General Conditions of Sale

Effective: November 2014

1. Scope

1. These General Conditions of Sale shall apply to any and all business relations between J. Schmalz GmbH (hereinafter referred to as “Schmalz”) and the customer, even if not mentioned in subsequent contracts. They shall apply accordingly to work performances and services. In case of work performance, taking of the delivered products shall be replaced by acceptance of work, and in case of services by receipt of the service.

2. Any terms and conditions of the customer conflicting with, in addition to, or deviating from these General Conditions of Sale shall not form subject matter of the contract unless Schmalz consented to their applicability in writing. These General Conditions of Sale shall also apply in case Schmalz unconditionally effects delivery to the customer, having knowledge of its conflicting, additional, or deviating terms and conditions.

3. Any agreements between Schmalz and the customer made in addition to or deviating from these General Conditions of Sale and entered into for the purpose of performing a contract shall be laid down in the respective contract in writing. This shall apply accordingly for the waiver of this written form requirement.

4. Rights exceeding these General Conditions of Sale that Schmalz are entitled to pursuant to legal provisions or other agreements remain unaffected.

2. Conclusion of Contract

1. Offers quoted by Schmalz are subject to change and nonbinding.

2. Specifications as to illustrations, drawings, weight and dimension, declarations of weight, measurements and consumption as well as any other descriptions of the products contained in the documents pertaining to the offer shall only be approximate unless expressly specified as binding. They constitute neither agreement nor guarantee as to the characteristics or durability of the products.

3. Schmalz reserves all rights of ownership, copyrights, and any other property rights to all offer documents. Such documents must not be made available to third parties.

4. Orders are not binding until they have been confirmed by Schmalz in a written order confirmation or until Schmalz performs the order or in particular when Schmalz fulfills the order with the consignment of the product. Any order confirmation processed by use of automatic appliances and lacking signature and name is considered a written order confirmation. To the extent the order confirmation contains obvious errors, misspellings, or miscalculations, Schmalz shall not be bound to it.

5. Silence of Schmalz as to offers, orders, requests, or other declarations of the customer is deemed consent only if there is a prior written agreement to that effect.

6. Should the customer file a request for the opening of insolvency or comparable proceedings against its assets, or should the request for the opening of insolvency or comparable proceedings against the customer's assets filed by a third party be denied for lack of assets, Schmalz may rescind the contract in whole or in part.

3. Scope of Delivery

1. The written order confirmation of Schmalz is authoritative for scope of delivery. Changes to the specification or scope of delivery by the customer require the written confirmation of Schmalz to be effective. Schmalz reserves the right to modify the design and form of the products provided the modifications are customary in the industry or where the deviations are within DIN tolerances or if the modifications are not substantial and are reasonable to the customer.

2. Delivery in part is permissible.

3. In individual cases, we will accept the return of delivered goods within a period of 3 months after delivery but only if this has been agreed with the customer, provided the products are in “as new” condition and standard products. For respective expenses as a result of quality checks and re-storage we will charge a fee of 20% of the net value, but not less than 20 €.

4. Delivery Dates and Periods

1. Delivery periods and dates must be agreed in writing and are non-binding unless expressly specified by Schmalz as binding in writing in advance.

2. The delivery period begins when the order confirmation is sent by Schmalz, however not before the customer has produced all documents, approvals, and releases to be provided by it, all technical issues have been resolved and an agreed down-payment has been received, respectively in case of international orders not before payment has been received in full. In the case of delivery dates, the delivery date will be rescheduled as appropriate if the customer does not produce the documents and approvals to be provided by it in a timely manner, if releases have not been granted in a timely manner, if not all technical issues have been fully resolved in time, or the agreed down-payment have not been issued in time, or in the case of international orders, payment has not been received in full by Schmalz. All delivery dates and periods are subject to the due and timely fulfillment of all further obligations of the customer.

3. The delivery date respectively period is deemed met if the products have left the factory or Schmalz has communicated the shipping readiness or the readiness for collection within the delivery period or by the delivery date. All delivery dates and periods are subject to proper self-supply of Schmalz, unless Schmalz itself is responsible for the reason for improper self-supply. In case of improper self-supply Schmalz is entitled to rescind the contract. Schmalz will inform the customer immediately if Schmalz makes use of its right to rescind and will grant back advance performances, if any, made by the customer.

4. The goods and services required for performance of the contract are subject to reservation that there are no obstacles arising from national or international regulations, in particular export control regulations, embargoes or other restrictions. Delays due to export inspections or approval procedures render delivery dates and times inoperative. If required approvals are not granted, both parties are respectively entitled to withdraw from the contract.

5. In case of delay in delivery, the customer is entitled to rescind the contract after a reasonable grace period, which it had set Schmalz upon commencement of the delay in delivery has expired unsuccessfully.

6. Should Schmalz and the customer have entered into a framework contract on future deliveries with fixed delivery periods and dates, and should the customer fail to call the products in due time, Schmalz is entitled to deliver and invoice the products after a reasonable grace period set by Schmalz has expired unsuccessfully, to rescind the contract, or to claim damages or reimbursement of expenses whereas damages or reimbursement of expenses can only be claimed if the customer is responsible for the failure to call the products in due time.

5. Prices and Payment

1. Unless specific agreements are made to the contrary, all prices apply ex works and are exclusive of shipping and packaging costs, insurance, statutory taxes, customs duties, and other levies. The costs incurred in this context, in particular the costs for packaging and transport of the products, will be invoiced separately. With a net order value of less than EUR 50, we are entitled to charge a net minimum quantity surcharge of EUR 10 (Exception: Purchase orders via online shop). Statutory VAT will be shown separately on the invoice at the statutory rate valid on the day of invoicing. The customer bears the cost of the samples made on request and the preparation work therefor, if the contract does not come to conclusion.

2. Orders without expressly agreed fixed prices and with a delivery period or date of at least six weeks following the conclusion of contract will be invoiced at the list prices of Schmalz valid on the day of delivery. The recording of the list price valid on the order date on the order form or order confirmation does not constitute agreement of a fixed price. The customer shall be entitled to rescind the contract to the extent prices are increased by more than 5%. The customer will promptly notify Schmalz upon the latter's request of whether or not it will exercise such right of rescission. If production-related price increases occur by the date of delivery, Schmalz shall, irrespective of the offer and order confirmation, be entitled to adjust the prices accordingly.

3. Unless a separate agreement is made to the contrary, the net delivery price is payable within 10 days following the invoice date. The day of payment is considered the day Schmalz is able to dispose of the delivery price. If the customer defaults payment, it shall pay default interest of 8 percentage points above the respective base interest rate p.a. Any exceeding claims of Schmalz shall remain unaffected.

4. In case of international orders, payment shall, in derogation of paragraph 3 above, take place prior to delivery unless otherwise agreed in advance in writing.

6. Passing of Risk

1. The risk of accidental loss and accidental deterioration shall pass to the customer as soon as the products have been handed over to the person effecting transport or have left the warehouse of Schmalz for purposes of shipment. In case the customer collects the products, the risk of accidental loss and accidental deterioration shall pass to the customer upon notification of readiness for collection. Sentences 1 and 2 above shall also apply for partial deliveries or if Schmalz has assumed additional services, e.g., the transport costs or setup of the products at the customer's site.

2. If the customer falls into default in accepting the products, Schmalz is entitled to demand compensation for the damage incurred including possible additional expenses. The same applies if the customer violates any other obligations to co-operate, unless the customer is not responsible therefore. Where the customer falls into default in accepting the products or violates any other obligations to co-operate, the risk of accidental loss and accidental deterioration of the products shall pass to the customer at the time the customer falls into default of acceptance at the latest. Schmalz is entitled to otherwise dispose of the products after the unsuccessful expiry of a reasonable grace period set by Schmalz and to supply the customer within a reasonably extended period.

3. In case shipping is delayed due to circumstances Schmalz is not responsible for, risk shall pass to the customer upon notification of shipping readiness.

4. The delivered products must be accepted by the customer even if they have minor defects, without this affecting its claims based on defects.

7. Claims for Defects

1. The rights of the customer to assert claims based on defects presuppose that the customer inspects the delivered products upon receipt insofar as this can be reasonably expected also by sample processing or use, and notifies Schmalz of any apparent defects in writing without delay, however no later than two weeks after receipt of the products. Hidden defects must be reported to Schmalz in writing promptly after their discovery. The customer must describe the defects in writing when notifying Schmalz of said defects. Claims based on defects asserted by the customer also require that the planning, construction, assembly, connection, installation, commissioning, operation and maintenance of the products are observed according to the specifications, instructions, guidelines and conditions in the technical instructions, assembly-, installation- and operating instructions, design-assembly-guidelines, and other documents of the individual products, and in particular that maintenance is duly performed and accounted for, and that recommended components are used.

2. In case the products are defective, Schmalz shall at its own choice render subsequent performance either by removing the defect or by delivering a product free of defects. When rendering subsequent performance, Schmalz shall be obligated to bear all expenses required in this respect, in particular transport, shipping, personnel, and material costs, unless such expenses are increased due to the fact that the products were shipped to a place other than the delivery address. Costs for personnel and material asserted by the customer in this context shall be invoiced at cost price. Replaced parts pass into the ownership of Schmalz and shall be returned to it.

3. In case Schmalz is not prepared or able to render subsequent performance, the customer may, without prejudice to any claims for damages or reimbursement of expenses, at its own choice either rescind the contract or reduce the delivery price. The same shall apply in case subsequent performance fails, is unreasonable for the customer, or is unreasonably delayed for reasons attributable to Schmalz.

4. The customer's right to rescind the contract is excluded if the customer is unable to return the performance received and (i) this is not attributable to the fact that return is impossible due to the nature of the performance received, or (ii) Schmalz is responsible for it, or (iii) the defect was not revealed until the product was processed or modified. The right to rescind is also excluded if Schmalz is not responsible for the defect and if the customer must compensate the value instead of returning the performance.

5. The assertion of claims based on defects is excluded if the defect is due to natural wear and tear, particularly in parts subject to wear and tear, improper handling, operation, or storage or improper modifications or repairs of the products by the customer or third parties. The same shall apply for defects attributable to the customer or resulting from a technical cause other than the original defect.

6. Claims of the customer for reimbursement of expenses instead of claims for damages in lieu of performance are excluded unless a reasonable third party would have incurred such expenses.

7. Schmalz does not assume any warranty, in particular any warranty of quality or durability, unless otherwise agreed in writing.

8. The limitation period for claims based on defects asserted by the customer shall amount to one year. If the defective products have been used in accordance with their intended purpose for a structure and have caused its defectiveness or there is a defect in a structure, the limitation period is five years. This limitation period shall also apply for claims in tort based on a defect of the products. The limitation period begins when the products are delivered. The shortened limitation period shall not apply to the unlimited liability of Schmalz for damages resulting from a breach of a guarantee or from harm to life, physical injury, or harm to health, for intent and gross negligence, and for product defects or insofar Schmalz has assumed a procurement risk. Any comment of Schmalz on a claim based on defects asserted by the customer shall not constitute an opening of negotiations on such claim or on the facts giving rise to the claim, provided that Schmalz rejects the claim based on defects to the full extent.

8. Liability of SCHMALZ

1. Schmalz is fully liable for damages resulting from a breach of guarantee or from harm to life, physical injury, or harm to health to the contractual partner within the framework of legal liability. The same applies for intent and gross negligence or insofar Schmalz has assumed a procurement risk. Schmalz is liable for slight negligence only if material duties are violated, such duties arising out of the nature of the contract and being of essential importance for the attainment of the purpose of the contract. In case of breach of such duties and in case of default and impossibility of performance, liability of Schmalz shall be limited to damages that are typically expected to occur within the context of the contract. Statutory liability for product defects remains unaffected.

2. To the extent that liability of Schmalz is excluded or limited, this shall also apply for the personal liability of the employees, staff members, representatives, and auxiliary persons of Schmalz.

9. Product Liability

1. The customer will not modify the products; in particular, it will not modify or remove existing warnings about risks due to improper handling of the products. In case of breach of this undertaking, the customer shall internally indemnify Schmalz from and against any and all product liability claims asserted by third parties unless the customer is not responsible for the defect causing liability.

2. In the event Schmalz is caused to call back or send a warning notice due to a defect in the products, the customer shall use its best efforts to support Schmalz and take part in all reasonable measures that Schmalz deems reasonable and appropriate; in particular, the customer will establish the necessary customer information. The customer shall bear the costs for the product recall or warning notice unless it is not responsible for the defect in the products and the loss occurred according to the principles of product liability laws. Further claims of Schmalz shall remain unaffected.

3. The customer will promptly inform Schmalz in writing about any and all risks in connection with the use of the products and any possible defects in the products that become known to it.

10. Force Majeure

1. In case Schmalz is hindered by force majeure from the fulfillment of its contractual duties, in particular from supplying the products, Schmalz shall, for the duration of the hindrance and a reasonable restart period, be released from its duty to perform without being obligated to pay damages to the customer. The same shall apply if the fulfillment of the obligations of Schmalz is unreasonably impeded or temporarily impossible due to unforeseeable circumstances beyond the control of Schmalz, in particular due to strike, measures of public authorities, lack of energy, difficulties in supply on the part of a sub-contractor, or material interruptions of operation. This also applies if such circumstances affect sub-contractors and in case Schmalz is in default. To the extent Schmalz is released from its obligation to supply, Schmalz will grant back preliminary performances of the customer as may have been made.

2. Schmalz shall be entitled to rescind the contract after a reasonable grace period has elapsed if such hindrance continues for more than four months and the performance of the contract is no longer of interest to Schmalz due to such hindrance. Upon the customer's request, Schmalz will after expiration of such grace period declare whether it will exercise its right of rescission or will deliver the products within a reasonable period.

11. Retention of Title

1. Schmalz retains title to the delivered products until the purchase price and any and all claims against the customer that Schmalz is entitled to under their business relationship have been fully settled. For the duration of the retention of title, the customer shall handle the products subject to retention with care. It shall in particular sufficiently insure the products subject to retention at its own expense at replacement value against fire, water, and theft damage. The customer shall provide Schmalz upon the latter's request with proof of the insurance policy. The customer assigns to Schmalz, with effect as from today, all claims for compensation in connection with such insurance. Schmalz herewith accepts such assignment with effect as from today. If the insurance agreement does not allow for such assignment, the customer herewith instructs the insurance company to make payments to Schmalz exclusively. Any exceeding claims of Schmalz shall remain unaffected.

2. The customer is permitted to sell the products subject to retention of title in the ordinary course of business only. The customer shall not be entitled to pledge the products subject to retention, to transfer them by way of security or to otherwise dispose of them in a way endangering title of Schmalz. The customer shall promptly notify Schmalz in writing of any attachment or any other intervention by a third party, provide all information required, inform the third party of the title of Schmalz, and assist in all measures of Schmalz in order to protect the products subject to retention. To the extent the third party is not able to reimburse Schmalz the judicial and extrajudicial costs for enforcing title of Schmalz, the customer shall reimburse Schmalz the loss sustained by Schmalz in this connection unless the customer is not responsible for the breach of duty.

3. The customer assigns to Schmalz, with effect as from today, all claims in connection with the resale of the products with any and all ancillary rights, irrespective of whether the products subject to retention were resold prior or after processing. Schmalz accepts such assignment with effect as from today. If such assignment is not permissible, the customer herewith instructs the third party debtor to make payments to Schmalz exclusively. The customer shall be revocably authorized to collect the claims assigned to Schmalz in trust for Schmalz in the customer's own name. The amounts collected shall be transferred to Schmalz immediately. Schmalz may revoke the customer's authorization for collection and resale for cause, in particular if the customer fails to duly meet its payment obligations vis-à-vis Schmalz, defaults or ceases payment, or if the customer files for the opening of insolvency proceedings or similar debt settlement proceedings against its own assets, or if the request for the opening of insolvency or comparable proceedings against the customer's assets filed by a third party is denied for lack of assets. In case of a blanket assignment by the customer, the claims assigned to Schmalz shall expressly be exempted.

4. Upon request of Schmalz, the customer shall promptly notify the third party debtor of the assignment and provide Schmalz with any information and document necessary for collection.

5. In case the customer conducts itself contrary to the terms of the contract, in particular in case it defaults in payment, Schmalz shall, without prejudice to its other rights, be entitled to rescind the contract after a reasonable grace period set by Schmalz. The customer shall promptly grant Schmalz or its authorized agents access to the products subject to retention and return them. After due and timely notice, Schmalz may otherwise dispose of the products subject to retention in order to satisfy its matured claims against the customer.

6. The processing or remodeling of the products subject to retention by the customer shall always be made for Schmalz. The customer's expectancy right to the products subject to retention shall also apply to the processed or remodeled item. Should the products be processed or remodeled together with other objects not belonging to Schmalz, Schmalz shall gain joint title in the new item in the proportion of the value of the delivered products to the other, processed objects at the time of such processing or remodeling. The same shall apply in case the products are connected or mixed with other objects not belonging to Schmalz in such manner that Schmalz loses full ownership. The customer shall keep the new objects for Schmalz. In all other regards, the item created through processing or re-construction as well as connection or mixing is subject to the same provisions as the products subject to retention.

7. In case the realizable value of the securities, taking into account usual valuation adjustments by the banks, exceeds the claims of Schmalz arising from the business relationship with the customer by more than 10%, Schmalz shall at the customer's request be insofar obligated to release the securities the customer is entitled to. The valuation should be based on the invoice value of the products subject to retention and on the nominal value of the claims. The choice of the security to be released is upon Schmalz in each case.

8. In case of delivery to other legal systems in which the above provisions of retention of title do not have the same retaining effect as in the Federal Republic of Germany, the customer hereby grants Schmalz a corresponding security interest. The customer will take all further measures that are necessary in this respect to grant Schmalz such corresponding security interest. The customer shall assist in all measures necessary or conducive for the effectiveness and enforceability of such security interests.

12. Assembly

1. If not only the delivery but also the assembly is assigned to us, it shall do so on the basis of an independent contract for services separate to the delivery.

2. Our particular written assembly provisions apply for such contract of assembly.

13. Confidentiality

1. The parties undertake to keep confidential and neither to record, hand on, or use any information that becomes available to them and that is indicated confidential or is in other circumstances identifiable as business or trade secrets for an unlimited period, unless required for the business relationship.

2. By appropriate binding agreements, the parties will ensure that the employees and agents acting on their behalf neither record without authorization nor hand on nor exploit such business and trade secrets for an unlimited period.

3. The confidentiality obligation shall not apply if the information of the other party were proven prior to the commencement of the contractual relationship to be accessible or known, generally known or publicly available or generally known through no fault of the other party. The onus rests with each disclosing party.

14. Final Provisions

1. The transfer of rights and obligations of the customer to third parties requires the prior written consent of Schmalz.

2. The customer shall be entitled to set off only if its counterclaims have been determined in a legally final manner or are unchallenged. The customer may exercise a right of retention only to the extent its counterclaim is based on the same contractual relationship.

3. The legal relationships between the customer and Schmalz shall be governed by and construed in accordance with the laws of the Federal Republic of Germany to the exclusion of the United Nations Sales Convention (CISG).

4. Exclusive venue for any and all disputes arising out of or in connection with the business relationship between the customer and Schmalz shall be the statutory seat of Schmalz. Schmalz shall also be entitled to bring an action at the customer's statutory seat and at any other permissible venue.

5. Place of performance for all obligations of the customer and Schmalz shall be the statutory seat of Schmalz.

6. The text decisive for these General Conditions of Sale is the one written in German language. Therefore, in case of a different interpretation of the German and the English text, the German wording shall prevail.

7. Should an individual provision of these General Conditions of Sale be or become ineffective or unenforceable in whole or in part, or should these General Conditions of Sale contain a regulatory gap, the validity of the remaining provisions shall not be affected thereby. Instead of the ineffective or unenforceable provision, the effective or enforceable provision shall be deemed to be agreed which comes as close as possible to the economic purpose of the ineffective or unenforceable provision. In case of a regulatory gap, the provision shall be deemed to be agreed which corresponds to the provision that would have been agreed in terms of the object of these General Conditions of Sale if the parties had considered the matter.