Terms and Conditions Contract

These standard terms for selling plants, plant sections, spare parts for such as well as for delivery of them between KCS GmbH and each Customer apply exclusively if they are not changed expressively by an agreement in writing between the parties.

The offer, the acceptance of the offer, confirmation of order or the sale of any products are subject to the conditions submitted. Any conditions or provisions changing the contract from the Customer will be contradicted; they only are effective towards KCS GmbH if they agree to these changes in writing.

These provisions present the basis for any single business in future between KCS GmbH and the purchaser and they exclude any other agreement.

General Terms of Delivery Kraft Curing Systems GmbH (hereafter “KCS GmbH”)

I. General

1. Following General Terms of Delivery regulate the sale of plants, plant sections, spare parts for such as well as for the delivery of the same between KCS GmbH and each Customer. Any deviating provisions " especially in any such on forms " are contradicted explicitly. They become binding for KCS GmbH if they are confirmed in writing by them.

2. Customer has to meet the on- site requirements to secure any plants, plant sections, spare parts as well as the delivery of such at the delivery date agreed upon, otherwise the Customer falls into default of acceptance.
a) If Customer falls into default of acceptance on the due day, he, however, is obliged to play the purchase price agreed upon. In these cases storage is going to be effected by KCS GmbH at Customer’s risk and costs. Customer can request KCS GmbH to insure the goods at his costs.
b) Should Customer not meet the on-site requirements for the delivery within a reasonable period of time after the confirmation of order, then KCS GmbH is entitled to set a last deadline within such the Customer has to fulfill the on-site conditions. If such period of time expires without any results, KCS GmbH is entitled to withdraw from the contract and to assert the damage occurred towards the Customer in reliance on him performing the contract.

3. The term ’In writing’ referred to in these GTD, this means: by document, being signed by both parties or by letter, fax, e-mail or any different form agreed upon by the parties.

4. These GTD either apply towards any entrepreneurs in the sense of §14 German CC or towards any other legal entity under public law as well as special fund under public law.

II. Offer

1. As far KCS GmbH sends or leaves any documents to the Customer within the frame of contract transacting, such ones remain in its ownership and may neither be copied nor given to any third parties without prior approval of KCS GmbH.

2. Any pictures or off-set drawings serve the purpose of illustration; any changes in the construction and form are reserved by KCS GmbH.

3. Any documents like pictures, drawings, data of weight and measure, data on procedure, consumption and performance belonging to each offer are only then binding as far they are expressively given as binding in the order confirmation.

III. Scope of Delivery

1. The contents of the order confirmation in writing by KCS GmbH shall be decisive for the scope of the claim to delivery.

2. KCS GmbH reserves the right to change and improve construction and material and execution as far the object to be delivered is not going to be changed seriously and the change reasonable for the Customer.

IV. Price and Payment

1. Each price per unit is deemed, unless otherwise agreed upon in writing, to be ex works Lindern in Euro including loading within the works, but excluding packaging and transportation. VAT amounting to each legal rate on the day of invoicing is added to the prices.

2. Parties shall have the right to renegotiate a reasonable price increase if the time between order confirmation and delivery date is extended to more than 12 months due to any reasons which KCS GmbH may not be held responsible for.

3. If Customer wants to change anything of the contract after the order is confirmed then KCS GmbH is entitled to charge Customer for any additional costs arisen by this change provided KCS GmbH may not be held responsible for the reasons of this change.

4. Payment, unless otherwise agreed upon in writing, shall be rendered in cash strictly net and namely:
a) With such contracts covering the delivery of plants and plant sections against proof of availability of an irrevocable L/C which takes into consideration the following disbursement conditions concerning the sum mentioned in L/C:

- 30 % after receipt of the order confirmation at the Customer,
- 60 % when loading the object of purchase and presentation of the consignment note at the Customer,
- 10 % ten days after commissioning, at the latest, however, 90 days after readiness for shipment.

b) With such contracts covering the delivery of any individual machine parts become due within 10 days after invoice date.

c) Those contracts covering service calls and any other services become mature 10 days after invoice date without any discount.

5. Customer may only offset with such claims being legally established, undisputed or acknowledged upon the part of KCS GmbH. Customer has no right of retention concerning any such disputed claims.

6. Regardless of the means of payment used payment is not deemed to be effected until payment is irrevocably credited to the business account of KCS GmbH.

7. If Customer comes into arrears with payment, KCS GmbH may claim for default interest from due date on. It is deemed to be eight percentage points above the interest rate of the main refinancing facility of the European Central Bank being in force on the due date of payment.

8. If payment is delayed, KCS GmbH may, after a written message to the Customer, suspend to fulfill its own obligations until the reception of payment. Should Customer be in arrears with payment for more than three months, KCS GmbH is entitled to resign from contract by written message to Customer and KCS GmbH is entitled to demand compensation for loss suffered which, however, may not exceed purchase price agreed upon.

V. Delivery, Transfer of Risk

1. The contractual Terms of Delivery shall have to be interpreted by the INCOTERMS being valid at the time of conclusion of contract. Delivery item is deemed to be delivered ’FCA’ (Free Carrier), Lindern, Germany for lack of particular clauses of delivery in the contract.

2. If KCS GmbH commits itself to ship the delivery item FCA to Customer’s destination at Customer’s request, then transfer of risk passes to Customer at the moment of receiving the item by the first carrier.

3. KCS GmbH shall be empowered to partial deliveries.

VI. Delivery Time and Delays

1. Readiness for Shipment is:

a) One (1) week for contracts of machine part deliveries if delivery item is on stock of KCS GmbH and if delivery is to a destination within the Federal Republic of Germany or within the EU.

b) In any other cases, especially in the case of delivery of plants or plant sections as well as those parts being not on stock of KCS GmbH, the delivery time agreed upon is the exclusive effective one, for lack of such one a reasonable delivery time is valid.

2. Both the previously mentioned delivery time stipulated and also such one deviating from this one shall begin with the conclusion of the purchase contract, but not before receipt and check of the irrevocable L/C, conclusion of every official formality, settlement of all the payments being due when the contract is concluded, provision of any securities if applicable as well as the fulfillment of any other pre-conditions stipulated.

3. Has one of these conditions not been fulfilled yet, which of these are provided by the Customer, then the commencement of the delivery time shall be prolonged accordingly.

4. Delivery time is deemed to be kept to if delivery item has left KCS GmbH’s factory before the delivery time has expired. Should Customer have carried out transport himself, then delivery time is deemed to be kept to with Customer’s receipt of the announcement of readiness to deliver by KCS GmbH.

5. If shipment of the delivery item is delayed at the request of Customer or to the Customer’s fault after the expiry of the valid delivery time, then KCS GmbH shall be entitled to charge Customer with the storage costs resulting from this amounting to a flat rate of one thousandth of the order value per month or part thereof.

6. Should delivery be delayed by Force Majeure (see Point XI) or by Customer’s action or omission, KCS GmbH is prepared to grant a reasonable extension of the delivery time. This extension shall be granted regardless of whether the reason occurred prior to or after the delivery time agreed upon.

7. Any claims on the Customer’s part against KCS GmbH in the case of non-delivery by such are excluded. Any other claims against KCS GmbH regarding delays are excluded, if KCS GmbH has not proven to be grossly negligent. Gross negligence within the frame of an action or omission is then shown if either KCS GmbH has not exercised all due care regarding the occurrence of any serious consequences which a reliable supplier normally would have foreseen or insofar KCS GmbH has consciously disregarded the consequences of such an action or omission.

8. If it is foreseeable for Customer that he is unable to accept the delivery item at the delivery date, he shall be obliged to mention the reason for such to KCS GmbH as well as to mention, if possible, an alternative point of time at which he can accept delivery.

9. In the case of Customer’s non-acceptance of the delivery at the day of delivery, KCS GmbH is entitled to claim for that purchase price being due on delivery. In this case, KCS GmbH will cause the storage of the delivery item at the Customer’s risk. At Customer’s request, KCS GmbH will insure the delivery item at Customer’s expense.

10. Should Customer’s non-acceptance of the delivery item not be caused by Force Majeure (cp. point XI.), KCS GmbH shall be entitled to request Customer in writing to accept the delivery within a reasonable last deadline. KCS GmbH shall be entitled to withdraw from the contract partially or wholly, insofar as Customer does not accept delivery within the last deadline and non-acceptance could not be caused by KCS GmbH’s behavior. In this case, KCS GmbH shall be entitled to compensation of that damage being occurred due to the delay caused by Customer. However, the total amount of this indemnification may not exceed the purchase price corresponding to such part of the delivery item in respect of which contract will be dissolved.

VII. Reservation of Title

1. The delivery item remains the property of KCS GmbH until such one has been paid in full, insofar as such a reservation of title is subject to applicable law. Insofar as KCS GmbH demands this, Customer shall have to support KCS GmbH comprehensively within the frame of KCS GmbH’s efforts to protect its proprietary right in the country concerned.

2. Granting the above-mentioned reservation of title shall not affect the provisions concerning the transfer of risk according to point V.

VIII. Liability for Defects

1. KCS GmbH shall be obliged to repair any defects and deviations respectively according to the following provisions (hereinafter called ’defect/defects’) based upon an error in construction, material or design.

2. KCS GmbH shall be liable for such defects occurring within one year in one-shift operation or 2.000 operation hours " whichever occurs first " from commissioning on. This liability does not apply for such parts being subject to normal tear and wear due to contact with concrete.

3. The liability stipulated in the previous point also extends to those parts which are inserted into such one due to a defect of the delivery item. The period mentioned under point VIII.2. is extended for all the remaining parts by the duration of business interruption caused by such defect.

4. If Customer has discovered a defect, he shall immediately be obliged to make a complaint in writing to KCS GmbH. In any case, such a complaint of defect shall have to be effected within a period of two weeks after the expiry of that period mentioned under point VIII.2. Such defect must be described specifically and in detail.

5. Insofar as Customer does not complain a defect in writing within that period prescribed under point VIII.4., Customer shall lose his right to repair that defect.

6. Is it possible that such a defect may cause any further damages, Customer shall have to inform KCS GmbH on that point immediately and in writing. Insofar as Customer refrains from informing KCS GmbH on such point, he then shall bear the risk for this kind of damages.

7. On receipt of the complaint of defect according to point VIII.4. KCS GmbH shall repair such defect immediately and at its own expense. Principally, such defect is to be repaired at the place of the delivery item. KCS GmbH reserves the right, however, to have that defective part or that delivery item sent back for the purpose of repair or exchange. Should installation or disassembly of the spare part require any special knowledge, KCS GmbH itself will perform such work. If any such special knowledge is not required, KCS GmbH is just obliged to supply to Customer the part being duly repaired and exchanged respectively.

8. Insofar as Customer has made a complaint to KCS GmbH and such a defect does not exist, then Customer shall be liable to KCS GmbH for that damage arisen to KCS GmbH due to such unjustified complaint.

9. The transport of the delivery item and / or the parts of the delivery item to be replaced being necessary within the frame of the repair of defects shall be effected at risk and costs of KCS GmbH. Customer shall have to follow such instructions by KCS GmbH within such a transport.

10. Customer shall have to bear all the additional incurring costs to KCS GmbH within the frame of repair, installation and disassembly as well as the transport if the place of the delivery item deviates from the stipulated destination or " if no destination is stated " from the place of delivery.

11. Such defective but repaired parts become the property of KCS GmbH and must be made available to KCS GmbH.

12. If KCS GmbH does not fulfill its obligation to repair the defect within a reasonable period, Customer shall be entitled to set a last written deadline to repair such defect. If KCS GmbH does not fulfill its obligation within this time limit, then Customer shall be entitled to repair or to have the necessary repair done by a third party at KCS GmbH’s expense and risk. With refund of these repair costs on the part of KCS GmbH all the Customer’s claims to KCS GmbH with regard to the defect shall be deemed to have been met.

13. If subsequent remedy fails according to point VIII.7., Customer shall be entitled to the following rights:

a) He may claim for a reduction of the purchase price corresponding to the reduced value of the delivery item, whereby this such deduction is limited to a maximum amount to 15 % of the purchase price; or

b) Insofar as Customer loses interest in contract due to the extent of the defect, Customer may cancel the contract after having informed KCS GmbH in writing. Then Customer is entitled to claim for a compensation of 15 % maximum of the purchase price.

14. KCS GmbH shall not be liable for such defects resulting from materials which were made available by Customer or from a construction prescribed by the Customer.

15. Liability on the part of KCS GmbH requires the delivery item to be used under the contractual operating conditions and within the frame of proper use. KCS GmbH is not liable for any those defects occurring due to the following circumstances:
a) Poor or lack of maintenance,
b) improper installation,
c) normal tear and wear,
d) incorrect repair on the part of the Customer or
e) changes to the original item without any written approval by KCS GmbH.

16. Any use of spare parts being not approved by KCS GmbH shall lead to a relief from liability of KCS GmbH.

17. KCS GmbH’s liability for any such defects of any such parts of the delivery item is always limited for a period of one year as of the period stipulated in point VIII.2. This applies notwithstanding the provisions according to point VIII.1 to 16.

18. Subject to the provisions according to point VIII.1 to 17. KCS GmbH shall not be liable for any defects. Especially, KCS GmbH is not liable for damages caused by any defects like a standstill in production, lost profit or any other indirect damages. This limitation of liability applies / does not apply

a) within the frame of intent or gross negligence according to point VI. 11 or , however, in case of culpable injury of life, body or health;
b) in case of culpable injury of essential contractual obligations by KCS GmbH. in case of slight faults, KCS GmbH is only liable for such typical and reasonably foreseeable contractual damage;
c) insofar as KCS GmbH is liable due to any errors in the delivery item for personal injury or material damage at privately used object according to the stipulations of the German Product Liability Act;
d) for defects which KCS GmbH has maliciously concealed.

IX. Assembly and Commissioning

1. The General Terms of Assembly (GTA) of KCS GmbH shall apply regarding the assembly and commissioning.

2. Assembly and commissioning are calculated according to actual expense on the basis of a supervisor assembly. Such costs shall be borne by the Customer and separately calculated on the basis of countersigned assembly slip.

X. Safety Devices, Protection Devices

1. Insofar as the protection devices being given in the plans as well as due to any safety provisions have not been installed yet, KCS GmbH shall be entitled to refuse the handover of the delivery item.

2. Insofar as any further protection devices at the delivery item are necessary due to the local conditions, especially due to the binding rules and laws and those several interpretations resulting from these, then KCS GmbH’s offer shall not include these prices and deliveries resulting from such conditions.

XI. Force Majeure

1. If the following circumstances prevent you from fulfilling each contractual duty or if they complicate such ones unreasonably, each party shall be entitled to discontinue the fulfillment of its contractual duties: industrial disputes and any other circumstances beyond the control of the parties like fire, war, extensive military mobilization , requisition, embargo, seizure, restrictions in the use of power as well as delays in delivery by subcontractors caused by any such circumstance as referred to in this point.

2. One circumstance referred to this point whether occurring prior to or after the conclusion of the contract shall give a right to suspension only if its effect on the performance of the contract could not be foreseen at the time of concluding the contract.

3. Insofar as one of the parties invokes Force Majeure, this one has to inform the other immediately and in writing on the occurrence and the end of this circumstance. Is Customer prevented from fulfilling the contractual duties due to Force Majeure, Customer shall have to compensate KCS GmbH for its expense spent in order to secure and protect the delivery item.

4. Is Force Majeure given, each party shall have the right " notwithstanding all the consequences mentioned in these Conditions of Delivery " to withdraw from the contract by informing in writing the other party, however, only if this suspension according to point XII.1 would last for more than six months.

XII. Foreseeable Non-fulfillment

1. Each party has the right to suspend its duties being incumbent upon, if circumstances doubtless show, that the other party will not be in the position to fulfill its duties. If one party suspends to fulfill its duties this requires immediate and written information on such action.

2. Insofar as the provisions are not opposed to these General Terms of Delivery, liability among the parties is deemed to be excluded due to a standstill in production, lost profit, loss of use, contractual losses or any other consequential losses or indirect ones. This limitation of liability shall not be granted in commensurate application of point VIII. 18, clause 3a), insofar as the conditions mentioned there do exist.

XIII. Disputes and Applicable Law

1. Insofar as the world-wide delivery of plants or plant sections as well as the delivery of individual parts to places outside the EU is the subject of this contract, then the following arbitration clause is agreed upon:

a) All the disputes ensuing from or being in connection with the previously mentioned business relations are deemed to be definitely decided in accordance with the Arbitration Code of the International Chamber of Commerce (ICC) by one or more arbitrators designated in accordance with this Code.

b) Arbitration proceedings are deemed to be executed by the ICC Swiss Commission of Arbitration, Hegibachstr. 47, CH-8032 Zurich, as the arbitration board. Both parties accept the arbitration of the arbitration board as a binding one. The arbitration costs shall be divided for proof of between both parties. Proceedings are deemed to be conducted in German.

2. Insofar as the delivery of individual machine parts to places within the EU being the subject matter of this contract, then ordinary German jurisdiction is agreed upon and so Lindern is expressively agreed as the legal venue.

3. All the contracts concluded with KCS GmbH shall be without exception and exclusively subject to the substantive law of the Federal Republic of Germany.

XIV. Severability Clause

The contract remains valid even if some of these provisions of the General Terms of Delivery may be legally invalid. In addition to this does the legal invalidity of any individual provision not affect the legal validity of the remaining provisions.

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