VII. TRANSFER OF RISK

1. The risk shall pass to the Purchaser upon dispatch of the delivery parts to

the Purchaser at the latest, including in those cases in which partial deliveries

are made or where the Supplier has assumed responsibility for other supplies

and services such as travel to the site and installation or the costs of shipping.

Except where other trade terms are explicitly agreed, delivery of the delivery

item shall be "Ex works" (EXW). Where trade terms are agreed, these shall

be interpreted according to the INCOTERMS valid at the time the contract was

formed.

On request of the Purchaser the delivery shall be insured – at the cost of the

Purchaser - by the Supplier against theft, breakage, transport, fire and water

damage and other insurable risks.

Any risk of loss or damage to the works not covered by the first paragraph

of this Clause shall pass to the Purchaser on acceptance of the works.

Any loss or damage to the delivery item and works after the risk has passed

to the Purchaser shall be at the risk of the Purchaser, unless such loss or

damage results from negligence of the part of the Supplier.

2. Should dispatch or acceptance be delayed for reasons for which the

Purchaser is responsible, the risk shall pass to the Purchaser on the day on

which readiness for dispatch has been notified; however, the Supplier shall

obtain requisite insurance cover at the request and cost of the Purchaser.

3. Partial deliveries shall be allowed where these are reasonable for the

Purchaser.

VIII. DELIVERY PERIOD, DELIVERY DELAYS

1. The delivery period shall commence upon dispatch of the confirmation of

order, but not prior to receipt of an agreed advance payment. Delivery

periods can only be adhered to by the Supplier if all commercial and technical

issues have been clarified by the contracting parties and the Purchaser has

complied with all the obligations incumbent on the Purchaser, such as providing

the requisite official certification or permits. Should this not be the case, the

delivery period shall be extended for a reasonable period of time. This shall not

apply in cases in which delay is the responsibility of the Supplier.

2. Compliance with the delivery period is subject to receipt by the Supplier

of correct and timely supplies. Impending delays shall be notified by the Supplier

as soon as possible.

3. The delivery date shall be deemed to be kept if the delivery item has left the

Supplier’s works or been reported as ready for dispatch by this date.

4. The Supplier shall be entitled to an extension of the delivery period if delay

occurs:

a) owing to any of the circumstances referred to in Clause XVI.1, or

b) owing to variation work under Clause V.2, or

c) as a result of variations under Clauses VI.1-5 , or

d) as a result of suspension under Clauses IV.2, XII.5, XVI.3 or

e) an act or omission on the part of the Purchaser.

The extension shall be reasonable having regard to all the circumstances.

This shall also apply should such circumstances affect subcontractors.

The circumstances referred to above shall not be deemed to be the responsibility

of the Supplier should they occur during an existing delay. In important

cases the Supplier shall notify the Purchaser of the onset and termination of such

hindrances as soon as possible.

5. In the event that dispatch is delayed at the request of the Purchaser, the

Purchaser shall be charged the costs of storage, or should storage be made at

the Supplier's works a minimum of 0.5% of the invoice amount, for every

month commencing one month subsequent to the date on which notification

of readiness for dispatch has been notified.

The Supplier shall however be entitled, after stipulation and the abortive expiry

of a reasonable period, to dispose otherwise of the delivery item and to make

delivery to the Purchaser within a reasonably prolonged period of time

provided that the Supplier has drawn the attention of the Purchaser to such

consequences at the time said period was stipulated.

6. The Purchaser shall be entitled to terminate the contract without notice should

performance become irreversibly impeded and impossible in its entirety for

the Supplier prior to the transfer of risk. The Purchaser shall also be entitled

to terminate the contract should delivery of part of an order become impossible

and should the Purchaser have a legitimate interest in refusing partial delivery.

Should this not be the case, the Purchaser shall pay the contract price applicable

to such partial delivery. The same shall apply in the event of inability to

perform on the part of the Supplier. Clauses XI.3, 4 and 5 apply accordingly in

all other respects.

Should such impossibility or inability to perform occur during an instance of

default on acceptance or should the Purchaser bear sole or main responsibility

for the same, the Purchaser shall be bound to provide consideration.

7. Compliance with the delivery period shall be contingent on fulfilment of the

Purchaser's contractual obligations.

IX. ACCEPTANCE TESTS

1. Unless otherwise agreed, acceptance tests shall be performed upon

completion of the installation work to determine whether the works comply

with the contractual terms for acceptance.

The Supplier shall notify the Purchaser in writing that the works are ready for

acceptance. Said notice shall specify a date for acceptance tests which provides

the Purchaser with sufficient time to prepare for and be represented at the same.

The Purchaser shall bear all costs of acceptance tests. The Supplier shall,

however, bear all costs relating to its personnel and other representatives.

2. The Purchaser shall provide free of charge any power, lubricants, water, fuel,

raw materials and other materials required for the acceptance tests and for final

adjustments in preparing for these tests. The Purchaser shall also install free of

charge any equipment and provide any labour or other assistance necessary

for the performance of acceptance tests.

3. Should the Purchaser fail to fulfil its obligations under Clause IX.2 after

having been notified in accordance with Clause IX.1 or should the Purchaser

otherwise prevent the acceptance tests from being performed, the tests

shall be regarded as having been satisfactorily completed on the date for

acceptance tests stated in the Supplier's notice.

4. Acceptance tests shall be carried out during normal working hours. Unless

the contract explicitly stipulates the technical requirements, the tests shall be

carried out in accordance with general practice in the appropriate branch of

industry concerned in the Purchaser's country.

5. The Supplier shall prepare a test report of the acceptance tests which shall be

sent to the Purchaser. Should the Purchaser not be represented at the

acceptance tests after having been notified in accordance with Clause IX.1,

the test report shall be accepted as accurate.

6. Should the acceptance tests show that the works do not comply with the

contract, the Supplier shall remedy the defects forthwith. New tests shall be

carried out in accordance with Clauses IX.1-5 should this be requested in

writing without undue delay by the Purchaser. This shall not apply in the case of

immaterial defects.

X. ACCEPTANCE

1. The works shall be deemed to be accepted

a) if the acceptance tests have been completed successfully or are deemed to

have been successful pursuant to Clause IX.3; or

b) if the Purchaser has been notified in writing by the Supplier that the works

have been completed, provided that the works comply with contractual

acceptance conditions and only in those cases in which the parties have agreed

not to perform acceptance tests.

Acceptance shall not be prevented by minor defects which do not affect the

efficiency of the works.

2. The Purchaser shall not be entitled to use the works or any part thereof

prior to acceptance. Should the Purchaser do so without the Supplier's consent

in writing, the Purchaser shall be deemed to have accepted the works. In such

cases the Supplier shall be relieved of its duty to perform acceptance tests.

3. The period referred to in Clause XVII shall start to run as soon as the works

have been accepted pursuant to Clauses X.1 or 2. Upon a request made by

the Supplier in writing, the Purchaser shall issue a certificate stipulating the

point in time at which the works have been accepted. Should the Purchaser

nonetheless fail to issue such a certificate, this shall not affect acceptance

pursuant to Clauses X.1 and 2.

XI. COMPLETION, SUPPLIER'S DELAY

1. The works shall be regarded as completed upon their acceptance pursuant to

Clause X.1 or 2.

2. Clause VIII. 4 shall apply to extensions of the time for completion accordingly.

The time for completion shall also be extended accordingly should delivery be

delayed pursuant to Clauses VIII. 1, 2,4 7.

3. The Supplier shall be deemed to be in delay should the works not be

completed pursuant to Clause XI.1 on the completion date stipulated by contract

or according to Clause X1.2. Delay on the part of the Supplier shall entitle

the Purchaser to liquidated damages from the date on which the works should

have been completed.

The liquidated damages shall be payable at a rate of 0.5 per cent of the contract

price for each completed week of delay. The liquidated damages shall not exceed

5 per cent of the contract price.

Should only part of the works be delayed, the liquidated damages shall be

calculated on that part of the contract price which is attributable to such part of

the works as cannot in consequence of the delay be used as intended by the

parties.

The liquidated damages become due upon request made by the Purchaser

in writing, not however prior to completion of acceptance or termination of the

contract pursuant to Clause XI.4.

4. Should the Supplier's delay be so lengthy that the Purchaser is entitled to

the maximum liquidated damages under Clause XI.3 and should the works

still not be completed, the Purchaser shall be entitled to make a demand in

writing for completion within a final reasonable period which shall not be less

than four weeks.

Should the Supplier not complete the works within such final period and should

this not be due to circumstances for which the Purchaser is responsible, the

Purchaser shall be entitled to serve notice in writing to the Supplier to terminate

the contract in respect of such part of the works which, due to the Supplier's

delay, cannot be used as intended by the parties.

Should the Purchaser terminate the contract, the Purchaser shall be entitled to

compensation for losses suffered as a result of the Supplier's delay.

Total compensation, including liquidated damages as payable under Clause

XI.3, shall not exceed 10 per cent of that part of the contract price which is

attributable to the part of the works in respect of which the contract is terminated.

5. The remedies available to the Purchaser in the event of delay on the part

of the Supplier shall be limited to liquidated damages under Clause XI.3 and

termination of the contract with limited compensation under Clause XI.4.

All other claims against the Supplier based on such delay shall be excluded,

except where the Supplier has been guilty of gross negligence, wilful intent or

culpable breach of contract.

XII. PRICE AND PAYMENT

1. Unless agreed otherwise, prices shall be ex works, including loading and

packaging in the works, but excluding unloading. Value-added tax at the applicable

statutory rate shall be added to the prices.

2. Unless otherwise agreed, payment shall be made to the account of the

Supplier - 30 per cent as advance payment following receipt of the confirmation

of order, 30 per cent as soon as the notification is provided to the Purchaser

that the main parts are ready for dispatch, 30 per cent upon delivery of the

delivery item or the major part of the delivery item to the site and the remaining

part of the contract price upon acceptance.

3. The Purchaser shall only be entitled to retain payments or to offset payments

with counterclaims to the extent that such counterclaims are undisputed or have

been legally determined.

4. Should baselines dates for payments be culpably exceeded, the Supplier shall

beentitled to charge interest on arrears without first issuing a reminder; more

extensivedamages for delay may also be claimed.

5. In the event of late payment the Supplier shall be entitled - after notifying the

Purchaser in writing – to suspend performance of the contract pending

receipt of payment.

XIII. RETENTION OF TITLE

1. Title to all delivered goods shall only pass to the Purchaser following settlement

ofall claims by the Purchaser – including future claims - arising from the

business relationship.

2. The Supplier shall be entitled to insure the delivery item, at the cost of the

Purchaser,against theft, breakage, fire, water damage and other damages unless

the Purchaserhas demonstrably taken out insurance cover itself and has assigned

its claims arisingfrom said insurance cover to the Supplier in advance.

3. The Purchaser may not pledge the delivery item or assign same by way of

security.The Purchaser shall notify the Supplier forthwith in the event of

attachments andseizure or other third-party dispositions. Unless given the explicit

consent of the Supplier, the Purchaser shall not – prior to receipt of all payments

pursuant to Clause XIII.1 - impair the Supplier's retention of title in any way and

shall not, in particular, resell, process, mix or join in any other way the delivery

item with other objects.

Should the delivery item nonetheless be treated or processed by the Purchaser,

the provisions regarding the retained goods shall likewise apply to the new object

resulting from such treatment or processing. Should the goods be processed,

blended or joined with other objects, the Supplier shall acquire co-retained title to

the new object created as a result in the ratio of the value of the delivery item to

the other processed or joined items at the time of such processing or joining.

In undertaking any processing work the Purchaser shall be active on behalf of

the Supplier without acquiring any claims against the Supplier as a result of

such processing.

4. Should the Purchaser act in breach of contract, particularly in the event of

default in payment, the Supplier shall be entitled to retake possession after

issuing a warning and the Purchaser shall be obliged to surrender.

The assertion of the retention to title and the attachment of the delivery item

by the Supplier shall not constitute withdrawal from the contract.

5. The institution of insolvency proceedings shall entitle the Supplier to terminate

the contract and to demand immediate surrender of the delivery item.

XIV. WARRANTY CLAIMS

The Supplier provides the following warrants for material defects and defects in

title, excluding further claims – subject to Section XV. – as follows.

Material defects

1. Claims for defects of the Purchaser shall exist only if the Purchaser has

complied with its inspection and notification duties pursuant to Sec. 377 of the

German Commercial Code(Handelsgesetzbuch –HGB) in due time.

Non-recognisable defects shall be notified within 1 week of their discovery,

but at the latest within 3 months of delivery or termination

of any other services. The Purchaser shall perform a functional test within this

period. Defects which should have been detected during an acceptance inspection

shall notbe notified subsequent to agreed acceptance.

2. All such parts are to be replaced or repaired free of charge at the discretion

of the Supplier that are shown to have been defective prior to the transfer

of risk. The discovery of such defects shall be notified to the Supplier in

writing forthwith. Replaced parts shall become the property of the Supplier.

Such parts shall be transferred to the Supplier on request forthwith.

3. Should the Supplier have requested that the defective part or the delivery

item be returned to it, and should the Purchaser fail to comply with this

duty, the defect shall be deemed as unproven. In such cases the Purchaser shall

reimburse all the costs incurred by the contractor relating to the exchange of

the part notified as defective (e.g. costs of spare parts and delivery costs).

4. Following agreement with the Supplier, the Purchaser shall make the necessary

time and opportunity for carrying out all the reworking and replacement

deliveries deemed necessary by the Supplier; should the Purchaser fail to

provide such time and opportunity, the Supplier shall be released from liability

for the consequences of the same. Only in urgent cases, and following

immediate notification of the Supplier, in which operational safety may be

jeopardized or in order to ward off disproportionately greater damages shall the

Purchaser be entitled to rectify the defect itself or to arrange for such defects to

be rectified by third parties and to demand reimbursement of the necessary

expenditure from the Supplier.

5. Should the complaint prove to be legitimate, the Supplier shall bear

those of the direct costs arising from reworking or replacement deliveries

incurred for the replacement item including dispatch of the same. The Supplier

shall also bear the dismantling and re-assembly costs as well as the costs

for the provision of any fitters and auxiliary personnel who may be required,

including travel expenses provided that this does not entail imposing an

unreasonable burden on the Supplier.

Should the works not be at the site, the Purchaser shall bear any resulting

additional costs incurred by the contractor when remedying defects.

6. In the framework of statutory provisions, the Purchaser shall be entitled

to terminate the contract should the Supplier – taking account of statutory

exemptions – allow a reasonable period of grace for reworking or

replacement delivery on account of material defects to expire abortively.

In the case of insubstantial defects the Purchaser's right shall be limited to the

right to demand a reduction in the contract price. The right to demand a

reduction in the contract price is excluded in all other cases.

Further claims are governed by Clause XV.2 of these General Conditions.

7. No warranty shall be assumed in the following cases in particular:

Unsuitable or improper use, faulty installation or commissioning by the Purchaser

or third parties, natural wear and tear, faulty or negligent treatment, improper

maintenance, unsuitable operating equipment, faulty construction work,

unsuitable foundations, chemical, electrochemical or electrical influences –

except where these are the responsibility of the Supplier.

8. Should the Purchaser or a third party perform improper reworking, the

Supplier shall accept no liability for the consequences of the same.

The same shall apply should alterations be made to the delivery item without

the prior approval of the Supplier.

Defects in title

9. Should use of the delivery item result in the infringement of domestic

intellectual property rights or copyrights, the Supplier shall – as a matter of

principle and at its own cost – procure the right of the Purchaser to make

further use of the delivery item or shall modify the delivery item in a manner

acceptable to the Purchaser such that it no longer infringes the intellectual

property rights.

Should this not be possible on reasonable business terms or within a

reasonable period, the Purchaser shall be entitled to terminate the contract.

Subject to the specified preconditions the Supplier shall also be entitled to

terminate the contract.

The Supplier shall also hold the Purchaser harmless against undisputed or

legally effective claims asserted by the owners of the relevant intellectual

property rights.

10. Subject to Section XV.2, the duties of the Supplier referred to in

Clause XIV.8 shall be exhaustive with regard to the infringement of intellectual

property rights or copyrights.

These shall only exist if

- the Purchaser notifies the Supplier forthwith of any claims regarding

infringements of intellectual property rights or copyrights,

- the Purchaser provides the Supplier with appropriate support warding off

such claims or enables the Supplier to perform the modification measures

referred to in Clause XIV.8,

- all measures to ward off such claims, including out-of-court settlements,

remain the preserve of the Supplier,

- the legal defect is not the result of instructions issued by the Purchaser, and

- the infringement has not been caused by the fact that the Purchaser has

modified the delivery item independently or in a manner which does not comply

with contractual provisions.

XV. LIABILITY

1. Should it not be possible for the Purchaser to use the delivery item as

foreseen by contract through the fault of the Supplier as a result of omitted or

faulty implementation of suggestions and consultations made before or after

conclusion of the contract or as a result of the infringement of other

subsidiary contractual duties, in particular instructions regarding the

operation and maintenance of the delivery item, the provisions of Clauses XIV.

and XV.2 shall apply accordingly, ruling out further claims by the Purchaser.

2. The Supplier shall only be liable for damages not incurred on the delivery

item itself – regardless of the legal standing of the same – in the event of:

- wilful intent

- gross negligence of the proprietor / corporate bodies or executive employee,

- non-accidental injury to life, limb or health,

- in the event of the fraudulent concealment of defects or where the absence of

such defects has been warranted,

- in the event of defects in the delivery item where liability is borne under

the German Product Liability Act (Produkthaftungsgesetz) for personal injury

and damage to privately used property,

In the event of a culpable breach of contract, the Supplier shall also be liable

for gross negligence on the part of non-executive employees and for slight

negligence – in the latter case limited to reasonably foreseeable damages which

are intrinsic to the contract.

Further claims are excluded.

XVI. FORCE MAJEURE

1. Either party shall be entitled to suspend performance of its obligations under

the contract to the extent that such performance is impeded or made

unreasonably onerous by any of the following circumstances: industrial

disputes and any other circumstance beyond the control of the parties

such as fire, war, extensive military mobilization, insurrection, requisition,

seizure, embargo, restrictions in the use of power and defects or delays in

deliveries by subcontractors caused by any such circumstance as referred to in

this Clause.

Should any of the circumstances referred to in this Clause occur prior or

subsequent to formation of the contract, such circumstances shall only entitle

the parties to suspend performance if the effect of such circumstances on

performance of the contract could not be foreseen at the time of the formation

of the contract.

2. The party claiming to be affected by Force Majeure shall notify the other

party in writing without delay on the intervention and on the cessation of such

circumstance.

Should Force Majeure prevent the Purchaser from fulfilling its obligations,

the Purchaser shall compensate the Supplier for expenses incurred in securing

and protecting the works.

3. Regardless of anything which may otherwise follow from these General

Conditions, either party shall be entitled to terminate the contract by

notice in writing to the other party if performance of the contract is suspended

under Clause XVI.1 for longer than six months.

XVII. LIMITATION PERIOD

All claims of the Purchaser – regardless of their legal standing – are subject

to a limitation period of 12 months. Compensation claims under Clause XV.2

shall be subject to the statutory periods.

XVIII. APPLICABLE LAW, LEGAL VENUE

1. All legal relations between the Supplier and the Purchaser shall be subject

to the law of the Federal Republic of Germany to the exclusion of the United

Nations Convention on Contracts for the International Sales of Goods (CISG).

2. The exclusive legal venue shall be the court with jurisdiction for the head

office of the Supplier. The Supplier shall, however, be entitled to bring an action

at the Purchaser's head office.