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Delivery and Payment Conditions

Delivery and Payment Conditions
as of 01.05.2004

• 1. Scope of Application
• 2. Order
• 3. Prices and Costs of Performance of Contract
• 4. Terms of Payment
• 5. Delivery and Default of Delivery
• 6. Measures, Weights, Quantities
• 7. Packing, Packaging Costs, Consignment
• 8. Warranty
• 9. Liability
• 10. Force Majeure
• 11. Retention of Title
• 12. Proof of Export
• 13. Governing Law, Disputes
• 14. Set-off, group set-off clause

1. Scope of Application

1. These General Terms of Sale and Delivery (hereinafter “General Conditions”) apply exclusively to all sales by Georgsmarienhütte GmbH (hereinafter “GMH”). Any conflicting and/or supplementing terms or conditions of the Buyer are not binding upon GMH. This applies also, if GMH shall not expressly object to such terms or conditions or if GMH shall fulfil its obligations without objecting to such terms or conditions.
2. The General Conditions together with the document of which they form a part, contain all relevant terms and conditions of the agreement entered into with the Buyer. No additional agreements exist.
3. These General Conditions apply also to all future business with the Buyer.

2. Order

1. Any offers made by GMH are non-binding. They merely constitute an invitation to the Buyer to submit an offer himself.
2. Public Statements made by GMH, or the producer of the delivered goods or his assistants, in particular while promoting or labelling the goods, are not descriptions of the quality of the goods or a guarantee hereof.

3. Prices and Costs of Performance of Contract

1. The prices designated in the confirmation of order shall be firm and binding. All prices do not include VAT.
2. In the event, that the costs of GMH shall increase after four weeks from the confirmation of order and prior to delivery due to increases of, e.g. increases in raw material and wages, public charges or other costs beyond GMH´s control, GMH shall be entitled to adapt the prices accordingly. GMH will provide the Buyer with evidence for such cost increases upon request.
3. In the event that the parties agreed upon acceptance of performance/ materials testing said acceptance of performance/ materials testing shall be carried out before placing the goods at the disposal by GMH in its plant. Any personal and factual costs of acceptance shall be borne by the Buyer.
4. In the event of deliveries to other EC member states the Buyer shall prior to delivery inform GMH of his VAT identification number, under which he carries out the income taxation within the European Union. Failing this, he shall pay for GMH´s deliveries the VAT amount owed by GMH in addition to the agreed purchase price.

4. Terms of Payment

1. Payments are due and payable not later than on the fifteenth of the month following the delivery without deduction. Thereafter the Buyer will be liable for default of payments pursuant to sec. 286 subsec. 2 number 2 German Civil Code. The legal consequences will be determined pursuant to section 288 German Civil Code.
2. In the event that the Buyer fails to meet his payment obligations GMH is entitled to suspend further performance either in whole or in part until payment of the amounts due or provision of security.
3. In the event that after the conclusion of the contract the Buyer’s financial situation deteriorates substantially which endangers the payment of the agreed price, e.g. suspension of payment by the Buyer or filing of a petition of the commencement of insolvency proceedings upon the assets of the Buyer, GMH shall be entitled to suspend performance until payment in advance or provision of security. If after a reasonable period of time the Buyer shall have failed to pay in advance or provide security, GMH is entitled to rescind the contract.
4. Where the contract provides for payment by Letter of Credit the Buyer is obliged to open and deliver on the hand of GMH said Letter of Credit within seven days. GMH is under no circumstances obliged to perform the contract before receiving the Letter of Credit.
5. Set-off or retention rights of the Buyer are only given if his counterclaim is undisputed or has been confirmed by a final court decision.
6. The Buyer is not entitled to assign any rights or claims under this contract to a third party without GMH´s prior written consent.

5. Delivery and Default of Delivery

1. All deliveries shall be made ex works Georgsmarienhütte, Hüttenstraße 1 (EXW) in accordance with Incoterms 2000.
2. Time limits, in particular delivery dates stipulated by GMH, are only binding if expressly confirmed as binding in the confirmation of order. For the purpose of adherence of delivery dates placing the goods at the plant shall be decisive. GMH is under no obligation to meet confirmed delivery dates if any final specifications, information or cooperation by the Buyer, in particular issuance of the Letter of Credit, adduction of domestic or foreign certificates or import licence which are required for the delivery of the goods, are received by GMH after dispatch of the confirmation of such time limit.
3. Periods of delivery can be reasonably extended in the event of impediments beyond the control of GMH, in particular short falls in energy supply, transport impediments, embargo impositions, disturbances of operation, discontinuance of operation, strikes, industrial actions, deficiencies or delays of deliveries by sub-suppliers. GMH will inform the Buyer of such impediments without undue delay.
4. In the event that GMH fails to meet binding delivery dates, the Buyer may rescind the contract after granting GMH a grace period of at least four weeks. Save as provided in art. 9 (liability) of the statutory rights remain unaffected.
5. In the event that the Buyer fails to accept the due delivery, GMH is, without prejudice to any other remedies, entitled to store the goods at the Buyer’s risk and recover from the Buyer any extra expenses (such as additional storage charges) incurred due to the Buyer’s failure of acceptance.
6. If the Buyer continues to fail to accept delivery after the expiry of a reasonable grace period, GMH is entitled to otherwise dispose of the delivered goods and to charge the Buyer 20 % of the purchase price as minimum damage, unless the Buyer is able to prove that the actual damage was considerably lower.
7. GMH is entitled to make partial deliveries.

6. Measures, Weights, Quantities

1. GMH will deliver its products in accordance with DIN-, DINEN and EURO standards as well as in accordance with comparable foreign regulations, steel-iron-material- and testing regulations and the steel-iron list, each in its valid version.
2. Deviations from measures, weights and quantities are admissible according to the regulations specified in para.(1) or the established practice. The weights are established on GMH´s calibrated scales and shall be decisive for the purpose of invoicing. The attestation of weight shall be carried out by submission of the weighing record. If single weighing is not usually carried out the overall weight shall be decisive.

7. Packing, Packaging Costs, Consignment

1. As far as customary in the trade, GMH will deliver the goods packed and protected against oxidation. GMH retains the choice of appropriate packing. Any costs of packing shall be borne by the Buyer.
2. The Buyer shall report any transport damages to the Transport Company without undue delay and shall have the facts of the case recorded.
3. The Buyer shall be responsible for loading and unloading. If GMH provided the Buyer with wagons or loading units, the Buyer shall return such wagons and loading units completely empty, duly cleaned in accordance with the regulations and complete to GMH.

8. Warranty

1. The Buyer must examine the goods without undue delay following delivery by GMH and notify a defect to GMH without undue delay in writing. If the Buyer fails to notify GMH the goods are deemed approved unless there is a defect which at the time of the examination was not detectable. Where such a defect becomes apparent at a later time, notice must be made without undue delay following detection. Otherwise the goods are deemed approved with regard to this defect.
2. If the delivered goods should be defective, GMH may remedy the defect or effect a substitute delivery at its own discretion (subsequent performance). If GMH fails to subsequently perform or subsequent performance is unacceptable to the Buyer, the Buyer shall be entitled to proportionate reduction of the purchase price or rescission of the contract. Additional claims of the Buyer are excluded, notwithstanding any rights pursuant to art. 7 (liability). Any claims of the Buyer pursuant to section 478, 479 of the German Civil Code (recourse within the supply chain) remain unaffected.
3. The Buyer shall afford GMH sufficient time and opportunity in order to remedy defects. On request of GMH the Buyer shall make available the disputed goods or samples thereof for the purpose of examination by GMH. If the Buyer refuses the remedy of defects, although it is reasonable for him, GMH shall be exempted from warranty.
4. If the parties agreed upon acceptance of performance/ materials testing, notification of any defects which were detectable on such acceptance of performance/ materials testing shall be excluded after the execution of such acceptance of performance/ materials testing.
5. The warranty period shall be twelve months from the transfer of risk.
6. With respect to goods which have been sold as second quality material – e.g. so called II a material – the Buyer shall not be entitled to warranty claims regarding the indicated defects and such defects which he usually might expect.

9. Liability

1. GMH shall only be liable for damages, if (a) liability is mandatory under the applicable law, e.g. under the Product Liability Act or in case of injury to life, body or health, (b) GMH has granted a guarantee, (c) GMH through its own fault commits a material breach of this contract, or if (d) the damage is attributable to gross negligence or wilful conduct on the part of GMH.
2. In all other cases GMH has no liability for damages whatsoever, irrespective of the legal basis. In particular, GMH does not assume any liability for indirect and/or consequential damage, lost profit or damage to other assets of the Buyer.
3. In any event liability shall be limited to such damages which GMH foresaw or ought to have foreseen at the time of the conclusion of the contract, in the light of the facts and matters of which GMH then knew or reasonably ought to have known, as a possible consequence of the breach of contract. This limitation of liability is not applicable in cases of subsection (1), lit. a) and b) of this section 9 (liability) as well as in cases of wilful damage.
4. The exclusion and/or limitation of claims for damages according to the above sections apply also to claims against employees and contractors of GMH.

10. Force Majeure

Notwithstanding any rights pursuant to art. 9 (liability) GMH is not responsible or liable for any impediments to or default of the performance of any part of this contract insofar as the same is caused by the occurrence of events beyond GMH’s control, including strikes or any other industrial disputes. Should such conditions prevail for 30 days or more, GMH and the Buyer shall have the right to rescind the contract at any time by giving notice to the other party without any liability for loss or damage caused thereby.

11. Retention of Title

1. GMH retains title to the delivered goods (hereinafter “the retained goods”) until full settlement of all claims – present and future – under the business relationship with the Buyer.
2. The retained goods are always processed or transformed by the Buyer on behalf of GMH as producer, but without binding GMH. In case GMH loses title to the delivered goods due to processing or transformation, GMH acquires partial title to the new product proportionate to the value of the delivered goods in relation to the value of the other components of the new product at the time of processing. Where the title entirely passes to the Buyer due to fixed attachment or mixture, the Buyer is obliged to transfer to GMH a partial title proportionate to the value of the delivered goods in relation to the value of the other components of the new product at the time of the fixed attachment or mixture. The Buyer will diligently store the goods to which GMH has acquired the (partial) title on behalf of GMH. If the goods are situated with a third party, the Buyer herewith assigns all claims for possession against the third party. GMH herewith accepts such assignment. GMH’s partial title acquired under the provisions of this clause shall pass to the Buyer under the same conditions as GMH’s full title to the delivered goods.
3. The Buyer shall be entitled to resell retained goods in the ordinary course of his business. The Buyer assigns to GMH all present and future accounts receivable (including VAT) resulting from the sale of these goods in the amount corresponding to the invoice value of the respective retained goods. GMH accepts such assignment. The Buyer remains entitled to collect said accounts receivable from the respective party which does not, however, affect GMH’s right to collect the account receivable itself. GMH is obliged not to collect the assigned accounts receivable, while the Buyer fulfils his obligation to forward collected payments to GMH, is not in default of payment and no filing for the commencement of insolvency proceedings has been made and the Buyer has not suspended payment.
4. The Buyer is not entitled to use the goods title to which is retained for any other purposes. In particular he is not entitled to transfer ownership by way of security or pledging. The accounts receivable assigned to GMH may be assigned for security purposes to or pledged in favour of a third party only with GMH´s prior written consent.
5. The Buyer must notify GMH in writing without undue delay of any attempts of impairment or attachment of the retained goods by third parties. The cost required to protect the right of GMH has to be borne by the Buyer to the extent that such costs will not actually be reimbursed by the third party.
6. If the Buyer commits a material breach of contract, in particular if he is in default of payment, GMH shall be entitled to take the goods title to which is retained back at the Buyers expense or to demand assignment of the rights of possession which the Buyer has towards third parties. In addition thereto GMH is entitled to revoke the Buyer’s right to sell the goods, collect accounts receivable and to use, process, ship or sell the retained goods. Where GMH takes the goods title to which is retained back or sells these goods, such act shall not be deemed to be a rescission of contract. GMH may offset the proceeds of the sale against the outstanding amounts. The Buyer is liable for any loss to the extent that the proceeds of the sale are lower than the purchase price outstanding.
7. To the extent that the value of the securities provided exceeds the claims of GMH by more than 50 %, GMH is obliged upon the Buyer’s request to release securities at its discretion.
8. To the extent that GMH is entitled to take back retained goods, the Buyer undertakes to offer GMH and its representatives the irrevocable right to enter its premises during normal business hours and to tolerate the removal of the retained goods.

12. Proof of Export

If the Buyer who is not a resident in the Federal Republic of Germany (external Buyer) or his representative calls for goods and carries or dispatches them abroad (external territory) the Buyer shall provide GMH with the necessary fiscal proof of export. Failing this proof the Buyer shall pay for the deliveries the VAT amount owed by GMH in addition to the agreed purchase price.

13. Governing Law, Disputes

1. The contract is governed by the laws of the Federal Republic of Germany. The CISG (United Nations Convention on Contracts for the International Sale of Goods) is not applicable.
2. Osnabrück shall be the place of exclusive jurisdiction in respect of all legal disputes arising from or in connection with a contractual relationship. Notwithstanding such agreed jurisdiction, GMH shall always be entitled to bring legal action at the Buyer’s seat of business.

14. Set-off, group set-off clause

1. We shall be entitled to set off any claims which we may have against the supplier against all claims which the supplier may have, for whatever legal reasons, against companies in which Georgsmarienhütte Holding GmbH has a majority shareholding, either directly or indirectly.
2. The current group of companies in the sense of paragraph 2 above in which Georgsmarienhütte Holding GmbH has a majority shareholding, either directly or indirectly can be viewed in the internet under http:// www. georgsmarienhuette-holding.de. On request, the supplier will be provided at any time with the information on the group of companies in the sense of paragraph 2 above.

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