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General Terms and Conditions

as of January 2008

These general terms and conditions (hereinafter: GTC) generally apply to legal transactions between businesses.

I. Scope of Application

1. These GTC shall apply to all orders and services between the client and the contractor. The client's GTC shall not apply unless this has been expressly agreed upon by the contractor in writing before entering a contract. The client agrees to exclusively conclude agreements based on these GTC. In case of conflict between the provisions of these GTC and the client's GTC, the contractor's GTC shall apply. Non-conflicting provisions of each GTC shall apply equally.

2. The client and the contractor expressly agree that these GTC shall not only apply to the first commercial transaction but also to any other dealings between the parties.

3. By signing an order, the client agrees to these GTC. By signing an order, the client acknowledges that he/she read and/or understood these GTC.

4. Verbal agreements are deemed to be legally void. Verbal agreements or amendments to these GTC are only deemed legally valid, if confirmed by the contractor in writing.

5. Order confirmations and notifications of dispatch are only issued by the contractor at the client's explicit written request.

II. Quotations, Prices, Shipment

1. Quotations by the contractor shall only be regarded legally binding, if a purchase order is verifiably issued in writing within 14 days of the date of the quotation, unless there are provisions to the contrary. If a purchase order is issued without a prior quotation, the client will be charged according to prices quoted in the general price list. The contractor reserves the right to charge express delivery fees in addition to the prices quoted in the price list, if a purchase order is issued at short notice.

2. Quoted prices shall be binding within a period of three months of the date of the quotation. Hence, after that period expired, the contractor is entitled to increase contractual prices or prices quoted according to clause II.1.

3. Quoted delivery dates and deadlines are non-binding. For contracts based on fixed deliverables, delivery periods refer to the day the parts to be processed arrive at the contractor's premises. In case of service contracts the delivery period starts as soon all parts and material are at the contractor's premises. If there is production related issues to be resolved, that period shall start after all issues have been resolved by the contractor. This shall be the case once the contractor notifies the client in writing that all production related issues are resolved.

4. Prices given in catalogues, journals, brochures, company information, leaflets, advertisements, newsletters, marketing material, at trade fair booths, or any other media detailing the contractor's services do not constitute a quotation by the contractor and therefore are not legally binding.

5. Quoted prices do not include statutory VAT, postage, and packaging fees. Unless agreed otherwise, payments are due 14 days after receipt of the invoice and must be paid in full without additional costs, even if a notification of defects has been made. A notification of defects does not entitle the client to partially or fully withhold the agreed payment.

6. The client agrees that late payments will incur an interest rate of 12.5 % p.a. Additionally, the contractor shall charge the client for any further interest incurred. Furthermore, the client is liable for all expenses caused by a late payment such as (but not exclusively) costs for reminders, collection attempts, judicial and extrajudicial attorney's fees and costs.

7. Unless expressly agreed to the contrary, it is the client's obligation to deliver any material to be processed, free of charge. Place of fulfilment for all services are the premises of the contractor where the material to be processed was shipped. This also applies to sales contracts.

8. If the client commissions the shipment of finished goods, the client agrees that type packaging and means of shipment are at the contractor's discretion. Expenses incurred for packaging, transport, and insurance for loss and damage to the finished goods, are to be paid by the client.

9. When shipping the finished goods the contractor is entitled to charge the client with any expenses incurred by packaging and transport, as well as fees for cash on delivery. The client not accepting the finished goods at the stipulated date of delivery constitutes default of acceptance. In case of default of acceptance the contractor's services are deemed rendered and payment is due in full.

10. The client expressly waives the right to offset any alleged claims against the contractor on the claims the contractor has on the client according to the contractually agreed payment or according to clause II.1 of these GTC. The same shall apply to offsetting any alleged claims for reduction of price or according to the contractual warranty.

III. Right of Lien, Right of Retention, Reservation of Title

1. By providing the material to be processed and other commodities, the client grants the contractor the right to retain this material, the processed material, as well as any other commodities provided. Any pledged goods in the contractor's custody serve to cover all claims of the contractor against the client, including claims resulting from other legal transactions. After payment is due the contractor reserves the right to sell pledged goods by auction or by private contract at any time.

2. Furthermore, in order to secure the contractor's contractual and other claims against the client, the contractor reserves the right to withhold material to be processed, finished goods until all open claims, including claims according to clause II.6 of these GTC, are settled.

3. All goods and products shall remain the contractor's property until full payment has been received. In case goods and products under reservation of title are sold, or in case there are third party rights to these goods and products, the client shall hold the contractor free and harmless regarding any such claims.

IV. Required Information

1. As part of a service contract, the client needs to verifiably provide the contractor with the following information in writing: Name, quantity, material, blueprints conforming to standards, quotation number (if applicable), as well as a preferred date of delivery.

2. For contracts based on fixed deliverables, the client needs to provide information about the any material and semi-finished parts shipped to the contractor as well as delivery notes in addition to the information listed in clause IV.1. Furthermore, the client needs to detail the production steps to be performed.

3. In case the information listed in clauses IV.1 and IV.2 is not provided to the contractor in writing, or if this information is incomplete or unclear, production may commence without any obligation for the contractor to consult the client about missing information. Any information not received with the purchase order and the material to be processed shall be deemed inconsequential. If the client fails to provide this information in writing, or if the information incomplete or ambiguous, the warranty by the contractor is revoked. In such case the contractor is not liable for compensation.

V. Intellectual Property Rights, Drawings, Samples

1. The client is held liable to the contractor for any infringement of domestic or foreign property, patent, trade mark, or design rights, due to the contracted service, or the use of any drawings, samples, or similar work or auxiliary instructions provided. If a third party asserts claims for such infringements, the client shall hold the contractor free and harmless.

2. The contractor is not liable for loss or damage of any tools, drawings, samples, appliances, or any other itmes delivered. Insurance can be taken out at the express request of the client and at the client's expense.

VI. Warranty

1. The warranty period shall be six months, starting from the date of delivery of the finished goods or when the finished goods are made available at the contractor's premises.

2. Warranty is excluded if the client fails to provide the contractor with faultless and correct parts, materials, blueprints, drawings or data sheets or if the client fails to provide the required information according to clauses IV.1 and 2, clearly and completely. Since there is no inspection of the delivered parts, materials, blueprints, drawings, data sheets, and the like at the contractor's premises, the onus in a possible legal dispute to prove that said deliverables were faultless, in due form, and according to state of the art is on the client.

3. Warranty and liability are excluded for processing of supplied components regarding out-of-roundness, deviations from bearing tolerances and the like. Therefore, if the delivered parts need to be reprocessed or remanufactured, the client will be charged with corresponding costs. The agreed remuneration is to be paid even if, after processing of the provided parts and materials, it turns out that the agreed specifications are not achievable/

4. If the provided materials or parts develop faults during the course of processing, the contractor is entitled to withdraw from the contract and to charge the client with all expenses for services accrued up to this point, or, if technically possible, to correct any defects in the materials and parts provided at the client's expense, and to continue to process the goods.

5. Notifications of defect and complaints of any kind shall be filed in writing immediately after acceptance of the goods. Verbal or delayed notifications of defect or complaints as well as notifications of defect without immediate surrender of the rejected goods are disregarded.

6. Notifications of defect and complaints The contractor is entitled to perform or commission any inspection deemed necessary, even if the goods or parts are rendered useless by such an inspection. If the inspection yields conclusive evidence that the contractor is not at fault, the client has to bear the costs for the inspection.

7. Modification of the finished goods or parts in any way by the client without the contractor's prior written consent shall invalidate the warranty.

8. If the client asserts any claim for warranty, the contractor is entitled to avert a claim for price reduction by amendments in due course. Furthermore, instead of amendments or acceptance of a price reduction, the contractor is entitled to credit the client with such proportionate part of the payment as relates to the subject of the claim.

9. Any and all costs incurred by amendments, such as transportation and travel expenses, shall be borne by the customer.

VII. Liability

1. The contractor shall only be liable for damages, if the client can provide evidence of intention or gross negligence. Liability for simple negligence is excluded.

2. Liability for subsequent damage, financial loss, loss of savings or interest, and for third party claims against the client is excluded in any case.

3. In any case, the client needs to demonstrate the contractor's negligence.

4. The contractor's liability is limited to the amount of the agreed payment or the payment determined according to clause II.1 for the contract. The contractor only accepts service contracts or contracts based on fixed deliverables on condition of this limited liability. Any further liability of the contractor is expressly excluded.

5. If the defective goods are due to the client providing wrong, incomplete, or unclear information (clauses IV.1. and 2.), or the client providing faulty or wrong parts, materials, blueprints, drawings, data sheets, liability of the contractor is excluded.

6. Furthermore, the contractor excludes all liability due to damage from warpage of cut parts, fissures, hardening, casting, or material defects. For flawless processing results a corresponding allowance in the material provided is required. If there is no adequate allowance, we do not provide any warranty for the processed parts.

VIII. General

1. Should any provision of these general terms and conditions be void, this shall not affect the validity of the remaining provisions. The parties agree that any void provisions shall be replaced by provisions customary within the industry, corresponding as closely as possible with the void provision.

2. The parties agree to submit all the contractor's services and client's claims to the jurisdiction of the relevant local German courts.

3. Changes or amendments to this contract including the GTC need to be made in writing in order to be legally effective. This requirement for written changes must be rescinded in writing. It is noted that no ancillary agreements are in effect.

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