Sales and Delivery Terms of Julius Hoesch GmbH & Co. KG

Preamble

We supply to businesses as defined by § 14 BGB, legal entities in public law and estates in public law only subject to the following Sales and Delivery Terms. The exceptional validity of other terms-in particular purchase terms by the customer- will be subject to our explicit written confirmation.

§ 1 Offer and Acceptance

a) Our offers are non-binding and subject to change. Orders will only be binding for us if confirmed by us in writing or we have started to process them. Verbal agreements, promises and guarantees by our employees, with the exception of executive bodies, authorized signatories and parties with general authorization, will only become binding in connection with our written confirmation if confirmed by us in writing. A waiver of the writing requirement itself must in turn be made in writing.

b) Supplementary clauses for designation of the goods such as "circa", "as already delivered ", "as usual " or similar tags refer in our offers exclusively to the quality or quantity of the goods, but not to the price. Such information on orders is understood by us and confirmation is implicit.

c) Specified quantities are approximate only in every case. Deviations of 10 % +/- related to safety or filling will be regarded as in compliance with the contract in the case of deliveries of demountable, fixed tanks or silo vehicles. Such quantity deviations will be invoiced accordingly to account for the increase or decrease.

§ 2 Purchase price and payment

a) Value added tax at the statutory rate will be due additionally on our prices. Calculation is on the basis of the quantities and weights determined by us or our supply plant. However, calculation may be on the basis of the quantities or weights determined by the recipient where the values were determined using calibrated scales and the goods were transported at our risk.

b) The purchase price is payable as a net amount in cash upon delivery of goods unless otherwise agreed in writing.

c) We reserve the right to charge interest of 5 per cent above the basic interest rate as from the due date.

d) In the case of delay we will charge default interest of 8 per cent above the basic interest rate and reserve the right to assert further-reaching damage.

e) Bills of exchange and checks will be accepted for the purpose of payment only; they will be regarded as payment where they have been cashed without reservations. Any customary bank charges will be borne by the purchaser.

f) The purchaser may only make a set off against our purchase price claim with claims that are uncontested or res judicata. He will only be entitled to rights of retention where they are based on the same contractual relationship.

g) Where the purchaser is in arrears with payment of one of our invoices to an amount that is significant for the business relationship - 20 % of the invoice amount for one month, calculated as an average of the 12 months before the start of the delay, all our claims from the business relationship will be due immediately, irregardless of any acceptance of bills of exchange. We are then further entitled to demand cash payment before any possible further delivery. If the default is not corrected within a reasonable grace period, we have the right to rescind the contract and demand compensation in damages on account of delay or non-performance. This particularly applies for agreed but not yet conducted subsequent transactions. Should we become aware of facts indicating a significant financial deterioration of the purchaser we will have the right to demand cash payment before delivery of the goods even where otherwise agreed prior to this and to demand payment of our claims from the current business relationship that have not yet been extinguished..

§ 3 Delivery

a) The agreed delivery deadlines and dates are approximate in every case if no fixed date has been expressly agreed on.

b) In the case of deliveries not concerning our business (en-route deliveries) our delivery date and deadline will be regarded as having been complied with where the goods leave the supply plant in good time so that the consignment arrives on time at the recipient’s address given the usual time for transport.

c) Incidents of force majeure-including legal restrictions such as strikes and lockouts- will entitle us to rescind the contract. Damage compensation claims on grounds of breach of duty are excluded in such cases. This also applies in the case of delayed supply by our own suppliers for which we are not responsible.

We will be obligated to inform the purchasers of such incidents immediately. The purchaser is then likewise entitled to rescind the contract.

d) Where we are in arrears with delivery the purchaser will be obligated to stipulate an adequate period of grace and after it has lapsed unsuccessfully may rescind the contract. He may only demand damage compensation on grounds of breach of duty after the fruitless lapse of the period of grace where delivery delay arose and was caused by at least a negligent breach of cardinal contractual duties by our legal representative or a vicarious agent.

§ 4 Shipping and Acceptance

a) The risk during transport from the place of delivery will be borne by the purchaser in every case, including in the case of freight-paid deliveries or door deliveries except where we carry out the transport with our own vehicles from our company or warehouse.

b) Where the goods are collected from the place of the delivery the purchaser or his representatives will be responsible for loading the vehicle and compliance with the statutory provisions on the transport of hazardous goods..

c) Unloading and storage is incumbent on the purchaser in every case.

d) In the case of deliveries in tank vehicles and demountable tanks the recipient must ensure a flawless technical condition of his tanks or other storage containers and have the filling lines connected to his collection system at his own responsibility. Our responsibility will be limited to the operation of the installations proper to the vehicle.

e) Where our employees additionally assist with unloading or filling and cause damage to the goods or other damage during the process they are acting on the exclusive risk of the purchaser and not as our vicarious agents.

f) The aforementioned provisions will apply accordingly in the case of supply by third party transport companies to the extent that liability could be deduced from their actions. Liability by third parties will remain unaffected.

§ 5 Packaging

a) Where deliveries are made in leased drums they are to be returned by the purchaser within 30 days after arrival at the purchaser’s address emptied and in a flawless condition for his account and at his risk or to be returned to our vehicle free of charge in return for a receipt.

b) Where the purchaser fails to comply with his duty specified under a) on schedule we have the right to charge an adequate fee for the time exceeding 30 days and after fruitless stipulation of a deadline for return of the goods to demand the replacement price subtracting the aforementioned fee.

c) The labels may not be removed. Leased packaging may not be exchanged and may not be filled with other goods. The purchaser will be liable for decreases in value, accidental exchanges and loss without regard to fault. The condition of the incoming goods as determined by our company will be authoritative. Use as storage containers or passing the goods on to third parties is not permitted unless agreed on beforehand in writing.

d) In the case of deliveries in tank cars the purchaser must ensure prompt unloading and return to us or to the specified address at his own responsibility. In the case of an extension of the storage time at his company for which the purchaser is responsible the tank car leasing fee incurred will be borne by the purchaser.

§ 6 Retention of Title

a) The title to the goods will not pass to the purchaser before full payment of the purchase price and all other claims, including any future claims from the business relationship. This will also apply where payments are effected on specially designated claims. In the case of current invoicing the reserved title will be regarded as security for our balance compensation claim. The title will pass to the purchaser by the latest at the time when we uncontestedly have no more claims against him.

b) As long as the purchaser properly satisfies his liabilities towards us he is authorized to use the goods subject to retention of title in the regular course of business subject to the condition that his claims from the resale as set out in e) pass to us.

c) Where the purchaser fails to comply with his payment duties even after stipulation of a period of grace we have the right to demand return of the goods subject to retention of title without further stipulation of a period of grace and without a declaration of rescission. For the purpose of return we will have the right to enter the purchaser’s company.

d) Treatment or processing of the goods subject to retention of title will be for us, without obligating us. We are regarded as the manufacturer as defined by § 950 BGB and acquire the ownership of intermediate and final products on the basis of the ratio of the invoice value of our goods subject to retention of title to the invoice values of third party goods; in this sense, the purchaser acts gratuitously as a trustee. The same will apply in the case of combination or blending as defined by §§ 947, 948 BGB of goods subject to retention of title with third party goods.

e) The purchaser is hereby assigning to us any claims arising against third parties from the resale of the goods subject to retention of title for securing all our claims. Where the purchaser sells goods in which we have only proportional ownership in accordance with lit. d) he is assigning the claims against third parties to us to the respective proportional amount. Where the purchaser uses the goods subject to retention of title within the framework of a work (or similar) contract, he is assigning to us the (wages) claim to the invoice amount of our goods being used for this.

f) The purchaser is authorized to collect the claims from further use of the goods in the scope of proper business. Where we become aware of facts indicating a significant deterioration of the purchaser’s financial situation the purchaser must inform his customers of the assignment upon our request, refrain from any disposal of the claims, provide us with all necessary information regarding the existence of the goods in our possession and the claims assigned to us and to issue us with the documents for asserting the assigned claims. We are to be notified immediately of any access by third parties to the goods subject to retention of title and the assigned claims.

g) Where the value of the securities we are entitled to exceeds the total claim against the purchaser by 10% we will be obligated to release securities upon request by the purchaser.

§ 7 Guarantee Rights, Purchaser’s Duty to Inspect Goods and Report Defects

a) We will be liable for material defects in accordance with the statutory provisions either to make-up performance ( rectification or replacement) or reduction of purchase price where the following conditions have been fulfilled in addition to the statutory requirements:

The purchaser must inspect the goods and their packaging immediately upon delivery in accordance with the customs usual in business. Where the goods are sent in shipment units he must additionally check the labelling of each shipment unit to ensure that it matches the order. In addition, before filling he must ensure that the condition of the goods is in compliance with the contract through sampling as customary in the business.
Any defects found during the inspection must be reported by the purchaser immediately in writing.
Where the purchaser fails to carry out the respective inspection or fails to immediately report a detected or detectible defect the goods will be regarded as having been approved. The same will apply in the case of a mistaken delivery even where the deviation is so great that an approval by the purchaser would be excluded.
In the case of a hidden defect the purchaser must immediately report the defect after detection. This failing, the goods will be regarded as approved.

b) The purchaser’s right to rescind the contract in the case of a material defect subject to the terms set out in § 437 No. 2 BGB will remain unaffected.

c) In the case of material defects we will be liable for damage compensation or for reimbursement of expenditure which proved to be useless pursuant to § 8 below.

§ 8 Liability for Damage

a) The provisions of the Product Liability Act will remain unaffected by the terms below as will cases in which we are liable for damage to life, limb and health and also for negligent breach of contract.

b) We will be liable for damage incurred to the purchaser’s legal interests by defects to the purchase item, wrong delivery or packaging, including to his financial assets, as follows:

Where damage could have been prevented through compliance with the purchaser’s inspection duties any type of liability by us is excluded unless the damage can be attributed to willful behaviour by our legal representatives. A change of the burden of proof to the purchaser’s detriment is not associated with the above provision.
Where damage is incurred despite compliance with the purchaser’s inspection duties we will only be liable for willful or gross negligent breach of contract.

c) For damage other than that regulated above-irregardless of the grounds for liability such as an illegal act or breach of contract- we will only be liable if it was caused by a willful or gross negligent act by us or one of our vicarious agents.

d) We will not be liable for the suitability of the goods for the purchaser’s intended purposes unless the intended purpose has become part of the subject matter of the contract in writing. Where we provide technical advice on applications, information or recommendations, etc. we will be liable for wrong advice, information or recommendations on the basis of gross negligence only where they were given in writing.

e) Claims based on defects of the products being delivered will expire after one year.

§ 9 Place of Jurisdiction, Applicable Law, Severability Clause

a) The place of jurisdiction is our company’s domicile.

b) The laws of the Federal Republic of Germany will apply excluding the UN Sales Convention in the respective valid version (United Nations Sales Convention on the International Sale of Goods CISG of April 11, 1980)

c) Should individual terms of the above clause be or become invalid the invalid terms are to be replaced by terms which come as close as possible to the economic purpose of the contract, while duly taking both parties’ interests into account.

Düren, January 1, 2004
Julius Hoesch GmbH & Co. KG