General Terms And Conditions Of Purchase

Validity for Paletti Automation GmbH & Co. KG and Paletti Profilsysteme GmbH & Co. KG

Sec. 1 General Aspects

1. These general terms and conditions of purchase apply to all legal relations between:
   1. Paletti Automation GmbH & Co. KG, who is subsequently also called customer, or
   2. Paletti Profilsysteme GmbH & Co. KG, who is subsequently also called customer
   3. their subsidiary company, also called customer, on the one hand and the contractor on the other hand.
2. The legal relations between the customer and the contractor exclusively comply with these conditions. Variations, changes and additions are to made in writing. Opposing,supplementing or contractors' conditions differing from these conditions only become part of the contract if the customer explicitly accepts this in written form. The receipt of deliveries and services as well as their payment does noway represent the acceptance of any conditions of the contractor.
3. These terms and conditions of payment are only valid if a commercial transaction from both parts is concerned. They are valid for all future legal relations between the contractor and the customer, even if in a particular case reference is not explicitly made to these conditions of purchase.

Sec. 2 Offer, Placing Of Order

1. The preparation of the offer for the customer is free of costs. In the offer the contractor has to advise the customer explicitly of deviations from the query documents.
2. Delivery contracts come off when the contractor confirms the customer's order. Delivery schedules as well as changes and supplemetations in them are to be made in written. As far as agreed between the contractor and the customer, a telecommunication is sufficient for this formal requirement.
3. In the case that the contractor does not accept the order with an order confirmation within two weeks after the entry of the order, the customer is authorzsed to revoke the order, but this does not mean that the customer is entitled to claims for damages.

Sec. 3 Content Of Services, Completion, Changes

1. The content of services results from the respective individual order. Documents, statements, ideas, drafts, exemplars, patterns and all other results, incurring in the service provision are part of the order services.
2. The contractor performs his services with extreme accuracy considering the latest state of science and technology, the safety regulations of the authorities and the trade associations, especially considering DIN or ISO certifiying conditions, as far as these concern his share of benefit as well as his own existing experiences and realizations or those gained during the remittance work. The contractor guarantees the compliance with the statutory provisions, the agreed technical specifications and other requirements.
3. The contractor will develop drawings, datas and other documentations according to the requirements, regulations and guidelines of the customer as well as of his clients.Iin the case of unclarity, the contractor is obliged to gather all information required for the completion of the order before the beginning of work. This applies particularly to the computer systems and programs which are to be utilized.
4. At customer's request the contractor will give necessary particulars about the composition of the delivery item as far as this is necessary for the completion of licensing requirements and the respective legal regulations at home and abroad.
5. As long as the contractor has not fully fullfiled his obligations, the customer is authorized to ask for changes of the order regarding the construction, completion, amount and delivery time within responsibility. Thereby the results (for example additional or reduced costs, delivery time) are to be arranged adequately amicable.
6. The contractor is obliged to notify doubts about the mode of completion of the delivery/service immediately in written form and to propose changes which he considers necessary in order to fullfil the agreed specifications or to meet the legal demands.

Sec. 4 Service terms, defaults and exclusion of the obligation of performance

1. Agreed deadlines are binding. For the observance of the delivery date the handover of the conventionary total output to the customer is decisive. If free delivery or free location delivery is not agreed, the contractor must supply the service considering the usual time for transport or consignment.
2. If the contractor does not observe the delivery date, the customer is authorized to ask at his own option for additional supply or compensation instead of the service without any further grace period notification because of work not performed or not owing. The customer is also authorized to withdraw the order. In the case of delayed delivery, a contract penalty of 0,5 per cent of the order value for each week of delay started is agreed. The contract penalty is limited to maximum 5 per cent of the agreed renumeration. The assertion of further rights hereof remanins unaffected . The delay penalty must be allowed for an actually occurred and claimed damage caused by delay. The right to ask for the payment of the contract penalty is not forfeited by unconditional acceptance of the delayed delivery.
3. As soon as it is evidenced that the agreed intermediate deadlines or the time limit are not observed, the contractor is obliged to inform the customer immediately. The customers' lawful rights are not affected by this message.

Sec. 5 Act Of God

1. Acts of God, industrial conflicts, riots, official measures and other unpredictable, inevitable and fatal events cause reciprocally the repose of the contractual obligations of the contractual partner for the period of the disturbance. In a reasonable manner, the contractual partners are obliged to give immediately the necessary information and to adapt their obligations to the changed circumstances.
2. In case that the obligations of the performance rest for more than two weeks due to the Acts of God, the customer is authorized to cancel the contract with immediate effect. In this case the contractor can demand damages of his costs demonstrably occurred, which have emerged from his confidence to existing contractual relation up to the repose of the contractual obligations.

Sec. 6 Reimbursement

1. The contractor obtains the agreed reimbursement (compensation package) for the appointed performance including any expenses, such as expenses for the material, utilizations of equipment, travel expenses, transport, insurance, free packing, customs duties, taxes etc. Furthermore, the contractor will make out an invoice. The billing of the compensation has to be effected after the acceptance of the complete performance of the order.
2. If a payment plan is arranged, the payment occurs after the receipt of a relative invoice for partial delivery according to the deadlines and to the partial amounts appointed in the payment plan. Before the contractor's or the end customer's acceptance of the performance, several payments occur on account without the recognition of the previous performance as a contractually stipulated performance. The billing of the ending rate occurs at any rate after the acceptance of the total output.The customer is authorized to reserve the ending rate or maximum 20 % of the order value up to the lapse of the warranty period, but the contractor is thereby not authorized to claim for damages. Minor defects remain unconsidered.
3. Invoices are to be sent to the customer in triplicate under specification of order number, purchase order indicator and number of each position. Otherwise they do not implement the terms of payment.
4. Payment occurs after the receipt of the invoice within 4 working days with the discount of 3 % Skonto, or within 90 calendar days net with means of payment of our choice. Terms of payments are implemented with the laterest of the following possibilities:
   1. delivery or acceptance of performance,
   2. receipt of the invoice or
   3. the delivery date mentioned in the order.
5. In case that the customer pays before the transfer of perils, the assignment of the delivery item is considered as valid unless the customer has required and obtained securities to the amount of the payment.
6. The sales tax has to be shown separately on the invoice.
7. The contractor is not authorized to assign claims to third parties or to let third parties collect a claim. In case that the contractor assigns the claims to third parties without the consent of the customer, the assignation is effective anyhow. But at his own option, the customer can discharge the obligation to the contractor or to the third parties.
8. The customers' payments are considered as effectuated as soon as the customers are applied for payment by the contractor.
9. The customer is authorized to offset also claims, which are entitled to affiliated companies against the contractor.
10. In the case of incorrect delivery, the customer is authorized to reserve the value percentage of the payment until the regular fulfillment.

Sec. 7 Provisions Of Material, Tools

1. Provisions of material remain property of the customer and they must be stored separately free of charge by the contractor. Furthermore they must be identified and administered. Their utilization is only permitted for the underlying order. In the case of depletion or of loss, the contractor must pay damages and take over insurance for this purpose at his own expense. This also applies to the calculated handover of order-bound material.
2. In the manufacturing process and the alteration of the material the customer becomes proprietor of the new or remodelled product. The contractor stores the new or remodelled product gratuitously for the customer with the carefulness of a prudent businessman. The contractor's reservation of proprietary rights of the performance outcome is excluded in any form.
3. The property of auxiliary models and auxiliary tools, models, forms etc. (in the following "tools"), which are necessary for the contractual performance passes over to the costumer. Thus, tools must be handled like provisions of material by the customer. In his own discretion, the customer is authorized to ask for the dispatch of the tools or to let the tools scrap by the supplier, which must occur free of charge for the customer. The scrapping of the tools requires a written agreement of the customer.
4. The contractor will identify confidential documents as the customer's propriety and he will store them separately. At customer's request the contractor will hand over all confidential documents and items immediately and without being asked to the customer. Rights of retention are excluded.

Sec. 8 Subcontracting

Subcontracting of orders to third parties is only allowed after the customer's written agreement . In case that the contractor violates this regulation, the customer is authorized to withdraw from the contract with immediate effect. In this case the contractor is not authorized to enforce claims for compensation in any form.

§ 9 Acceptance

If the installation of the delivery item is part of of the order, a formal acceptance, which can only be effected after the successfully test phase, is required. Furthermore, the delivery item is deemed to be accepted after 4 weeks that the item has been used, as far as no prevenient defects are claimed on the part of the customer during this period. In case that the contractor's order performance is integrated in a total output of the customer for his end customer, the acceptance of the contractor's performance is only effected when the end customer accepts the total output of the customer. This process does not require an explicit declaration. If payments are effected, this does not mean at all that the delivery item has been accepted. With the acceptance of the order performance the transfer of perils commences.

Sec. 10 Secrecy

1. The contractor commits to treating all trading, technical and not evident details, which he gets to know through the business relation, as business secret. And he is obliged to save them from unauthorized reference, loss or utilization. Drawings, models, paterns, exemplars and similar items, which have been disposed or produced at our costs, remain property of the customer and may not be accessible or disposed to unauthorized third parties without the customer's written consent. The duplication of such items is only allowed within the internal requirements and proprietary regulations. Considering the prescription of secrecy, the documents left to the contractor must be handed over to the customer after the completed work without being asked or they must be securely destroyed afer consultation with the contractor. The contractor does not reserve or keep any copies, duplicates etc, unless he is obliged to archive them due to a statutory provision. Subject to further rights, the customer is allowed to ask for the handing over of them, if the contractor breaks his duties.
2. Staff and sub-supplier must be bound respectively.
3. As soon as no other regulations are agreed in the order, this obligation to secrecy persists 5 years after the delivery and/or after the performance.
4. The supplier is only allowed to advertise with this business relation after a customer's written agreement.

Sec. 11 Liability For Defects

1. WIf the limitation period of the warranty for hidden defects is not agreed separately, the customer guarantees that his order performance remains free of defects during a period of 36 months after the customer's or the end customer's acceptance of the total output. In any case, the period must not exceed 48 months after the handing over of the total output to the customer. The limitation period of the warranty for hidden defects is valid indipendently of the operative period of use. Defects must be immediately reported by the customer, as soon as they are noticed after the conditions of a correct business process. In this respect the supplier renounces the objection of belated notice of defects. The notice of defect interrupts the limitation period of the warranty for hidden defects concerning the defective delivery item until the complete remedy of the defect. Defects of title become time-barred after the legal limitation period. At his own choice the customer is authorized to lodge the warranty claims. In the case of subsequent performance or replacement delivery, the contractor is obliged to remedy the defect immediately at his own costs free destination or to provide a new performance. He must bear all the costs which arise from the remedy or the replacement, including necessary travel expenses.
2. In urgent cases, such as danger in delay or in those cases in which the customer's own contractual obligations require an immediate remedation, the customer himself or through third persons can perform the remediation at the contractor's costs without any deadlines. This also applies for the case in which the contractor has delivered after the occurrence of delay.
3. For the rest, following additional are in force.

Sec. 12 Liability

1. If the customer is made a claim on because of liabilty regardless of negligence or force of third parties towards the right alterable by mutual consent, the contractor stands up for the customer insofar as he would also directly guarantee. For the compensation of the damage between the customer and the contractor, the following principles of sec. 254 from the Civil Code apply respectively.
2. For the rest, the contractor is liable within legal regulations.

Sec. 13 Industrial Property Rights

1. The contractor is liable for claims which are dued to the violation of given and declared industrial property rights at conventionary application of deliveries and services. The contractor indemnifies the customer and the latter's customers from any claims of the violation of such industrial property rights. This is not valid as far as the contractor works according to consigned drawings, models, information etc. and as far as he does not know or does not have to know in conjunction with his performed services that industrial property rights are violated thereby.
2. In case of violation, the customer is authorized to obtain the necessary authorization for the delivery item's consignment, implementing, utilization, resale etc from the owner of such industrial property rights at the contractor's costs. A customer's claim for damages going beyond this remains unaffected.

Sec. 14 Cancelation Of A Contract

The customer is authorized to cancel the contract at any time. The explanation of the rescission is to be made in written. In such a case, the customer is in any case authorized to pay compensation for the value instead of the refund or the handover of the services received so far. The amount of the compensation for the value complies with the value of the services performed at the time of the handing in of the termination notice.

Sec. 15 Other Agreements

1. In the case that the contractor ceades payment or that an insolvency proceeding against his assets or a judicially and extrajudicially composition proceeding are filed, the customer is authorized to withdraw from the contract. As far as no withdrawal occurs, the customer is authorized to deduct an amount of at least 0 % of the remuneration as security for the contractual claims by the expiry of the contractual limitation period of the deficiency claims.
2. Unless in the individual order a different place of fulfillment is mentioned, the place of fulfillment for performances and deliveries of the relative individual order is the head office in Berlin or the registered office of the customer's commissioning office.
3. Exclusive jurisdiction is, if legally acceptable, Minden.
4. Additionally to these conditions, the law of the Federal Republic of Germany is exclusively valid. The application of the unified United Nations Conventions on Contracts for the International Sale of Goods is excluded.