General Terms and Conditions of Sale

Palladion GmbH & Co. KG, In der Baake 8, 33181 Bad Wünnenberg

§ 1 General, Scope

1. The present general terms and conditions of sale (GTC) apply to all our business relations with our customers (hereinafter: “Buyer”). The GTC only apply if the Buyer is a contractor (§14 of the German Civil Code BGB), a corporate body under public law or a special fund under public law.
2. The GTC apply in particular to contracts on the sale and/or the delivery of moveable property (also referred to as: “Goods” in the following), regardless of whether we produce the goods ourselves or acquire them from suppliers (§§433 and 651 of the German Civil Code BGB). These GTC shall also apply, in their current version, as a framework agreement for future agreements on the sale and/or delivery of Goods with the same Seller, without us being required to refer to them in each individual case.
3. Our GTC apply exclusively. Differing, contradictory or supplementary general terms and conditions of the Buyer shall only become part of the contract if and to the extent that we have expressly consented to their validity. This requirement for consent applies in all cases, for example even when, in full knowledge of the GTC of the Buyer, we carry out the delivery to the latter without reservation.
4. Agreements made with the Buyer on an individual basis shall always have priority over these GTC. A written contract and/or our written confirmation is decisive for the content these kinds of agreements.
5. Legally significant declarations and notices that are to be submitted to us by the Buyer after conclusion of the contract (e.g. deadlines, defect notices, declaration of withdrawal or reduction), must be in writing to guarantee their validity.
6. References to the validity of statutory regulations shall only have clarifying significance. Therefore, statutory regulations shall also apply without such a clarification insofar as they are not directly changed or explicitly excluded in these conditions.

§ 2 Conclusion of Contract

1. Our offers are subject to change and non-binding. This also applies if we have provided the Buyer with catalogues, technical documentation or other product descriptions or records.
2. The ordering of goods by the Buyer is regarded as a binding contractual offer. We have the right to accept this contractual offer within four weeks of us receiving it.
3. This acceptance may declared either in writing or by the delivery of the goods to the Buyer.

§ 3 Delivery Period and Delay in Delivery

1. The delivery period shall be agreed on individually and/or specified by us upon acceptance of the order.
2. If we cannot comply with binding delivery periods for reasons for which we cannot be held responsible (non-availability of the service), we shall inform the Buyer of this immediately, disclosing the new foreseeable delivery date at the same time. If the service is not available within the new delivery period either, we are entitled to withdraw from the contract fully or in part; we shall reimburse any possibly already rendered counter-performance. Non-availability of service refers in particular in this sense to delayed internal supply by our supplier if we have concluded a congruent covering transaction. Our statutory rights of withdrawal and termination as well as the legal regulations concerning the completion of the contract if the obligation to perform is excluded shall remain unaffected. The rights of withdrawal and termination of the Buyer under § 8 of these GTC shall also remain unaffected.
3. The start of our default on delivery shall be determined by the statutory regulations. A warning from the Buyer is necessary in any case. Should we be late in delivery for reasons for which we are responsible, the Buyer may demand lump-sum compensation for any damage suffered by the latter as a result of late delivery. The lump-sum compensation equates to 0.25% of the delivery value for every completed month of delay, however no more than 5% of the delivery value of the late delivery goods in total. We reserve the right to furnish evidence that the Buyer has not suffered any damages or considerably less damages than reflected by the aforementioned lump-sum.

§ 4 Delivery, Risk Transfer, Acceptance and Default in Acceptance

1. The delivery shall be made ex-works, wherever the place of performance is. The goods shall be sent to another destination at the request and expense of the Buyer (sale by dispatch). Unless otherwise arranged, we are entitled to define the type of dispatch ourselves (in particular transport company, shipping method and packaging).
2. The risk of accidental destruction or accidental deterioration of the goods passes to the Buyer upon handing over at the place of performance at the latest. However, in the case of sale by dispatch, the risk of accidental destruction or accidental deterioration of the goods as well as the risk of delay passes to the forwarding agent, the haulage contractor or any other party designated to carry out the dispatch, upon dispatch of the goods. If an acceptance procedure has been agreed, this is decisive for the risk transfer. Furthermore, the statutory regulations on contracts for work and services shall apply accordingly in the event of an agreed acceptance procedure. The same shall apply for handover and/or acceptance if the Buyer is in default of acceptance.
3. In the event that the Buyer is in delay of acceptance, omits to carry out an act of cooperation or if our delivery is delayed for other reasons for which the Buyer is responsible, we shall be entitled to demand compensation for damage resulting from this, including extra expenses.

§ 5 Prices and Payment Terms

1. Our invoices are payable within 8 days of the date of invoice without deduction, unless agreed otherwise in writing.
2. Prices will be invoiced to confirmed prices or to prices valid at the date of dispatch. Prices are calculated on current raw-material and labour costs. Unexpected increase authorise us to adjust prices or to withdraw the contract free of charge in case of call-orders, multiple delivery orders and orders with a runtime of more than 3 month.
3. VAT is not included in the prices and is added at the current rate as provided by law to the invoice amount.
4. In the case of sale by dispatch, the Buyer assumes the transport costs ex works and the costs of any transport insurance wished by the Buyer. Any customs duties, fees, taxes and other public levies shall be borne by the Buyer.
5. If the above payment period lapses the Buyer will be in default. Interest should be paid on the purchase price at the respectively valid interest rate during default. We reserve the right to assert any further damages caused by default. Our entitlement to commercial overdue payment interest (§ 353 of the German Commercial Code HGB) vis-à-vis merchants shall remain unaffected.
6. The Buyer is only entitled to offsetting and withholding rights insofar as its claim is legally established or undisputed. § 7 Section 6 shall remain unaffected in the event of defects in the delivery.
7. If, upon conclusion of the contract, it becomes clear that our claim to the purchase price will be endangered by a lack of solvency on the part of the Buyer, we are entitled to withdraw from the contract in accordance with statutory regulations on refusal of performance. In the case of contracts concerning the manufacture of non-fungible items, we may declare withdrawal immediately; statutory regulations on the dispensability of setting a deadline shall remain unaffected.

§ 6 Title Retention

1. We reserve the right to the property of the sold goods up until the full payment of all our present and future claims resulting from the purchase contract and an ongoing business relationship (secured claims).
2. The goods subject to reservation of title may neither be pledged to third parties, nor assigned as collateral before the full payment of the secured claims. The Buyer must inform us immediately in writing if and to the extent that third parties gain access to goods belonging to us.
3. In the event of action by the Buyer in breach of the terms of the contract, in particular in the event of default on the purchase price due, we are entitled, in accordance with statutory regulations, to withdraw from the contract and to demand the return of the goods on account of the title retention and withdrawal. Should the Buyer fail to pay the purchase price due, we may only assert these rights if we set the Buyer a reasonable period for payment beforehand without success or if such a deadline is unnecessary according to the legal regulations.
4. The Buyer is authorised to resell and/or further process goods subject to reservation of title in the proper course of business. The following provisions apply in this case.
   
   1. The reservation of title covers products that are produced by processing, mixing or combining our goods at their full value, whereby we are deemed to be the manufacturer. If during the processing, mixing or combination with items of third parties their property right should persist, we thus acquire co-ownership of the new item at the ratio of the invoice values of the processed, mixed or combined goods. Otherwise, the same applies to the resulting product as to the goods subject to reservation of title.
   2. The Buyer hereby now already assigns to us as collateral the claims against third parties resulting from the resale of the goods or product in total or in the amount of our possible co-ownership share, according to the aforementioned paragraph. We accept the assignment. The obligations of the Buyer stated in Section 2 shall also apply in view of the assigned claims.
   3. We and the Buyer are authorised to collect any debts. We undertake not to collect the debt so long as the Buyer complies with its payment obligations to us, does not default in payment, no application for initiation of insolvency proceedings has been filed and there is no other deficiency in the Customer's performance capacity. However, if this is the case, we may request that the Buyer discloses to us the assigned claims and their debtors, provides all information necessary for collection, surrenders the relevant documents and informs its debtors (third parties) of the assignment.
   4. If the realisable value of the securities exceeds our claims by more than 10%, we will release securities of our choice at the Buyer's request.

§ 7 Default Claims of the Buyer

1. The statutory regulations apply to the rights of the Buyer in the event of defects in goods and title, unless otherwise specified in the following. The special legal provisions in the case of final delivery of the goods to a consumer (supplier’s recourse according to §§ 478 and 479 of the German Civil Code BGB) shall remain unaffected in all cases.
2. The primary basis of our liability for defects shall be the agreement made concerning the quality of the goods. Regarded as an agreement on the quality are product descriptions, designated as such, that are surrendered to the Buyer before its order or that are integrated in the contract in the same way as these GTC.
   The ordering party shall assume liability for print or manufacture errors that the Buyer has overlooked in the item labelled by the latter as approved.
3. In the absence of any agreed quality of the goods, the existence of defects shall be determined in accordance with statutory regulations. However, we shall not be held liable for any public statements by third parties.
4. Claims for asserted made by the Buyer require that it has performed its legal duties to examine and notify (§§ 377 and 381 of the German Commercial Code HGB). If a defect should come apparent during or following the examination, we are to be notified of this immediately in writing. The notice is deemed immediate if it takes place within two weeks, whereby timely issue of the notification suffices to observe the deadline. Regardless of this duty to examine and notify, the Buyer must indicate clear defects (including incorrect and short delivery) in writing within two weeks of delivery, whereby the timely issue of the notification suffices to observe the deadline in this case too. If the Buyer fails to carry out the proper inspection and/or report of defects, our liability for the defect that was not reported is excluded.
5. If the delivered object is faulty, the remedy of the defect (subsequent improvement) shall apply initially. If this cannot be done, the delivery of a defect-free object (replacement) can be requested.
6. We are entitled to make the owed supplementary performance dependent on payment of the due purchase price by the Buyer. However, the Buyer is entitled to withhold a reasonable share of the purchase price proportionate to the defect.
7. The Buyer must give us the time and opportunity necessary for the owed supplementary performance and, in particular, for handing over the objectionable goods for the purposes of examination. In the event of a replacement, the Buyer must return the defect items to us in accordance with statutory regulations.
8. The expenses, particularly transport, route, labour and material costs necessary for the purposes of examination and supplementary performance shall be borne by us if a defect is actually present. However, we may demand reimbursement of resulting costs, if the Buyer’s request for remedy of defects turns out to be unjustified.
9. If the supplementary performance fails or a deadline to be set by the Buyer for supplementary performance expires unsuccessfully or is unnecessary according to statutory regulations, the Buyer may withdraw from the purchase contract or reduce the purchase price. However, the right of withdrawal does not exist in the event of an insignificant defect.
10. Claims of the Buyer to damage compensation and/or the reimbursement of futile expenses shall only exist in accordance with § 8 and are otherwise excluded.

§ 8 Sonstige Haftung

1. Insofar as nothing else results from these GTC including from the following provisions, we shall be liable according to the relevant statutory regulations in the event of violation of contractual and non-contractual obligations.
2. We shall be liable for compensation – for whatever legal reasons – in the event of intent and gross negligence. In cases of simple negligence we are only liable
   
   1. for damage resulting from death, physical injury or harm to human health.
   2. for damages resulting from the breach of an essential contractual obligation (obligation, the fulfilment of which makes the proper execution of the contract possible in the first place and on the observance of which the contractual partners can regularly rely); in this case liability is however limited to typical foreseeable damages.
3. The liability restrictions resulting from Clause 2 do not apply , insofar as we have maliciously failed to disclose a defect or have assumed a guarantee for the condition of the goods. The same applies for claims of the Buyer under product liability law.
4. The Buyer may only withdraw or terminate the contract on account of a violation of obligation that is not based on a defect, if we are responsible for the violation of the obligation. A free right of termination of the Buyer (in particular under §§651 and 649 of the German Civil Code BGB) is excluded. Otherwise the legal requirements and consequences apply.

§ 9 Limitation

1. By way of derogation from § 438 Clause 1 No 3 of the German Civil Code BGB, the general limitation period for claims for material defects and defects of title is one year from delivery. If an acceptance procedure has been agreed, the limitation begins upon acceptance.
2. The special legal stipulations for in rem claims to return of third parties (§ 438 Clause 1 No. 1 of the German Civil Code BGB), in the event of malice on the part of the Seller (§ 438 Clause 3 BGB) and for claims regarding supplier’s recourse in case of final delivery to a consumer (§ 479 BGB) shall remain unaffected.
3. The aforementioned limitation periods of commercial law also apply to contractual and non-contractual damage compensation claims of the Buyer that are based on a defect in the goods, unless the application of the regular legal limitation period (§§ 195 and 199 BGB) would lead to a shorter limitation period in individual cases. The limitation periods of the product liability law remain unaffected in all cases. Otherwise the statutory limitation periods apply exclusively to claims for damage compensation of the Buyer in accordance with § 8.

§ 10 Applicable Law and Place of Jurisdiction

1. The law of the Federal Republic of Germany shall apply to these GTC and all legal relations between us and the Buyer, excluding all international and supranational (contractual) legal systems, especially the UN Convention on Contracts for the International Sale of Goods. The pre-requisites and effects of the reservation of title under § 6 are however subject to the law at the respective storage location of the item, if, under said law, a choice of law made in favour of German law is not permitted or is void.
2. If the Buyer is a merchant as defined by the German Commercial Code, a corporate body under public law or a special fund under public law, our company headquarters are the sole – and international – place of jurisdiction for all disputes arising from this contractual agreement. We are however also entitled to take legal action at the Buyer’s general place of jurisdiction. Unless otherwise specified in the order confirmation, our business seat shall also be the place of performance.

 Should this English GTC contradict the German GTC, the German ones shall apply in the case of doubt.

General Terms and Conditions of Purchase

Palladion GmbH & Co. KG, In der Baake 8, 33181 Bad Wünnenberg