GENERAL CONDITIONS OF BUSINESS

FERGO Armaturen GmbH – Blindeisenweg 31 – 41468 Neuss

All our quotations, sales and deliveries are exclusively subject to the last edition of our following “General Conditions of Sale”.

I. Quotations and contracts

The prices quoted are subject to change without notice and are valid for the quoted amount only. Contracts are effective only after written order confirmation. The same applies to any amendment, modification or later agreement. In addition to these general conditions of sale, Incoterms valid at time of shipment of contract are applicable. In the event the Buyer supplies drawings or samples he is liable to the Seller that the use of same does not infringe the rights of third parties. The Seller is not liable for drawings and samples supplied by the Buyer. Samples of the Seller are to be considered as a guide only.

II. Prices

Seller’s prices do not include value added tax (VAT). This tax, if any, is charged separately at the rate valid at the time of performance of services. The Buyer absorbs customs duties as well as any taxes or expenses outside Germany. Prices quoted in currencies other than that of Germany are based on the officially fixed average rate of exchange of the German Mark to the respective foreign currency at the Francfort Exchange Bourse at the date of the Seller’s last offer. If this rate of exchange varies between the date of this offer and receipt of the payment by the Seller, the price changes accordingly. If an offer was not made by the Seller, the rate of exchange in effect at the date of order confirmation by Seller is applicable. The prices agreed upon are based on the current prices of raw materials, operating costs, the German wage tariffs and freight costs, foreign exchange rates and duties, and are to be understood ex factory excluding loading and packing, if not stipulated otherwise. If these costs change, the Seller reserves the right to reestablish prices within the limits of the cost increase incurred maintaining the principles of reasonable equity. Additional costs resulting from later changes to the order for which the Seller is not responsible, are for the Buyer’s account.

III. Extent of delivery

The delivery time commences from the date of clarification of all technical and other details, the receipt of necessary import licences, if required, and/or the presentation of the contractual Letter of Credit. If the Buyer does not comply with his contract obligations, the Seller is not bound to the delivery time. When deliveries of an open quantity are spread over a fixed time period, each release requires an individual agreement as to quantity and date of delivery. The delivery time is considered as fulfilled if the goods have left the works prior to the expiry date or if they are ready for shipment and such dispatch is prevented by circumstances beyond the Seller’s control. The Seller is entitled to postpone the delivery or to cancel it completely or partially in the event of circumstances beyond his control, e.g. strike, lock-out, hindrance of shipping at Seller’s own works or at subcontractors work, breakage, lack of raw materials, sundry materials or fuels, or any incidents occasioned by Force Majeure. In case of unsufficient supply by his subcontractor the Seller is released from his contract obligations as long as he has concluded a corresponding congruent contract and his subcontractor failed to fulfill ist contract due to delayed or omited delivery. If by personal fault the Seller fails to deliver at the specified date, the Buyer may agree on an adequate extension of the term, and on expiration of such term, he shall be entitled to renounce that part of contract not yet fulfilled. If a partial performance of the contract is not in the interest of the Buyer, he may cancel the entire contract. Further rights such as claims of damages are regulated by No.

or has been delivered late. If the seller is in default of delivery due to his own fault, the buyer may set a reasonable grace period and, upon expiry of this period, withdraw from the contract insofar as it has not yet been performed. If the buyer has no interest in partial performance, he may withdraw from the contract in its entirety. Any further rights, i.e. claims for damages, shall be governed by Clause IX, subject to the proviso that the seller shall also be liable for damages resulting from delay caused by gross negligence, insofar as such damages are typical and foreseeable.

IV. Takeover

If the goods are inspected by the buyer prior to dispatch, they shall be deemed to have been delivered in accordance with the agreed terms. If goods ready for delivery are stored at the buyer’s disposal for reasons for which the buyer is responsible, the invoice may be issued immediately and payment demanded. The goods shall then be stored at the buyer’s expense and risk. This shall not affect the seller’s right to demand collection.

V. Dispatch

Shipment is at the buyer’s risk, even in the case of carriage paid delivery. Transport and other insurance shall only be provided upon request and shall be borne by the buyer. If shipment cannot be carried out in accordance with the agreed terms, it shall be carried out on the best possible terms, at the seller’s discretion. The costs of any protective covering or packaging used shall be borne by the buyer.

VI. Invoicing and Payment

If the agreed due dates are exceeded, the seller shall be entitled, as a minimum, to charge the buyer interest on arrears at a rate of 3 per cent above the applicable Lombard rates of the Deutsche Bundesbank. The seller shall be entitled to charge the applicable value added tax on all amounts invoiced to the buyer. The seller is under no obligation to accept bills of exchange. Should the seller accept them, the charges shall be borne by the buyer. Payment shall not be deemed to have been made until, in the case of bills of exchange, they have been honoured or the buyer’s bank has actually paid the cheque. The buyer may only set off amounts against the seller’s claims if the buyer has a counterclaim that has been legally established or is undisputed by the seller. Only counterclaims recognised by the seller – including those arising from notices of defects – entitle the buyer to withhold payments due. In the event that justified doubts arise as to the buyer’s solvency, the seller may make further deliveries conditional upon the provision of security.

VII. Retention of title

The seller retains title to the goods delivered until all its claims arising from the supply contract or from previous contracts between the parties have been settled. The buyer is not entitled to pledge the goods subject to retention of title or to assign them as security. The seller must be notified immediately of any attachments by other creditors. Provided the buyer is not in default of payment, they are entitled to further process and resell the goods in the ordinary course of business. The retention of title also extends to any new items created through processing. In the event of combination or mixing with items not belonging to the seller, the seller shall acquire co-ownership. The buyer hereby assigns to the seller any claims arising from resale, irrespective of whether the goods subject to retention of title are resold without or after processing, and whether they are resold to one or more purchasers. The assigned claims serve as security for the seller up to the value of the goods subject to retention of title sold in each instance. In the event that the goods subject to retention of title are sold by the buyer together with other goods not belonging to the seller, whether before or after processing, the assignment of the claim for the purchase price shall apply only up to the value of the goods subject to retention of title.

The buyer undertakes to provide the seller, upon request, with the names of the third-party debtors and the amounts of the claims. In the event of default by the buyer, the seller is entitled to notify the third-party debtor of the assignment and to enforce the assigned claim. Should the Seller’s claims for the purchase price be at risk, the Seller shall be entitled to take immediate possession of the goods subject to retention of title. At the Buyer’s request, the Seller shall be obliged to release parts of the security at its discretion if the value of the security held by the Seller in respect of its claims exceeds the amount of the claims by more than 20 per cent. Any costs arising from such interventions shall be borne by the Buyer.

VIII. Warranty

The purchaser must inspect the consignment for completeness and correctness of the goods immediately upon receipt of the delivery and, where applicable, lodge a written complaint immediately upon discovery of any defects. If the purchaser fails to lodge a complaint, the delivery shall be deemed to have been accepted. Any characteristics of the goods that have been inspected by the buyer or a third party commissioned by the buyer prior to dispatch and not objected to may not be the subject of a subsequent complaint. Once the goods have been resold, processed or installed, defects that were detectable immediately upon receipt of the goods may no longer be the subject of a complaint. Claims arising from any defects in the delivery may relate only to the individual defective parts. In this respect, deliveries are deemed to be divisible performances. The warranty period for machinery, equipment, etc. is 6 months; in the case of multi-shift operation, it is 3 months, in each case calculated from the date of delivery. No warranty is provided for items subject to continuous mechanical wear and tear or for second-hand goods. In the event of defects for which the seller is demonstrably responsible, the seller shall, at its discretion, either deliver defect-free goods ex works free of charge within a reasonable time or, following carriage-paid return of the goods, remedy the defects free of charge within the scope of the contractual obligations undertaken, provided that the principles of reasonable discretion are observed. The Seller’s warranty obligation shall lapse if the Buyer has failed to fulfil its essential contractual obligations, in particular its obligations to give notice of defects and to make payment. If rectification is carried out in fulfilment of the warranty obligation, the warranty period for the affected part shall be suspended for the duration of the rectification work. In all other respects, the above terms and conditions shall also apply to such rectification work. In the event of disputes regarding the warranty for specific characteristics of the goods, a decision shall be made exclusively by a neutral expert to be appointed by the seller. Any samples to be taken shall, where possible, be taken jointly. The costs of the examination or expert assessment shall be borne by the party found to be at fault.

IX. Scope of liability

Any claims by the buyer beyond those agreed in these Terms and Conditions of Sale, in particular claims for compensation for damages of any kind, whether arising from the warranty or any other legal basis – including non-contractual liability – are excluded. The above limitation of liability shall not apply in the event of wilful misconduct or gross negligence on the part of the Seller or its senior executives and vicarious agents, or in the event of failure to comply with warranted characteristics, insofar as the warranty was specifically intended to protect the Buyer against damage of the kind that has occurred. Liability arising hereunder shall be limited to compensation for typical and foreseeable damage. All claims by the buyer against the seller shall become time-barred no later than six months after receipt of the goods by the buyer, unless shorter limitation periods are provided for by law or contract.

X. Place of performance and jurisdiction

The place of performance for delivery is the location of the manufacturing plant, and for payment, the location of the seller’s registered office. Neuss or the registered office of the seller’s supplier is the exclusive place of jurisdiction. The

The seller is entitled to bring legal proceedings against the buyer before the court having jurisdiction over the buyer’s registered office. In the case of international orders, the application of the United Nations Convention on Contracts for the International Sale of Goods (CISG) is expressly excluded. The German text of these terms and conditions is legally binding. In addition to these terms and conditions of sale, the law of the Federal Republic of Germany shall apply; the provisions of the German Civil Code (BGB), the German Commercial Code (HGB) and the Code of Civil Procedure (ZPO) shall take precedence over other German legal provisions. The German text shall be authoritative for the interpretation of these terms and conditions of sale. Any provisions deviating from these terms and conditions of sale, in particular the buyer’s terms and conditions, shall only become effective upon the seller’s specific written confirmation. The mere acceptance of an order by the seller shall under no circumstances constitute acceptance of the buyer’s terms and conditions. At the latest when the goods pass into the buyer’s possession or the buyer makes use of the seller’s services, these terms and conditions of sale shall be deemed to have been accepted by the buyer, even without the buyer’s express confirmation.

XI. Miscellaneous

Should any provision of these terms and conditions be found to be invalid, this shall not affect the validity of the remaining provisions.