General Conditions of Delivery and Payment of GERSYS GmbH

Edition: April 2014

1. Scope of Application
1.1 The following General Terms and Conditions of Delivery and Payment (-hereinafter “terms and conditions” -) of GERSYS AG (- hereinafter “GERSYS”) shall apply exclusively. These terms and conditions shall also apply to all future transactions with the customer. Customer’s general terms and conditions contrary to or deviating from GERSYS’ terms and conditions shall not apply unless they have been expressly approved in writing by GERSYS. These terms and conditions shall also apply if GERSYS makes deliveries to the customer without reservation in the knowledge of contrary conditions of the customer or conditions of customer which differ from these terms and conditions.

1.2 These terms and conditions are only binding for entrepreneurs and public law entities as set forth in section 310 (1) of the German Civil Code (BGB).

2. Offer, Order Confirmation
2.1 In the event an order by the customer qualifies as an offer pursuant to section 145 of the German Civil Code, GERSYS may accept such order by sending an order confirmation within four weeks of the receipt of offer.

2.2 Unless otherwise agreed, offers and estimates by GERSYS shall not be binding. Unless otherwise agreed, a contract shall first be effected by way of a written order confirmation by GERSYS. The submission of an invoice shall equal an order confirmation.

3. Delivery Period
3.1 The delivery period shall begin with the dispatch of the order conformation, but not before submission of any necessary documents, approvals and releases to be procured by the customer and not before receipt of the agreed advance payment.

3.2 The delivery deadline shall be deemed to have been observed if the customer has been notified of readiness for dispatch before the appointed time or the goods to be delivered have left our works.

3.3 The delivery deadline shall be extended in the event of industrial disputes, in particular strikes and lock-outs, or unforeseen hindrances which are beyond GERSYS’s control, e.g. stoppages, delays in delivery of essential materials, insofar as these obstacles are proven to have a substantial effect on the delivery of the ordered goods. This also applies if such situations occur at the premises of subcontractors. The delivery deadline shall be extended commensurate with the duration of the dispute or hindrance. Nor shall GERSYS be responsible for the above-described situation if it occurs during an existing delay. In critical cases GERSYS shall undertake to notify the customer without undue delay of the start and finish of such hindrances.

3.4 Partial deliveries shall be permissible within the deadlines set by GERSYS, provided no disadvantages arise for the use of the goods.

3.5 In the event the delivery is delayed upon the request of the customer or due to the customer’s fault, the goods shall be taken into custody at the risk and expense of the customer on GERSYS’ premises.

3.6 GERSYS shall be only obligated to comply with the agreed and delivery and performance period, if the costumer fulfilled his contractual obligations duly and on time.

3.7 In the event that the customer falls into arrears in accepting delivery or violates any other cooperation duties, GERSYS shall be entitled to exercise its statutory rights (§§ 280 ff. German Civil Code). In this event, the risk of an incidental loss or damage of the contracting goods shall pass to the customer at the time that he falls into arrears.

4. Scope of Delivery
4.1 The scope of delivery shall be determined by the written order confirmation of GERSYS.

4.2. GERSYS reserves the right to make modifications to design and form attributable to technical improvements or legal requirements during the delivery period, provided the changes to the goods are neither substantial nor unreasonable to the customer.

5. Cancellation Charges
In the event that the customer cancels an order, GERSYS shall be entitled to charge 20% of the purchase price to cover order processing costs and lost profits, without prejudice to the right to claim a higher amount of actual damages. The customer retains the right to prove lesser damages.

6. Price, Time for Payment, Delay in Payment
6.1 Unless otherwise specified in the offer, all prices of GERSYS shall be considered ex works. Packaging as well as the cost for retrieving used empty packaging shall be invoiced separately. Shipping and handling costs shall likewise be invoiced separately. If the customer orders shipment by GERSYS, it shall be within the discretion of GERSYS to choose the mode of shipment and the routing.

6.2 Price changes shall be permissible if more than six weeks elapse between the time of signing the contract and the agreed delivery date. Should wages, material costs or market cost prices increase before the goods have been manufactured, GERSYS shall have the right to adjust its price accordingly. The customer shall not be entitled to withdraw from the contract unless the price increase substantially exceeds the consumer price index for the time between the placing of the order and the delivery.

6.3 The statutorily applicable value added tax is not included in the prices of GERSYS and shall be invoiced separately.

6.4 Provided no other payment periods are indicated in the order confirmation, payments shall be due upon delivery or performance.

6.5 The customer shall be automatically be in default of payment 30 days after the delivery and the receipt of invoice without the necessity of a reminder.

6.6 In the event the customer is in default of payment, GERSYS shall be entitled to charge interest in the amount of 12% p.a. The right of GERSYS to charge the customer for higher damages shall not be affected. The customer retains the right to prove lesser damages. In any case, GERSYS shall be entitled to charge the statutory interest in the amount of 8 % p.a. above the current base rate published by the German Bundesbank.

6.7 In the event that the customer is in default of performance other than payment of money, GERSYS shall be entitled to charge interest in the amount of 9 % p.a. The right of GERSYS to charge the customer for higher damages shall not be affected. The customer shall be entitled to prove, that the damage caused by the delay in payment is lower. In any case, GERSYS shall be entitled to charge the statutory interest in the amount of 5 % p.a. above the current base rate published by the German Bundesbank.

6.8 Checks and bills of exchange shall only count as payment upon encashment and acceptance of all costs by the customer, especially the bill tax due to the encashment.

6.9 The customer may only set off claims with undisputed counterclaims recognized by GERSYS or recognized by a final judgment. The same shall apply in respect to any right of retention of the customer.

7. Acceptance and Transfer of Risk
7.1 The customer shall be obligated to accept delivery of the goods. Unless otherwise agreed (delivery by GERSYS) the transfer of goods shall take place in Wolfratshausen. The customer shall be entitled to inspect the goods within fourteen days of receipt of the notice of availability or other advice of completion at the point of transfer. Unless the customer he is temporarily hindered without fault from doing so, the customer shall be obligated to accept the goods within the same period.

7.2 Should the customer fail, either intentionally or due to gross negligence, to take delivery of the goods within a period of fourteen days of receipt of notice of availability, after granting a respite of a further fourteen days GERSYS shall be entitled to cancel the contract and claim compensation for non-fulfilment. The granting of a respite shall not be required if the customer strictly and finally refuses to take delivery or will clearly not be in a position to pay the purchase price within this period.

7.3 The risk of incidental loss or damage shall vest to the customer if the subject matter of the contract is handed over to a transporting person. This shall also apply if GERSYS is in charge of the transport/shipping.

8. Warranty
8.1 Claims on the part of the customer because of defects shall require that the customer has duly complied with the obligations of inspection and notification as set forth under section 377 of the German Commercial Code. The inspection shall be based on the mutually agreed written specifications of the delivered goods. In the case that no specifications were agreed upon, the inspection shall be based on the specifications of the manufacturer. The customer shall immediately provide GERSYS with written notice of apparent defects but at the latest within eight days from acceptance of the goods.

8.2 Advertisement information or other public declarations from third parties shall not constitute any defect whatsoever. In this respect, the warranty for defects shall be excluded.

8.3 The warranty for defects of the contractual goods shall be limited to the right of after-fulfilment. In this case the customer shall be entitled to choose whether GERSYS shall remedy the defect or deliver a defectfree contractual good. In the event that the after-fulfilment can only be carried out with disproportionate costs, GERSYS shall be entitled to refuse it.

8.4 The customer shall only be entitled to send back the delivered goods for after-fulfilment with the written consent of GERSYS. The customer shall bear the costs for transport. The risk of an incidental loss or damage of the contracting goods shall pass to the customer if GERSYS receives the goods at its place of business. In the event of a replacement delivery or performance, the customer shall be obligated to return the delivered contractual goods.

8.5 Should GERSYS not be willing or able to perform the afterfulfilment or, in particular, should the after-fulfilment be delayed beyond a reasonable period of time at the fault of GERSYS, or should the after-fulfilment fail for other reasons, the customer shall be entitled to withdraw from the contract, demand a price reduction or damage compensation according to the statutory provisions of the German Civil Code. The after-fulfilment shall be regarded as failed only after three unsuccessful attempts by GERSYS.

8.6 All claims of the costumer based on defects, including damage compensation, shall be statute-barred in one year unless GERSYS acted intentionally or grossly negligent. The statute of limitation shall begin to run as set forth under the statutory provisions.

8.7 If the customer or any third person authorized by the customer modifies the contracting goods without the prior consent of GERSYS, the warranty rights of the customer shall be forfeited unless the customer proves that the defect is not caused by the modification

9. Liability
9.1 GERSYS shall be liable for compensation for damages only in cases of intent and gross negligence. In case of ordinary negligence, GERSYS shall only be liable for the reasonably foreseeable damage to the given type of contract as long as a breach of major contractual obligations (cardinal duty) is given.

9.2 In the case of ordinary negligence, the liability of GERSYS shall be limited at the most to 5 % of the agreed contractual price.

9.3 In the event of initial impossibility of performance, GERSYS shall only be liable if GERSYS was aware of the hindrance or if the lack of knowledge thereof is based on gross negligence.

9.4 The above mentioned liability limitations/exemptions shall not apply for claims in accordance with the Product Liability Act (Produkthaftungsgesetz) and for claims related to injuries to life, body or health.

9.5 In the event the liability of GERSYS is limited, the same limitations shall apply to employees, representatives, and work force of GERSYS.

9.6 All damage compensation claims of the customer according to this section, except claims based on tort law, shall be statute-barred in one year. The statute of limitation shall begin to run as set forth under the statutory provisions.

10. Reservation of Title
10.1 GERSYS hereby reserves the right to title of the delivered goods until all payments from the business relation with the customer have been received. This shall also apply for all future payments which arise out of the business relation between the customer and GERSYS.

10.2 In the event that the customer acts in breach of contract, in particular, in the event of delayed payment, GERSYS shall be entitled to take back the delivered goods. The redemption of the delivered goods by GERSYS shall not be considered as a withdrawal from the contract unless GERSYS expressly declared otherwise in writing.

10.3 As long as the customer is not in delay with his payment, the customer shall be entitled to resell the delivered goods within the ordinary course of business. The customer hereby assigns GERSYS all claims resulting from the resale in the amount of the purchase price agreed upon by GERSYS and the customer (including the value added tax) in advance regardless of whether the delivered goods are sold before they have been manufactured or after being manufactured. GERSYS accepts this assignment. The customer shall be empowered to collect such claims after the claims have been assigned. The authorization of GERSYS to collect the claims itself shall remain unaffected hereby. GERSYS, however, hereby agrees not to collect the claims as long as the customer properly fulfils its payment obligations, is not in arrears in payment and no motion for commencement of bankruptcy proceedings or cessation of payments is given. If this is the case however the former does not apply and GERSYS may demand that the customer disclose the assigned claims and their debtors, provide all information necessary for collection, surrender the related documents and inform the debtors (third parties) of the assignment.

10.4 The delivered goods shall always be processed or transformed by the customer on behalf of GERSYS. In the event that the delivered goods are processed with other objects not belonging to GERSYS, GERSYS shall acquire the join title to the new goods in proportion of the value of the delivered goods to the other objects at the time of the manufacture. GERSYS reserves the right to title of the new processed goods as set forth in the above provisions. In the event that the delivered goods are mixed with other objects not belonging to GERSYS, to the extent that they cannot be separated from one another, GERSYS shall acquire joint title to the new goods in proportion of the value of the delivered goods to the other mixed objects at the time of the mixture. If the mixture is carried out in such way that the goods of GERSYS can be regarded as an integral part of a main product of the customer, it shall be deemed to have been agreed that the customer shall grant GERSYS joint ownership accordingly. The customer shall keep in safe custody the joint title for GERSYS.

10.5 In the event of any pledging as well as any attachment orders or any third party dispositions, the customer shall indicate to the third party the ownership by GERSYS and shall provide GERSYS with all information and documentation necessary to safeguard its rights. The customer shall be liable for the judicial and extrajudicial costs of safeguarding the ownership rights of GERSYS if the third party is unable to pay these costs.

10.6 GERSYS agrees to release the securities to which it is entitled upon the request of the customer to the extent that such securities do not exceed the value of the claims to be secured by GERSYS by more than 20 %. GERSYS shall be entitled to select the securities to be released.

11. Export
11.1 GERSYS draws attention to the fact that the supply of items (products, software, technology) in the performance of this contract may be subject to restrictions and prohibitions. The Customer shall comply with all applicable export control regulations and corresponding restrictions. This particularly applies to European, German and, if relevant, provisions of US law relating to (re-) exports. In the case of a re-sale / forwarding of the supplied items, the Customer shall draw the recipient’s attention to the provisions of export control law.

11.2 In particular, the Customer shall ensure that items are not used, either directly or indirectly, for a purpose that is connected in any way to chemical, biological or nuclear weapons and their carrying systems. Furthermore, he shall ensure that the items are not put, either directly or indirectly, to a military end-use in a country subject to a weapons embargo. The Customer shall not sell, export, re-export, supply, forward the items or otherwise make them available to persons, companies, facilities, organizations or in countries, either directly or indirectly, if doing so would violate European, German or any relevant provisions of US law relating to (re-) exports.

11.3 In relation to GERSYS, the Customer shall, on request, issue and send originals of the necessary final destination documents in order to prove the final destination and end-use of the products.

11.4 The Customer shall be fully liable for any loss suffered by GERSYS that has been caused by his failure to comply with the applicable export control provisions or US (re-) export provisions.

11.5 The performance of the contract and corresponding obligations relating to supply are subject to the condition that the required export or transfer authorizations or any other authorizations stipulated by foreign trade law or clearances by the competent authorities are issued and there are no other legal restrictions owing to provisions of export control law that must be complied with.

11.6 The Customer shall be responsible for all taxes, charges and duties in connection with the service outside the Federal Republic of Germany and compensate GERSYS if applicable.

12 Purchase on Approval
12.1 In the event that GERSYS agreed to deliver samples of the contractual goods, the customer shall be entitled to withdraw from the contract by written notice within the agreed period of time.

12.2 The purchase on approval shall be governed by the above mentioned general terms and conditions. In particular the risk shall vest to the customer as set forth in section 7.3.

12.3 The customer shall bear the costs for sending back the sample goods to GERSYS. The return of these goods shall be indicated to GERSYS by prior written notice. The risk of an incidental loss or damage to the returning goods shall not pass to GERSYS until the goods were delivered to GERSYS at its place of business. The customer shall be obligated to return the goods in the original condition without any defects.

13. Place of Performance and Jurisdiction
13.1 The place of performance shall be the place of business of GERSYS, Wolfratshausen, Germany.

13.2 Any dispute arising out of or in relation to the contract shall be settled by the court of jurisdiction for the principal place of business of GERSYS, Wolfratshausen, Germany.

13.2 This agreement shall be construed and interpreted in accordance with the law of the Federal Republic of Germany. The Vienna UN Convention on the International Sale of Goods (CISG) shall not apply, even if the customer’s registered office is in a foreign country.

14. Miscellaneous
14.1 Any assignment or transfer of the customer’s rights and obligations in connection with the contract concluded with GERSYS shall not be effective without the prior written consent of GERSYS.

14.2. Should any provision be or become void, the remaining provisions shall not be affected thereby.