General Conditions of Delivery and Payment

A. General Conditions

I. Contract conclusion

1. We supply our goods and services exclusively in accordance with the conditions given below. The buyer's conditions of sale are hereby declared void.

2. Offers we make are subject to confirmation. Our official statements are made in writing. Our invoice serves as a confirmation of your order. For order confirmations, ancillary agreements or changes are effective only following written confirmation. For the manufacture of magnets or magnet systems, under- or over-deliveries of up to 10% of the ordered quantity are deemed acceptable.

II. Payment terms

1. Payments for deliveries are due within 30 days of the invoice date, not with standing the right to give notice of defects. The buyer may offset payments only against claims that are uncontested or have been established by a court of law. If payment is made within 7 days of the invoice date, we grant a 2% discount on the value of goods invoiced. Discounts are not given if the balance due to us is in arrears at the point in time the payment is made. Payments are offset against the oldest debt outstanding, insofar as this debt is older than 30 days. Bills of exchange cannot be accepted; cheques are accepted only in lieu of payment. As we incur bank surcharges for payments made from outside Germany, we charge a fee surcharge of EUR15.00 on foreign orders for goods valued at less than EUR 150.00.

2. If payment deadlines are missed, interest is charged at 3% above the applicable discount rate set by Deutsche Bank.

3. If our payment claims are endangered by subsequently occurring circumstances that result in a substantial deterioration to the buyer's financial situation, we are entitled to set these claims as due, regardless of the term of any bills of exchange received in lieu of payment.

4. If the buyer falls into arrears, we are entitled to prohibit further processing of the goods supplied or to reclaim these goods, whereby the latter does not constitute withdrawal from the contract.

5. In cases where 3. and 4. are valid, we may revoke any direct debit mandate given (A. IV. 7) and demand prior payment for any outstanding deliveries.

6. The buyer may avert the legal consequences named in A. II. 3-5 by provision of a security to the amount of our endangered payment claim.

7. Statutory provisions governing late payment remain unaffected.

III. Securities

We are entitled to securities of the usual type and scope in relation to our claims, even where these are conditional or limited.

IV. Retention of title

1. All good supplied remain our property ("retained goods", i.e. goods sold subject to retention of title) until all claims due to us on account of the terms of business are settled - including in particularly any relevant balance claims. This also applies to future and conditional claims.

2. Processing/working of retained goods is made on our behalf as the manufacturer (cf. BGB s. 950) but without our incurring any obligation. Any worked/processed goods are retained goods in the sense of 1. above.

3. Where the buyer processes, aggregates or compounds retained goods with other goods, we have a right of co-ownership to the new good in the proportion of the invoice value of the retained goods to the invoice value of the other goods used. If our right to title ceases as a result of processing, aggregation or compounding, the buyer hereby transfers to us the buyer's due rights of title or transfer of title to the new stock or the good in the proportion of the invoice value of the retained goods to the invoice value of the other goods used, and holds these rights for us free-of-charge. Our rights of co-ownership are retained goods in the sense of 1. above.

4. The buyer may resell on the retained goods only as part of normal business, using the buyer's normal terms of business and only if the buyer is not in arrears. Further preconditions are that the buyer retains title to the goods and that the claims from the resale pass to us in accordance with A. IV. 5 and 6. The buyer is not granted further entitlements concerning the retained goods. A resale in the sense of A. IV also applies to the use of retained goods to fulfil contracts for work and services or work and materials.

5. The buyer hereby transfers to us the buyer's claims from the resale of the retained goods. These serve as securities to the same extent as retained goods in the sense of A. IV. 1.

6. If the buyer resells the retained goods together with other goods, then the claim from the resale is transferred to us in the proportion of the invoice value of the retained goods to the invoice value of the other goods. Concerning the resale of goods to which A. IV. 3 accords us a right of co-ownership, a portion of the claim is transferred to us in proportion to our co-ownership stake.

7. The buyer is entitled to recover claims from the resale, unless we have revoked the direct debit mandate as a result of the cases specified under A.II. 3 and 4. At our request, and if we do not do this ourselves, the buyer must inform the buyer's purchaser immediately concerning the transfer of rights to us and hand us the information and documents necessary for recovery. Under no circumstances it the buyer entitled to transfer the claims; this also applies to all types of factoring business, which the buyer may not engage in, even on account of our direct debit mandate.

8. The buyer must inform us without delay concerning a seizure of assets or other detrimental third-party factors.

9. If the value of the existing securities exceeds the total claims secured by more than 10%, then we are, at the request of the buyer, obliged to release securities as we see fit to this amount.

V. Place of fulfilment and jurisdiction

The place of fulfilment and jurisdiction for both parties to the contract is - insofar as legally permissible - Solingen. We are also entitled to institute proceedings against the buyer at the buyer's general place of jurisdiction.

B. Performance of delivery

I. Delivery dates and deadlines

1. Delivery deadlines commence at the date of our order confirmation, although not before the full clarification of all details of the order; the same applies to delivery dates.

2. If the buyer does not fulfil contractual obligations (including duties to cooperate and secondary duties) - such as opening a letter of credit, supplying domestic or foreign certification, providing down payments or similar - in good time, then we are entitled to postpone our delivery deadlines and dates, without affecting our rights arising from default on the part of the buyer, to match the demands of our production processes.

3. The point in time goods leave the factory is definitive for determining compliance with delivery deadlines. If the goods cannot be shipped on time through no fault of our own, then we are in compliance with delivery deadlines and dates if we declare our readiness to ship.

II. Dimensions, weight, quality

Variations in dimensions, colour, quantity, weight and quality are permissible in line with DIN or applicable practice. Weights are determined on our officially calibrated scales and are definitive for invoicing.

III. Shipping, packaging, transfer of risk

1. We select the haulier or haulage contractor.

2. If the loading or conveyance of the goods is delayed for a reason for which the buyer bears responsibility then we are entitled to warehouse the goods as we see fit, and at the buyer's cost and risk, to take any and all action perceived as necessary to safeguard the goods and to invoice the buyer for the goods as delivered. The same applies if goods reported as ready to ship are not collected within three days. Statutory provisions governing late acceptance remain unaffected.

3. The buyer bears the costs of packaging. Packaging returns are not accepted.

4. If goods are damaged in transit, the buyer must request an official report without delay from the relevant authorities.

5. Risk passes to the buyer with the transfer of goods to the haulier or haulage contractor and no later than the goods leaving the factory or warehouse.

IV. Guarantees

1. Where a legitimate notice of defects is submitted in writing within 8 days of goods receipt we will take back defective goods and supply replacement goods in their place; we are entitled to substitute rework for replacement. The buyer is entitled to statutory guarantee rights only if we fail to comply with these obligations. In cases where goods lack warranted qualities we are liable for claims for compensation only insofar as our warranty served to safeguard the buyer specifically against the losses as suffered.

2. The buyer must not delay in granting us an opportunity to satisfy ourselves of the nature of the defect, and, in particular, must furnish us with the goods or samples in question.

3. Following completion of acceptance as agreed, no complaints may be made concerning defects that could have been identified by this procedure. Compensation for other losses arising from the infringement of secondary contractual obligations is excluded. Any right to reimbursement/withdrawal is explicitly excluded. The client undertakes to inform the client's customers concerning the proper and correct use of the goods, and the dangers that result from non-observance.

V. Industrial property rights

If goods are manufactured and delivered to customer specifications - provided e.g. as specimens, drawings, samples, etc. - then the buyer bears liability for ensuring that no industrial or other third-party property rights are infringed by the use of these specifications. If a third party should sue our company to enforce such claims - and claims for compensation in particular - then the buyer is obliged to indemnify us against all third-party claims.

C. General exclusion of liability

If not otherwise governed by these provisions, our liability for claims for compensation on account of infringement of contractual or extra-contractual duties is limited to intent or gross negligence. Our liability for intent or gross negligence on the part of non-executive vicarious agents, however, requires the infringement of a substantial contractual duty. Rights granted by product liability law remain unaffected.

D. Other

1. Export records
If a buyer headquartered outside the borders of the Federal Republic of Germany as at 03/10/990 (extraterritorial customer) or an agent of this buyer collects goods or conveys or ships these into the external territory, then the buyer must supply us with the export record that is required by tax law. If this record is not provided, the buyer must pay the value-added tax levied on deliveries within the Federal Republic of Germany for the sum as invoiced.

2. Where deliveries are made from the Federal Republic of Germany to other EU member states, the buyer must inform us prior to the delivery of the VAT registration number under which the buyer's revenues are taxed within the European Union. If we are not so informed, the buyer must pay the amount of VAT that we owe in addition to the agreed purchase price for our deliveries.

3. Applicable law
The law of the Federal Republic of Germany applies, with the exclusion of the United Nations Convention on Contracts for the International Sale of Goods of April 11, 1980.

E. Partial invalidity

Should individual provisions of these Conditions of Delivery and Payment prove unenforceable or invalid, whether in whole in part, this does not affect the validity of other provisions. In such a case, the invalid provision is to be reinterpreted or supplemented in such a way that the commercial purpose intended by the invalid provision is thereby achieved.