General terms of delivery and payment

der KARASTO Armaturenfabrik Oehler GmbH

– Domestic –

I. Scope

1. These general terms of delivery and payment (GTDP) apply to all contracts of KARASTO Armaturenfabrik Oehler GmbH with customers, whose relevant registered office is located in the Federal Republic of Germany. The relevant office is that which enters into the contract in its own name.

2. These GTDP apply exclusively to entrepreneurs, legal persons under public law, or special funds under public law.

3. This GTDP apply to all our offers and deliveries. They also apply to all future contracts with the purchaser, even if their applicability is not expressly agreed.

4. Contrary terms and conditions of the purchaser or any provisions in the terms and conditions of the purchaser which deviate from the rules of these GTDP will apply only if we expressly consent to their validity.

5. If terms are agreed between us and the purchaser that are contrary to individual provisions of these GTDP, the validity of the remaining provisions of these GTDP will not be affected.

II. Bid/acceptance of order

1. Our quotation is non-binding.

2. Changes and errors regarding the images and drawings relating to our goods and drawings found in brochures, promotional material and price lists, and the data contained therein, for example, material, dimensions, consistency of form, are reserved unless they are expressly designated as binding.

3. Orders under a net goods value of € 250 and, in the case of a new customer’s first order, € 500, with the exception of orders for spare parts, are not accepted.

4. The purchaser’s order is binding after a period of two weeks following the order being received by us.

5. The contract is concluded either by the despatch of our written order confirmation or with the fulfilment of the order, depending on which occurs first.

III. Delivery periods and non-availability

1. Information about delivery periods is not binding unless it has been designated as binding.

2. The delivery period will commence subject to paragraph 3 with the despatch by us of the order confirmation.

3. If the purchaser is obliged to obtain certain documents, such as permits, approvals, etc., or to make a deposit payment, the delivery period will begin at the earliest at the point at which all the documents to be procured by the purchaser are received by us or a deposit to be paid is received by us.

4. The delivery deadline will be deemed to have been met if the delivery item has left the factory before the expiry thereof or readiness for dispatch has been communicated.

5. If, for reasons for which we cannot be held responsible (non-availability of service), we cannot adhere to binding delivery periods, we will immediately inform the purchaser thereof and, at the same time, inform the purchaser of the envisaged new delivery period. If the delivery also cannot be made within the new delivery period, we will be entitled to withdraw from the contract either wholly or in part; any payment already made by the purchaser will be refunded without undue delay. Non-availability of service will be deemed to apply in this sense especially in the event of the failure of our own supplier to supply us punctually, if we have entered into a congruent hedging transaction, if neither we nor our supplier are at fault or if we are not obliged to provide in a particular case.

6. The onset of a delay in delivery on our part will be determined according to the statutory regulations. In any case, however, a written warning from the purchaser with the setting of an appropriate period of grace is required.

7. Our liability in the event of a delay in delivery is limited pursuant to paragraph IX. of these GTDP. For all other cases, the statutory rights of the purchaser and our statutory rights, in particular in the event of an exclusion of the obligation to perform (e.g. due to the impossibility or unreasonableness of service and/or subsequent service), are unaffected.

IV. Partial deliveries, partial delay, partial impossibility

1. Partial deliveries are allowed and are independently billable insofar as this is reasonable for the purchaser and it has an objective interest in the partial delivery.

2. In the event of a partial delay or partial impossibility, the customer can withdraw from the contract as a whole or claim damages for non-fulfilment of the entire commitment only if it has no interest in the partial performance of the contract.

3. In all other cases, partial delay is governed mutatis mutandis by the provisions of the preceding paragraph III.

V. Delivery and transfer of risk

1. EXW (Incoterms 2010) applies to delivery and transfer of risk from our warehouse in Backnang or, as the case may be, in the case of drop shipments from the warehouse of our supplier. The risk will pass EXW to the purchaser even if we pay the shipping costs in individual cases.

2. Packing is calculated at cost but will be no less than at € 7.00.

3. If shipment should be delayed as a consequence of circumstances for which we cannot be held responsible or on request of the purchaser, the risk will pass over to the purchaser on the date of notification of readiness for despatch; We are, however, obliged to arrange any insurance cover required by the purchaser at the request and expense of the same.

6. If shipment is delayed at the request of the purchaser, monthly storage costs of 0.1% of the price of the sold merchandise will be invoiced starting one month after notification of readiness to despatch.

5. If the goods are shipped at the customer’s request, the shipping routes and means of shipment will be selected by us without any assumption on our part of liability for the cheapest shipment.

6. For orders for shipment to third parties a surcharge, currently € 25.00, will be charged; the minimum order value of € 250.00 remains unaffected.

VI. Prices, terms of payment

1. All prices are quoted in EURO plus VAT at the applicable rate ex stock at Backnang, plus packaging and shipping costs.

2. Payments are to be made free of banking costs to the supplier in 30 days net. In the event of settlement within 10 days of the date of invoice, we will grant a 2% cash discount.

3. In the case of bill of exchange payments, all expenses and costs will be invoiced to the purchaser.

4. The purchaser will be entitled to set off payments with counterclaims only if the latter are undisputed or have been legally established be declaratory judgement.

5. The purchaser will be entitled to withhold payments only as a result of effective and due counterclaims from the same contractual relationship.

VII. Retention of title

1. We reserve title to the goods until the complete payment of all present and future receivables (including all ancillary claims such as financing costs, interest rates) from the business relationship with the purchaser. If a current account agreement has been agreed with the purchaser, the retention of title will apply until full payment of the recognised current account balance has been made.

2. The customer is obliged to handle the goods with care; it is in particular obliged at its own expense to insure the goods at their replacement value against damage caused by fire, water and theft.

3. If the goods subject to retention of title are combined by the purchaser with other goods, we will be entitled to co-ownership of the new item in the ratio of the invoice value of the reserved goods to the invoice value of the other goods plus processing value. If our ownership should expire through combining, mixing or processing, the purchaser will transfer to us at the time of combining, mixing or processing the right of ownership of the new item to which it is entitled to the extent of the invoice value of the reserved goods and keep them for us free of charge. The rights of ownership to which we become entitled thereby will count as reserved goods within the meaning of paragraph 1.

4. The purchaser assigns to use here and now any claims that may arise from resale or processing but also for any other legal reason (e.g. any purchase price, wage or other claims that arise in the event of an insurance claim or tortious acts concerning the reserved goods, including the recognised balance from a current account agreement) in the amount of the invoice value of the reserved goods to us; we accept the assignment. The assignment of the claim in accordance with sentence 1 will be used to secure all present and future claims from the business relationship with the customer.

5. The purchaser is revocably entitled to collect receivables from the resale for us in its own name. This collection authorisation can be revoked only if the customer fails to duly meet its payment obligations. At our request, the purchaser will in such a case provide the information required for the collection of the receivables, provide the appropriate documents, and advise the debtors of the assignment.

6. The purchaser will immediately notify us of the garnishment, seizure, damage or misplacement of the delivered goods; a breach of this obligation will gives us the right to withdraw from the contract. The purchaser will bear all the costs incurred particularly in the context of third-party proceedings for the successful revocation of a garnishment and, if necessary, the successful recovery of the delivered goods, insofar as these costs cannot be collected from third parties.

7. If we have effectively withdrawn from the contract, we will be entitled to take back the reserved goods as long as their repossession has been threatened with a reasonable period of notice. The purchaser will bear the costs incurred by the exercise of the right of repossession, in particular for transport. We will be entitled to exploit the repossessed reserved goods and avail ourselves of the proceeds as long as such exploitation was previously threatened with a reasonable period of notice. If the proceeds exceed the outstanding claims from the contractual relationship, this surplus will be returned to the purchaser.

VIII. Notification of defects, rights in the case of material defects

1. The purchaser is to inspect the goods immediately upon receipt thereof and notify us in writing of all apparent defects without undue delay, at the latest, however, within 7 working days (Saturday is not working day); the goods will otherwise be deemed approved. We must be notified in writing of any hidden defects immediately after the discovery thereof, at the latest after a period of seven working days (Saturday does not count as a working day); otherwise, the goods will be deemed approved also with regard to these hidden defects.

2. If the product has a defect, we can choose at our discretion either to rectify the defect (rectification) or to supply a non-defective item (replacement delivery). The purchaser is in all other cases entitled to exercise its statutory rights resulting from material defects.

3. Complaints in respect of partial deliveries do not entitle the purchaser to reject the remaining deliveries unless the customer is entitled to withdraw from the entire contract due to the defective partial service.

4. If the purchaser should assert claims for damages, we will be liable only in consideration of the following paragraph IX.

IX. Liability

1. We will be liable without limitation for damage due to injury to life, limb or health based on a negligent breach of duty by us or an intentional or negligent breach of duty by one of our legal representatives or vicarious agents, and in the case of mandatory liability irrespective of culpability pursuant in particular to the German Product Liability Act (Produkthaftungsgesetz), and in the case of warranty liability.

2. We will be liable for other damage arising from an intentional or grossly negligent breach of duty by us or our legal representatives or vicarious agents. In this case, the liability is restricted to the damage typical of such a contract that is foreseeable at the time of the conclusion of the contract.

3. We will be liable for intentional or negligent violation of essential contractual obligations, where the liability is restricted to the damage typical of such a contract that is foreseeable at the time of the conclusion of the contract. An essential obligation is an obligation without whose fulfilment the execution of the contract concluded with the purchaser would be impossible and on whose fulfilment the purchaser has relied and should be able to rely and whose culpable non-fulfilment would jeopardise the achievement of the contractual purpose.

4. In all other cases, liability on our part is excluded.

5. If our liability is excluded or limited, this applies also to the personal liability of our employees, representatives and vicarious agents.

X. Limitation

1. In the case of recourse against suppliers in the supply chain of a sale of consumer goods, in the case of mandatory liability irrespective of culpability pursuant especially to the German Product Liability Act (Produkthaftungsgesetz), and in the case of guarantee liability, the statutory limitation period applies.

2. In the case of damage due to injury to life, limb or health based on a negligent breach of duty by us or an intentional or negligent breach of duty by one of our legal representatives or vicarious agents, and in the case of other damage due to an intentional or grossly negligent breach of duty by us or an intentional or negligent breach of duty by one of our legal representatives or vicarious agents, and in the case of damage due to an intentional or grossly negligent breach of essential contractual obligations from the contract in question by us or our legal representatives or vicarious agents, the statutory period of limitation will also apply.

3. In the case of a building and an item that has been used for a building in accordance with its customary mode of use and has caused the defectiveness of said building, and in the case of a work whose success consists in the provision of planning or monitoring service for a building, the limitation period is five years.

4. In all other cases, the warranty period is one year.

XI.    Trade mark rights

1. In the case of the delivery of goods that we produce according to drawings, models or other specifications of the customer, we will not be liable for any infringement of third-party rights. The purchaser must indemnify us against claims of third parties.

2. In no case of violation of third-party rights will we reimburse the purchaser for lost profits.

XII. Place of performance and place of jurisdiction

1. The place of performance for deliveries and payments is Backnang.

2. The place of jurisdiction for all disputes arising in connection with the contract is Stuttgart. We can however also assert claims in the legal jurisdiction of the purchaser.

KARASTO Armaturenfabrik Oehler GmbH

Backnang, Juli 2014