General Terms and Conditions for Supplies and Services

I.     General Conditions; Validity


1.     The following terms of business shall exclusively govern all supplies and services (referred to in the    following as "supplies" or "deliveries") to be provided by KUNZ.

2.     The Customer's general business terms and conditions shall not become an integral part of the contract even in the event that KUNZ does not expressly contradict them or when KUNZ fulfils the contract without having expressed such contradictions.

3.     Deviating agreements shall be effective only when KUNZ has confirmed them in writing.

4.     Offers and quotations in commercial business intercourse shall not be binding. Customer orders shall only be binding subsequent to written confirmation by KUNZ or delivery; the acceptance of payments shall not as a rule be considered as the conclusion of the contract. KUNZ reserves for itself a period of 14 days for the acceptance of orders.

5.     Drawings, models, tools, or devices provided by KUNZ for the execution of the order shall not, unless otherwise specified in supplementary agreements, be subject-matter of the contract. KUNZ shall retain inasmuch all rights of ownership and copyrights. Furthermore, unless expressly otherwise stipulated, KUNZ shall retain all property rights pertaining to inventions created within the framework of the contractual services and/or the thus obtained expertise acquired within this framework.

6.     Inasmuch as the supplying effectuated by KUNZ mainly constitutes scheduling or other principally intellectual services, the Customer shall be restricted to the contractually agreed utilization of such services. If the supply includes software programs, KUNZ grants to the Customer the non-exclusive right to use the software programs in accordance with the determined purpose of the delivery object. The software programs shall only be reproduced, transferred and used in accordance with the determined purpose of the delivery object. Further utilization shall require prior written consent by KUNZ, and shall be separately remunerated. If the Customer's utilization capacity has not been contractually stipulated, this capacity is to be determined with regard to all decisive circumstances, and especially with regard to the particular sectoral customs as well as the manner and amount of remuneration. In case of doubt, the Customer is not authorized to repeated or other further utilization.

II.     Delivery Time

1.     All delivery and execution deadlines (uniformly referred to in the following as "delivery period") require written agreement.

2.     The delivery period shall begin on the day of the conclusion of the contract, however, not previous to clarification of all technical details and fulfilment of all cooperative duties on the part of the Customer such as furnishing documents, permits, releases, etc. as well as executing payments.

3.     The delivery period has been adhered to when the delivery object has left the plant by the expiration of such period or when the Customer has been informed of preparedness to ship.

4.     While KUNZ is not at fault with respect to an obligation of assumption, precaution or avoidance, the delivery period is extended in cases of force majeure, work conflicts, insufficient material supplies, limitations in energy supply, as well as any other hindrances lying beyond the influence of KUNZ, such hindrances being especially the delayed fulfilment of the Customer's cooperative duties or the complete lack thereof, non-justifiable disturbances in services and/or inadequate deliveries on the part of suppliers, subcontractors or other such KUNZ contractors, at least for the duration of such hindrances.

5.     Culpable delays in payments in turn delay the expiration of the delivery period.

III.    Delivery; Passing of Risk; Acceptance

1.     KUNZ has the right to effectuate partial and advance deliveries.

2.     As a rule delivery is effectuated ex works. In such cases the passing of risk to the Customer shall occur at the latest 14 days subsequent to the date of notification of preparedness to ship. In the time between passing of risk and collection of shipping KUNZ shall be liable for damages caused by gross negligence of its executives or persons employed or involved by KUNZ in the performance of its obligations. In the case of all deliveries, however, the passing of risk to the Customer shall occur at the latest when the delivery object has left the KUNZ plant. This is also the case when KUNZ is responsible for transport.

3.     KUNZ shall take out insurance only upon the Customer's demand. The Customer must be willing to pay the expenses thereof, and the insurance must be purchasable on the relevant insurance market.

4.     If the Customer culpably delays acceptance or if shipping is delayed upon his request, the risk shall thus be passed over to him. In such cases, KUNZ shall nonetheless retain the right to make claims, to charge the delivery objects which are ready to transfer or ship as being delivered ex works, and to store the objects at the Customer's cost.

5.     The Customer shall also accept the delivery in cases of irrelevant defects. His warranty rights in compliance with Article VI of theses terms and conditions remain unchanged.

6.     In case KUNZ delays delivery and the Customer has fixed an adequate time limit connected with the refusal not to accept the delivery, Customer is entitled to terminate the contract upon ineffectual expiry of the time limit; the Customer is only entitled to demand damages due to non-performance in the amount of the foreseeable damage, if the delay is caused by intentional action or gross negligence; in other cases the liability for damages shall be restricted to 50 % of the accrued damage.

The restriction of liability mentioned in the foregoing Paragraph 6 shall not be applicable if a business of fixed terms was agreed or if the Customer may object due to a delay being at KUNZ's fault that his interest in performing the contract has been omitted.

IV.     Price and Payment

1.     All prices shall be considered as being ex works not including costs for weighing, packing, loading, insurance, and shipping as well as duties, plus valued added tax in the respective legally determined amount.

2.     Travelling expenses resulting from tasks a KUNZ employee has executed in order to fulfil an order shall require separate invoicing, which shall be executed according to the terms as stipulated in the respective valid KUNZ travel-expense policy.

3.     All payments shall be executed in EURO discount- and expense-free with 30% down payment with order, 70% prior to shipment, or Irrevocable Letter of Credit, payment at sight upon presentation of shipping documents, confirmed by a German Bank, to be opened in our favor at time of order, bank charges at openers account. This is to be effectuated in such a manner that the amount shall be at KUNZ's disposal by the due date at the latest.

4.     Checks or bills of exchange which are discountable and must be duly taxed shall be accepted only upon corresponding agreement, and for payment purposes only. Crediting checks or bills of exchange may be effected subject to the honouring of the check minus expenses and other incidental expenses, interest, etc., with the value date being on the day KUNZ has the valuta at its disposal.

5.     KUNZ claims resulting from the respective contractual relationship with the Customer shall be immediately due if the Customer has not adhered to the payment agreements, if he has not cashed matured bills of exchange, or if other circumstances bring forth evidence of dubious credit-worthiness. The due claim shall be deducted by a rate of 4 % and by the expenses saved by KUNZ. The provisions of ' 321 BGB shall remain unaffected.

6.     Starting on the first day of culpable payment delay, financial debts shall entail interest at the rate of 2 percent over the respective discount rate determined by the German Federal Bank (DBB), which must nonetheless amount to at least 7 percent. Further claims by KUNZ shall remain unaffected.

7.     The Customer may make a counterclaim or make valid the right of withholding - including such right as stipulated in ' 369 HGB (Commercial Code) - only when these counterclaims (including warranty rights) have been recognized by KUNZ as valid or have been determined as being res judicita by a court of law.

V.     Retention of Ownership

1.     KUNZ shall retain ownership of the delivery object until the contractual debt has been paid in full, including any incidental claims (exchange costs, interest, etc.) as well as any other claims vis-à-vis the Customer regarding delivery (for example, due to repairs or other services). In the case of deliveries effectuated within the framework of continuous business relations the retention of ownership encompasses all existing claims stemming from such business relations with the Customer at the time of delivery.

2.     Handling and processing the conditional merchandise shall be performed for KUNZ as manufacturer in compliance with ' 950 BGB (Civil Code). The processed merchandise is considered as conditional merchandise as defined by these terms and conditions. In cases of processing or inseparable combining with other merchandise not belonging to KUNZ, KUNZ obtains co-ownership of the new object in the proportion of the invoice value of the conditional merchandise to the invoice value of the other merchandise utilized at the time of the processing or combining. The thus resulting co-ownership rights are considered as conditional merchandise as long as defined in these terms and conditions.

3.     The Customer may resell the conditional merchandise as long as he retains the ownership of the merchandise in view of this customers until it has been paid in full, as long as he has not effectuated an advance transfer of his due claims vis-à-vis third parties resulting from such sale, and as long as the resale is effected in customary commercial intercourse. The Customer may not utilize the conditional merchandise for other purposes, and he is above all not allowed to pawn or assign the merchandise as a security.

4.     The Customer already now transfers to KUNZ his due claims vis-à-vis third parties (with all accessory rights) which result from the resale of the merchandise in order to safeguard the claims stipulated under retention of ownership according to Paragraph 1 regardless of whether the conditional merchandise is sold with or without processing. The Customer may collect the claims resulting from the resale as long as he duly fulfils his obligations vis-à-vis KUNZ.

5.     In addition to the claims transferred to KUNZ, the Customer must, upon request by KUNZ, also inform KUNZ of his debtors and his debtors of the transferred claims.

6.     If the value of the claims from the resale which have been transferred to KUNZ increases KUNZ's secured claims (as defined in Paragraph 1) by more than 20 percent, KUNZ is obligated, upon request, to release a corresponding portion of that security.

7.     If the Customer is responsible for a breach in important contractual obligations, especially in the case of culpable delay in payment, KUNZ - under reserve of other claims - shall be entitled to take back the delivery object subsequent to previous notification; the Customer is obligated to furnish the object. The simple taking back of goods as well as a seizure of goods effectuated by KUNZ shall not, inasmuch as the Instalment Purchase Law does not apply, entail a cancellation of the contract.

8.     In the case of damage inflicted upon the conditional merchandise during the seizure thereof or during other interventions effected by third parties, the Customer shall immediately notify KUNZ, among other notification possibilities, by the sending of a seizure protocol. The Customer is responsible for all expenses - especially for court and attorney fees resulting from intervention lawsuits - which occur for KUNZ in the safeguarding of the conditional ownership.

The Customer is obligated to insure the delivery object for the duration of the retention of ownership against the more common risks, these being at least fire, water, storm, theft, transport and assembly risks. This is to be done at the Customer's cost by concluding an insurance contract which identifies KUNZ as co-insured and as the receiver of the services.

VI.     Warranty

KUNZ provides a warranty for material and production deficiencies.

1.     In the case of deliveries with deficiencies, KUNZ shall either remedy them within an adequate extension period or effect a new delivery, depending on the choice.
In the case of failure to remedy or effectuate a replacement delivery/production, the Customer may, as he chooses, either demand a reduction in remuneration or the cancellation of the contract.

2.     Qualities shall be legally assured only when they have been confirmed in writing.

3.     In cases of lack of warranted qualities as a rule not accounted for by models and descriptive passages in catalogues, brochures and instructions for use, the Customer may demand, in lieu of the rights stipulated in Paragraph 1, damages due to non-performance. In commercial business intercourse, KUNZ shall nonetheless be liable for typical and foreseeable damage only, unless the warranty had the very purpose of also protecting the Customer from further damage.

4.     Unless herein otherwise expressly agreed, other Customer claims are excluded, also those not included in the warranty, such as, especially, damage claims stemming from culpa in contrahendo/culpa post contrahendum, positive violation of contractual duty (not consisting of culpable delay in performance or due to supervening impossibility) or torts, unless the damage is the result of intentional action or gross negligence on the part of KUNZ, KUNZ's legal representatives, or persons employed in performing obligations.

5.     If KUNZ, KUNZ's legal representatives, or persons employed in performing obligations break a major or essential contractual obligation by negligence, the liability shall be restricted to typical and foreseeable damage.

6.     The period of warranty shall be twenty-four months and commence on the date of passing of risk. This period shall be a statutory term of limitation and shall be applicable to compensation claims for consequential damages except claims in tort.

7.     KUNZ shall be notified in writing of obvious deficiencies within 10 calendar days after the handing over of merchandise, and of non-obvious deficiencies in commercial business intercourse within 10 days subsequent to the discovery of such deficiency. KUNZ's receipt of the notification of deficiency is essential in order to safeguard the period. Upon expiration of the period, the customer loses all rights that he would have otherwise had due to a deficiency.

8.     KUNZ shall not be liable for deficiencies and/or damage which are the result, among other things, of objects implemented by the Customer, wear and tear, faulty assembly/faulty putting into service by the Customer or by third parties, faulty or negligent handling, unsuitable or undue utilization, excessive operational load, disregarding of KUNZ utilization or instruction manuals, unsuitable operational resources, spare materials, deficient construction work, unsuitable construction area, modifications and/or repairs not approved by KUNZ, repairs etc. effected by the Customer or third parties, excessive storage time and other circumstances lying within the Customer's sphere of influence including implementing material, instructions given by the Customer, etc. The Customer is obligated to release KUNZ from all claims made by third parties resulting from circumstances mentioned above. Upon request by KUNZ, the Customer is obligated to provide verification of existing insurance coverage which is sufficient for liability risks occurring thus.

9.     KUNZ is responsible for costs resulting from remedying or a new delivery (in the case of timely and well-founded notification of deficiency) in commercial business operation, as well as vis-à-vis legal entities under public law, for transport and costs of installation and removal, only to the extent that these costs are in a suitable proportion to the value of the parts to be remedied or newly delivered.

10.   The warranty on parts of the delivery object that KUNZ obtained from third parties is extended or limited to the scope of the warranty obligation the third party has vis-à-vis KUNZ.

11.   In cases of additional delivery of individual spare parts, a new warranty period begins for these spare parts, but not for the entire delivery object.

VII.     Liability

1.     A further liability for damage of KUNZ as provided in Article VI Paragraphs 3, 4, 5, 6, 8 and 10 shall be excluded - irrespective of the legal nature of the claim.

2.     This Paragraph 1 shall not apply to claims pursuant to Paragraphs 1, 4 Produkthaftungsgesetz and to cases of impossibility of performance.

3.     The personal liability of KUNZ's employees, representatives, or other persons employed or involved in the performance of KUNZ's obligations shall be excluded and restricted in the same way and extent as KUNZ's liability.

VIII.    Interferences with the Performance of Services, etc.

1.     The Customer shall be responsible for additional costs which occur to KUNZ as a consequence of one of the events mentioned in Article II, Paragraph 4 of these terms and conditions.

2.     If events as defined in Article II, Paragraph 4 substantially change the economical and/or technical definition and purpose of this contract and/or the content of the supply/delivery or if the operation of KUNZ is influenced to such an extent, in spite of effectuating appropriate contractual adaptation, for example, by extending the delivery period, that adhering to the contract becomes unreasonable for KUNZ, then KUNZ shall have the right to withdraw from the contract. The Customer shall be immediately notified of an intended withdrawal as soon as KUNZ has recognized the scope and implications of the event in question.

If KUNZ culpably fails to deliver on schedule, and if an appropriate extension period accompanied by a warning of refusal also remains unobserved, the

1.     Customer shall then have the right to terminate the contract. Further rights or claims, especially concerning damages, may only be resorted to when KUNZ, its legal representatives, or the persons employed in performing obligations have brought about the delay intentionally or by gross negligence. In such cases, the Customer's claims are restricted to typical and foreseeable damage inasmuch as commercial business intercourse is involved.

2.     Paragraph 3 correspondingly applies when the performance of the agreed services becomes impossible for KUNZ previous to the passing or risk.

IX.     Industrial Property Rights and Copyrights

1.     Inasmuch as KUNZ designs, manufactures, and/or assembles according to instructions, drawings, or other such documents furnished by the Customer, KUNZ shall not be liable for any violation of property rights resulting there from.

2.     In the case of a third party maintaining that a violation of property rights has occurred vis-à-vis the Customer, the Customer shall furnish KUNZ with immediate notification thereof.

3.     In the case of liability due to a violation of property rights, KUNZ alone is authorized and obligated to defend the Customer against the claims made by the bearer of such rights and to settle these claims at the company's own cost. KUNZ shall subsequently provide the Customer with the right to utilize the supply or service. In case it is not possible for KUNZ to effectuate this in economically suitable and customary conditions, KUNZ may choose to change or replace theses supplies and services in such a manner that the property right shall not be violated, or the supply or service may be revoked and remuneration effected minus the amount deducted for the past possibility of utilization. The Customer shall bear all disadvantages resulting from non-compliance with KUNZ's right to defend and settle claims due to property-rights violation, or from his non-support or insufficient support in KUNZ's defence against such claims.

4.     Remaining relevant matters shall be governed by Article VII Paragraph 4 of these terms and conditions.

X.    Reservation of the Right to Terminate the Contract

1.     1. If, subsequent to the conclusion of the contract, but nonetheless previous to KUNZ's performance of the service, a substantial deterioration in the Customer's financial situa­tion occurs to the extent of endangering KUNZ's claim of consideration, or if the Customer provided false information concerning his credit-worthiness previous to the conclusion of the contract, KUNZ shall have the right to terminate the contract. A substantial deterioration in the financial situation in this case would especially be the cases of the Customer stopping payments, the threat of stopping payments or the incapacity to effectuate payments, if a petition has been filed for instituting composition or bankruptcy proceedings, or if protests of bills of exchange, checks, or promissory notes become public.

The right to terminate the contract shall not exist if the customer eliminates the danger to the KUNZ claims which are the consequence of the deterioration of the financial situation within an appropriate period via a provision of security.

If the deterioration of the financial situation as defined in Paragraph 1 occurs subsequent to KUNZ's rendering of the service, the entire consideration owned by the Customer shall be due immediately (Article IV, Paragraph 4). If the Customer fails to fulfil this obligation and furthermore fails to offer sufficient security, KUNZ may thus terminate the contract.

XI.    Final Provisions

1.     If a part of these terms and conditions and/or contracts concluded which are based thereupon is or becomes ineffective, the remaining terms and conditions/contractual agreements retain their full validity. In such a case, the parties commit themselves to replacing the ineffective clause by individual agreement with an effective one which is closest in economical meaning and purpose to the ineffective clause.

2.     In the case of a foreign customer or of a customer whose headquarters are located abroad, the legal relations between KUNZ and the Customer are governed by the substantive law of the Federal Republic of Germany.

The United Nations Convention on Contracts for the International Sale of Goods of April 11, 1980, shall not apply.

3.     In the case of all disputes occurring as a result of the contractual relation, if the Customer is a registered merchant, a legal entity under public law, or a separate estate governed by public law, the suit shall be filed in the court of law which is competent for the registered office of KUNZ. KUNZ's right to file suit against the Customer in his registered residence or place of business remains unaffected.