Version: January 2014

1. General information – area of applicability

1.1 These terms and conditions (T&C) shall apply for all present and future deliveries and performances on the part of our company within the framework of purchase contracts, contracts for work and labour and contracts for work and materials.

1.2 Deviating, conflicting or supplementing general terms and conditions, even if acknowledged by us, shall not be a component of the contract, unless we have expressly agreed to their validity in writing.

2. Quotation and scope of delivery

2.1 Our quotations are always subject to change. Documents, such as illustrations, drawings, weight and dimensions specifications included with the quotation are only approximately authoritative unless they have been expressly designated as binding. Changes shall be accepted by the purchaser, if they do not exceed the scope that is usual in the trade. We retain the property rights and copyrights to all cost estimates, drawings, and other documents. They must not be made accessible to third parties.

2.2 The purchaser shall be bound to his purchase order. The purchase contract shall be considered as concluded when we confirm acceptance of the purchase order of the goods more precisely described, or when delivery is executed.

2.3 All agreements made between us and the purchaser shall be stipulated in writing in the respective purchase contract or delivery contract.

2.4 If import licenses or other approvals are required in the country of destination, then we must be notified of this circumstance when the purchase order is issued, with specification of the number, approval date and validity of the import licenses or other approvals.

3. Price and payment

3.1 The prices are net prices, ex works and/or customs warehouse, unpackaged. The prices invoiced shall be the prices that are valid on the day of delivery. Prepayments made shall not apply as partial fulfilment. Bills of exchange and checks shall only apply as payment when the funds are available in our bank account. Discount and bank fees shall be the responsibility of the purchaser.

3.2 In the absence of a special agreement, payment shall be due after receipt of invoice, without any deductions at our point of payment. Rights to withhold payment to which the purchaser is entitled, as stipulated in section 320 of the German Civil Code (BGB) shall remain hereby unaffected. Statements concerning discounts shall only apply if the purchaser is not in arrears with payment for earlier deliveries.

3.3 Offsetting with counterclaims on the part of the purchaser that are disputed by us or that are not legally established shall be prohibited.

3.4 It shall only be possible for the purchaser to legally assert a right of retention if such assertion is based on claims arising from the same contractual relationship. If notification of defect is submitted the purchaser’s payments shall only be withheld in a scope that is reasonably proportional to the defects that have been asserted.

4. Delivery periods and delay

4.1 Delivery periods and delivery dates shall only be agreed as binding, if we have expressly designated such delivery periods and delivery dates as binding.

4.2 The delivery period shall begin when a contract is signed by both parties, however, not before provision of any documents, approvals, releases, that the purchaser must procure, or before an agreed advance payment has been received.

4.3 The prerequisite for commencement of the delivery time specified by the purchaser for brand-new purchase objects shall be clarification of all technical questions.

4.4 For brand-new purchase objects, the right to make design changes or dimensional changes, deviations in colour, as well as changes in the scope of delivery on the part of the purchaser during the delivery period shall be reserved, if the changes or deviations are reasonable for the seller with due consideration of the purchaser's interests. If the purchaser requires symbols or numbers for designation of the purchase order or of the ordered purchase object, no rights shall be derivable solely from such symbols or numbers.

4.5 The delivery period shall be complied with, if readiness for dispatch on the part of the purchaser has been communicated within the delivery period. The prerequisite for compliance with the delivery period shall be fulfilment of the purchaser's contractual obligations.

4.6 The delivery period shall be extended appropriately if the delivery of the goods is delayed due to external circumstances for which we are not responsible, such as war, natural forces, civil unrest, governmental measures, as well as measures associated with lawful labour disputes, particularly strikes and lockout.

4.7 The same shall apply if on our part, we do not receive deliveries in good time. We shall be authorized to withdraw from the contract if the manufacturer does not make deliveries to us. However, this shall not apply if we are responsible for the non-delivery.

4.8 Our liability for damage resulting from delays shall remain restricted to intent and gross negligence. The purchaser shall be entitled to demand reimbursement for the verifiable damage that occurs. However only in the amount of ½% of the purchase price per week of delivery delay, overall, a maximum of 5% of the purchase price.

4.9 We shall not be responsible for delayed or omitted deliveries for which our upstream supplier is at fault – with the exception of culpability for selection and monitoring. Sentence one shall not apply if the relationship between us and the purchaser is determined in accordance with the law governing contracts for work and labour. In this case we shall be obligated to hold the purchaser harmless if the purchaser cannot completely enforce the rights that have been assigned to the purchaser relative to the supplier.

4.10 In addition to the legal period stipulated in section 286, paragraph 3 of the German Civil Code (BGB) and in the reminder, we can also put the purchaser in default through a different due date for payment that can be ascertained via calendar as stipulated in section 286 paragraph 2 of the German Civil Code (BGB).

4.11 We shall be entitled to demand reimbursement of expenses incurred through the default of acceptance on the part of the purchaser.

4.12 Notwithstanding our right to claim a higher damage actually incurred, we shall, should the purchaser cancel an order without justification, be entitled to claim 15% of the purchase price for the costs incurred due to the processing of the order and for lost profit. The purchaser shall have the right to provide evidence of lower damage

5. Field trial

5.1 Execution of a field trial shall require the express written confirmation of J. Kotte GmbH & Co. KG.

5.2 In the absence of a different agreement, the product shall be tested within 14 days after it is received. If the trial cannot be executed within this period for season-related reasons, then the trial must occur immediately after commencement of the possible deployment time. The trial shall last a maximum of 1 day. If the trial deployment does not run to the satisfaction of the recipient, the purchaser shall be obligated to inform us without delay and to give us an opportunity of executing another trial deployment in the presence of our representative within an appropriate time period.

5.3 if the product functions properly the product shall be considered as accepted. An implement shall also be considered as accepted by the recipient if it is used by the recipient for longer than 1 day. In this case, the purchaser shall only be entitled to return the product to us, if proper work was not performed in the trial deployment in the presence of our representative. In this case, the product shall be sent back to us or to an address we specify, without delay in cleaned condition, carriage free and at purchaser’s risk. Required costs for refurbishment shall be the responsibility of the purchaser, if the wear is attributed several days of deployment. If the product is not sent back 1 week after execution of the trial deployment at the latest, then the product shall be considered to have been permanently accepted. At return of a product delivered for field trial, claims for replacement delivery or for compensation of damages of any type on the part of the purchaser shall be excluded.

6. Transfer of risk and shipping

6.1 Shipping route and shipping method shall be left to our discretion in the absence of a special agreement. Shipping costs shall be the responsibility of the purchaser. The goods shall be ensured on the request of, and at the expense of the purchaser.

6.2 In the event of sale by delivery to a place other than the place of performance, the risk shall be transferred to the purchaser with transfer of the goods to the freight forwarder or freight carrier, at the latest however when the goods leave the warehouse or in the case of direct shipment ex works, when the goods leave the plant. This shall also apply in the case of partial deliveries or if we have taken over additional services.

6.3 If shipment is delayed for circumstances for which the purchaser is responsible, then the risk shall be transferred to the purchaser, from the day the shipment is ready for dispatch. However, we shall be obligated at the request of, and at the expense of the purchaser, provide the insurance coverage that the purchaser demands.

6.4 The goods shall be accepted by the purchaser without prejudice to the rights stipulated in number 8 (Notification of defects and liability for defects), even if the goods show insignificant defects.

6.5 Partial deliveries shall be permissible if this is reasonable for the purchaser.

6.6 The purchaser shall be obligated to accept the purchase object within 14 days after receipt of notification of provision. In the event of nonacceptance, the seller shall be entitled to avail himself of his legal rights. If the seller demands compensation for damage, then such compensation shall be 15% of the purchase price. Compensation for damage shall be set higher or lower if the seller verifies a higher damage amount or if the purchaser verifies a lower damage amount.

7. Retention of title

7.1 We shall retain title until payment in full of all receivables arising from the business agreement with the purchaser.

7.2 The purchaser shall be obligated to treat the purchase object with care, to safeguard it against third-party intervention, as well as – if agreed in writing – to insure it against damage “on the account of others" without delay and to verify such insurance coverage on request. Otherwise we shall be entitled to safeguard the goods ourselves at the expense of the purchaser. The purchaser herewith assigns any legal insurance claims or other indemnification claims to us.

7.3 The purchaser shall not be entitled to pledge or to assign the goods by way of security without our consent. The purchaser shall be obligated to notify us in writing, without delay, of any pledges or other third-party interventions. So that we can initiate proceedings in accordance with section 771 of the German Code of Civil Procedure (ZPO). If the third party is not in a position to reimburse us for the court costs and out-of-court costs of a legal action in accordance with section 771 Z of the German Code of Civil Procedure, the purchaser shall be responsible for compensating us for these costs.

7.4 The purchaser shall be entitled to resell the goods in the proper course of business. The purchaser at this time assigns all receivables in the amount of our final invoice amount (including VAT) arising from this transaction, and in the amount of all other unpaid final invoice amounts (including VAT) that accrue to the purchaser from the resale to his customer or third party. The assignment shall be independent of whether the goods have been resold without processing or after processing. We accept the assignment.

7.5 The purchaser shall also be authorised to collect these receivables after assignment. Our right to collect the receivables ourselves shall remain hereby unaffected. We shall be obligated not to collect the receivables as long as the purchaser properly honours the purchaser's payment obligations. Otherwise we can demand that the purchaser notify us of the assigned receivables and the debtors, that the purchaser provides us with all information required for collection, gives us the associated documents and communicates the assignment to the debtors.

7.6 Processing of the goods on the part of the purchaser shall always be executed in our name, and in our behalf. If processing is executed with other objects that do not belong to us, then we shall acquire joint ownership in the new item in the ratio of the value of the goods delivered by us to the other processed objects. The same shall apply if the goods are mixed with other objects that do not belong to us.

7.7 If the purchaser violates the contract, particularly if there is default of payment, we shall be entitled to take back the goods. In this regard, as well as with regard to pledging of the goods, withdrawal from the contract shall only exist if we expressly declare such withdrawal in writing.

7.8 All costs associated with the take back and sale of the purchase object shall be the responsibility of the purchaser. Without verification, utilisation costs shall be 10% of the proceeds of the sale, including VAT. Utilisation costs shall be set higher or lower if the seller verifies higher costs or if the purchaser verifies lower costs. The proceeds shall be credited to the purchaser after deduction of the costs and other receivables associated with the purchase contract, as well as all other receivables to which we are entitled.

7.9 If the value of the existing securities exceeds the secured receivables by more than 20% overall, then we shall be obligated to release securities of our choice on purchaser's request.

7.10 In the event of take-backs, restocking costs of 10% of the value of the goods per part taken back, at least however €20.00 per part taken back, shall be incurred.

8. Defect notification and liability for defects

8.1 At delivery, the purchaser shall be obligated to examine the received goods without delay for quantity, condition and assured characteristics. The purchaser shall be obligated to note apparent defects immediately at delivery with a clear description of the apparent defects on the bill of lading of the deliverer. Thereafter the purchaser shall be obligated to inform us immediately in this regard in writing. Defects that cannot be detected through external inspection must be reported to us within one week after delivery.

8.2 The warranty shall end 12 months after delivery of the delivery object to the purchaser, unless the purchaser has resold the unused delivery object, and we have received from the purchaser without delay after transfer of the delivery object to the purchaser, the completely filled-out and signed transfer certificate; in this case, the warranty shall end 12 months after transfer to the purchaser.

8.3 If parts that are subject to increased wear, for example, in the case of deployment of up to 60 hours per week, or in two-shift operation, become unusable within 6 months, or 3 months in two-shift operation, or become significantly impaired in their usability, then it shall be presumed that the impairment is related to wear, unless this assumption is not justified based on the type of item or the type of impairment.

8.4 If defects are present, the purchaser shall not be entitled to demand from us reimbursement of repair costs, or similar costs, that the purchaser himself incurred or that were incurred through a third party. Costs shall only be covered by us, if need be, if we have agreed to this in writing beforehand.

8.5 The warranty claim shall invalidated as soon as the purchaser or a third party commissioned by the purchaser makes unauthorized changes or executes repair tasks – also for commissioning – without our written permission.

8.6 For all parts that turn out to be unusable or significantly impaired in their usability due to a circumstance existing before transfer of risk – in particular due to faulty design, poor materials or defective execution, we shall with equitable discretion be entitled to repair or provide replacement. Replaced parts shall become our property. In the event of replacement of the entire purchase object in the course of subsequent fulfilment, we shall have a claim against the purchaser for compensation for use for the object taken back.

8.7 No warranty shall be assumed for damage that occurs for to the following reasons: Unsuitable or improper use; faulty assembly or faulty placement in service by the purchaser or a third-party; modification through installation parts of third-party origin; neglected maintenance tasks, if such maintenance tasks are recommended by us or by the manufacturer; normal wear, particularly of wear parts; faulty or careless treatment; unsuitable ground; chemical, electronic or electrical influences. This shall not apply if the damage is attributable to faults on our part.

8.8 In the event of defect rectification, the purchaser shall be obligated to set an appropriate period for the necessary tasks. If the purchaser refuses to set an appropriate period, then we shall be free of the liability for defects. In urgent cases that endanger operational reliability, and in order to avert disproportionately high levels of damage, the purchaser shall be obligated to notify us immediately. If we cannot immediately rectify the defects, or if we are otherwise in default with rectification of the defect, the purchaser shall be entitled to rectify the defect himself or to have it rectified through a through a third party. In this case, the purchaser shall be entitled to demand reimbursement of the necessary costs.

8.9 Of the costs incurred through repair or replacement delivery, we shall be responsible for transport costs, travel costs, labour costs and material costs – if the complaint justified. Repairs that exceed a total amount of €200.00 must be reported to us and coordinated with us prior to executing the tasks. Otherwise we reserve the right to refuse cost reimbursement. Of the direct costs incurred through the repair or replacement delivery, we shall be responsible for the costs of the replacement item, ex works – if the complaint is justified. All other costs, including travel costs, and assembly costs shall be the responsibility of the purchaser. The vehicle owner shall be obligated to make the vehicle available for the time required for repair. The cost of transporting the vehicle to be repaired to the authorized dealer or to the specialized workshop of our choice shall not be reimbursed.

8.10 We categorically reject all liability for downtimes that occur due to the defect of a vehicle. We shall not grant a claim for provision of a loan vehicle or rental vehicle during the downtime.

8.11 The warranty period for the replacement item and the repair shall be one year. The warranty period for the original delivery object shall be extended by the duration of a possible operating interruption of the delivery object. If a repair or replacement delivery that we are obligated to fulfil should fail in spite of several attempts, then the purchaser shall be entitled to withdraw from the contract or demand an appropriate reduction of the remuneration. The purchaser shall be obligated to routinely give us two opportunities for subsequent fulfilment within an appropriate period.

8.12 We shall assume no warranty for used goods, unless this has been agreed in writing.

8.13 Additional information concerning the processing of warranty claims is provided in the handbook, “Processing of Warranty Claims”.

9. Limitation of liability

9.1 We shall be liable only for intent and gross negligence to the extent stipulated in statutory regulations. The same shall also apply if the goods lack an assured characteristic, or if we culpably violate an essential contract obligation. If we violate an essential contract obligation, our replacement obligation shall be limited to the damage that is typical and foreseeable for this type of contract. In all other cases our liability shall be excluded – regardless of legal grounds. We shall not invoke this exclusion clause if insurance coverage in our favour exists for the claim asserted by the purchaser.

9.2 The above limitations of liability shall not affect the purchaser's claims arising from product liability. Moreover, the limitation of liability shall not apply should we be answerable for personal injury and health hazards or loss of life of the purchaser.

9.3 Damage compensation claims on the part of the purchaser due to a defect shall expire one year after transfer of risk. Moreover, the limitation of liability shall not apply if we are guilty of gross negligence, for instance should we be answerable for personal injury and health hazards or loss of life of the purchaser.

10. Final provisions

10.1 The laws of the Federal Republic of Germany shall apply. The provisions of the UN Convention on Contracts for the International Sale of Goods shall not apply.

10.2 If the purchaser is a merchant, legal entity under public law or special fund under public law, the exclusive place of jurisdiction for all disputes arising from this contract shall be our registered place of business. The same shall apply if the purchaser has no general place of jurisdiction in Germany, or if purchaser’s domicile or habitual place of residence are unknown at the time legal action is filed.

10.3 Should individual provisions of the contract with the purchaser, including these T&C be ineffective, or become ineffective, in whole or in part, then the effectiveness of the remaining provisions shall remain hereby unaffected. The provision that is ineffective in whole or in part shall be replaced by a provision that most nearly approaches the economic intent in spirit and purpose. The same shall apply in the event of a loophole.