General Terms and Conditions

I. General sphere of validity

Our goods and services including quotes and other additional services shall be subject to the following Terms and Conditions of Sale and Delivery alone, provided that the customer is a business as defined by § 14 of the (German) Civil Code [BGB], a legal entity under public law or a public law special fund. These terms and conditions shall also apply for all future transactions, even if express reference is not made to them and also if we deliver goods and render services to the customer without reservation and we are aware that the customer’s terms and conditions of business differ from our own.

II. Quotes and entering in a contract, Content of performance

1.Our quotes are subject to change without notice. In the absence of a written agreement, a contract shall only materialise once we have confirmed an order in writing or render the ordered goods or services without reservation. In so far as we do confirm an order, it shall be instrumental for defining the scope of the goods and service.

2.The technical data and descriptions in our product information or advertising materials shall not, however, constitute any guarantee for the condition or durability of the goods to be delivered by us.

3.When selling by sample or pattern, these shall only describe proper standard patterns and samples, but they shall not constitute any guarantee for the condition or durability of the goods to be delivered by us.

III. Prices, Terms and Conditions of Payment, Default in payment

1.The prices agreed when the respective contract was signed, and in particular those prices stated in our order confirmation, shall apply. If a price has not been agreed separately, the prices valid in accordance with our price list (net ex Works) at the point in time at which the contract was signed shall apply plus the rate of value added tax in force on the date of delivery as well as the costs of proper packing as required for the method of despatch, the cost of transport and, provided that this has been agreed, the costs of transport insurance. When delivering to customers outside Germany other country-specific duties may also have to be paid in addition.

2.We shall reserve the right to adjust our prices as appropriate for goods and services which are not to be delivered or rendered within two months from the contract being signed, if after signing the contract our costs change as a result of collective bargaining wage agreements, of an increase in the prices charged to us by our suppliers, or of fluctuations in the rates of foreign exchange.

3.Unless another term for payment has been agreed, our invoices are to be paid in full within 30 days from the date of invoice. Once the date on which payment is due stated on the invoice has expired the customer shall be in arrears in accordance with § 286 II No BGB. We shall grant a prompt payment discount of 2% on the amount in the invoice qualifying for this discount if payment is made within 14 days from the date of invoice. The amount shown in the invoice minus packing, transport and insurance shall qualify for a prompt payment discount.

4.The customer shall only be entitled to the right to offset or the right of retention if his counter claims have been declared final and absolute in a court of law or if they have been recognised by us. Moreover, the customer shall only be entitled to the right of retention if the counter claim asserted by him is based on the same contract as our claim for payment.

5.If the customer does not pay invoices due for payment, fails to pay invoices by the date on which payment is due, or if after the contract is signed we become aware of information calling into question his solvency or creditworthiness (in particular he stops making payments, his cheques or drafts are protested) we shall be entitled to make the entire amount of his remaining debts to us payable immediately and to amend the agreements we have made with him and demand payment in advance, the furnishing of a security or the immediate payment of all our accounts based on the same legal relationship, after goods have been delivered.

IV. Delivery period for good and time limit for performance

1.Periods agreed for delivery and performance shall only apply as approximations, provided that a transaction has not been expressly agreed on a fixed date in writing. If nevertheless we fail to deliver within a set delivery period us for reasons for which we are to blame, the customer may, after a reasonable subsequent period for delivery set by him has expired unsuccessfully, withdraw from the contract. Withdrawal from the contract must be made in writing.

2.We shall only find ourselves in default after a reasonable subsequent period of time set by the customer has expired. In the event of force majeure and other unforeseeable, exceptional events for which we are not to blame, (e. g. interruptions in operations due to fire, breakdown of production plant and machinery, our suppliers failing to supply us within set delivery periods, stoppages in operations due to shortages of raw materials or power shortages, strike, lock-out, traffic stoppages, official intervention) we shall, provided that we are prevented from fulfilling our delivery obligations through no fault of our own as a result of the named circumstances, entitled to postpone the delivery of goods and /or the rendering of performances beyond the duration of the hindrance plus a reasonable startup period. If, as a result of this, the goods or service are delayed by more than one month, not only we, but also the customer, shall be entitled, to the exclusion of any compensation claims for damages, to withdraw from the contract in writing subject to the preconditions in accordance with No VIII.1– 5 with regard to the volume of goods /service affected by the disruption to delivery.2.

3.Our obligation to pay compensation for damages shall be limited in every instance of default in accordance with No VIII1– 5.

4.We shall be entitled to deliver part deliveries and to render part services within the agreed periods for delivery and performance, if this is reasonable for the customer.

5.Compliance with our delivery and performance obligation assumes that the customer has fulfilled his obligations properly and on time. We shall reserve the right to raise the objection that a contract has not been fulfilled.

V. Passing of risk, Transport and packing costs

1.Unless agreed otherwise in writing, delivery shall be ex Works and consignments are to be collected there by the customer at his own risk and cost. In this case risk shall pass over to the customer after the goods have been made available for collection and the customer has received notification that the goods are ready for collection. Otherwise risk shall pass over to the customer when the consignment is handed over to the freight forwarder (even if the goods are delivered carriage free or if we have insured the consignment in transit). The Buyer (Party placing the order) alone shall be responsible for ensuring that consignments are loaded safely and securely.

2.If non-standard packing is used at the Buyer’s request, this shall be invoiced at cost.

3.If the goods are dispatched on pallets, these shall consequently be invoiced. If the pallets are returned to us directly carriage free and undamaged, they will be repaid by means of a credit.

VI. Retention of title

1.The goods shall remain our property until the purchase price and all other present or future accounts to which we are entitled from the customer as a result of the business relationship have been paid in full. If our claim for the payment of the purchase price is to be paid under a current account arrangement, and we accept a balance of account, this shall not affect our retention of title.

2.The customer shall be obliged to treat gods belonging to us with care, in particular he shall be obliged to insure them sufficiently at his own expense against loss or damage to provide cover for new replacements. The customer shall assign his claims under the insurance policies to us here and now. We accept this assignment. In so far as maintenance and inspection work are necessary, these are to be carried out by the customer in good time at his own expense.

3.The customer must not pledge or assign by bill of sale as a security goods belonging to us. He is however entitled in accordance with the following terms and conditions to resell the delivered goods in the normal course of his business. The above-named entitlement shall not exist, in so far as the customer has assigned or pledged the account against his buyer created by reselling the goods – and this account is in each case legally valid – to a third party or has agreed a prohibition of assignment with him.

4.As a security for the fulfilment of all our accounts named in Number VI, the customer shall assign to us here and now all accounts – including those created in the future and conditional accounts – created by reselling the goods delivered by us with all ancillary rights amounting to 10 % gross of the final invoice amount of the delivered goods ranking above his remaining accounts. We hereby accept this assignment.

5.As long as, and as far, as the customer fulfils his payment obligations to us, he shall be authorised to collect the accounts – which are assigned to us – against his customers as part of proper management. However, he is not entitled, with regard to these accounts, to agree a current account payment arrangement or prohibition of assignment with his customers or to assign them to third parties or to pledge them. If, contrary to Sentence 2, a current account payment arrangement does exist between the customer and the buyers of the goods subject to our retention of title, the account assigned in advance to us shall also apply to the recognised balance of the current account as well, in the event that the buyer becomes insolvent, to the balance of account existing at that time.

6.At our request, the customer shall have to prove the accounts assigned to us individually and to announce to his debtors that the accounts have been assigned to us with the request that the customers pay our accounts to us. We shall also be entitled at any time to inform the customer’s debtors ourselves of the assignment and to collect the accounts. We shall however, not make any use of this authority as long as the customer fulfils his payment obligations properly and on time, an application has not been made to instigate insolvency proceedings against the customer and the Buyer has not stopped making his payments. If, on the other hand, such a case does arise, the customer shall have to notify us of the assigned accounts and who owes them as well as pass over to us all the information required to collect the accounts. He shall also have to hand over to us the documents required to do so.

7.In the event of levies of execution or other third party intervention, the customer shall have to notify us without delay in writing so that we can take legal action in accordance with § 771 of the (German) Code of Civil Procedure [ZPO].

8.The processing, treatment or transformation of the delivered goods subject to retention of title shall always be made by the customer for us, without any liabilities accruing to us as a result. If the delivered goods subject to retention of title are processed, mixed or combined with other objects not belonging to us, we shall consequently acquire co-ownership to the new thing in proportion to the value of the delivered goods (Total invoiced amount including value added tax) to the other objects at the point in time of processing, mixing or combining. Moreover the same shall apply to the thing created as a result of processing as for the goods delivered to us subject to the retention of title. If processing, mixing, combining takes place in such a way so that the customer’s thing is to be regarded as the main thing, it shall be regarded as agreed that the customer shall assign proportional coownership to us. The customer is entitled to dispose of the new thing created as a result of processing, treatment, transformation, mixing or combining in the course of his proper business operations without pledging or assignment, as long as he fulfils his obligations under his business relationship with us on time. The customer shall assign his accounts from the sale of this new thing, to which we are entitled ownership rights, here and now equal to our share of the ownership of the thing. If the customer mixed or combines the delivered goods with a main thing, he shall assign here and now his accounts against the third party to us for the amount of the value of our goods. We hereby accept these assignments.

9.At the customer’s request we shall undertake to release the securities to which we are entitled at our choice to the extent that the marketable value of our securities exceeds the value of our accounts against the customer to be secured by more than 20 %.

10.In the event that the customer is in breach of contract, in particular if he is in default with the payment of more than 10 % of the invoiced amount over a not inconsiderable period of time, we shall – irrespective of the other rights to which we are entitled (compensation for damages) be entitled to withdraw from the contract and to demand the return of our goods. After taking back the goods we shall be entitled to sell them. The sale proceeds – minus reasonable costs of sale – shall be counted towards the customer’s existing liabilities to us.

VII. The Customer’s rights in the event of defects

1.Obvious physical defects, incorrect deliveries and discrepancies in volumes are to be notified to us in writing without delay by the customer, no later however, than 3 days from receipt of the goods. Concealed defects are to be notified in writing without delay, but no later however, than 3 days from being discovered. The customer shall be obliged, if necessary, to check by means of a test run, whether the delivered goods are free of defects and are suitable for the intended use. If a notification of defect is reported late or improperly in accordance with No VII Sentence 1– 2 the customer shall forfeit his defect rights subject to the preconditions of No VIII1– 5 of these terms and conditions, unless the defect has been maliciously concealed by us.

2.In the event that the delivered goods have defects, we shall, at our choice, only be obliged to effect a repair or to supply goods without defects (Subsequent fulfilment). If we are not prepared, or not in a position, to render subsequent fulfilment, in particular if there is a delay beyond a reasonable period of time for reasons for which we are to blame, or if the subsequent fulfilment fails for other reasons, the customer shall consequently be entitled as he chooses, to withdraw from the contract or to demand a reduction in the purchase price. A subsequent repair shall be regarded as having failed after the third attempt, unless the failure is attributable to the nature of the thing itself or to other circumstances. In so far as the Buyer has sustained a loss or has incurred expenses in vain as a result of the defects to delivered goods, our liability for this shall be determined in accordance with No VII 1, No VIII1– 5 and No IX.

VIII. Rights and Duties of our company

1.Our company shall only be liable for losses or expenses spent in vain – regardless of whatever legal reason on which they are based, if the loss or the expenses spent in vain:

a.were caused by us or by one of our assistants as a result of a culpable breach of an important contractual duty or

b.is attributable to a grossly negligent or intentional breach of duty by us or by one of our assistants. In accordance with No VIII1a) and b) we shall be liable for losses or expenses spent in vain which have been caused as a result of advice or information which was not to be paid for separately, only in the event of an intentional or negligent breach of duty by us, provided that this breach of duty does not constitute a physical defect in accordance with § 434 BGB of the goods delivered by us.

2.If we are liable in accordance with Number VIII1a) for the breach of an important contractual duty, without being guilty of gross negligence or intent, our liability to pay compensation for damages shall be limited to typical foreseeable damage. In this case we shall not be liable in particular for the customer’s lost profit and indirect consequential losses which were not foreseeable. The limitations on liability above in accordance with Sentence 1 and 2 shall equally apply for losses caused as a result of gross negligence or intent by our employees or appointed persons.

We shall not be liable for the Buyer’s indirect losses which he incurs as a result of third parties asserting contractual penalty claims.

3.The limitations of liability named above in Number VIII1to 2 shall not apply, provided that our liability is compulsory based on the provisions of the (German) Product Liability Act or if claims are asserted against us based on a loss of life, physical injury or impairment to health. If the goods delivered by us lack a guaranteed feature, we shall only be liable for such damages which the subject matter of the guarantee precluded.

4.Any further liability to pay compensation for damages other than that provided for in Numbers VIII1– 3 shall be ruled out, regardless of the legal nature of the asserted claims. This shall also apply in particular for compensation claims for damages based on faults existing when the contract was signed in accordance with § 311 Section 3 BGB, breach of contract other than delay or impossibility in accordance with § 280 BGB or on account of tortious claims in accordance with § 823 BGB.

5.In so far as the liability to pay compensation for damages is ruled out or is limited in accordance with Number VIII1– 4, this shall also apply with regard to personal liability to pay compensation for damages by our salaried staff, employees and representatives and assistants as well as vicarious agents.

IX. Time limit on claims

1.The customer’s claims on account of defects or on account of performances rendered in contravention of duty – including claims for the payment of compensation for damages and claims for the reimbursement of expenses spent in vain – shall become time-barred within one year counting from the passing of risk, provided that Numbers IX 2 – 4 below do not provide otherwise.

2.In the event of a claim for damages based on a delivery in accordance with § 478 and § 479 BGB, the time limit within which claims must be asserted shall not be affected. It is 5 years from the point in time at which we delivered the goods concerned to the customer. This extended time limit for compensation claims shall not apply, provided that the customer could have already have successfully relied upon the objection that the time limit for claims had expired towards his buyer.

3.If we have rendered advice and / or information in breach of our duty which is not to be remunerated separately, without having delivered goods in connection with the information or advice, or without the advice or information in breach of our duty constituting a physical defect of the goods delivered by us in accordance with § 434 BGB, claims against us based on this shall become time barred within one year from the beginning of the statutory period of limitation. The customer’s claims against us base on a breach of contractual, pre-contractual or statutory duties which do not constitute a physical defect of the goods to be delivered or delivered by us in accordance with § 434 BGB, shall likewise become time-barred within one year from the beginning of the statutory period of limitation. Provided that the above-named breaches of duty constitute a physical defect to the goods delivered by us in connection with the advice or information in accordance with § 434 BGB, the arrangements made in No 1 and 2 as well as 4 shall apply for the period of limitation for the claims based on the above-named breaches.´

4.The provisions made in No 1 to 3 shall not apply for the period of limitation for claims based on account of loss of life, physical injury or impairment to health unless the time limit for claims based on the (German) Product Liability Act and on legal defects in the goods delivered by us exist as a real third party right, on the basis of which the return of the goods delivered by us can be demanded. Moreover, they shall not apply for the period of limitation of claims asserted by our customer which are based on us having maliciously concealed defects in goods delivered by us or if we have intentionally breached a duty with gross negligence. In the cases named in this Number IX 4 the statutory periods of limitation shall apply for the limitation periods for these claims.

X. Taking back of products

Goods delivered without defects will not be taken back. If, by way of exception, we state that we agree to take back goods without defects, a credit for them shall consequently only be raised provided that we confirm that they can be used again without limitation. The actual costs, or at least 20 % of the invoiced amount or at least 10 Euro shall be deducted for checking the goods, preparing them and repacking them. Such a credit shall not be paid out, but shall only serve for the purposes of offsetting against our future deliveries.

XI. Prohibition of assignment

Rights and / or claims against us in particular on account of defects to goods delivered by us or on account of breaches of duty committed by us must not be assigned, either completely or in part to third parties or pledged to third parties without our express written consent. § 354 a of the (German) Commercial Code [HGB] shall not be affected by this.

XII. Place of fulfilment, Place of jurisdiction, Applicable law, Terms of delivery

1.The place of fulfilment and sole place of jurisdiction for all claims between us and registered businessmen or legal entities established under public law or public-law special funds shall be Iphofen; the place of jurisdiction for payments shall be the place of payment stated in the invoice, provided that there are no compulsory regulations contrary to this. We shall however be entitled to take legal action pending against a customer at his statutory place of jurisdiction as well.

2.Only the law of the Federal Republic of Germany, as applied between German businesses, shall apply to the legal relationship between us and the customer. The application of the UN convention on the international sale of goods (CISG) and the German international private law shall be expressly excluded.

3. n so far as International Commercial Terms (INCOTERMS) are agreed, it shall be the most recent edition of INCOTERMS (currently INCOTERMS 20000 which shall apply.

4. The sphere of validity of these terms and conditions of sale and delivery refers to all countries in which deliveries are made in which German law is applicable.

XIII. Final Provisions

1. Should individual of the above terms and conditions be invalid, partially invalid or excluded as a result of a special agreement, the validity of the remaining provisions shall not be affected as a result.´

2. We save our customers data in the course of our reciprocal business relationships in accordance with the Federal Data Protection Act.

Edition: November 2007

Knauf PFT GmbH & Co. KG
97346 Iphofen Germany

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