressly agreed otherwise in the individual contract. If the customer cancels an agreed order without prior agreement we have the right to decide whether or not to accept such a cancellation. If we accept such cancellation we may without prejudice demand the application of a higher level of compensation, 10% of the purchase price for the costs arising from the processing of the order and for loss of profit. The customer retains the right to prove that a lower level of compensation is appropriate.

Section 6 Shipping, packaging

(1) We generally supply "ex works". If the customer requests that the goods be shipped this is always at the cost and risk of the customer, including in the case of carriage free shipment.

(2) In addition, packaging materials become the property of the customer and will be invoiced by us. Carriage and postage charges as well as packing costs will be invoiced separately. We will select the delivery method at our own equitable discretion.

Section 7 Acceptance and default of acceptance of goods

(1) The customer undertakes to accept delivery of the goods or to collect them and to investigate any defects or missing goods without delay (cf. Section 11 paragraph 1).

(2) If the customer fails to collect or accept delivery of the goods purchased within fourteen days from notification that the goods are ready for collection we have the right, after a further fourteen days' notice has been given and has elapsed, to cancel the contract or to demand compensation on the grounds of default. Notification of the extension of the notice period is not required if the customer genuinely and definitively refuses to accept the goods or is clearly unable to pay the purchase price within this period. Statutory provisions concerning default of acceptance remain unaffected.

Section 8 Prices, price changes, payment terms

(1) Our prices generally include value added tax at the currently applicable rate and are exclusive of packing and shipping costs.

(2) Unless otherwise stated in the order confirmation, our prices are ex works.

(3) Price changes are permissible if there are more than four weeks between the agreement of the contract and the agreed delivery date - 6 weeks in the case of merchants, bodies corporate under public law and special funds under public law. If after this time and before completion and supply of the order there is an increase in wages, prices of raw materials or other costs, if there is an increase in customs duties, taxes or other charges or in carriage charges or if these are introduced where they did not previously exist then we reserve the right to increase the price accordingly, appropriate to the increase in our costs. This also applies in the case of a fixed price having been agreed. The customer is entitled to cancel only if the price increase is considerably greater than the increase in the cost of living between ordering and dispatch.

(4) The purchase price and payments for additional services become due upon handover of the goods insofar as no other terms have been expressly agreed in writing on an individual contract basis. The acceptance of bills of exchange is subject in principle to our prior written consent. In the case of the acceptance of bills of exchange the bank's discount and collection charges will be invoiced. These must be paid immediately in cash.

Section 9 Set-off and retention

Our claims may not be set off against accounts receivable not established as undisputed or final and absolute. The same applies to the exercising of a right of retention with regard to a debt set off against a debt. If the customer is a merchant, a body corporate under public law or a special fund under public law it is also not permissible to exercise a right of retention on the grounds of accounts receivable which are not established as undisputed or final and absolute. This does not apply to the right of retention as per section 320 of the BGB (German civil code) for which the statutory provisions apply.

Section 10 Contractual penalties; compensation for late supply

Contractual penalties are not permissible unless expressly agreed otherwise in writing on an individual contract basis. Contractual penalties of any kind - in particular on the grounds of late delivery - which the customer must pay to a third party due to circumstances caused or represented by GELBAU may only become the subject of a right to compensation by the customer if the customer has given notice in writing upon agreement of the contract that the threat of contractual penalties exists and the extent of the threat. Compensation and other rights on the grounds of late supply are only applicable if GELBAU receives an official reminder notice from the customer and if an appropriate extension of the deadline for delivery has been set in writing. Delay as defined in section 286 of the BGB - in contrast to this statutory regulation - is deemed to exist when this extended deadline has passed. The extension period must be at least one week.

Section 11 Defects, complaints, warranty, compensation

(1) The statutory requirement to make a complaint in respect of a defect immediately on receipt of goods in accordance with section 377 of the HGB (German commercial code) applies along with the legal consequences as contained therein. If a defect is visible and in spite of this the goods are further processed, fitted or in any other way put to use then the goods - irrespective of whether the statutory requirement to make a complaint in respect of a defect immediately on receipt of goods in accordance with section 377 paragraphs 1, 3 and 4 of the HGB has been fulfilled - will be deemed to have been accepted in accordance with section 377 paragraph 2 of the HGB unless GELBAU has confirmed in writing that any claims regarding defects shall be upheld.

(2) In the case of defective goods and at our discretion we may either replace the goods or, if possible, correct the fault. If it is absolutely not possible to replace or correct the goods as in section 11, paragraph 5 then the customer has the statutory right to reduce or refuse payment. Goods which the customer deems faulty may only be returned to us with our consent.

(3) The statute of limitation for claims regarding faults is 1 year and not the statutory period as under sections 438 para. 1, point 3 and 634a para. 1, point 1 of the BGB. In all other cases the statutory regulations apply.

(4) The guarantee does not apply to damage caused after the transfer of risk and due to improper or inappropriate use, incorrect fitting and commissioning, natural wear and tear, improper or negligent treatment, excessive load, unsuitable equipment or due to improper electrical and/or mechanical influences insofar as such damage is not caused by GELBAU.

(5) The customer has a right to reduce payment or to cancel the contract if GELBAU fails to meet a reasonable deadline set for remedy (correcting the defect, replacement of the goods, supply of replacement parts) with regard to a defect as referred to in these Terms and Conditions of Supply if the remedy twice fails to resolve the problem or is no longer considered reasonable by either of the parties.

(6) Insofar as contractual liability for compensation exists due to fault on the part of either the vendor or purchaser in accordance with the statutory provisions the following shall apply: GELBAU is liable for the non-fulfilment of duties which are not central to the contract in the case of damage to property and assets only in the case of intention or gross negligence on the part of the Managing Director or management employees of GELBAU and its sub-contractors. Further, liability is limited to damages typically arising in businesses of the type in question. In the case of contracts with users GELBAU is fully liable where intention or gross negligence exists. Extensions to liability are not permissible unless expressly agreed otherwise in writing on an individual contract basis.

Section 12 Retention of title

(1) We retain the title to the goods supplied until full and final settlement of the purchase price as defined in the contract of supply.

(2) Our exercising of the right to retention of title and the distraint of the goods supplied does not constitute cancellation of the contract insofar as the provisions of sections 491 to 504 of the BGB apply or insofar as this is expressly declared in writing by us.

(3) The finishing or alteration of the goods by the customer is always carried out on our behalf. If the goods supplied are finished using items which do not belong to us then we acquire joint ownership of the new item in the ratio of the value of the items supplied to the other finished items at the time of finishing.

(4) If the goods supplied are inseparably conjoined with other items which do not belong to us then we acquire joint ownership of the new item in the ratio of the value of the objects supplied to the other conjoined items. The customer will be responsible for the safekeeping of any such joint property.

(5) The customer may neither pledge nor assign as collateral the goods supplied. In the case of distraint, seizure or other act by third parties the customer must inform us immediately and make available to us all information and documentation necessary for the assertion of our rights. Any enforcement officer or third party must be made aware of our ownership. If our goods are warehoused then the warehouse keeper must be made aware of our ownership beforehand.

(6) We undertake to release securities attributed to us at the request of the customer if their value exceeds by more than 20% the value of the claims secured, insofar as these have not yet been settled.

(7) In the case of application with regard to merchants, a body corporate under public law or a special fund under public law the following shall also apply: The customer is entitled to resell the goods supplied in the ordinary course of business as long as he properly fulfils his obligations with regard to us. However, he now assigns to us all receivables in the amount of the purchase price agreed between us and him (including value added tax) which result to him from such resale and irrespective of whether the goods supplied are resold with or without further processing. The customer is empowered to recover these receivables after assigning them so long as he has properly fulfilled his obligations to us. Our right to recover these receivables ourselves remains unaffected; however we undertake not to recover the receivables so long as the customer properly meets his payment obligations and is not in arrears. If this is not the case however we may demand that the customer makes known the amount owed to him and the debtor, that he provides all information necessary for the recovery of the amount, that he hands over the documentation in connection with the matter and that he informs the debtor (third party) of the assignment of the debt.

Section 13 Concluding conditions

(1) All legal relationships between the customer and us shall be governed by and construed in accordance with German law even if the customer is registered abroad. The United Nations Convention on Contracts for the International Sale of Goods is expressly excluded.

(2) The courts of Siegburg, Germany shall have exclusive jurisdiction for merchants. Place of performance is Niederkassel, Germany.

(3) If an individual provision of this contract is or becomes invalid this does not affect the validity of the remaining provisions. The parties undertake to replace any invalid provision with a valid one such as to have insofar as is possible the same commercial effect as was sought by the invalid provision.

(4) Contractual agreements and alterations must be made in writing. This also applies to the suspension of the requirement for the written form.

Version 01.02.2010