Terms and Conditions of Sale

(version 1/2015, dated 01.10.2015)

1) Application

(1.1) For any - also future - agreements and offers between all enterprises within the SCHLENK Group (currently Carl SCHLENK AG, SCHLENK Metallic Pigments GmbH, SCHLENK Metallfolien GmbH & Co KG) and our customers, the following terms and conditions of sale shall exclusively apply. Contrary or deviating conditions of our clients shall not apply, unless we accept them explicitly in writing. Unconditional performing of contractual services despite of knowledge of contrary or deviating conditions of the Customer shall not constitute any acceptance of those. Any contrary or deviating terms are herewith purely precautionary objected.

(1.2) Deviating individual agreements between the contracting parties shall have priority. In this case these Terms and Conditions of sale apply subordinately and complementarily.

(1.3) These Terms and Conditions of sale only apply towards companies in the sense of §14 BGB (German Civil Code), legal entities and special funds under public law as defined in §310 I BGB (German Civil Code).

2) Offer and Order

(2.1) Our offers are subject to change and non-binding. A contract becomes only valid with our final acceptance by a written confirmation of order or by performance of the order.

(2.2) Any verbal agreements, additional understandings, etc. as well as any warranties or representations made by members of our staff shall become binding upon us only if confirmed by us in writing.

(2.3) The agreed contractual quality of the Products solely depends on the individual agreements in writings between the parties at the conclusion of the contract. Neither descriptions of Products nor any data sheets shall be deemed as a warranty of quality or an indication of quality. This shall equally apply to the qualities of any samples sent. Samples are always sent for information purposes only. Any warranties or any procurement obligations shall only be valid if they were expressly designated as such. Only the most recent confirmation of order shall be valid in each individual case. Any previous confirmations of order shall cease to be valid upon a new confirmation of order sent.

3) Delivery

(3.1) Regarding deliveries of metal foils, a quantity deviations of +/- 10% from those ordered shall be permitted, in case of small orders of less than 50 kg, larger quantity deviations shall be permitted. Customary excessive lengths and shorts as well as part deliveries shall be permitted.

(3.2) If any circumstances become known to us which might give rise to serious doubts as to the solvency or creditworthiness of the Customer, we shall be entitled to request immediate payment upon delivery or the provision of adequate security. If the Customer fails to comply with such justified demand, we shall, at our option, be entitled to withdraw from the contract or claim damages. If a justified petition is filed to open insolvency proceedings against the assets of the Customer, we shall, in addition, be entitled to withdraw from the contract.

(3.3) Delivery times will be individually agreed on and indicated in the confirmation of order. The indicated delivery time assumes unhampered production as well as correct and on-time receipt of our own supplies. Delivery times shall be deemed complied if the Products have left our factory/warehouse or if in case of impossibility of dispatch, readiness for dispatch is notified.

(3.4) Indicated delivery times shall not be deemed as firm dates but as limitation to the agreed performance period. This shall apply to any calendric dates determined as well. Anything to the contrary shall only apply if delivery times have been explicitly assured as firm dates. Contract penalty for delayed delivery shall not be agreed.

(3.5) In case of a Force Majeure Event the Parties are relieved form their duties to perform their obligations. Deadlines and terms shall extend corresponding to the duration of the Force Majeure Event. As Force Majeure Events shall be deemed, in particular but without limitation: lack of energy/raw materials, industrial actions, lockouts, natural disasters, administrative orders, excusable absence or defectiveness of supplies by third parties, breakdowns, malfunctions and any other impediments beyond the reasonable control of the parties.

(3.6) If delivery becomes impossible for us due to impediments stated in 3.5, our obligation to deliver shall cease. Insofar we immediately notified the Customer about the impediments, eventual possible compensation claims and withdrawal rights of the customer shall not apply.

(3.7.) In case of exceeding the delivery time indicated on the confirmation of order not due impediments stated in 3.5, the Customer shall be obliged to set an appropriate period of grace. Period of grace shall be no less than fourteen (14) days.

(3.8) Delivery shall be ex works (Incoterms 2010) carriage forward unless otherwise explicitly agreed on in the confirmation of order. Any extra costs for rapid, express or time-definite delivery shall always be charged separately to the Customer

(3.9) Shipping method for prepaid shipments shall be selected at our best discretion. Otherwise, we will try to satisfy the Customer’s request as far as possible.

4) Prices

(4.1) Unless fixed prices are explicitly agreed, the stock market price prevailing at the date of delivery shall be decisive. Delivery dates shall be the days on which the Products leave the factory or warehouse.

(4.2) Price modifications shall be permitted if there is a period of more than eight (8) weeks between conclusion of contract and the agreed delivery date or the production costs increase in particular due to higher labor and/or material costs. The price increase must be appropriate to the actual cost increase.

(4.3) The value-added tax valid at the date of delivery, shall be added to the agreed price. For primary material provided by the Customer, no value-added tax shall be charged. If, at a later date, the fiscal authority establishes that there were taxable sales, the Customer shall make retrospective payments in relation to the value-added tax.

(4.4) Our packages are usually disposable packs and included in the price. Special packs - particularly Euro pallets, special packs for aluminium, copper powder and Rogal types as well as coils and cores for rolling mill products - shall be lent to the recipient. These packing materials shall remain our property. After emptying the Customer shall return them without delay to the loading site. The valid address of the loading site can be found on the original invoice and/or on our invoice for loan containers. Any damaged or unreturned loan containers shall be charged at cost.

5) Transfer of risk

The risk of accidental destruction and/or accidental deterioration in the Products shall pass to the Customer upon delivery to the forwarding agent, however, at the latest, when the Products leave/ upon the Products leaving the factory or warehouse, irrespective of who bears the freight charges and whether shipment is made from the place of performance.

6) Due dates

(6.1) Payment for Products delivered shall be due within fourteen (14) days after receipt of Products and invoice unless otherwise explicitly agreed on in the confirmation of order. The Customer shall be automatically in default as of the 15th day after receipt of Products and invoice, insofar no payments are received.

(6.2) In the event of default payment by the Customer all existing debts shall become immediately due in cash, irrespective of any accepted bills of exchange or credits granted. The Customer shall not be permitted anymore to sell any Products that are our property or co-property and shall be obliged to provide security.

(6.3) The same shall apply if the Customer suspends payments or loses creditworthiness.

(6.4) From the moment of default in payment the statutory provisions regarding default interest shall apply.

(6.5) Bills of exchange shall be accepted only subject to their eligibility of discount and only after individual agreement on account of performance, without assuming any liability for protest.

(6.6) No early payment discount shall be agreed.

(6.7) If we have delivered partially defective Products, the Customer shall, nevertheless, be obliged to pay for the portion of Products which is incontestably free from any defects unless the part shipment is not of any interest to him. Besides, the Customer shall be entitled to set off only against counterclaims which have been recognized by declaratory judgment or are uncontested.

7) Reservation of title

(7.1) All Products delivered shall remain our sole property until payment in full of all sums due to us, including any future accounts receivable. Such sums due shall also include any accessory claims, e.g. shipping charges, exchange charges, packing charges and interest. Payment shall be deemed made upon our receipt of the equivalent value.

(7.2) If we grant the Customer the cash value for paying the purchase price by endorsing a bill of exchange issued by us and accepted by him for discounting (bill-cheque exchange procedure), the title of the Products shall pass to the Customer only when the bill of exchange has been honored and our liability under the bill has expired.

(7.3) The Customer shall be entitled to resell the reserved Products or to process or mix them with Products which do not belong to us in the ordinary course of business, but not to pledge or transfer the same by way of security without our written approval. Our reservation of title shall then refer to the share in the new product in the ratio of the value of our reserved Products to the remaining external products, which have also been used, at the time of their processing.

(7.4) The Customer shall assign to us now any claims on third parties arising from the resale of the reserved Products up to the invoiced amount (including VAT) . In case the value of this security exceeds the value of our open claims against you for more than 20%, we shall be obliged for release of security at our choice on demand.

(7.5) Irrespective of the assignment and of our right to collect, the Customer shall remain authorized for the collection of claims as long as he fulfills his commitments towards us and as long as he does not suffer a financial collapse. Upon our demand, he shall inform the debtor of the assignment. The authorization for resale, processing and collection shall be revocable in the event that the Customer fails to comply with his obligations under this agreement.

(7.6) The Customer shall notify us forthwith of any execution proceedings concerning the reserved Products or any assigned claims.

(7.7) The Customer shall be obliged to treat the reserved Products with care and to maintain them in good order and condition. He shall take out insurance for the reserved Products with the reasonable care of a prudent businessman at his own expenses against damage, theft, fire and water.

(7.8) Dem Abnehmer ist bekannt, dass in den Mustern und Fertigungsmitteln (Werkzeuge, Formen, Schablonen etc.), die er in Auftrag gegeben hat, erhebliches Entwicklungs-Know-How verkörpert ist und dass wir hieran ein besonderes Geheimhaltungsinteresse haben. Aus diesem Grund wird vereinbart, dass ein Anspruch des Abnehmers auf Herausgabe der Muster und Fertigungsmittel, gleich aus welchem Rechtsgrund, zu keiner Zeit besteht, auch nicht bei vollständiger Übernahme der Werkzeugkosten durch den Abnehmer und/oder durch Beendigung der Lieferbeziehung. Das Recht des Abnehmers, bei Vorliegen der gesetzlichen Voraussetzungen Geldersatz zu verlangen, bleibt unberührt.

8) Warranty (“Gewährleistung”) and Liability

(8.1.) The Customer shall be obliged to examine the Products forthwith upon receipt in a suitable manner within the scope of an incoming inspection according to §377 HGB (German Commercial Code). Apparent defects shall be claimed in writing forthwith, not later than seven (7) days, upon receipt; Hidden defects shall be claimed in writing forthwith upon detection

(8.2.) In case of a delayed notification in writing indicating the defect and batch-/order-/invoice number by the Customer, the Products to this extent shall be considered as approved and free of defects.

(8.3) In case of defective delivery, we shall as supplementary performance, at our own choice, provide a substitute or rework. The Customer shall have the right of reduction or withdrawal only if supplementary performance failed repeatedly or is unreasonable. In cases of insignificant defects, the Customer shall only have the right of reduction under the same conditions.

(8.4) The warranty (Gewährleistung) shall not cover damage arising from improper processing, storage or treatment. We shall provide no liability (Haftung) for any defects arising from inappropriate or improper use, from faulty assembly or incorrect commissioning by the Customer or a third party, from normal wear and tear, or from faulty or negligent treatment. There shall likewise be no liability for the consequences of incorrect changes or carried out modifications without our consent, as well not for repairs carried out by the Customer or by a third party.

(8.5) We shall not assume liability for effects of oxidation caused on unprotected metal strips, foils or other products after transfer of risk. Protected metal strips and foils shall be processed within the product shelf life stated as MHD. If this processing period is exceeded, the liability for any defects being the result thereof shall be excluded.

(8.6) Metal powders and pastes or other products shall be durable for at least six months, reckoned from the production date, respectively until the stated shelf life (MHD), if handled properly (storage, transportation, etc.). If this processing period is exceeded, any products shall be subject to a separate quality control by the Customer. Liability for damages as a result of processing defective Products, which could have been avoided by a separate quality control are hereby excluded.

(8.7) For the storage and handling of our products please see our respective leaflets and as well any separately given intstructions. Non-compliance with these guidelines shall exclude any liability for damage resulting therefrom.

(8.8) The customer shall be obliged in case of processing in deviations of product details, to implement self-reliant suitability tests for each deviating process form. As our products are subject to strict testing obligations, the product details solely refer to testable process forms by us. In case of any deviating or not testable process forms by us, the Customer has additionally to a self-reliant suitability test, to inform us, even in cases of minor deviations, insofar the deviation could result in damage attributable to the further processing, which exceeds the purchase value of our products. In the event of a culpable non-compliance with this duty to inform, we shall reserve the right to claim damages. § 444 BGB (German Civil Code) shall remain unaffected.

(8.9) The warranty period shall commence with the date of delivery of Products to the Customer. It shall, however, end at the latest one year after the Products have left our factory or warehouse.

(8.10) Subject to the condition that you purchase our Products as authorized dealer/distributor, you shall be obliged to pass these liability terms and provisions on to your customers. In the event of a culpable non-compliance with this obligation, recourse to us shall be excluded in so far as your liability towards your customers would have been restricted by passing on these warranty terms and provisions.

(8.11) We and our vicarious agents shall be liable for breaches of duty only in cases of gross negligence and/or intent. We shall also be liable for explicitly given guarantees (“Garantien”), for fraudulent intent as well for culpable injury to life, limp or health. In case of negligent caused property or personal damages we and our vicarious agents shall only be liable for breaches of essential contractual obligations; however limited to the amount of the predictable and contractually typical damages at the conclusion of the contract. Essential contractual obligations are those, which performance is characteristically and which the Customer can rely on.

(8.12) Liability shall be limited to the maximum amount covered in our operational liability insurance cover (typical and customary in this line of business). It shall also be limited to reasonably predictable and contractually typical damages. Liability for damage resulting from delay shall be limited to 5% (five per cent) of the purchase price. This shall not apply in cases of intent or gross negligence as well as case of culpable injury to life, limp or health

(8.13) Unless otherwise agreed on, we are only obliged to perform in accordance with the applicable regulations for us. In case a third party raises a justified claim due to property right infringement, we are only liable towards the customer in the terms stated in (8.14) and in case that the customer instantly informs us in writing about the claim, that he does not admit the claim and that all legal actions are reserved for us. In case the customer will be sued due to alleged property right infringement, he has to inform us in writing instantly and shall enable us to participate in the legal dispute. We are not liable for property right infringements if they are due to customer requirements or to reasons which the customer is culpable for (modifications, deviating applications, etc.)

(8.14) Any claims prescribe after 12 months. Claims due to intent or gross negligence as well as claims due to §478 BGB are subject to the statutory periods of limitation.

9) Confidentiality

(9.1) Each party to this agreement shall use any documents (including samples, models and data) and any business or product information received in the context of the business relations with our company only for the mutually pursued purposes and shall keep them secret from third parties with the same diligence and care as he would apply to his own documents and business or product information in case the other party classifies them as confidential or has an evident interest in keeping them secret.

(9.2) This obligation shall commence as of the date the documents or any knowledge thereof were first received and shall terminate thirty-six (36) months after termination of the business relations.

(9.3) This obligation shall not apply to any documents and/or business or product information which is or are generally known or which the contracting party is already aware of, without having been obliged to observe secrecy, or which is or are subsequently passed on by a third party entitled to disclose them or which are developed by the receiving party to this agreement without making use of any documents that are to be kept secret or of any business or product information of the other party.

10) Place of performance and jurisdiction

(10.1) Place of performance and exclusive jurisdiction for all disputes resulting from this contract shall be Nuremberg, Germany

(10.2) The contractual relationship shall exclusively be governed by the Law of the Federal Republic of Germany.

11) Severability clause

In case an individual provision of this contract or these terms and conditions is or becomes completely or partly invalid, it shall in no way affect the validity of the rest of the contractual provisions. The contracting parties commit themselves to immediately establish a legally binding regulation resembling the economically intended purpose of the invalid provision. This shall also apply if any supplementation might be required in the course of the execution of the contract.

These Terms and Conditions of Sale exist in a German and an English version. In cases of discrepancies or ambiguities the German version shall prevail exclusively.