General Terms and Conditions.

For use against

• Commercial customers, if the contract is part of the operation of the commercial business;
• legal entities under public law and special funds under public law.

1.1 Our terms and conditions of sale and delivery apply exclusively; we do not recognise any terms and conditions of the customer that conflict with or deviate from our terms and conditions of sale and delivery unless we have expressly agreed to their validity in writing. Our Terms and Conditions of Sale and Delivery shall also apply if we carry out the delivery to the customer without reservation in the knowledge that the customer's terms and conditions conflict with or deviate from our Terms and Conditions of Sale and Delivery.

1.2 All agreements made between us and the buyer for the purpose of executing the delivery contract must be set out in writing in this contract.

1.3 Our terms and conditions of sale and delivery shall also apply to all future transactions with the buyer.

2.1 If the order qualifies as an offer according to § 155 BGB, we can accept it within two weeks.

2.2 Our offers are subject to change and non-binding. All contracts are concluded upon receipt of our written order confirmation, at the latest upon execution of the delivery. The written order confirmation is decisive for the scope of delivery. Collateral agreements and amendments require our written confirmation without fail.

3.1 In the absence of a special agreement, prices are ex works and exclude any charges based on public law provisions. Value added tax at the statutory rate is added to the prices.

3.2 In the absence of a special written agreement, payment shall be made in cash without any deduction free our paying agent. If the buyer is in default of payment, we are entitled to demand interest on arrears at a rate of 8 percentage points above the base rate of the European Central Bank in accordance with §§247, 288 para. 2 BGB p. a. If we are in a position to prove higher damages caused by default, we are entitled to claim these. However, the customer is entitled to prove to us that we have not incurred any damage or a lower damage as a result of the delay in payment.

3.3 The customer is only entitled to offsetting rights if his counterclaims have been legally established, are undisputed or have been recognised by us. Furthermore, he is only entitled to exercise a right of retention insofar as his counterclaim is based on the same contractual relationship and is also legally established, undisputed or recognised by us.

4.1 The delivery period shall not commence before the Purchaser has provided the documents, permits, releases to be procured by the Purchaser and before receipt of an agreed down payment.

4.2 The delivery time shall be deemed to have been observed if the delivery has left our factory by the time of its expiry or if readiness for dispatch has been notified.

4.3 The delivery period shall be extended appropriately in the event of measures within the scope of industrial disputes, in particular strikes and lock-outs, as well as in the event of unforeseen obstacles which are beyond our control, insofar as such obstacles demonstrably have a considerable influence on the delivery. This also applies if such circumstances occur in the case of sub-deliveries. We are also not responsible for the above-mentioned circumstances if they occur during an already existing delay. In important cases, we will inform the customer of the beginning and end of such obstacles as soon as possible.

4.4 If, after we are already in default, the customer sets us a reasonable extension of time with the threat of refusal, he is entitled to withdraw from the contract if this period expires without result. The buyer is only entitled to claims for damages due to non-fulfilment in the amount of the foreseeable damage if the delay is due to intent or gross negligence. Otherwise, liability for damages is limited to a maximum of 5% of the value of that part of the total delivery which cannot be used in time or in accordance with the contract as a result of the delay.

4.5 If dispatch is delayed at the request of the customer, the customer shall be charged the costs incurred for storage, beginning one day after notification of readiness for dispatch, but in the case of storage at our works at least 0.5 % of the invoice amount per day, unless the customer can prove that less damage was incurred. We are entitled, after setting and fruitless expiry of a reasonable period of time, to dispose otherwise of the delivery item and to supply the customer within a reasonably extended period of time. In addition, we are entitled to demand compensation for the damage incurred by us, including any additional expenses. In this case, the risk of accidental loss or accidental deterioration of the delivery item shall also pass to the customer at the point in time at which the customer defaults on acceptance.

4.6 The compliance with a delivery period presupposes the fulfilment of the contractual obligations of the buyer.

4.7 If we are released from delivery in cases of force majeure in accordance with the above provision, but the delivery is then nevertheless carried out after the obstacle has ceased to exist, we shall be entitled to charge any additional costs for the replacement procurement of raw materials and/or to deviate from the composition and guaranteed values insofar as the obstacle makes this necessary and the interests of the buyer are only insignificantly impaired.

4.8 Bills of exchange and cheques are only accepted on account of performance; any costs incurred as a result are to be borne by the customer and become due upon acceptance of the bill of exchange or cheque.

4.9 In the event of justified doubts about the solvency of the buyer, in particular arrears of payment, we may, subject to further claims, revoke payment terms granted and make our claims, including any claims from bills of exchange, due immediately. In addition, we may demand advance payments or the provision of security for further deliveries. Agreed current account relationships can be cancelled retroactively with immediate effect. In this case, the customer no longer owes from the balance account but the payment of the individual deliveries.

4.10 In all other respects, the risk shall pass to the buyer at the latest upon dispatch of the delivery, even if partial deliveries are made or we have assumed other services, e.g. the shipping costs or delivery. At the request of the customer, we will insure the consignment at his expense against theft, damage, breakage, transport, fire and water damage and other insurable risks.

4.11 The delivery item, even if it has minor defects, is to be accepted by the buyer without prejudice to his further rights.

4.12 Partial deliveries are permitted.

4.13 In the case of deliveries of less than 100 kg, we reserve the right to charge the shipping costs, even if nothing else has been agreed. Additional freight charges for desired or necessary other modes of transport shall be at the expense of the buyer. Any defects that may occur must be reported to the carrier immediately upon delivery. The dispatch weight determined at the time of dispatch or delivery in our company is decisive.

5.1 The customer's warranty rights are subject to the condition that he has properly fulfilled his statutory obligations to inspect and notify defects.

5.2 We are not liable for the delivery being suitable for the purposes considered by the buyer. In the event of impossibility of return, the submission of an expert opinion by a publicly appointed and sworn expert on the reason, scope and quantity of the defect is required. Complaints acknowledged by us will only be reimbursed in kind or in cash up to the amount of the returned quantity, at our discretion. For essential third-party products, our liability is limited to the assignment of the liability claims to which we are entitled against the supplier of the third-party products.

5.3 The warranty period shall also apply to claims for compensation for consequential damage caused by defects, provided that no claims in connection with tort are asserted.

5.4 We do not assume any warranty for damages caused by unsuitable or improper use, faulty or negligent handling, unsuitable equipment, chemical, electrochemical or electrical influences on the delivery item, unless they are attributable to our fault.

5.5 In the case of subsequent delivery, we shall bear the costs of the replacement delivery, including shipping, insofar as the complaint is justified. In all other respects, the customer shall bear the costs.

5.6 Further claims of the buyer, in particular a claim for compensation for damages that have not occurred to the delivery item itself, are excluded. In particular, we shall not be liable for loss of profit or other financial losses of the buyer. The above exemption from liability shall not apply if the cause of damage is based on intent or gross negligence. Furthermore, it shall not apply if the customer asserts claims for damages for non-performance due to the absence of a warranted characteristic. If we negligently violate an essential contractual obligation, our liability to pay compensation for property damage and personal injury is limited to the amount covered by our product liability insurance.

5.7 Insofar as our liability is excluded or limited above, this also applies to the personal liability of our employees, workers, staff, representatives and vicarious agents.

5.8 If we are not the manufacturer of the delivery item, claims against us - notwithstanding the above provisions - may only be made to the extent that the manufacturer is liable to us.

5.9 The above provisions shall apply accordingly if, through our fault, the delivery item cannot be used by the customer in accordance with the contract as a result of omitted or faulty execution of suggestions and advice given before or after conclusion of the contract as well as other contractual accessory obligations - in particular instructions for the use of the delivery item.

5.10 We shall have unlimited liability for damages resulting from injury to life, body or health due to a negligent breach of duty by us or an intentional or negligent breach of duty by one of our legal representatives or auxiliary persons.

6.1 The buyer can withdraw from the contract if the entire performance becomes finally impossible for us before the transfer of risk. The buyer may also withdraw from the contract if, in the case of an order for similar items, the execution of part of the delivery becomes impossible in terms of quantity and he has a justified interest in refusing a partial delivery. If this is not the case, the buyer may reduce the consideration accordingly.

6.2 If there is a delay in performance within the meaning of the above terms of delivery and the customer grants us a reasonable period of grace with the express declaration that he will refuse acceptance of the performance after expiry of this period and if the period is not complied with, the customer shall be entitled to withdraw from the contract.

6.3 If the impossibility occurs during the delay in acceptance or through the fault of the buyer, the buyer remains obliged to counter-performance.

6.4 In addition, the customer has the right to withdraw from the contract if we allow a reasonable grace period granted to us for the replacement delivery with regard to a defect for which we are responsible within the meaning of the terms of delivery to expire fruitlessly through our fault. The customer's right of withdrawal also exists in other cases of failure of the replacement delivery by us.

6.5 Excluded are all further claims of the buyer, in particular for cancellation, termination or reduction of the purchase price as well as for compensation of damages of any kind, including those damages which did not occur to the delivery item itself. This exclusion of liability is limited in the same way as in section 5 above.

7. The returnable containers (e.g. transport containers, containers, plastic containers, barrels, crates, pallets, etc.) provided to the customer remain our sole and unrestricted property. They are to be returned to us by the customer immediately after use for the intended purpose, in perfect and cleaned condition. Otherwise, we shall be entitled to charge the customer for the cleaning and replacement costs.

8.1 We reserve the right of ownership of the delivery item until receipt of all payments due to us from the customer under the present and future business relationship. If the customer acts in breach of contract, in particular in case of default of payment, we are entitled to take back the delivery item. The taking back of the delivery item by us does not constitute a withdrawal from the contract, unless we have expressly declared this in writing. Seizure of the delivery item by us always constitutes a withdrawal from the contract. After taking back the delivery item, we shall be entitled to exploit it. The proceeds of such realisation shall be set off against the liabilities of the customer - less reasonable realisation costs.

8.2 The buyer is obliged to treat the delivery item with care. In particular, he is obliged to insure it sufficiently at his own expense against fire, water and theft damage at replacement value, unless it is intended for immediate use.

8.3 In the event of seizure or other interventions by third parties, the buyer must inform us immediately in writing. If the third party is not able to reimburse us for the judicial and extrajudicial costs of defending our rights, the buyer shall be liable to us for the loss incurred.

8.4 The customer is entitled to resell the delivery item in the ordinary course of business; however, he hereby assigns to us all claims in the amount of the final invoice amount, including VAT, which arise from the resale against his customers or third parties, irrespective of whether the delivery item has been resold with or without further processing. The customer remains authorised to collect this claim even after the assignment. Our authority to collect the claim ourselves remains unaffected by this. However, we undertake not to collect the claim as long as the customer meets his payment obligations to us, is not in default of payment and, in particular, no application for the opening of insolvency or composition proceedings has been filed or payments have been suspended. If this is the case, however, we can demand that the customer informs us of the assigned claims and their debtors, provides all information necessary for collection, hands over the relevant documents and informs the debtor (third party) of the assignment.

8.5 Processing of the delivery item by the customer is always carried out for us. If the delivery item is mixed with other items not belonging to us, we shall acquire co-ownership of the new item in proportion to the value of the delivery item to the other items mixed with it at the time of mixing. For the new object resulting from the mixing, the same applies as for the object delivered under reservation of title. The customer shall keep this new item in safekeeping for us.

8.6 We undertake to release securities to which we are entitled at the request of the customer to the extent that the value of our securities exceeds the claims to be secured by more than 20%. The selection of the securities to be released is at our discretion. The reference value is the respective purchase price.

9. An invoice or a bank statement shall be deemed to have been accepted if no written objection is made to us within one week. For the observance of a deadline, the receipt by us is decisive.

10.1 If the customer is a registered trader, our place of business shall be the place of jurisdiction. However, we are also entitled to sue the customer at his place of jurisdiction.

10.2 Unless a written agreement provides otherwise, our place of business is the place of performance. The law of the Federal Republic of Germany shall apply exclusively to the business relations and all legal relations with us, excluding the UN Convention on Contracts for the International Sale of Goods.

10.3 Should a provision in these terms and conditions of business or within the framework of other agreements be or become invalid, the validity of all other provisions or agreements shall not be affected. All previous terms and conditions of delivery and payment are hereby revoked.

Werkzeugbau Kröger GmbH
June 2008