General Terms and Conditions of Sale

01.03.2010

1 General, Validity

1.1 The following general terms and conditions of sale (“Terms of Sale”) shall apply exclusively to all our services rendered, all goods or materials delivered and all information given by us (“Goods”). We do not accept conflicting or different terms and conditions of our customers, unless we have explicitly agreed in writing to the validity of such terms and conditions. Our Terms of Sale shall also apply in the case that we accept a request to conclude a contract or accept services or goods of our customers without reservation, even if we are aware of conflicting or different terms and conditions of our customers.

1.2 Our general terms and conditions shall also apply to all future contracts with the customer.

1.3 Our special terms and conditions for installation, starting and functional test of leak detectors (“Special Terms for Leak Detectors”) shall apply additionally if such Special Terms for Leak Detectors have been shipped with the leak detectors or if SGB has pointed out the Special Terms for Leak Detectors to the customer. In case of conflict, the Special Terms for Leak Detectors shall override the Terms of Sale.


2 Costs, Specifications, Documents, Delivery

2.1 The customer shall bear all shipment and packaging costs of all Goods.

2.2 All specifications given in sketches as well as dimensions and weight specifications are approximate values only.

2.3 In cases of small orders with a net purchase value less than EUR 30.00, we charge an additional handling fee of EUR 16.00.

2.4 We reserve the full property right and title on sketches, cost estimates and similar documents as well as tools and Goods which have been produced in context with the order, even if the customer is charged separately for such items.

2.5 The delivery period specified shall commence on the day on which the parties have agreed on all details concerning the contract and delivery of the Goods. In case the customer has to provide technical specifications, materials or tools or has to make down payments, the delivery period shall not commence before the receipt of such specifications, materials, tools or payments by SGB.

2.6 Partial delivery is allowed.


3 Passing of risk

3.1 We have accomplished our delivery obligations and the risk of destruction or damage is transferred to the customer as soon as the Goods are handed over to the post office, the railway station, the carrier or the carrying agent. The same applies as soon as the Goods have been loaded on one of our vehicles for the purpose of transport to the customer.

3.2 All deliveries are performed at the risk of the customer.

3.3 We are entitled, but not obligated, to insure the delivery and Goods in the name and at the expense of the customer.


4 Warranty

4.1 Notification of defects must be asserted immediately upon receipt of the Goods. The defective Good has to be provided to SGB with the notification of defects.

4.2 Notification of defects concerning hidden defects must be asserted immediately after discovery of the defect. The defective Good has to be provided to SGB with the notification of defects.

4.3 Any warranty will end 24 months after beginning of operation of the device, equipment or Good, in any case latest 27 months after the date of delivery.

4.4 Any warranty and any eventually given guarantees will expire and we will not be liable for defects,

4.4.1 if the Goods, devices or apparatus are not installed according to the applicable and relevant regulations by a qualified, accredited and specialised person or company,

4.4.2 in case of damages which are caused by incorrect operation of the Goods or devices, especially in case of damages caused by continuous stress by virtue of insufficient impermeability of the complete system, fouling or other external influences,

4.4.3 if the customer or any other party makes modifications or repair works on the Goods or devices without our previous approval,

4.4.4 if defective parts are not shipped to us on our request and /or if we have no opportunity to examine the defect at the Good or device.

4.5 In case of a timely and legitimate notification of defects, the customer is entitled to claim the retraction of the rejected Goods and a compensation delivery. At our choice we are entitled to repair the rejected Good instead of sending a compensation delivery. In any case we replace only such parts, which are defective with regard to the material or work. Replaced parts will be our property. Our warranty does not integrate the costs of mounting or dismounting or any other expenses originated by the replacement. Our warranty does not include any kind of wear and tear, any damages which occur after passing of risk or are caused by incorrect or negligent treatment, excessive strain, inappropriate machinery materials, imperfect construction works, inappropriate foundation, chemical, electro-chemical or electric influences. The customer has to concede us an adequate period of time for all kinds of replacements, repairs, etc. as well as for delivery of replacement parts. If the customer does not concede us this period of time, our warranty and any obligation connected with it expires. If repair and replacement are not possible or fail, the customer is entitled at his own option to withdraw from the contract or to require an adequate abatement on the purchase price.

4.6 Other or further claims or warranty claims, especially claims on compensation of installation costs and costs of third parties, are excluded. This exclusion does not apply with regard to costs and damages which are originated by a lack of qualities which we have expressively guaranteed in written form. The exclusion of warranty claims includes all damages, which happen to other objects besides the delivered Goods. The exclusion applies as well to contractual claims or claims in tort on damages occurred to the totality of Goods after the passing of risk, which are caused by an initially delimited defect of low value of a part of the Goods.

4.7 We shall not be liable for defects caused by inappropriate or careless usage or incorrect mounting, installation, commissioning or operation.

4.8 Our warranty does not include parts, which may be perished premature due to their consistence or category of usage (e.g. gaskets, etc.). Furthermore, we are not liable for defects or corrosion damages caused by humid or inappropriate installation environments.

4.9 Variations in colour, dimensions, weight or quality, which are insignificant or customary in trade, shall not be considered to be defects.


5 Obligation of disposal

5.1 The customer incurs the obligation to dispose the delivered Goods after end of use at his own costs according to the legal provisions. The customer releases SGB from any legal obligation similar to the German § 10 (2) Electric Apparatus Act and any third party claim connected to such regulation.

5.2 Our right to recourse does not prescribe before the end of two years after the definitive end of the use of the Goods. This period of two years commences with the written notification of the customer about the end of use.


6 Violation of third party rights

6.1 If SGB executes an order according to customer specifications (design, etc.), the customer shall be solely responsible to provide the necessary rights of commercial exploitation of these specifications or documents.

6.2 If the production or distribution of Goods according to the specifications of the customer violates any right of any third party or any provision regarding the labelling of Goods, the customer shall be obliged to exempt SGB from all possible claims of third parties and to reimburse any costs incurred by SGB.


7 Terms of payment

7.1 Payment for delivered leak detectors shall be due 30 days after the date of invoice without any discount or within 8 days with 2% discount. Payment for services or delivery of spare part and accessories shall be due within 14 days after the date of invoice without any discount. From due date on the customer shall pay an interest of 5 % on any outstanding money according to § 353 German Commercial Code.

7.2 For avoidance of doubt, the day of validation on our accounts is decisive with regard to the punctuality of any payment.

7.3 If no other agreements are made, payments are set off against the oldest outstanding account including corresponding accessory claims.

7.4 We accept bills only upon prior agreement. The discount depends on our bank's rates and shall be due starting with the due date of payment. The customer shall bear the discount and collection fees for bills and cheques. Such fees shall be due for immediate payment. Payment by bills and cheques shall be considered as payment only after such bills and cheques are cashed.

7.5 A right of retention and any offset of counterclaims against our demands is excluded unless the counterclaim of the customer is not disputed by us or asserted by a final and conclusive legal title.


8 Default, deterioration of financial situation

8.1 Unless otherwise agreed, the customer is in default if he has not paid within 7 days after due date.

8.2 During the time of default the customer has to pay a default interest of 8 % above base rate according to § 288 German Commercial Code, if the customer is not a consumer.

8.3 For each written reminder of payment after due date we charge a fee of € 10.00.

8.4 During default of the customer we shall not be obliged to deliver or manufacture ordered Goods until all overdue amounts are paid.

8.5 If the customer is in default and does not pay the due amounts within an additional period of grace set by SGB, SGB is entitled to withdraw from the contract.

8.6 In case of default and in case of deterioration of customer's financial position (e.g. protest for non-payment) or transfer of customer's business to a third party, liquidation of customer's business or death of customer, we are entitled to demand prepayment for all undelivered Goods. If the customer refuses to accept this procedure, all claims shall fall due for immediate payment.

8.7 In case of application or opening of insolvency proceedings all claims of SGB fall immediately due.


9 Default in delivery, force majeure

9.1 If SGB exceeds a non-binding delivery date or a non-binding term of delivery, SGB will only be in default of delivery, if SGB does not accomplish the delivery within an additional adequate grace period set by the customer.

9.2 If SGB exceeds a binding delivery date or a binding term of delivery, the customer has to set an adequate grace period to SGB. SGB will only be in default of delivery, if SGB does not accomplish the delivery within this adequate grace period.

9.3 In case of a culpably caused default of delivery of SGB the customer is entitled to withdraw from the contract, if he has set an adequate grace period and SGB has not accomplished the delivery within this grace period. Further claims are excluded, except the case of gross negligence on the part of SGB.

9.4 In case of acts of god or other circumstances, which happen independently of SGB´ s influence and make the production or delivery of the ordered Goods excessively difficult or expensive or temporarily impossible – e.g. difficulties in material procurement, business disruption, fire, strike, vandalism, lack of transport capacities, stoppage of traffic, official interventions, breakdown of machines, embargoes of import or export, lack of energy supply, mobilisation, war, blockades, etc. –, SGB is released from the obligation of delivery during the time of disablement and their after effects. The same applies, if such acts of god or such aforesaid other circumstances
happen to our supplier(s).

9.5 If the circumstances mentioned in 9.4 result in that our delivery becomes impossible or unreasonable, our delivery commitment extinguishes. If a delay in delivery is longer than two months, the customer is entitled to withdraw from the contract.

9.6 If our delivery commitment extinguishes, the delivery period is extended or the customer withdraws from the contract, the customer is not entitled to any claim for damages or indemnity. Such claims as well as all other claims are excluded, if not regulated otherwise explicitly and in written form. This exemption does not apply in case of wilful acts or gross negligence on our part.


10 Retention of title

10.1 We retain the title to the delivered Goods until all claims resulting from the business relations are fulfilled. This includes interest, accessory claims, costs of a possible prosecution or a necessary intervention resulting from a seizure of the delivered Goods by a third party. If an execution is levied upon the delivered Goods, the customer shall be obliged to notify us immediately. The customer shall bear the costs of the necessary intervention.

10.2 In case of violations of the contract by the customer, in particular in case of default in payment, we shall have the right to take back the delivered Goods. In case we take back the delivered Goods, this does not constitute a withdrawal from the contract by us, unless we have explicitly declared the termination of the contract in written form. Any seizure of the delivered Goods by SGB shall always constitute a termination of the contract. After retraction of Goods we shall have the right to exploit such Goods. The revenue generated by such exploitation shall be offset against SGB´ s compensation of reasonable exploitation costs and all other claims against the customer.

10.3 In the case of seizure or other interventions of third parties, the customer shall immediately notify us in writing so that we can institute an action as per § 771 ZPO German Code of Civil Procedure. If the third party is unable to reimburse the legal and extra-judicial costs, the customer shall be liable for the loss incurred by us.

10.4 The customer shall be entitled to resell the delivered Goods within the course of regular business. If the customer resells the Goods, all claims against customer's buyer or third parties are hereby assigned to us to the complete invoice amount (including VAT), regardless of whether the Goods are sold as they are or further processed. The customer shall remain entitled to collect such claims even after the assignment. This does not affect our right to collect such claims ourselves. We will not collect such claims as long as the customer meets his payment obligations from the revenue, the customer is not defaulting in payment, no insolvency proceedings are filed against the customer and no cessation of payments takes place. If any of the aforesaid conditions are not met, we shall be entitled to request the customer to notify us of the assigned claims and the corresponding debtors. Upon our request, the customer shall provide us all information and the appropriate documents necessary for the collection of such claims and notify its customer of the assignment.

10.5 Processing or modification of the delivered Goods by the customer shall always be made on our behalf. If delivered Goods are combined or processed with other Goods not belonging to us, we shall hold the title to the new product to a proportion that corresponds to the ratio of the value of the Goods delivered by us and the value of the other objects used in the new product at the time of processing. The provisions regarding retention of title shall apply to the new product resulting from further processing.

10.6 If the Goods delivered by us are combined with other objects not belonging to us in a way that it is impossible to separate such Goods and objects, we shall acquire co-ownership to such new products to a proportion that corresponds to the ratio of the value of the Goods delivered by us and the value of the other objects used in the combination at the time of processing. If Goods and objects are combined in such a way that the object of the customer is the main object, the parties agree hereby that we shall acquire co-ownership to a proportional share. The customer shall keep the Goods which are in our sole ownership or co-ownership in our behalf.

10.7 In order to secure our claims, the customer assigns to us such claims against a third party, which are originated by the combination of the delivered Goods with real estate.

10.8 If the value of our securities exceeds the claims to be secured by more than ten percent, we will release a corresponding part of the securities upon request of the customer. The assortment of the securities to be released shall be at our discretion.


11 Liability

11.1 We shall not be liable in case of violations of immaterial contractual obligations caused by slight negligence. In any other cases of slightly negligent violations of obligations, our liability shall be limited to the foreseeable, contractually typical direct average damage with regard to the type of Goods or services covered by the contract. This shall also apply to slightly negligent violations of obligations committed by our legal representatives and vicarious agents such as employees, other staff, subcontractors, etc.

11.2 In case of gross negligence committed by simple vicarious agents, any claim for damage and indemnity shall be limited to the foreseeable, contractually typical direct average damage with regard to the type of Goods or services covered by the contract.

11.3 Customer's claims for damage and indemnity shall be subject to a period of limitation of one year after delivery of the Goods or acceptance of the service.

11.4 The limitations of liability and the period of limitations mentioned in this paragraph 11 shall not apply in case of injury or loss of life. They shall neither apply in case of claims according to the German Product Liability Act, in case we have guaranteed certain qualities, in case of inability or impossibility to perform (provided we are responsible for such inability or impossibility to perform) or in case of wilful acts or gross negligence on our part. However, in case of gross negligence on the part of simple vicarious agents, the liability limitation as per paragraph

11.2 and the period of limitations as per paragraph 11.3 shall remain in effect.

11.5 Any other liability claims against us, regardless of the cause in law, shall be excluded.

11.6 If our liability is excluded or limited, such exclusion or limitation shall also apply to the personal liability of our legal representatives and our vicarious agents.


12 Governing law, Place of performance, Jurisdiction

12.1 The legal relations between us and our customers as well as any dispute shall be governed exclusively by the laws of the Federal Republic of Germany. In no event un-purchase right applies.

12.2 Place of performance of our contractual obligations and the customer's contractual obligations is 57076 Siegen.

12.3 Exclusive place of jurisdiction are the courts of Siegen.


SGB GmbH, Hofstraße 10, D-57076 Siegen; Post-Office Box 21 07 41, D-57032 Siegen, Germany
Tel.: +49 271 48964-0, Fax: +49 271 48964-6, www.sgb.de, e-mail: sgb@sgb.de