Standard terms and conditions of sale and delivery

1.1 The following standard terms and conditions of sale and delivery form an integral part of every purchase agreement. They are the sole applicable terms and conditions. We do not recognize any terms and conditions of the Buyer which are at variance with or contrary to our own, unless we have explicitly agreed in writing that said terms of Buyer shall be valid. Our terms and conditions of sale shall remain applicable even if, knowing that the Buyer has terms and conditions contrary to or at variance with our own, the order is shipped to said Buyer without reservations.
1.2 The entire sum of agreements made between ourselves and the Buyer relating to the execution of the order are written down in this contract.
1.3 Our terms and conditions of sale are applicable only vis-à-vis business enterprises as contemplated by art. 310 par. 1 German Civil Code (BGB).

2. Offers and orders
2.1 If the order is an offer within the meaning of art. 145 BGB, we may accept or reject same within a period of two weeks.
2.2 Our offers are non-binding in respect of price, volume, period allowed for delivery and availability. Orders are binding upon us only if we confirm them or complete them by supplying the items required or by sending the appropriate invoice. Oral agreements must be confirmed in writing to be legally binding.
2.3 Where business relations are on-going, our terms and conditions of sale are valid for all future business with the Buyer. It will not be necessary to mention this fact or refer to the general terms and conditions of sale. This shall apply likewise to call orders or subsequent orders placed in person or by telephone.

3. Delivery, delayed delivery, acceptance of goods
3.1 The stated dates of delivery are non-binding until they have been confirmed in the written order confirmation. If a binding delivery date has been agreed, delivery will be postponed by a reasonable period in cases of force majeure.
3.2 When the period for delivery named by us commences will depend on when all the technical issues have been clarified. Furthermore our adherence to delivery obligations shall be dependent on the timely and correct fulfilment of any obligations the Buyer may have. We reserve the plea of non-performance of contract.
3.3 If the Buyer defaults in accepting the goods or if he is culpably in breach of his duty to cooperate, we shall be entitled to demand compensation for the losses caused thereby, including any extra expenses incurred. Further claims are not thereby precluded.
3.4 If the pre-conditions for default in acceptance are given, the risk of accidental loss or accidental deterioration of the object of sale shall pass to the Buyer from the date on which he is first to be deemed to have defaulted in accepting delivery or is otherwise in default.
3.5 We are liable pursuant to legal provisions, inasmuch as the underlying sales agreement concerns a transaction for delivery by a fixed date within the meaning of art. 286 par. 2 no. 4 BGB or art. 376 German Commercial Code (HGB). We are also liable pursuant to legal provisions if, as a result of a delay in delivery for which we are to be held accountable, the Buyer is entitled to claim that he no longer has an interest in the subsequent performance of the contract.
3.6 We are further liable pursuant to legal provisions inasmuch as the delay in delivery is due to a deliberate or grossly negligent breach of contract for which we are to be held accountable; we are to be held responsible for the culpability of one of our agents or servants. If the delay in delivery is not due to a deliberate breach of contract for which we are accountable, our liability for losses shall be limited to the foreseeable loss, such as is typically to be expected.
3.7 We are also liable pursuant to legal provisions inasmuch as the delay for which we are to be held accountable is due to the culpable breach of a material duty under the contract. In this case, however, the liability to pay compensation is limited to the invoice value of the object in question.
3.8 We reserve the right to have received timely and correct delivery ourselves.
3.9 The day of delivery is deemed the day on which the goods leave our premises.
3.10 Our liability for losses due to delayed delivery is limited to the invoice value of the object in question.
3.11 If the Buyer takes longer than normal to unload a tank truck we reserve the right to bill the Buyer for standing time.

4. Prices, terms of payment
4.1 Unless otherwise specified in the order confirmation, prices stated are ex-works.
4.2 Statutory value added tax is not included in our prices. It will be added at the legal rate on the billing date and stated separately on the invoice.
4.3 No prompt payment discounts or other deductions shall be granted without special written agreement.
4.4 Unless otherwise stated in the order confirmation, the net purchase price without deductions falls due within 30 days of the invoice date. The legal provisions relating to the consequences of late payment shall apply.
4.5 The definitive prices are those stated in our order confirmation. Prices and calculations are shown in the currency stated therein.
4.6 If payment is late or if there are well-founded doubts about the Buyer’s ability to pay, we are entitled to demand advance payment for supplies ordered but not yet delivered and to declare all receivables from the business relationship due at once, even if other arrangements were agreed in the order confirmation. If the Buyer is not prepared to comply with the demand for advance payment, we shall be entitled to withdraw from the contract. If payment has not been made by the stated deadline we are entitled to claim damages over and above the statutory interest for late payment (arts. 247, 288 par. 2 sentence 1 BGB), inasmuch as we are obliged to pay higher interest rates on bank loans. This does not preclude other claims for compensation. Inasmuch as we accept bills of exchange we give no guarantee for their timely presentation or protesting. Discount expenses and bank charges will be paid by Buyer.
4.7 Only undisputed claims and receivables or such for which final ruling in a court of law has been obtained shall entitle the Buyer to offset or retain sums of money.

5. Force majeure
5.1 Force majeure means circumstances and events which could not be prevented through prudent exercise of proper business management. Any kind of force majeure, unforeseeable breakdowns in business operations, transport or despatch, fire, flood, unforeseeable problems with supplies of manpower, energy, raw and auxiliary materials, strikes, lock-outs, official orders or other obstacles beyond our control, which reduce the volumes manufactured, despatched, accepted or consumed or which delay or prevent same, or make performance thereof unreasonably difficult, shall relieve affected party for the duration of the disruption from the obligation to supply or accept delivery. If, due to the disruption, delivery and/or acceptance is delayed by more than eight weeks, both parties shall be entitled to withdraw from the contract. Should our sources of supply fail in part or in total to deliver, we are under no obligation to purchase the shortfall from suppliers we do not know. In such cases we are entitled to allocate the available resources with consideration for our own needs. The Buyer has no further claims.

6. Transfer of risk, packaging costs
6.1 We reserve the right to determine the manner and route used for forwarding. If the Buyer has special forwarding requirements, he shall pay any additional costs caused thereby. This shall also apply if freight costs are increased after the contract has been concluded or additional costs are incurred for redirecting or storage, etc.
6.2 The risk of destruction, loss of or damage to the goods passes to the Buyer as soon as they are despatched or, if Buyer is collecting the goods himself, as soon as they have been made ready for collection. Unless otherwise stated in the order confirmation, delivery ex-works is agreed.
6.3 If agreed in advance, the Buyer can collect the ordered goods or have them collected at the place of performance within an agreed period of time. If the agreed period is allowed to lapse, a new collection date must be arranged with us.
6.4 We shall not take back any transportation packing or other packaging material which falls under the provisions of the Packaging Act. The Buyer is obliged to ensure that the packaging is disposed of at his expense. We may require packaging to be returned.

7. Properties of the goods, technical advice, use and processing
7.1 As a general rule, guaranteed properties are only those properties described in our product specifications. On no account is any property guaranteed which cannot be determined until the substance has been mixed or bonded with other substances or objects. Public utterances, claims or advertising are not statements of our products’ properties.
7.2 Our verbal, written or experiment-based advice regarding applications technology issues is given to the best of our knowledge, it is to be understood as non-binding in character and in relation to any possible industrial property rights of third parties; it is not a substitute for the Buyer’s own tests and trials on the products supplied by us to determine whether they are suitable for the intended processes and specific applications. We have no means of controlling the application, use or processing of the products, which matters are therefore the sole responsibility of the Buyer.

8. Complaints about defects
8.1 Before the Buyer pursues claims based on defects he must previously have examined the goods and made notification of his complaint in the due manner required under art. 377 HGB.
8.2 The Buyer must immediately examine the delivered goods to determine properties and suitability for the intended use – within reason, by means of the trial processing of a sample – and give notice of any defects found, otherwise the goods shall be deemed accepted with no defects in respect of properties or condition.
8.3 Complaints may be accepted only if they are lodged in writing and supported by evidence within 14 days of delivery – or for hidden defects, after they have been discovered, but no later than six months after delivery of the goods. Statutory limitation is not affected thereby. The Buyer bears the burden of proof that a hidden defect exists.
8.4 Goods which have been complained about may not be returned without our express, written consent.

9. Liability for defects
9.1 The Buyer’s claims based on defects are fundamentally limited to his right to demand subsequent performance from us. If such subsequent performance is not successful, the Buyer may reduce the purchase price or, if he prefers, cancel the contract. We must in any event be first allowed the chance to examine the rejected goods ourselves. His claims for compensation as stated in par. 10 are not affected thereby.
9.2 If measures are taken to rectify the defects, we shall be obliged to pay all expenses incurred for this purpose, in particular transportation, infrastructure, labour and material costs, inasmuch as these are not increased by the fact that the goods purchased were taken to a place different from the place of performance.
9.3 If recourse under the provisions of the Consumer Goods Purchase Act has been successfully taken against the Buyer in respect of the product for which he is making us liable for defects, claims under the right of recourse as contemplated in the provisions of the Consumer Goods Purchase Act are not thereby affected. In respect of claims for compensation, reference is made to the following par. no. 10. If a customer has recourse against the Buyer, he is to notify us of the matter as soon as it is brought to his attention.
9.4 If the Buyer has reached agreements with his customer that exceed the scope of the statutory rights in respect of defective goods, for example by offering warranties, we shall not be liable for such even when recourse exists.
9.5 Any warranty agreed must be put in writing. A declaration of warranty is effective only if it details with sufficient precision the nature and duration of the warranty and the territory in which protection is granted.

10. Compensation
10.1 Our obligation to pay compensation, irrespective of legal basis, is limited to the invoice value of whichever of our products was directly involved in the event causing the loss. The aforesaid shall not apply inasmuch as we have a liability due to imperative provisions of law relating to deliberate intent or gross negligence or where there is proof that certain properties have been absolutely guaranteed or due to imperative provisions of the Product Liability Act.
10.2 We are liable in accordance with statutory provisions, inasmuch as we are culpably in breach of a material obligation under the contract; in such cases, however, the liability to pay compensation is limited to the foreseeable loss that may typically be expected, this does not exceed the invoice value of the product directly involved in the event leading to the loss.
10.3 We shall be liable for indirect losses and such that were not foreseeable when the contract was concluded only if such are due to gross fault on the part of ourselves or one of our managers.
10.4 The above restrictions do not apply in cases of injury to life, limb or health. Imperative statutory liability provisions, such as liability when offering a warranty or under the Product Liability Act, are not affected thereby.
10.5 Liability for compensation beyond that described in par. 10 is precluded, irrespective of the legal nature of the claim brought forward. This shall apply in particular to claims for damages arising from culpa in contrahendo, for other violations of obligations or for claims in tort regarding compensation for property damage pursuant to art. 823 BGB.
10.6 Inasmuch as our liability to pay compensation is precluded or limited, such restrictions shall likewise apply to the personal liability of our salaried staff and other workers or employees, agents and servants.

11. Expiration of period for making claims
11.1 Claims based on defects pursuant to art. 438 par. 1 no. 3 BGB become statute-barred one year after the statutory period of limitation begins. Claims pursuant to art. 438 par. 1 no. 2 BGB become statute-barred two years after the statutory period of limitation begins. Imperative legal provisions regarding limitation periods and liability, such as liability when offering a warranty, liability for deliberate or grossly negligent actions, for injury to life and limb or to health, liability under the Product Liability Act and the provisions of the Consumer Goods Purchase Act are not thereby affected.

12. Reservation of ownership
12.1 We reserve ownership of the object of sale until all payments under the supply contract have been received. If the Buyer is in contravention of the contract, in particular if his payments are in arrears, we shall be entitled to repossess the object of sale. Repossession of the object of sale shall not constitute a withdrawal from the contract, unless we make explicit written declaration thereof. If we obtain the attachment of the object of sale this shall always be construed as a cancellation of the contract. Once we have repossessed the object of sale we are entitled to dispose of it as we wish, the revenue derived therefrom, less a reasonable charge for the expense of selling or exploiting, is to be deducted from the Buyer’s total debts.
12.2 The Buyer has a duty to treat the object of sale with care; in particular he has an obligation to buy adequate replacement value insurance against fire, water and theft.
12.3 If third parties secure an attachment or take other actions the Buyer shall give us written notification at once, so that we may file a complaint pursuant to art. 771 Code of Civil Proceedings (ZPO). Should this third party not be in a position to reimburse our court and non-court expenses for a complaint pursuant to art. 771 ZPO, the Buyer shall be liable to pay us for the loss sustained.
12.4 The Buyer is entitled to sell the object of sale in the course of normal business transactions; however, he assigns to us in advance all receivables due to him from his customers or third parties up to the final total of our invoice (including value added tax), irrespective of whether the object of sale was sold with or without further processing. Despite this assignment, the Buyer remains entitled to collect from his trade debtors. Our authority to collect these monies ourselves is not thereby affected. However, we undertake not to collect such debt as long as the Buyer meets his payment obligations to us from the revenues he collects, as long as he is not in arrears with payments and, in particular, as long as no application has been made to initiate bankruptcy or composition proceedings and Buyer has not suspended all payments. If such is the case, however, we may demand the Buyer to inform us of all assigned receivables and the debtors thereof, to provide all details required to effect collection, to hand over the necessary documents and to notify the debtors (third parties) of the assignment.
12.5 Buyer’s processing or reworking of the object of sale shall always be to our benefit. If the object of sale is processed together with objects which do not belong to us, we shall acquire part ownership of the new object in the same ratio as the value of the object of sale (final total of invoice including value added tax) stands to the value of the other processed objects at the date of processing. In all other aspects, the object created by the processing is subject to the same provisions as the object of sale supplied with rights reserved.
12.6 If the object of sale is indivisibly mixed with other objects not belonging to us, we shall acquire part ownership of the new object in the same ratio as the value of the object of sale (final total of invoice including value added tax) stands to the value of the other objects used at the time they were mixed. If the objects are mixed in such a manner that the Buyer’s share is to be regarded as the major part, it shall be deemed agreed that the Buyer transfers to us a pro rata share of ownership. Whether solely or partly owned, the Buyer will keep the newly created object in safe storage on our behalf.
12.7 To secure the monies he owes us, the Buyer also assigns such of his receivables from third parties which accrue to him from the integration of the object of sale into a piece of real estate.
12.8 We undertake to release securities at Buyer’s request whenever the realizable value of all securities exceeds the total of our credits thus secured by more than 10%; we may choose which of the securities are released.

13. Place of jurisdiction, place of performance
13.1 The place of performance for all deliveries and payments and place of jurisdiction for all legal disputes arising from these deliveries is Geesthacht. Additionally, we are entitled to pursue our claims in the court with general jurisdiction for the Buyer.
13.2 Governing law for all sales contracts is the law of the Federal Republic of Germany, to the exclusion of the UN Sales Convention.

14. Severability clause
14.1 Alterations, amendments and ancillary agreements to these terms and conditions of sale and delivery are valid only when documented in writing and signed by both parties. If any provisions in these terms and conditions of sale and delivery or any parts of such provisions be or become ineffective this shall not affect the validity of the remaining terms and conditions or any parts thereof. As soon as a provision is found to be invalid, it shall be replaced by a valid provision which most closely approximates the business intent of the original provision.

January 2006
nanoresins AG, Geesthacht