I. General

1. The following „General Terms and Conditions“ shall become part of this contract on the placing of an order and shall apply exclusively and to future business relations. These general terms and conditions are deemed accepted on the acceptance of goods or means of payment at the latest. Our business partners’ general terms and conditions, regardless of the nature of the latter, shall only be binding if and as long as they are confirmed by us in writing.

II. Delivery and performance PERIODS

2. We shall not be obliged to execute delivery as long as we or any other companies engaged by us in relation to the execution of the delivery transaction are impeded in the fulfilment of the contract by force majeur, strike, lockout, mobilisation, war, blockades, import and export bans, traffic delays and any other circumstances. Furthermore, we are not obliged to execute delivery as long as such goods that we ordered from third persons for the fulfilment of the business transaction have not been delivered despite our written demand (Mahnung). We shall immediately notify the buyer without any delay of any defaults of delivery (Lieferstörung) consistent with sentences 1 and 2 above.

3. We shall be entitled to withdraw from the contract upon written declaration in accordance with paragraph 5 in all cases contained in paragraph 3. No rights exercisable against us shall result from such a withdrawal for the buyer.

4. Such rescission (Rücktritt) shall become effective if immediately after receipt of the notice of rescission the buyer does not declare in writing that he continues to desire delivery. In this case we commit ourselves to arrange at mutual expense for all adequate measures to be taken for the achievement of satisfaction of our delivery claim. The buyer shall not be entitled to any further claim against us.

5. The buyer shall remain under the obligation to perform acceptance in the cases of paragraph 3 regardless of the default of delivery occurred as long as we are obliged to accept our suppliers’ deliveries. The buyer may require, however, that we arrange for all adequate measures to be taken for our release from the contract with our suppliers.

III. PRICES

6. The agreed purchase price is the net price exclusive of the value added tax in force at the relevant point in time, and it is calculated on the basis of carriage, exchange rates, tax, customs duties and other public charges related to the contract. Accountable increases in parts of this calculation entitle us to modify the price accordingly.

IV. DELIVERY AND TRANSFER OF RISK

7. The risk of loss and of deterioration of the goods shall pass to the buyer in cases of deliveries free of charge and in the following events:

a) drop shipments with delivery to the forwarding agent or carrier,
b) FOB- and CIF-transactions subject to Incoterm’s particular regulations,
c) sales from stocks as soon as the goods are removed from the warehouse.

V. DEFECTS and WARRANTY

8. We sell according to trademarks, numbers and other quality descriptions as stated in the producers’ original specifications. These are descriptions and shall not be warranted qualities (zugesicherte Eigenschaften) of the goods at any point in time. Warranted qualities (zugesicherte Eigenschaften) may be agreed in writing under reference to the legal consequences.

9. The buyer shall examine the goods without any delay after their receipt and shall immediately notify us if a defect appears. His failure to do so or any consumption, mingling or selling on of the goods shall be deemed an unconditional approval. A notice of defect of a delivery does not entitle the buyer to reject further deliveries under the same or a different contract.

10. A claim of defect is excluded if the buyer has failed to preserve rights of recourse against third parties (e.g. Proces Verbal (TA), cargo damage reports). Our damage reduction measures shall not be deemed an acknowledgment of a defect (Mängelanerkenntnis). Negotiations concerning a notice of defect do not constitute a waiver of the objection that the notice of defect was not issued in due time, was factually unsubstantiated or was insufficient for any other reasons.

11. In the case of drop shipments our warranty obligation is limited to those rights that we may claim against our suppliers on the basis of the purchase contract for the goods sold. The buyer is entitled, however, to the rights in paragraph 13.

12. In the case of sales from stocks the buyer is entitled to claim abatement of the purchase price (Minderung) if he has given notice of the defect in due time. Alternatively he is also entitled to withdraw from the contract if he is not able to use the defective goods for his purpose.

13. Beyond the rights in paragraphs 12 and 13 the buyer is not entitled to any warranty claims (Gewährleistungsansprüche), damages for non-performance (Nichterfüllung), damages for consequential damage, and claims of negligent tortious acts (fahrlässige unerlaubte Handlung) under § 823 German Civil Code (Bürgerliches Gesetzbuch).

14. EAn obligation under a warranty (Gewährleistungspflicht) shall not come into effect after twelve months.

VI. TERMS OF PAYMENT

15. If nothing else has been agreed all payment without deduction must be received by us within seven days after delivery.

16. The principal is not entitled to a right of retention. A setoff with counter claims is only permitted if these have been approved by us as existing and due for payment or if they have been ascertained by a non-appealable declaratory judgment.

17. In the event of delayed payment, and starting from the due date we shall be entitled to charge interest of 8 % above the base rate of the Deutsche Bundesbank effective at the time of delayed payment in accordance with § 247 German Civil Code (Bürgerliches Gesetzbuch); we hereby reserve the right to claim any further damage. A processing fee of € 5 may be charged for every demand (Mahnung).

18. If the principal does not comply with his payment duties, or if we gain knowledge of circumstances that call his creditworthiness into question all our claims, including those for which we have accepted bills of exchange, shall become due for payment immediately. In this case we shall only be obliged to perform further deliveries if the principal offers payment concurrent (Zug-um-Zug) with the delivery. If the principal does not offer payment in cash we shall be entitled to claim damages for non-performance instead of fulfilment or to withdraw from the contracts if no deliveries have been executed yet.

VII. RESERVATION OF OWNERSHIP

19. The goods sold are only intended for processing in the buyer’s company and may not be sold in an unprocessed condition without our consent.

20. The goods delivered remain our property until full payment of all our receivables, including future ones, resulting from the business relationship with the buyer. The right of ownership shall also continue to be reserved if our receivables are added to a running account and the balance has been struck and approved.

21. The buyer is entitled to process the goods within the normal course of business if he fulfils all contractual duties herein and if none of the circumstances or events under paragraph 18 have taken place. Processing and manufacturing shall always be conducted for us under the exclusion of the acquisition of ownership by the processing and manufacturing party pursuant to § 950 German Civil Code (Bürgerliches Gesetzbuch) without however subjecting us to any duties. Objects resulting from any processing shall also serve as a security for our accounts receivable against the buyer. In the event of a processing with other goods not belonging to us we shall become co-owners of the objects that result from such processing to such a part as corresponds with the value of our goods in relation to the other goods also processed into the new object.

22. The buyer is entitled to sell the processed goods in the normal course of business subject to the requirements of paragraph 21, phrase 1. The buyer is obliged to reserve the conditional right of ownership of the goods in respect to his purchasers until the latter have fully paid the purchase price.

23. All the buyer’s claims to a resale of the goods under reservation of ownership shall hereby be assigned to us. If the goods under reservation are sold together with other goods that do not belong to the seller the purchase price shall only be deemed assigned up to an amount corresponding to the value of our goods. If the goods subject to reservation partly belong to us pursuant to paragraph 21, phrase 4, the amount of the receivables assigned to us due to a resale shall be determined corresponding to our part of the ownership.

24. Subject to the requirements of paragraph 21 the buyer is entitled to collect the receivables resulting from the resale. On our request the buyer shall notify us of any assigned receivables. We shall be entitled to notify the debtor of the assignment.

25. As long as our reservation of ownership is effective the buyer shall not be entitled to any other acts of disposal apart from processing and reselling under paragraph 21, i.e. paragraph 22.

VIII. PLACE OF PERFORMANCE, PLACE OF JURISTDICTION

26. The dispatching works or the dispatching warehouse are the place of performance for all deliveries including those free of charge. Our headquarters are the place of performance of the buyer’s duties and the place of jurisdiction.

27. The inner-German law of the Federal Republic of Germany shall be applicable. The common statutes on the international purchase of movable property are excluded. This exclusion shall apply in particular to the UN-Convention on Contracts for the International Sale of Goods (Vienna Sales Convention/COSG-Convention).

28. If individual provisions in these „General Terms and Conditions“ should fully or partly be or become invalid the validity of the purchase contract in total shall not be affected. The contractual parties are obliged to replace invalid provisions by a provision that comes closest to the invalid provision within the limits of statutory possibilities.

29. Any disputes arising out of the contract shall be settled at our discretion by mediation in accordance with the valid Hamburg Mediation Procedure for Commercial Conflicts, by amicable Hamburg Chamber of Commerce Arbitrage under appointment of a single judge in accordance with the valid Chamber’s means of Regulation or by resorting to the general courts of law. During the mediation process agreed upon the parties are not allowed to commence court proceedings or arbitration concerning the case in hand.

Version: 1st of December 2003
Tropag Oscar H. Ritter Nachf. GmbH