General Terms and Conditions of GfM Gesellschaft für Micronisierung mbH,

Lesumer Heerstr. 30, 28717 Bremen Status: April 2014

§ 1 General – Scope:

  1. Our general terms and conditions apply exclusively and are part of the mutual contractual relationship with the buyer; we do not accept conflicting or altering general terms and conditions of the buyer, unless we have expressly agreed to them. Our general terms and conditions will apply even if we execute delivery to the buyer without reservation, being aware of conflicting or altering general terms and conditions of the buyer.
  2. All agreements between us and the buyer for the execution of this contract need to be in writing.
  3. Our general terms and conditions only apply to entrepreneurs, legal entities under public law and separate estates under public law due to § 310 subsection 1 German Civil Code.
  4. Our general terms and conditions are also to be applied to all future business transactions with the buyer.

§ 2 Offer – Offer Documents:

  1. Our offers are subject to change without notice.
  2. Orders and side agreements are only binding upon our written confirmation. This also applies to modifications of and additions to the agreement.
  3. In case the order is to be qualified as an offer in terms of § 145 German Civil Code, we have the right to accept same within four weeks.
  4. We reserve ownership and copyright to any illustrations, drawings, calculations and other documents; these may not be disclosed to third parties. This applies especially to documents, which are marked as “confidential”; our explicit written consent is required prior to their transfer to third parties.

§ 3 Prices – Conditions of Payment:

  1. Prices are EURO-prices, if no other currencies are stipulated in our order confirmations or agreed upon otherwise with the buyer.
  2. Unless stipulated otherwise in the order confirmation, our prices are “ex works”, excluding packaging, which will be charged separately. We reserve the right to increase our prices accordingly if, after conclusion of the agreement, cost increases occur, especially based on collective agreements or increases regarding material prices. Same will be demonstrated to the buyer.
  3. Value added tax (VAT) is not included in our prices. This will be shown separately in our invoices according to the legal specifications at the date of the invoice.
  4. Any deduction of discount requires a separate written agreement.
  5. Payments to our accounts need to be free of any deductions of transfer fees. For bank transfers and (in doubt just on account of performance accepted) other non-cash payments only the unconditional credit on one of our accounts will effect full discharge of debtor. Bills (Wechsel) are not accepted.
  6. Unless stipulated otherwise in our order confirmation, payments shall be made net (without deductions) within eight days from the date of invoice. If the buyer is in default of payment, we shall be entitled to charge default interest at the rate of 8 % p.a. above the interest base rate due to § 288 German Civil Code. If we are able to prove a higher damage caused by the default, we are entitled to claim such damage. The buyer is entitled, however, to prove that there is no or a much lesser damage caused by default.
  7. In case there are any counterclaims basing on the same contractual relationship and being established by a final binding ruling, undisputed or accepted by us, the buyer has the right to set off these counterclaims. A right of retention may only be exercised by buyer if his counterclaim is based on the same contractual relationship.

§ 4 Time of Delivery:

1. In General offer information regarding delivery times/dates is non binding, if not explicitly stated as binding. Provided that all technical details/issues have been clarified and the timely receipt of all information, documentation, schemes, materials, necessary permits and approvals, to be provided by the buyer in due course and good manner and the fulfillment of the agreed conditions of payment and other obligations of the buyer we will comply with the binding delivery time quoted in the offer. If these preconditions are not fulfilled, the delivery time will be extended accordingly, except we are responsible for the delay.

2. If the delay is caused by force majeure, e. g. mobilization, war, riots, civil commotions or similar events, e. g. strikes or lockouts, the delivery time will be extended accordingly. The same applies in case we do not receive corresponding delivery orderly or in time.

3. Partial deliveries are permitted, unless those are unacceptable for the buyer.

4. If we are responsible for the delay in delivery, we cannot be held liable in case of ordinary (gewöhnliche) negligence.

5. If the buyer, after we have been in delay of delivery, sets an adequate deadline combined with the threat to refuse the goods in case of nonperformance, the buyer has the right to withdraw from the agreement if this date has been expired. The buyer is only entitled to claims for damages due to nonperformance if the delay was due to intent or gross negligence and those claims are limited to 50 % of the suffered and predictable loss and the amount of the respective order volume.

6. The limitations of liability as per clause 4 and 5 are not applicable if the partners agreed upon a firm deal (Fixgeschäft).

7. If the buyer is in default of acceptance or if he is in breach of other cooperation duties, we are entitled to claim damages, including potential additional expenditures. In case the buyer is in default of acceptance, the danger of potential destruction and deterioration of the goods is to be borne by the buyer.

8. In case the delivery is postponed on demand of the buyer for more than one month after the notice of readiness for dispatch, we are entitled to charge a monthly storing fee of 0,5 % of the value of the goods and services per additional month or part thereof up to a total of 5 %. Each party has the right to prove that the real storing fees are higher or lower.

§ 5 Transfer of Risk:

1. If nothing else is stipulated in the order confirmation, delivery is to be understood “ex works”. Also in case the delivery is free of carriage charges the risk is transferred to the buyer when the delivery is shipped or collected by a carrier.

2. A transport insurance coverage is optional on demand of the buyer at extra cost.

3. The risk is also transferred to buyer if the delivery or the receipt of the delivery is delayed due to reasons the buyer is responsible for or the buyer is in default of acceptance due to other reasons.

§ 6 Liability:

1. The buyer is not entitled to refuse the receipt of the delivery due to minor deficiencies.

2. We do not owe a particular work product or success, but only the execution of the performance using the agreed manufacturing process. If the buyer, when reviewing the performance (e.g. documentation tasks), discovers that this does not meet the agreed standards, the buyer is entitled to one rework free of charge, to the extent such rework is reasonable, permissible and possible. If such rework is unreasonable, impermissible, impossible or fails, the buyer – at his choice – is entitled to claim compensation for the reduction in value or withdraw from the agreement.

3. Liability for material defects is statue-barred 12 months after the transfer of risk. This does not apply if the defect was fraudulently concealed.

4. We are liable according to the provisions of the law, if we culpably violated a material obligation, which results from the nature of the agreement. Even in this case our liability is limited to the foreseeable, typical damage.

5. Furthermore, our liability is limited to cases of intent and gross negligence and to the compensation of the direct damage/loss.

6. Please be advised that our liability insurance limits the risk of damage to work in progress of goods that have been provided for further work/manufacturing process up to € 50,000.00. We do not hold any such insurance that covers higher insured or unlimited insured sum. We have been advised that any such insurances are not offered in general. Therefore in case of damage to work in progress of such goods our liability is limited to cases of intent and gross negligence and in case of gross negligence to the compensation of the direct damage/loss. In case of gross negligence our liability is furthermore limited to the respective contract value (agreed remuneration) but limited to a maximum amount of € 50,000.00.

7. We are neither liable for specifications/statements of the buyer or third parties nor for the quality/state of material provided by buyer or, upon his instruction, by a third party.

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  1. If not stated otherwise in the preceding provisions, we are not liable for any damages. The liability for damages concerning the violation of life, physical integrity and health remains unaffected.
  2. The buyer is obliged to indemnify us for any claims of third parties, relating to the sale and marketing of the goods irrespective of the legal ground.

10. Damage claims, which are not based on intent, are statue-barred 6 months after the date of the occurrence of the damage.

§ 7 Retention of Title:

  1. The goods delivered completely remain our property until full payment of the charged prices including any interests and expenses and until encashment of any cheques or bills. However, the buyer is entitled to sell or to process the goods in the course of his due and ordinary business. In case the goods are sold the buyer hereby assigns all rights and ancillary rights – including any current account balance claims – in the amount of the final invoice amount (plus VAT), to us, that he may have against his buyer of the goods. In case the goods and services subject to retention of title will be sold together with other goods without stipulating a single price for the goods and services subject to retention of title, the buyer hereby assigns the part of the total claim corresponding to the price charged by us for the goods and services subject to retention of title. The buyer is obliged to reveal at any time on demand the addresses of his customers and the amounts of the corresponding claim.
  2. The buyer is entitled to process the goods and services subject to retention of title and to mix and join them with other goods. The manufacturing etc. is made as per our order and on our behalf, without charge and without any obligations for us and in that way that we are to be considered as producer according to § 950 German Civil Code. The buyer keeps the new item for us using the care of a prudent businessman. The new item is considered as the goods subject to retention of title. In case of mixing and joining with other goods, which are not our property, we will obtain joint property regarding the new item in the amount corresponding to the relation of the value of our goods to the value of the other goods at the time of mixing and joining. The terms stipulated in number 1. concerning the assignment of claims apply accordingly to the new item. The assignment only occurs in the amount corresponding to the amount invoiced for our goods. The buyer is obliged to inform us upon demand at any time and completely, in particular about name and address of his manufacturer/processor.
  3. The buyer is obliged to duly take care of the goods, especially to have the goods adequately insured against fire, water and theft at his own cost at new replacement value.
  4. As long as the goods and services are subject to retention of title, the buyer is not entitled to pledge them or transfer them by way of security. A resale is allowed only to resellers within the due and ordinary course of their business under the condition that the reseller receives payment from his customer or sells also subject to retention of title.
  5. Until further notice the buyer is entitled to collect assigned claims resulting from sales. In case of good cause, especially delay of payment, suspending of payment, legal proceedings for bankruptcy, protest of a bill or reasonable evidence for over-indebtedness or impending illiquidity, we are entitled to revoke the collection authorization. Furthermore we are entitled after prior warning and adherence of a reasonable time period to disclose the assignment for security, to realize the assigned claims and to demand the disclosure of the assignment for security by the buyer to his customer.
  6. In case of attachment, seizure or other actions or interferences of third persons the buyer is obliged to immediately inform us in writing to enable us to take action according to § 771 ZPO (German Code of Civil Procedure). As far as the third person is not compensating us for all costs relating to such § 771 ZPO (German Code of Civil Procedure) proceedings, the buyer is liable for the remaining costs incurred.
  7. In case the value of our securities exceeds our claim by more than 20 % we are obliged to release securities on demand of the buyer or a third party being impaired by such over-securing. It is in our discretion what kind of securities we will release.
  8. The buyer is only entitled to sell the goods within the course of the due and ordinary business and to collect the claims against his own buyer as long as he meets his obligation for payment to us, he is not in delay of payment, there is no request for the initiation of insolvency proceedings or a suspension of payment.
  9. In case of breach of duty by the buyer, especially delay of payment, we are, aside from retrieving the goods, entitled to withdraw from the agreement after setting a reasonable time period for performance and expiry of this period. The legal regulations concerning the dispensability of setting a time period remain unaffected. The buyer is obliged

to return the goods. The retrieving due to the assertion of the claim of retention of title or the seizure do not constitute a withdrawal from the agreement, except we expressively declare this.

§ 8 Packaging, Postal and Parcel Charges:

  1. As far as nothing else is agreed upon packaging, will be charged at our usual rates. A return of packaging will neither be accepted nor refunded.
  2. If not agreed otherwise, postal and parcel charges will be charged at actual rates.

§ 9 Freight, Customs Duties etc.:

In case we, by way of exception, accepted to bear freight costs, export or customs duties etc. at fixed rates, any increase of such costs, fees or charges will be charged to the buyer.

§ 10 Place of Jurisdiction, Place of Execution, Applicable Law:

1. If the buyer is an entrepreneur etc. (see § 1 subsection 3) the venue is Bremen. We are, however, also entitled to sue the buyer at his business location.

2. If nothing else is stipulated in the order confirmation, our business location is the place of performance (Erfüllungsort).

3. These general terms and conditions as well as the entire legal relationship with the buyer are subject to the Laws of the Federal Republic of Germany, excluding UN commercial law, in particular regarding the sale of goods and German conflict of laws provisions which could lead to the applicability of non-German law.

§ 11 Binding Force of the Agreement:

1. If general terms and conditions or other provisions of the agreement – in whole or in part – have not become part of the agreement or are ineffective, the remainder of the terms and the agreement remains in effect.

2. To the extent that the terms have not become part of the agreement or are ineffective, the contents of the agreement are determined by the statutory provisions.

3. The agreement is ineffective if upholding it, even taking into account the alteration provided in subsection 2. above, would be an unreasonable hardship for one party.

§ 12 Language:

This English version of the general terms and conditions is only a convenience translation of the German version, if such German version was also submitted. In case of deviations the German version shall prevail.