General Terms and Conditions of Sale and Delivery of Timmer GmbH

(hereinafter called "TIMMER")

§ 1 General information

1. The following terms and conditions of business form the exclusive basis for all of our deliveries and services, including those resulting from future business contracts. Terms of the client do not apply even if we do not explicitly contradict them and carry out the services. Deviations and supplements on the part of the client will take effect only with our explicit written confirmation and only for the order for which we have confirmed them.

2. Oral agreements as well as ancillary agreements or changes to these terms must be made in written form.
§ 2 Offers

1. Our offers are made on a non-binding basis. If an order is to be qualified as an offer in accordance with §145 of the German Civil Code, the order requires our written acceptance to make it binding.

2. The information provided in documentation accompanying an offer by TIMMER such as illustrations, drawings, weight and dimension specifications is only approximate, insofar as it has not been explicitly marked as binding.

3. TIMMER retains the ownership rights and copyrights to cost estimates and other documentation, particularly catalogue pages, illustrations, drawings and calculations; they may not be reproduced or made available to third parties in whole or in part.

4. The buyer bears full responsibility for any documentation he provides to TIMMER with regard to the violation of commercial protective rights by third parties. TIMMER may make drawings and plans marked as confidential by the buyer available to third parties only with the consent of the buyer.

5. TIMMER will provide samples only for remuneration, which will be based on the generally applicable prices.
§ 3 Scope of delivery

1. For the scope of delivery, the written confirmation of the order by TIMMER is decisive in the case of an offer by TIMMER with a fixed period and timely acceptance of the offer, insofar as no timely confirmation of the order has been received.

2. Ancillary agreements and changes must be marked as such and must be made in writing.
§ 4 Prices and payment

1. The minimum order value is € 50.00 net.

2. If no other agreement has been made, prices are ex works. Packaging, freight and other incidental costs will be invoiced separately. If no other agreement has been made, TIMMER will select the shipping method and route at its own discretion.

3. The legally required V.A.T. will be added to the invoice amounts . Insofar as nothing else has been explicitly agreed, payments are due without any deductions free place of payment of TIMMER in cash, at the latest 30 days from the date of the invoice - this applies to partial payments as well. TIMMER is not obligated to accept cheques or bills of exchange. The acceptance of these, if necessary, will be done only for payment; the costs of discounting and collection will be borne by the buyer.

4. Deliveries for which fixed prices have not be explicitly agreed will be invoiced at the list prices valid on the day of delivery.

5. Should unforeseeable increases in material prices, wage costs, transport costs, taxes or levies between the date of conclusion of the contract and the date of delivery occur, TIMMER is entitled to adjust the prices in accordance with one of these factors - in the case of fixed prices as well - for commercial transactions. If the adjusted price exceeds the agreed price by more than 5%, the buyer is free to withdraw the order.

6. Should the buyer default on payment, TIMMER has the right to claim default interest, in the case of reciprocal commercial transactions maturity interest in the amount of 5% above the discount rate of the Deutsche Bundesbank and incidental costs in the amount of € 3.00. TIMMER reserves the right to document further damage. The buyer has the right to prove that damages are lower than claimed. The payment is considered timely only when the payment has been received by TIMMER within the deadline.

7. The buyer can net payables against receivables only with undisputed or legally established receivables or withhold payments due to such receivables. In the case of withholding of payments, the receivable must be based on the same contractual relationship.

8. If the financial situation of the buyer undergoes grave deterioration, TIMMER is entitled to cancel all advance lending on goods and to request the immediate settlement of all outstanding receivables from deliveries of goods, if the counterclaims of TIMMER are thereby put at risk. The same applies if the buyer discontinues his payments, requests the commencement of court composition or insolvency proceedings or requests settlement out of court.
§ 5 Delivery period

1. Delivery dates or delivery periods specified by TIMMER in the order confirmation will be complied with to the best of TIMMER's ability. However, they reflect only the probable date of delivery, not a fixed or calendar delivery date. In any case, delivery periods will not commence before the complete clarification of all details of the desired execution of the order, particularly the clarification of all technical details. Delivery will be carried out on time only when all queries have been answered in timely fashion, all required or requested drawings and documentation have been provided in timely fashion, all required releases and approvals have been issued in timely fashion, and the buyer has participated in all of the acceptance and preliminary acceptance procedures at the manufacturers of which he has been informed in a timely fashion. Furthermore, delivery periods will not begin before receipt of an agreed down payment.

2. If these conditions are not met for reasons which are beyond TIMMER's control, delivery periods and dates will be extended/postponed accordingly.
3. The delivery period is considered to be
observed if the object to be delivered has left the factory or notification of readiness for shipping has been issued by the expiration of the delivery period.

4. The delivery period will be extended for a reasonable period in the case of labour disputes, particularly strikes and lockouts, or in the case of unforeseen hindrances which are beyond the control of the supplier, insofar as such hindrances can be proven to have substantial influence on the completion or delivery of the object to be delivered. This also applies if such circumstances occur at the plants of TIMMER's sub-suppliers.

5. Furthermore, the circumstances described above are not the responsibility of TIMMER even if they occur during a delay which has already occurred. TIMMER will notify the buyer of the beginning and end of such circumstances as soon as possible.

6. TIMMER's liability for compensation for damages due to delay and nonperformance is always limited to the foreseeable damage. TIMMER is liable for lost profits only in the case of malicious intent and gross negligence.

7. Should TIMMER be liable due only to simple negligence resulting from delay, the compensation for damages for each completed week of delay is limited to 0.5% and to a total of 10% of the order total.

8. If, after TIMMER has defaulted on or delayed delivery, the client sets a reasonable deadline for subsequent performance, he is entitled to withdraw his order upon expiration of this new deadline. Compensation for damages due to non-performance is limited to 10% of the order total, unless the default/delay is due to malicious intent or gross negligence.

9. The aforementioned liability limits do not apply if a commercial fixed transaction has been agreed or if the buyer, based on the default/delay by TIMMER, can assert that his interest in contract fulfilment has been abolished.

10. If shipping is delayed upon request of the buyer, 0.5% of the invoice amount will be charged to him for each month of costs incurred for storage at the TIMMER factory, beginning one month after the notification of readiness for shipping. TIMMER has the right to set the buyer a reasonable deadline for acceptance and, upon fruitless expiration of this deadline, to dispose of the object of delivery as it sees fit and to supply the buyer within a reasonably extended period.

11. Compliance with the delivery period requires the timely and proper fulfilment of the obligations of the buyer.
§ 6 Transfer of risk and acceptance

1. Risk is transferred to the buyer with the dispatch of the goods from the supplying factory or from the warehouse, even in the case that TIMMER has taken over the delivery. If shipping is delayed for reasons for which the buyer is responsible, the risk is transferred to the buyer on the day of readiness for shipping. Only in the case of an explicit order of the buyer will the goods be insured by TIMMER on behalf of and for the account of the buyer in accordance with TIMMER's best judgement.

2. Delivered goods must be accepted by the buyer, even if they have minor defects.

3. Partial deliveries may be made.

4. Deviations from the delivery note or invoice must be reported to TIMMER in writing without delay upon acceptance of the goods.

5. Insofar as TIMMER is obligated to take back packaging in accordance with the law on packaging, TIMMER will take back only the packaging of its own products.

6. In the case of direct delivery to the end user, the respective manufacturing plant of TIMMER, from which the products are shipped, is the point of sale which must take back the packaging.

7. Transport packaging must be sent back to the manufacturing plant of TIMMER free of charge for the plant.

8. TIMMER will take back packaging from consumers only at the manufacturing plant.

9. The following applies to deliveries which require a contractual factory acceptance procedure:
a) The buyer is required to take part in the acceptance. Minor defects do not entitle the buyer to refuse acceptance.
b) If no formal acceptance is required, the acceptance begins with the commencement of use by the buyer.
c) Upon acceptance, risk is transferred to the buyer, insofar as he is not already bearing it.
§ 7 Warranty and Overall Liability

1. Conventional or minor, technically unavoidable deviations in quality, colour, width, weight, etc. do not entitle the buyer to complain about defects.

2. Otherwise the warranty is determined according to the following conditions, subject to the exclusion of further claims:
a) TIMMER is obligated to rework or to replacement delivery, at their own discretion. In the case of unsuccessful rework or refusal of rework or replacement, the buyer may request, subject to the exclusion of further rights, a reduction in price or, if he wishes, the revocation of the contract. The buyer is not entitled to assert further claims. The provisions of §§ 377, 378 of the German Commercial Code remain hereby unaffected.
b) Impairment of the goods delivered caused by natural wear and tear, damage or improper handling, e.g. improper connection, do not entitle the buyer to assert claims under warranty. Furthermore, quality agreements desired by the buyer or properties entitle the buyer to warranty claims only if they have been explicitly assured by TIMMER in written form.
c) Specifications confirmed in writing by TIMMER at the conclusion of the contract with regard to performance, consumption, etc. are relevant to the warranty only if TIMMER has explicitly guaranteed such compliance in writing.
d) The buyer is obligated to give TIMMER the required time and opportunity for replacement delivery or rework, whereby the buyer also guarantees that he will take any purchasing problems of TIMMER into account.
e) TIMMER's liability expires when the buyer himself or third parties undertakes rework and changes to the delivery of TIMMER without prior consent of TIMMER or if parts not supplied or not approved by TIMMER were used, unless TIMMER was given the opportunity for rework within a reasonable period of time prior to this.
f) Claims of the buyer to compensation for damages due to the consequences of defects, violation of contractual or legal ancillary obligations, positive contract violations, culpability at the conclusion of the contract or inadmissible action are excluded, unless they are based on malicious intent, gross negligence or the violation of cardinal obligations on the part of TIMMER or on the part of representatives of TIMMER.
g) Insofar as TIMMER is obligated to provide compensation for damages, this obligation is always limited to the damages foreseeable by TIMMER at the time of conclusion of the contract.
h) In the case of factory services, TIMMER must pay compensation for damages only for substantial defects which substantially impair the use of the goods. TIMMER must pay for lost profits only if the defect was caused by malicious intent or gross negligence or by a violation of the conventional rules of technology on the part of TIMMER.
i) The period of limitation for claims resulting from culpability at the conclusion of the contract as well as positive violation of the contract is the same as that for warranty claims, insofar as they are based on defects in the goods or on a property of the purchased goods. Otherwise the limitation period is three years, insofar as the culpability at the conclusion of the contract as well as the positive contract violation is not due to malicious intent or grossly negligent behaviour on the part of TIMMER or its representatives. Claims due to negligently omitted explanations of negative properties of TIMMER products are excluded, insofar as no defect in the goods is the reason for this, unless TIMMER has additionally provided advice to the buyer. These provisions are without prejudice to the regulations of the product liability law.

3. The aforementioned exclusions and limitations of liability also apply to the personal liability of employees, staff members and representatives and vicarious agents of TIMMER.
§ 8 Reservation of ownership

1. The goods remain the property of TIMMER until full payment of all receivables resulting from the business relationship with the buyer. Insofar as the validity of this ownership is subject to particular requirements or regulations in the country of the buyer, the buyer is required to ensure fulfilment of these at his own expense. Receivables include interest as well as the costs of any legal actions.

2. The buyer is entitled to process and sell the goods, but only subject to the following provisions:
a) The hypothecation or transfer by way of security of the goods to which ownership is retained or the assignment of receivables is not permitted.
b) Processing of the reserved property does not entitle the buyer to acquire ownership of the new goods pursuant to § 950 of the German Civil Code. The processing is done by the buyer for TIMMER, whereby the supplier does not accept any obligations with regard to the processing. When the reserved property is combined with objects which do not belong to TIMMER (installation), TIMMER is entitled to the newly created share of the ownership of the new object in proportion to the order value of the reserved property to the value of the rest of the object at the time of combination. If the buyer acquires sole ownership of the new object, the contract partners have already agreed at this point that the buyer will grant TIMMER co-ownership of the new object in the proportion of the order value of the combined reserved property to the value of the remaining object. The buyer is obligated to provide the documentation to TIMMER at any time upon request which is required to determine the share of co-ownership of TIMMER. The storage by the buyer, free of charge, of the objects co-owned by TIMMER is already agreed at this time.

3. The buyer hereby assigns the receivables resulting from the further sale of the reserved property to TIMMER in the amount of the agreed purchase price, to the degree to which the goods have been processed. TIMMER undertakes not to collect the assigned receivables as long as the buyer fulfils his obligation to pay. The buyer is, however, obligated to name the third-party debtor to TIMMER upon request and to notify the former of the assignments. Until the receipt of other instructions, the buyer is entitled to collect the receivables himself. TIMMER undertakes to release the security owed to it upon request of the buyer insofar as the value of the security exceeds the receivables by more than 20%. TIMMER is responsible for selecting the security to be released. In the case of hypothecation or other interventions of third parties, the buyer must notify TIMMER in writing without delay. Insofar as TIMMER incurs court or out-of-court costs of a legal action as a result, which the third party is unable to reimburse, the buyer is liable for the losses incurred by TIMMER.

4. In the case of discontinuance of payment, the buyer is obligated to provide TIMMER with a list of the still existing reserved property without delay, including the degree to which it has been processed, and a list of the receivables due by third-party debtors as well as copies of the invoices. In the case of behaviour in violation of the contract on the part of the buyer, particularly in the case of default on payment with a receivable resulting from the business relationship, or if the buyer's assets disintegrate, his payments stop, court composition or insolvency proceedings are requested or the buyer requests his creditors to settle out of court, TIMMER can request the immediate handover of its property without prejudice to its other rights and obligations. The acceptance of the returned reserved property or the hypothecation by TIMMER does not constitute a withdrawal from the contract, unless TIMMER has explicitly declared this in writing.

5. When asserting its reservation of ownership, TIMMER has the right to charge compensation for damages. TIMMER is entitled to insure the object of delivery at the expense of the buyer against theft, breakage, fire, water and other damage, insofar as the buyer has not insured the goods himself and provided documentation thereof.

§ 9 Right of the buyer to withdraw from the contract

1. The buyer can withdraw from the contract if TIMMER is unable to provide the entire service in the end. The same applies in the case of the inability of TIMMER. If TIMMER is unable to provide only part of the service, the buyer is entitled to withdraw from the contract only if he has a justified interest in the refusal of a partial delivery. Otherwise the buyer can reduce the remuneration accordingly.

2. If delivery default has occurred in the sense of § 5 of these General Terms and Conditions of Purchase and Delivery, the buyer can withdraw from the contract subject to the requirements of § 323 of the German Civil Code.

3. If the impossibility occurs during the default in acceptance or due to culpability on the part of the buyer, the latter remains obligated to pay.

4. In addition, the buyer has the right to withdraw from the contract if TIMMER, through its own inaction, fails to meet a reasonable deadline assigned to it for the rework or replacement of goods due to defects for which TIMMER is responsible. The right of withdrawal of the buyer also exists in the case of impossibility or inability on the part of TIMMER to rework or to replace the defective goods.

§ 10 Right of the supplier to withdraw from the contract

1. Should unforeseen events in the sense of § 5 of these General Terms and Conditions of Purchase and Deliveryoccur, which substantially change the economic significance or the content of the service or have a substantial effect on TIMMER's operations, the contract will be adjusted accordingly. The same applies in the case that the impossibility of performance becomes known after the fact. If this is not economically feasible, TIMMER has the right to withdraw completely or partially from the contract. The buyer has no claim to compensation for damages due to such a withdrawal, insofar as the supplier is not guilty of grossly negligent behaviour or malicious intent.

2. If TIMMER wishes to exercise this right of withdrawal, it must inform the buyer of this without delay as soon as it has recognized the extent of the difficulties, even if an extension of the delivery period was initially agreed with the buyer.

§ 11 Installation and initial operation

The following provisions apply to the installation of objects delivered and to putting them into use:
1. Installation and initial operation work will be done by TIMMER only on the basis of a separate written agreement.

2. The costs incurred for installation and initial operation must be additionally borne by the buyer, insofar as these costs were not already explicitly taken into account in the original pricing. Expenses include particularly the costs for personnel supplied by TIMMER, whose work must be reimbursed by the buyer in accordance with the installation rates established by TIMMER (including supplements for any overtime hours, etc.), including other travel and luggage transportation costs incurred.

3. The buyer must provide, at his expense and risk, the following in timely fashion:
a) the auxiliary personnel for the installation and/or initial operation (TIMMER bears no liability for them or for their work),
b) the preliminary work, devices, materials, aids and tools required for the installation and/or initial operation,
c) suitable, lockable rooms for the proper storage of the machines, devices and materials of all types which are required for installation and/or initial operation;
d) the buyer is obligated to take all required constructional and other measures required to ensure the timely execution of installation and/or initial operation work.

 4. The buyer bears all risks (including the risk associated with transport), for the machines, devices and materials of TIMMER which are destined for the installation and/or initial operation.

5. For damages of all sorts (including subsequent damages), related to the performance of installation and/or initial operation work, TIMMER bears liability exclusively in the context of § 7 of these General Terms and Conditions of Purchase and Delivery.

§ 12 Place of fulfilment and jurisdiction
1. The place of performance for the delivery obligation is the location of our factory.

2. The court of jurisdiction is Rheine, insofar as the client is a merchant in the sense of § 38, Sec. 1 of the German Code of Civil Procedure. However, TIMMER has the right to file suit in the domicile of the buyer. The agreement on the court of jurisdiction also applies to processes relating to cheques and bills of exchange. The law of the Federal Republic of Germany applies exclusively. The application of the Uniform UN Commercial Code – ClSG – is excluded.

§13 Final provisions

Should individual provisions of these contract terms be or become invalid, the validity of the remaining provisions is hereby unaffected. Should a sub-clause be invalid, the validity of the remaining clause remains unaffected, if the content thereof is separable from the sub-clause, is otherwise comprehensible in and of itself, and if it results in a logical regulation within the overall framework of the contract.

October 2003.