General Terms and Conditions of Sale, Performance and Delivery

I            General

(1)        Unless otherwise agreed, the General Terms and Conditions of Sale, Performance and Delivery as set forth hereinafter shall, on an exclusive basis, be applicable and binding on each and every contract concluded. Any agreement to the contrary shall be subject to our confirmation in writing.

(2)        Any terms and conditions of purchase of the ordering party shall not be applicable. Nor shall they be applicable, if we executed a relevant delivery/performance, knowing the existence of terms and conditions of purchase to the contrary.

(3)        As regards installation services, our Terms and Conditions for Installation Services shall be applicable exclusively. To the extent the ordering party does not know our Terms and Conditions for Installation Services or our Terms and Conditions for Installation Services have not been attached to our confirmation of order, the ordering party may obtain them from Grace Davison.

II          Offer and Conclusion of Contract

(1)        All offers submitted by Grace Davison shall be subject to alteration without notice.

(2)            Contracts shall be concluded on the basis of a confirmation of order issued by Grace Davison in writing. The final scope of the deliveries to be made on our part as well as the related final terms and conditions shall be set forth in our confirmation of order.

III         Period for and Quantity of Deliveries

(1)        Any periods for and dates of delivery shall refer to the point of time of dispatch (handing over to first forwarder), in case of ‘free buyer’s address’ deliveries they shall refer to the point of time of handing over to the relevant buyer, in case of deliveries involving equipment installation services to the point of time of set-up, and in case of deliveries involving equipment start-up services to the provision of equipment basically ready for operation (readiness for approval). Periods for deliveries shall start on the day of confirmation of order. The beginning of any period of delivery shall precondition the clarification of all technical aspects.

(2)        The period of delivery shall be prolonged for the term of failure to supply Grace Davison, unless the fault for such failure lies with Grace Davison. The foregoing stipulation shall apply mutatis mutandis in the event of any other interference with the performance of an obligation for which Grace Davison cannot be held responsible, as well as in the event of any enforcement of rights of retention. In case of prolongation exceeding a term of one month, each contracting party hereto shall be entitled to repudiate the relevant contract, unless performance was effected prior to the receipt of the relevant declaration of repudiation.

(3)        To the extent not unacceptable, partial deliveries shall be permissible.

IV            Passing of Risk, Packaging

(1)        All risks shall pass to the ordering party upon dispatch of the relevant goods. In the event dispatching is delayed on the grounds of circumstances not lying within the scope of control of Grace Davison, all risks related thereto shall pass to the ordering party as soon as the goods are reported to be ready for dispatch.

(2)        Grace Davison shall take precautions against frost, only if we declare our explicit commitment to do so.

V          Prices, Terms and Conditions of Payment, Default in Payment

(1)        In case manufacturing and/or production costs increase between the point of time of conclusion of contract and delivery due to rising prime costs for materials, wages, salaries or any other operating costs, including taxes, Grace Davison shall be entitled to effect appropriate price increases. The foregoing provision shall not apply, if the agreed period of delivery is less than four months.

(2)        All prices are ‘ex works’ prices being quoted in euro and not including the applicable value added tax rate. Packaging, loading, duties, freights, insurance and any other ancillary costs shall be at the expense of the ordering party. In case of deliveries of machines, implements and other devices, installation and start-up services shall be charged separately.

(3)            Payment periods shall start as from the day indicated on the relevant invoice. In case a payment period has not been granted explicitly, net payment of the invoiced amount(s) shall fall due within 30 days.

(4)        The ordering party shall be entitled to enforce any rights of set-off or retention, only if the ordering party’s counterclaim has taken final and binding effect, if it has been accepted by Grace Davison, or if it is not contested. Grace Davison shall be entitled to withhold services to be rendered by us vis-à-vis the ordering party on the grounds of own claims, including qualified claims and claims limited in time, even in case such claims do not base on the same legal relationship.

(5)        If the ordering party does not settle an invoice upon maturity, Grace Davison shall be entitled to charge default interests in the amount of the current account rates charged vis-à-vis Grace Davison.

(6)        Bills and checks shall be accepted on account of performance. Any discounting charges, bank and collection fees as well as any other expenses shall be borne by the ordering party; likewise, the latter shall also assume any stamp fees, taxes and exchange losses.

(7)        If the ordering party is required to call forward all or parts of ordered goods within specified periods and if the ordering party exceeds such deadline for a call, the quantity not called yet shall be stored at the expense and risk of the ordering party. Additionally, Grace Davison may demand payment for the entire goods so kept at the ordering party’s disposal.

(8)        Our field-service staff and representatives shall not be authorized to receive payments.

(9)        Vis-à-vis Grace Davison, the ordering party shall be liable for the due payment of the value added tax to the relevant revenue office.

VI            Retention of Ownership

(1)        All goods delivered by Grace Davison shall remain our property until full payment of each and every claim arising from the relevant business relationship, including all ancillary claims. The foregoing stipulation shall also be applicable in case individual or all claims against the ordering party have been integrated into a current invoice and the balance has been struck and accepted.

(2)            Machining and processing services performed on the goods subject to retention of ownership shall be without any obligation to Grace Davison as producer and/or manufacturer. Processed goods shall be deemed as goods subject to retention of ownership as defined in subsection 1 of this section.

(3)        If the ordering party processes, connects or intermixes the goods subject to retention of ownership with other goods which are not our property, Grace Davison shall acquire co-ownership in the new item in proportion to the total amount invoiced and agreed between the ordering party and Grace Davison for the goods subject to retention of ownership in their proportion to the total amount invoiced for the other goods at the point of time of processing or intermixing. If goods of the ordering party are connected or inseparably intermixed with other movable items to form a uniform item and if such other item is regarded as a principal item, it is hereby agreed that the ordering party shall assign to Grace Davison a co-ownership title in proportion to the total amount invoiced for the goods subject to retention of ownership, to the extent the ordering party is the owner of such principal item. The ordering party shall store any goods owned or co-owned by Grace Davison free of charge for us. The rights of co-ownership resulting and arising therefrom shall replace the rights to goods subject to retention of ownership.

(4)        The ordering party may sell the goods subject to retention of ownership within the framework of its due business operations on the basis of its normal terms and conditions of business. However, it is hereby agreed that the ordering party shall assign its purchase price claims arising to it vis-à-vis its purchasers to Grace Davison in the amount of the final total amount invoiced for our goods subject to retention of ownership. Such claims shall serve as a security to the same extent as the goods subject to retention of ownership. The ordering party shall be entitled and authorized to sell such goods, only if it is warranted that the claims arising therefrom and inuring to its benefit pass to Grace Davison. In the event the ordering party grants to its customer deferment of the relevant purchase price, the ordering party shall be required to reserve vis-à-vis such customer its ownership in the goods subject to retention of ownership on the same conditions as Grace Davison has reserved its ownership upon delivery of the goods subject to retention of ownership; however, the customer shall not be obligated to reserve its property as regards its claims arising vis-à-vis its purchasers in the future as well.

(5)        The ordering party shall be authorized to collect receivables. Grace Davison shall be authorized to revoke the authorization of sale and collection as soon as the ordering party is in default or if Grace Davison obtains knowledge of circumstances suitable for substantially impairing the creditworthiness of the customer. The ordering party shall be obligated to disclose to Grace Davison – to the extent the requirements for an execution of the right of revocation are met – the names of its debtors and to forward to Grace Davison all documents required to assert our rights on a legal basis; in particular, the ordering party shall be obligated to disclose to its debtors the assignment of claims to Grace Davison. Grace Davison shall have a right of disclosure as well.

(6)        In the event the ordering party sells the goods subject to retention of ownership together with other goods not sold by Grace Davison, the assignment of a claim arising from reselling shall be limited only to the final amount invoiced on the basis of the contract agreed between the ordering party and Grace Davison. In case of a resale of goods in which Grace Davison holds co-ownership interests, the assignment of a claim shall refer to the amount of the co-ownership interest (including value added tax).

(7)        If the ordering party uses the goods subject to retention of ownership to perform a contract for work or a work performance contract, the foregoing regulations shall apply mutatis mutandis to the claims arising from such contracts.

(8)        In case the amount of the securities provided in favor of Grace Davison exceed all secured claims by more than 50 percent, Grace Davison shall, to such extent, be obligated to release securities as we may choose at the request of the ordering party.

(9)        The ordering party shall be required to inform, without undue delay, Grace Davison of any attachment or any other interference initiated by (a) third party/-ies. The ordering party shall assume all intervention costs to the extent (a) third party/-ies is unable to collect such costs and a third party action against execution has been filed rightfully.

(10)       In the event Grace Davison asserts its right of retention of ownership, such assertion shall be deemed a withdrawal from a concluded contract, only if we declare such withdrawal explicitly and in writing. The right of the customer to possess the goods subject to retention of ownership shall extinguish, if it fails to comply with its obligations arising from the present Terms and Conditions of Sale, Performance and Delivery or any other contract.

(11)       The ordering party shall insure the goods delivered as well as any new items created from such goods against theft and any other risks.

VII        Defects and Requirements for Complaints

(1)        The period for complaints as defined in section 377 subsections 1 and 2 of the German Commercial Code amounts to 8 days; the receipt of a complaint in writing (also by facsimile) with Grace Davison shall be authoritative. The limitation period for complaint-related claims amounts to one year; that shall not apply to a defect based on a third-party right in rem allowing for the return of the item in dispute.

(2)        In the event of a justified notification of defect(s) forwarded within the set period, Grace Davison shall, on the basis of subsequent contractual performance, remedy (a) defect(s) as we may choose either by eliminating the defect(s) or by effecting a new, defect-free delivery.

(3)            Pursuant to legal stipulations, Grace Davison shall be entitled to refuse subsequent contractual performance. In the event of refusal of subsequent contractual performance, failure of subsequent contractual performance or unacceptability of subsequent contractual performance for the ordering party, the latter shall be entitled to withdraw from the relevant contract or to effect a reduction (of the purchase price) in accordance with the stipulation set forth in the subsection to follow.

The ordering party shall not be entitled to withdraw from a contract – to the extent such withdrawal is not precluded on a legal basis – or to reduce the purchase price until an appropriate period of time specified by the ordering party for subsequent contractual performance has elapsed without success, unless the specification of a period of time for such purpose is dispensable in accordance with legal provisions (section 323 subsection 2, section 440, section 441 subsection 1 of the German Civil Code). In the event of withdrawal of contract, the ordering party shall be liable for deterioration, loss and any missed utilization not only as to the care usually exercised by the ordering party but also to any fault resulting from negligence and intent.

As regards any claims for damages and claims for the compensation of expenses asserted by the ordering party, section VIII hereof shall be applicable.

(4)        Apart from the reasons for refusal as set forth by law, Grace Davison shall also be entitled to refuse subsequent contractual performance in cases and for as long as the ordering party has not yet returned, at our request, the item purchased and complained about; on the grounds of such refusal, the ordering party shall not be granted a right of withdrawal from the relevant contract or a right of reduction of the relevant purchase price. The ordering party shall not be entitled to exercise complaint-related rights, if, without our consent, interferences or modifications were effected in or on the item purchased, unless the ordering party presents sufficient proof that the defect was not caused by such interferences or modifications.

(5)        In the event of fraudulent concealment of a defect or in the event of assumption of a warranty for the nature of a purchased item at the point of time of passing of risk as defined in section 444 of the German Civil Code (declaration of the seller that, at the point of time of passing of risk, the purchased item holds a specific property and that the seller will assume no-fault liability for any consequences resulting from a lack of such property), the rights of the ordering party shall base exclusively on legal provisions.

(6)        If the final customer of the purchased item is a consumer in the supply chain, the ordering party shall – if the further requirements as set forth in section 377 of the German Commercial Code are met – be entitled to take recourse pursuant to legal stipulations (sections 478 and 479 of the German Civil Code); however, the ordering party may assert any possible claims for damages or claims for the compensation of expenses only on the terms and conditions set forth in section IX hereinafter.

VIII            Liability for Damages and Compensation for Expenses

(1)        In the event or a violation of an obligation committed prior to the conclusion of a contract, during the currency period of a contract and outside a contract, including the event of a defective delivery, tortious act and product liability, Grace Davison shall be liable for damages and the compensation of expenses – save further contractual or legal requirements to be met for assumption of liability – only in cases of intent, gross negligence as well as in case of ordinary negligence in connection with the violation of a substantial contractual condition (i.e. a contractual obligation the violation of which jeopardizes the attainment of the contractual purpose). However, Grace Davison’s liability shall – except for the case of intent – be limited to a damage typical of such contract and foreseeable at the point of time of conclusion of contract.

(2)        As regards a damage resulting from a delay, Grace Davison shall assume liability in the event of ordinary negligence only in the maximum amount of 5 percent of the agreed purchase price.

(3)        Outside the violation of major obligations, liability for ordinary negligence shall be precluded; in each case, however, such liability on the part of Grace Davison shall be limited to the amount of the relevant purchase price. The foregoing stipulation shall not affect section VIII subsection 2 hereof.

(4)        The exemptions from and limitations of liability as set forth in the foregoing subsections 1 to 3 shall not apply to the event of assuming a warranty for the nature of an item as defined in section 444 of the German Civil Code (see section VII subsection 5 hereinabove), in the event of fraudulent concealment of a defect, in the event of a damage resulting from injuries to life, body or health, as well as to the event of mandatory liability pursuant to the law on product liability.

(5)        All claims for damages asserted against Grace Davison, no matter their respective legal ground, shall become statute-barred one year following delivery of the relevant item to the ordering party at the latest, in the event of liability in tort as from knowledge or grossly negligent lack of knowledge of the circumstances constituting a claim and of the person liable for damages. The stipulations of the present subsection shall not apply – the relevant legal provisions being applicable –, in the event of liability for intent and in the cases listed in subsection 4 hereinabove. Possibly shorter statutory periods of limitation shall take precedence.

IX            Industrial Property Rights

(1)        The ordering party shall be entitled to use industrial property rights referring to our deliveries and services or to devices, catalogs, drawings samples or other documentation it received from Grace Davison only with our explicit consent; the ordering party may not grant third parties access to the devices and documentation it received from Grace Davison; furthermore, the ordering party shall be required to return to Grace Davison any such device and documentation promptly upon request.

(2)        If the execution of an order placed with Grace Davison infringes the industrial property rights of a third party, the ordering party shall be obligated to indemnify Grace Davison against any potential claims for damages and to pursue the defense against such claims at its own cost.

(3)        Any potential liability on the part of Grace Davison for the freedom of a purchased item from third-party industrial property rights shall refer to the territory of the Federal Republic of Germany exclusively.

X          Place of Performance and Jurisdiction

(1)        The registered office of our plant confirming an order shall constitute the exclusive place of performance for all deliveries and payments.

(2)        As regards any disputes arising from or in connection with the present General Terms and Conditions of Sale, Performance and Delivery, the City of Worms, Germany, shall be deemed as place of jurisdiction; however, Grace Davison shall have the right to sue the purchaser before its local competent court as well.

(3)        The present General Terms and Conditions of Sale, Performance and Delivery shall be subject to the laws of the Federal Republic of Germany, including the United Nations Convention on Contracts for the International Sale of Goods. Moreover, the Incoterms 2000 shall apply.

XI         Scope of Application

            The present General Terms and Conditions of Sale, Performance and Delivery shall be applicable to enterprises and special              legal funds exclusively.