Terms of payment and delivery

ALFRED SCHÜTZE Apparatebau GmbH

I. Scope

1. The complete range of our deliveries and performances (in short: deliveries) will be effected only in correspondence with our conditions included herein. Additional conditions, differing conditions or conditions in contradiction to these will not become contractual terms even if we have not opposed explicitly.

2. Our conditions are valid only in relation with individuals related to industry or trade (§ 14 BGB).

III. Delivery, passing of risk

1. Our deliveries are effected „ex works“.

2. Partial shipments are allowed if reasonable for the buyer.

3. The risk of accidental loss or accidental damage passes on to the buyer instantly after we have entrusted the consignment to a forwarding agent, a carrier or any person destined to carry out shipments. At the latest the risk passes on to the buyer as soon as the goods leave our works. This also if partial shipment is carried out. In cases of delay in the dispatch of goods, without our responsibility, the passing of risk to the buyer is effected at that time, when the buyer receives our dispatch note.

VI. Delivery lead time, delay in delivery, right of rescission

1. Our delivery time commences when goods leave works and is binding only if declared obligatory. Our delivery is not in default before a period of grace has expired.

2. The compliance with the agreed time of delivery provides the receipt of all necessary records in time to be made available by the buyer such as approvals and releases and is also providing the fulfillment of the agreed terms of payment, especially of agreed deposits. The time of delivery will extend accordingly if these preconditions are not complied with. This does not apply if we are responsible for a delay.

3. In cases of acts of God (unpredictable circumstances not in our fault and circumstances impossible to avoid with all the duty of diligence of an orderly entrepreneur f.i. strikes, war, fire, hindrances in transportation, shortage of raw materials) the period of delay is interrupted even if already in default.

4. In case we have entered into a congruent agreement with a sub -supplier in time our declared delivery time is subject to punctual and orderly receiving of our own requisition.

5. In case of no. IV. 3 + 4 we are ent itled to cancel a contract if we have informed the buyer in time regarding acts of God in the meaning of no.VI. 3 respectively of the apprehension of an unpunctual or improper receipt in the meaning of no.VI. 4 and if we have returned possible advance payment to the buyer. We declare binding our obligation in the sense of sentence 1 as far as an early information and refund is concerned.

6. Is the delivery delayed for reasons in our responsibility we are liable only according to legal provisions with the reservation of limitation as stated below in no. VIII.

V.Prices and Payment

1. Our prices are net prices ex works Bremen exclusive VAT, packing, freight, postage, insurance of transportation unless otherwise clearly arranged with the buyer.

2. Prices listed in our catalogues and price lists are in force whenever a contract is concluded. Our right to alter prices listed in catalogues and price lists is reserved if we have informed the buyer regarding alteration of prices early before conclusion of a contract. The right to alter prices accordingly is reserved if after conclusion of contract our costs of purchasing, costs of production and forwarding expenses are rising and if we are not responsible for same (f.i. increase of wages, raw material, taxes etc.) and if we have informed the buyer of the raise of prices early before delivery. This also applies when the delivery, possibly as desired by the buyer, is delayed for more than 6 weeks after conclusion of contract.

3. Our invoices are payable to one of our named accounts 8 days after date of invoice without discount. Payment is actually effected only when we have unlimited disposal of the amount.

4. Drafts and checks will be accepted only after we have agreed explicitly and with the reservation of bank discount guaranty. The discount expenses are to be born by the buyer and are to be reimbursed
immediately. These means of payment do not allow any deduction of discount and will be credited not before we have unlimited disposal of the amount.

5. In case we have knowledge of doubtful accounts of the buyer we are entitled to call all outstanding debts in the business relation to fall due, provided the deliveries were carried out. This also applies when drafts or checks were accepted already. A dangerous conomic state is evident if the information of a bank or a credit reference agency gives warning as regards credit rating. This also applies if the buyer is in default of payment for at least two invoices. In this case we are entitled to set a fair period of grace during which the buyer must either settle his account or give an equivalent warrant. After inefficiency we are entitled to cancel the contract. Is the buyer insolvent or encumbered a period of grace is not necessary. For further deliveries C.O.D. or payment in advance can be insisted on.

6. When the buyer is in default of payment we are entitled to accrued interest as per legal provisions.

7. The buyer may counterclaim only against undisputed or legally decided demands. This also applies to his rights of retention.

8. The assignment of a demand against us, if it is not of a monetary value, requires our approval to become effective.

VI. Claim for damages

1. In case the buyer is to be made responsible for a breach of duty we are entitled to claim a lump sum of 30 % of the price plus cost of transportation unless the buyer proves that we have not suffered any losses or losses lower than the lump sum. We allow the buyer implicitly this option of prove.

2. We reserve the right to claim concrete losses exceeding the lump sum.

VII. Rights and obligations for buyer ’s complaints

1. The buyer must examine goods right after receipt. Recognizable faults have to be reported at once, latest within 10 working days. Hidden defects have to be reported right after discovery. The obligation to examine and claim goods also applies to goods packed for resale forwarding. In case the buyer fails the prompt examination and the claim of a fault the buyer can no longer insist on a claim.

2. Justified and punctual claims give the buyer the right to complain as per the legal provisions, however in accordance with the following terms:

a) If the complaint refers to characteristics and features of our products as guaranteed in no. II. 4 the buyer has the unlimited right to claim according to legal provisions.

b) If the complaint does not fall under the guarantee in the meaning of the above no.VII.2.a) the claim of the buyer first of all is restricted to a deferred performance. We have the option either to later improvement or to subsequent delivery. If the deferred performance either fails or is refused by us or is unacceptable for the buyer an optional right allows the buyer to demand reduction or rescission.

c) If the claimed goods are located other than in the principal place of business of the buyer or are not in use as defined and should therefore arise higher costs in the meaning of a deferred performance the buyer has to bear any additional costs.

d) Claims of the buyer for damages due to faults as per the undermentioned no. VIII are excluded
unless the faults were concealed intentionally. In such cases the legal claims of the buyer remain valid.

e) If only individual components of a certain sales quantity or if only parts of a component are
defective the right of the buyer to rescind is limited to the individual component or parts of a component. This does not apply if an individual component or the parts of a component cannot be separated from the other components without damage or effects to the function of the number of components and also if this is not acceptable for the buyer. The buyer is to specify the reason for his non acceptance.

VIII. Restriction of liability, exclusion of rescission

1. In the event of damage to life, bodily harm or damage to health referring to a breach of duty in our fault we are liable unlimited notwithstanding the provisions of the rule of product liability.We reserve the right to claim concrete losses exceeding the lump sum.

2. Breach of duty of a fundamental nature (cardinal duties) oblig e us to unlimited compensation if intention or gross negligence is proved. If plain negligence is proved the compensation is
limited to the foreseeable, contract typical damage.

3. In all other cases claims for compensation of whatever reason are excluded unless an intention or gross negligence is proved against us, our legal representatives or our agents of vicarious liability. Our liability is limited to foreseeable, contract typical damage if gross negligence is proved.

4. The right of the buyer to demand a rescission of the contract is excluded if the claim refers to a defect of the product for which we are not responsible.

5. As far as our liability is excluded or limited according to the aforesaid paragraphs this also applies to the liability of our agents of vicarious liability.

6. As far as we have guaranteed conditions of the product in the meaning of no. II.4 the legal demands as well as the demands of the buyer according this guarantee remain in force.

IX. Reservation of property rights

1. The goods remain in our possession until our demands are settled (including all claims against current account). We are entitled to claim this as per any rule of law now and in future.

2. Processing or reworking of our products through the buyer a lways is in our favour. If our products are reworked, altered, mixed or attached inseparable we acquire co-ownership of the new product in pro rata value of our product and value of the other product at the time of reworking, altering, mixing or assembling. Is the new product to be considered as the essential product it is hereby agreed that the buyer transfers proportional ownership to us and we accept this transfer. The buyer takes care of our co-ownership without charge. For the new product the same terms apply as for the product we have delivered under reservation of title.

3. The right of the buyer to demand a rescission of the contract is excluded if the claim refers to a defect of the product for which we are not responsible.

4. As far as our liability is excluded or limited according to the aforesaid paragraphs this also applies to the liability of our agents of vicarious liability.

5. As far as we have guaranteed conditions of the product in the meaning of no. II.4 the legal demands as well as the demands of the buyer according this guarantee remain in force.

IX. Reservation of property rights

1. The goods remain in our possession until our demands are settled (including all claims against current account). We are entitled to claim this as per any rule of law now and in future.

2. Processing or reworking of our products through the buyer a lways is in our favour. If our products are reworked, altered, mixed or attached inseparable we acquire co-ownership of the new product in pro rata value of our product and value of the other product at the time of reworking, altering, mixing or assembling. Is the new product to be considered as the essential product it is hereby agreed that the buyer transfers proportional ownership to us and we accept this transfer. The buyer takes care of our co-ownership without charge. For the new product the same terms apply as for the product we have delivered under reservation of title.

3. The buyer is entitled to rework and sell the reserved goods in an orderly course of business as long as he is not in default with his obligation as against us. Pledging or chattel mortgage are
inadmissible. Demands resulting from resale of the goods (including all claims against current account), insurance claims against a third party because of damages, destruction, theft, or loss of goods are hereby assigned to us b y way of security. We hereby accept this assignment. In cases where only coownership is due to us, the assignment in advance is limited to that part of the demand which is in proportion to our co -ownership (based on the invoice amount). When the goods are resold our customer (the buyer) must reserve the ownership of the goods towards his customer until complete payment is effected. The buyer is not entitled to resale goods if the demand resulting from the resale is subject to an interdiction of assignment.

4. We authorize the buyer irrevocably to collect assigned demands acting on his own account. This authorization can be withdrawn if the buyer does not meet his commitments of payment due to us or if our demands are likely to become doubtful be cause of low efficiency rating of the buyer. The buyer has to give information regarding assigned demands. If the buyer assigns his demands resulting from the resale within the context of real factoring we must be informed appropriately. His demand against the factoring institute hereby is assigned covering the secured amount.

5. If a third party obtains access to the reserved goods the buyer must point out the reservation of title to the third party and give us immediate information. Our expenses for interposing are to be born by the buyer. We assign our claim against the third party to be reimbursed to the buyer in concurrent condition.

6. The buyer is entitled to insist on the release of demands if the value of the secured amount exceeds our demand by more than 10%. We are entitled to chose the individual amount to be released.

7. The buyer is obliged to insure his stock of goods sufficiently. He hereby assigns to us his possible demands against an insurance company up to the amount of the delivery value.

8. If the law of the state in which delivery takes place or in which the goods are located does not allow a reservation of property right as per the aforesaid, however allows to reserve similar real rights securing payment for goods delivered this is reserved on conclusion of contract. This is deemed as granted by the buyer. The buyer is obliged to participate in all measures we wish to undertake to secure our property rights or in lieu of this to obtain other rights protecting our pr operty on the goods with reservation. The buyer is also obliged to inform us immediately if a third party claims rights on the delivered goods. At deliveries across the border we can insist on the buyer to give bail of a bank to secure all contractual demands. Instead of we can also insist on an irrevocable L/C. In these cases we have to give our written call to the buyer at least 2 weeks before the estimated day of shipment to obtain the bail of a bank or the irrevocable L/C in time. These documents have to be in our hands at least on the working day preceding the delivery date.

X. Period of limitation

1. Claims of the buyer referring to a fault of the product fall under statute of limitation with a period of one year. Claims of the buyer referring to a fault of the product which stand in real right of a third party and are resulting in a right to demand the surrender of the product fall under statute of limitation with a period of three years.

2. Other contractual claims of the buyer due to breach of duty also fall under statute of limitation with a period of one year.

3. Differing from no. X. 1 + 2 for the following claims legal periods are valid:

a) Claims due to a damage resulting from harm to life, body, health or other damages resulting from intentional or gross negligent breach of duty caused by us, our legal representatives or vicarious agents.

b) Claims for indemnity as per § 478, subsection 2 BGB

c) Claims due to intentionally concealed faults.

4. For rights of the buyer to rescind from the contract because of breach of duty in our responsibility which is not referring to a fault of product the legal periods are correspondingly valid.

5. Our claims against the buyer fall under statute of limitation according to legal regulations.

XI. Applicability of right, place of performance, place of jurisdiction

1. The contract is subject to German right only. We reserve the right to claim concrete losses exceeding the lump sum.

2. Place of performance, including buyer ’s payment, is Bremen.

3. As far as the buyer is an accredited merchant the sole place of jurisdiction for both parties and for all indirect or immediate disputes is Bremen. We have the right, however, to sue the buyer at his general place of performance.

4. For deliveries across the border the sole place of jurisdiction to deal with all contractual disputes is Bremen, Federal Republic of Germany [Section 23. of EG-regulation no. 44/2001 covering the competence of court, the authentication and execution of decisions both in civil law and commercial law (EuGVVO) ]. We reserve the right to call any other court competent to EuGVVO.