Purchase, Delivery and Payment Terms of Maschinenbau Halberstadt GmbH (in the following „MBH“)

1. Applicability of these terms
(1) These purchase and delivery terms shall be applicable exclusively to business operators (within the meaning of Sec. 14 of the German Civil Code or “BGB”), incorporated entities and (special) estates. They shall apply to all subsequent transactions and business relationships at present or in the future regarding deliveries or services by MBH. We expressly object to the purchase terms of the customer.
(2) All offers, agreements, deliveries and services shall be carried out on the basis of and in accordance with the following terms. Contradictory or conflicting general terms, especially purchase terms, shall not be binding upon MBH, unless MBH has expressly declared its approval. In case two letters of confirmation are crossing, which contain conflicting terms, the letter of MBH is binding.
(3) All Agreements and orders require the written form in order to be legally valid. Oral side agreements do not exist. Proof to the contrary is not excluded.

2. Description of goods and services
All catalogues, data sheets and other public communication of MBH are subject to technical changes and may be erroneous. The services and goods of MBH are only state of the technology. MBH does not grant guarantees in the meaning of sec. 443 BGB.

3. Prices and payment
Prices are binding and EXW (Incoterms 2000). They are quoted in EURO and exclude the respective VAT, as well as the expenses for packaging, freight, transportation, transport insurance, duties and dispatch. In case of delivery to a foreign country, MBH shall not be liable for the taxes and charges thereby incurred. If no fixed prices have been agreed, the respectively current list prices are applied.
(2) Should the contract value be less than 100.00 Euro, MBH is entitled to demand an addition/bonus to the prices according to the price list, of 10.00 Euro at the most. For express deliveries, a further addition shall be levied, which can be requested with the purchase order.
(3) The set off of claims from the same contract or of counterclaims from other business operations between the parties is not admissible, unless the claim has become res judicata in court or is not contested by MBH. The withholding of a performance is only admissible f based on the same contractual relation.
(4) Invoices shall be paid within 10 days from date of invoice. Bank charges are assumed by the customer. MBH reserves the right to deliver only against prepayment, confirmed irrevocable letter of credit, cash or cash on delivery, especially in the case of first orders or in case of default of payment. Spare parts and other reparation deliveries, including service and maintenance, shall be paid completely immediately after delivery.

4. Delivery conditions
(1) Delivery dates are non-binding unless expressly agreed otherwise. If the goods are sent to the customer upon his own wish, a delivery period of at least two weeks shall be expected, even though the delivery will usually be operated in less time. For quantities of delivery exceeding the usual dimension, a delivery period of at least three months is assumed as agreed. These provisions are always under condition of correct and complete delivery to MBH. The transfer of risk shall take place, when the customer is informed of the readiness of dispatch.
(2) The transport shall only be insured by MBH if explicitly wished by the customer. The eventual expenses shall be assumed by the customer. By expressing his wish to have the transport insured, the customer entitles MBH to execute the necessary declarations.
(3) Binding delivery periods shall be fixed separately and individually. Partial deliveries are admissible. The delivery period is prolonged adequately in case of unpredictable, extraordinary events, which in spite of the necessary and reasonable care applied according to the circumstances of the case, could not be prevented. Such events are, e.g., business disruption, strike or lockouts, a ban on imports or exports, a refusal to issue or the revocation of authorizations or permissions or other administrative measures; this does also apply, should such an event strike a supplier or other producer.

5. Retention of title
(1) The delivered goods remain property of MBH until the complete payment of all claims from the business operation, including a possible current account balance (so far as it has been accepted by the customer). In case of default or other breaches of duty, MBH is entitled to rescind the contract and to take back any the goods subject to the retention of title, provided a suitable grace period has elapsed.
(2) The customer is entitled to resell the goods subject to retention of title within his normal conduct of business or if, the transfer of title is effected by fixing to the ground. Such entitlement is conditional on the transfer to MBH of any claim resulting from such resale including all ancillary claims (interest, VAT, packaging, transport etc.) and all related claims resulting from any other legal basis against the purchaser. The customer remains entitled to receive payments for such claims unless in case of default of payment or MBH is entitled to rescind the contract for other breaches of duty, provided a suitable grace period has elapsed. In that case, the customer shall inform his customers of the transfer of the claims and shall provide MBH with all information needed to demand payment from them. The customer is not permitted to encumber or let encumber the goods subject to retention of title with a pledge or a chattel mortgage.
(3) Any possible processing or treatment of the goods subjected to retention of title will be undertaken by the customer for MBH. In the case of the treatment, combination and amalgamation or mixing of the goods subjected to retention of title with other objects not belonging to MBH, MBH is entitled to the co-ownership share of the new object resulting from the action proportionally, on the basis of the proportion of the value of the goods subject to retention of title to the rest of the treated goods at the time of treatment, combination and amalgamation or mixing.
(4) The customer is obliged to inform MBH without delay of any seizures, confiscations or other enforcement measures or of provisions of third parties as to the goods subjected to retention of title or the claims ceded in advance, and to hand over the documents necessary for an intervention.

6. Liability
Should the goods or service provided by MBH be deficient, which includes the lack of the quality contractually agreed upon, MBH may, at its own discretion, either deliver a substitute or repair the defect; at least two attempts of repair or of substitute deliveries must be permitted.
(2) Perceptible deficiencies of the goods and/or service have to be communicated in written form immediately after receipt.
(3) MBH is not liable for damages due to improper use or treatment, deficient setting up and combination with other objects by the customer or by a third party, for natural abrasion, inappropriate equipment as well as chemical, electric or electrochemical influences originating from beyond the range of performance and sphere of influence of MBH. If the customer receives a faulty instruction, MBH is only obliged to deliver a correct instruction and this only if the deficiency of the instruction is opposed to a state of the art implantation.
(4) MBH is not liable for the compliance with foreign packaging and duty provisions. MBH reserves the right to undertake technical improvements even without notification of or coordination with the customer.
(5) The limitation period for any claims in case of defects is one year. It begins with the handover of the goods to the customer.
(6) Warranty shall be granted for all services of MBH in the amount und under the prerequisites of the following provisions. MBH is liable without limitation according to legal provisions, as far as MBH or one if its representatives are responsible for a deliberate or grossly negligent breach of contract, or as far as an injury to life, body or health has ensued or if MBH has assumed a guarantee. The liability for a slight negligence is excluded, unless an essential contractual obligation (cardinal obligation) has been violated. In this case, the liability is financially restricted to the predictable damage typical of the contract. These limitations of liability do likewise not apply, should MBH as a supplier be sued for contribution claims according to b§478 BGB or for claims according to §§ 1.4 law on product liability.

7. Compensation in case of cancellation of order
Should an order be cancelled for reasons for which the customer is responsible, he will pay MBH – without prejudice to the possible assertion of a greater actual damage – a compensation of 15 % of the net contract value, or, at his discretion, fulfil the contract. The customer is entitled to prove, that no or less damage has been caused to MBH.

8. Regulations for installation services
MBH is obligated to perform installation or assembly services only if expressly agreed. Such obligation is conditional on the provision of appropriate infrastructure (suitable installation site, electricity, water, lifting gear etc.) by the customer. In case more than one acceptance test is stipulated, the first of such a series of such tests shall be deemed to be the relevant acceptance in the meaning of statutory law. Acceptance is also effected in case the productive operation of the works provided by MBH has been commenced. The same applies in case MBH informs the customer of the readiness for acceptance with a time limit to confirm such acceptance and such time limit elapses without response.

9. Severability Clause
Should any provision of this agreement be or become entirely or partly invalid, the validity of the contract and of the other terms of purchase, delivery and payment shall not be affected thereby. The parties are obliged to replace invalid or impracticable conditions or contractual terms by valid provisions, which, to the extent possible, implement the intent pursued by the invalid provision.

10. General provisions
(1) As far as the customer is a business operator, an incorporated entity of public law or a (special) estate of public law, Magdeburg/Germany is the sole court of jurisdiction for all legal disputes arising directly or indirectly from the contract. However, MBH is also entitled to sue at the customer’s registered office. The same rule applies to customers without a general court of jurisdiction in Germany or whose permanent or usual residence at the time the suit is filed is unknown. The place of fulfilment is the registered office of MBH.
(2) The contractual relationship is governed exclusively by German law (especially BGB und HGB) under the explicit exclusion of its collision rules and the UN Convention on the Sale of Goods (CISG).

Halberstadt, April 2010