General terms and conditions of sale of DEBAG DEUTSCHE BACKOFENBAU GMBH GMBH

§ 1 General

1. Our terms and conditions of sale apply exclusively; we shall not recognise contrary terms and conditions of sale of the purchaser or those which differ from ours, unless we have expressly agreed in writing that they shall apply. Our terms and conditions of sale also apply where we complete the delivery to the purchaser without reservation in the knowledge of contrary terms and conditions of sale of the purchaser or of those which differ from ours. Our terms and conditions of sale also apply to all future transactions with the customer.
2. All agreements that are made between us and the purchaser for the purposes of executing this contract are set out in this contract in writing.
3. Our terms and conditions of sale only apply against entrepreneurs within the meaning of section 310 sub-section 1 of the German Civil Code (BGB).

§ 2 Quote

1. Our quote is without obligation. Orders and statements of acceptance must be confirmed in writing in order to be legally effective. The same applies to additions, amendments and collateral agreements. Our employees are not entitled to make oral collateral agreements or oral assurances which are beyond the scope of the content of the written contract.
2. Images, drawings, calculations, patterns, weight and measurement information and other performance data are only binding where this is expressly agreed in writing. We reserve ownership rights and copyrights in these. This also applies to those written documents that are designated as being "confidential". These require our express written consent before being forwarded to third parties.
3. The right to make minor technical amendments remains reserved during the validity period of a catalogue or price list.

§ 3 Prices – payment conditions

1. Unless it emerges otherwise from the order confirmation our prices are valid "ex works" plus VAT at the relevant statutory level. We shall remain bound by the prices for a period of 6 months unless otherwise agreed. Prices do not contain the costs of packaging, postage, customs, hazardous goods and safety surcharges or any ancillary costs.
2. Discounts require a special written agreement.
3. In the event of an essential change to the cost factors determining the price, such as material procurement costs, salary and ancillary wage costs and energy costs for example, we shall be entitled to increase the price proportionately in a reasonable manner if there are more than 6 months between contract conclusion and delivery.
4. Unless it emerges otherwise from the order confirmation / invoice, the purchase price is due for payment without any deductions within 14 days from the date of invoice. After the payment due date the purchaser shall be in default without any need for a formal reminder.
5. All payments must be made to the bank account stated in the invoice.

§ 4 Securities

1. In individual cases we are entitled to make fulfilment of the contract dependent upon the provision of a security by the purchaser up to the amount of the agreed compensation. Unless otherwise agreed the security may be provided by depositing cash, a bank guarantee or a guarantee from a credit insurer.
2. If information about an essential worsening of the purchaser's pecuniary situation becomes known following the contract conclusion which no longer justifies credit being granted, we shall be entitled to demand advance payment or the provision of a security for claims that are due and/or not yet due from the contracts not yet fulfilled by us, even if payment has already been made by bill of exchange. If the customer does not comply with this demand on time then we may withdraw from the contract and claim compensation. Deliveries may be refused until the advance payment has been made or the security provided.
3. An essential worsening of the purchaser's pecuniary situation is to be assumed in particular with the transfer of bad cheques, protests of a bill of exchange, seizure, forced administration and suspension and opening of insolvency and arrangement proceedings.
4. We are not obliged to accept bills of exchange. In the event of an acceptance which is not made in lieu of performance of contract then all expenses shall be borne by the customer. Payment shall only be deemed to have been made upon encashment of the bill of exchange or cheque.

§ 5 Offsetting and retention rights

The purchaser shall only have rights of retention if its counter-claims have been determined in law, are undisputed or are acknowledged by us. The purchaser shall only then be entitled to exercise a right of retention if their counter-claim is based on the same contractual relationship.

§ 6 Delivery times

1. Binding delivery times or periods will only be established if expressly confirmed to the purchaser in writing. Unless otherwise agreed a delivery time shall be deemed to have been complied with if upon its expiry the goods have been provided for shipment or their readiness for delivery has been communicated to the purchaser. Delivery periods shall only begin following receipt/fulfilment of all documents/actions of the purchaser required for order execution. If we are delayed with the delivery the purchaser shall be obliged to grant a reasonable grace period.
2. Even if binding periods and times have been agreed we shall not be responsible for delays to delivery and performance on account of force majeure and events that make the delivery considerably difficult or impossible for us – these include in particular strike, lockout, official orders, interruptions to operations, etc., even if these occur with our (sub-)contractors. They shall entitle us to postpone the delivery or performance for the period of the hindrance plus a reasonable start-up period, or to withdraw from the contract in whole or in part in relation to the part that has not yet been fulfilled.
3. If the hindrance lasts longer than 3 months the purchaser shall be entitled following the setting of a reasonable grace period to withdraw from the part of the contract that has not yet been fulfilled. If the delivery time is extended or if we are released from our obligation then the purchaser may not derive any claims for compensation from this.
4. It is the purchaser's responsibility to complete the necessary prerequisites (in particular of a structural kind, delivery of supply cables, approvals) for assembling/establishing the item to be purchased.
5. We are entitled to make partial deliveries and partial performance as well as to make advance deliveries.

§ 7 Transfer of risk

1. Unless it emerges otherwise from the order confirmation, the delivery agreed is "ex works" (INCOTERMS 2010). Risk shall pass to the purchaser ex works, including where the delivery is made free of charge or under similar clauses or includes assembly, or if the carriage is organised and managed by us.
2. If the shipment is delayed for reasons for which we are not responsible then the risk is transferred to the purchaser once the readiness for shipment is communicated to the purchaser.
3. If the purchaser wishes we will take out transportation insurance on the delivery; the purchaser shall bear the costs incurred with this.

§ 8 Warranty

1. The warranty period is 12 months calculated from the date of the transfer of risk.
2. Warranty is excluded in the event of inappropriate use and/or handling of the item purchased, defective assembly and/or start-up operations by the purchaser or third parties for the item purchased, usual wear and tear of the item purchased or parts of the item purchased, defective maintenance of the item purchased and the use of unsuitable operating equipment along with chemical, mechanical, electromechanical or electrical influences, unless DEBAG is responsible for these.
3. Claims for defects for new spare parts can only be asserted within the framework of the warranty if these parts were installed by authorised DEBAG service contractual partners or DEBAG service technicians.
4. Claims for defects for items purchased that have been used are excluded from the warranty unless otherwise agreed in the contract.
5. The purchaser must inspect the goods immediately upon delivery for the presence of any defects. Notification of obvious defects must be provided immediately in writing and no later than within one week following receipt of the goods, with details provided on the type and scope of the defect. The decisive point in time for compliance with the period for inspecting and providing notification of defects shall be the date of receipt by us. Where notification of obvious defects is not provided or not provided on time then the warranty claims related to these shall case to apply.
6. Notification of other defects must be provided in writing within one week once they are known, with detailed information on the type and scope of the defect. The decisive point in time for compliance with the period for inspecting and providing notification of defects shall be the date of receipt by us.
7. Minor defects which do not significantly impact the value, suitability or usability of the goods in a negative manner are excluded from the warranty. The information provided by us in the product description shall be decisive for the condition of the goods. Any public statements, promotions or other advertisements shall not represent any information on the condition of the goods under the contract.
8. In the event of a defect with the goods supplied we shall be entitled to execute supplementary performance at our discretion, i.e., rectification of the defect or to make a new delivery.
9. If the supplementary performance should fail we shall be entitled to repeat the supplementary performance. In this case also we shall decide between a new delivery or rectification of the defect.
10. If the supplementary performance should fail once and for all, the purchaser may at their discretion choose between a reduction in the compensation paid or rescission of the contract. The purchaser shall not be entitled to any claim for damages on account of the defect. This will not apply in the event of intentional breach of contract. In the event that the contract is rescinded the purchaser must still account for any usage made.

§ 9 Liability

1. Any liability for damages which goes above and beyond the provisions in section 8 are excluded, without consideration of the legal nature of the claim asserted. This applies in particular to claims for damages for culpability upon contract conclusion, for other breaches of obligation or for claims in tort for reimbursement for material damage. The limit shall also apply where the purchaser demands reimbursement for futile expenditure made in lieu of performance instead of reimbursement of the damage.
2. Where our liability for damages is excluded or limited then this shall also apply to the personal liability for damages of our employees, workers, colleagues, representatives and vicarious agents.
3. Sub-sections 1 and 2 shall not apply if the damage has been caused through a breach of obligation which is grossly negligent or intentional or if it involves damage from negligent or intentional injury of life, limb or health.

§ 10 Retention of title

1. We shall retain the title in the item purchased until all payments from the supply contract have been received and all claims from the business relationship with the purchaser have been satisfied. We shall be entitled to take the item purchased back in the event of conduct on the part of the purchaser which is in breach of contract, in particular default of payment. Where goods are taken back by us this shall not constitute a withdrawal from the contract unless we have stated this expressly in writing. Once we have taken the goods back we shall be entitled to utilise them. Proceeds from the utilisation minus the costs of utilisation shall be offset against the purchaser's liabilities.
2. Purchasers are obliged to handle the item purchased with care, in particular they are obliged at their own costs to insure these items adequately against fire and water damage and against theft to the amount of their replacement value. Where maintenance and inspection work is required, purchasers must execute this at their own costs and in good time.
3. The purchaser must inform us immediately in writing in the event of seizure or other third-party interventions so that we are able to take legal action in accordance with section 771 of the German Code of Civil Procedure (ZPO). Where the third party is not in a position to reimburse us for the judicial and extra-judicial costs of any such claim, the purchaser shall be liable for the loss incurred by us.
4. Purchasers shall be entitled to resell the item purchased in the normal course of business; they assign to us now, however, all claims to the amount of the final invoice amount (including VAT) of our claim which accrue to them from the resale against customers or third parties, irrespective of whether the item purchased has been resold without or following conversion. The purchaser shall remain authorised to collect this claim following this assignment. Our authority to collect the claim ourselves shall remain unaffected by this. We undertake not to collect the claim, however, for as long as the purchaser complies with their payment obligations from the proceeds collected, is not in default of payment and in particular as long as no application is made for the opening of settlement or insolvency proceedings or payments are suspended. If this is the case, however, then we may require the purchaser to inform us of the debts assigned and of the debtor, to provide all information required for collection, to hand over the associated documentation and to communicate the assignment to the debtors (third parties). If the item purchased is not paid for immediately and in full by third-party purchasers upon resale, the purchaser is obliged to resell the item to the third-party purchaser only whilst retaining the title in the goods.
5. Any conversions or alterations to the item purchased by the purchaser will be carried out for us in each case. If the item purchased is converted with other items which do not belong to us, then we shall acquire co-ownership in the new item in relation to the value of the item purchased (final invoice amount including VAT) proportional to the other converted items at the time of the conversion. For the item that emerges through the conversion the same shall also apply as for the item purchased which is supplied with the title retained.
6. If the item purchased is inseparably amalgamated with other items which do not belong to us, then we shall acquire co-ownership in the new item in relation to the value of the item purchased (final invoice amount including VAT) proportional to the other amalgamated items at the time of the amalgamation. If the amalgamation occurs in such a way that the purchaser's item can be seen as the main item, then it is agreed that the purchaser transfers proportional co-ownership to us. The purchaser shall hold the sole or co-ownership that has thus arisen in custody for us.
7. In order to secure our claims against the purchaser the latter shall also assign to us the claims that arise against third parties through combining the item purchased with property.
8. Where the purchaser is the lessee of the premises in which the item purchased is intended to be installed, they undertake to procure the consent of the owner of the property in advance, resulting in the owner of the property being in agreement with the installation and – in the event that the claim for the purchase price is not settled by the purchaser – with the removal of the item purchased with the title retained, including where procedures need to be carried out in the actual building itself for the purposes of removing and evacuating any items purchased which are not dissected into individual parts and these can be removed without leaving any damage behind, whereby the purchaser must account for the costs.
9. At the purchaser's request we undertake to release the securities to which we are entitled to the extent that the realisable value of our securities exceeds the claims to be secured by more than 20%; selection of the securities to be released shall be at our discretion.

§ 11 Place of jurisdiction, Place of fulfilment, Applicable law, Partial invalidity

1. The place of jurisdiction is our registered place of business. We are entitled, however, to bring proceedings against the purchaser at the court of their own domicile.
2. Unless it emerges otherwise from the order confirmation, our registered place of business and place of jurisdiction is in Bautzen/Stiebitz.
3. The law of the Federal Republic of Germany applies exclusively; application of the UN Convention on Contracts for the International Sale of Goods is excluded.
4. In the event that any provision in these terms and conditions of business or any provision that forms part of other agreements is or becomes invalid then this shall not affect the validity of the remaining provisions.

Bautzen, 01. März 2009