GENERAL TERMS AND CONDITIONS OF DELIVERY

1. Scope of application

The following Standard Terms and Conditions apply to all contracts for deliveries and services between us and individuals and legal entities insofar as these are not consumers within the meaning of §13 of the German Civil Code (BGB).

2. Acceptance of the Standard Terms and Conditions of Business

The following terms and conditions shall apply to all deliveries and services unless other agreements are made explicitly and in writing. They also apply to all future contracts unless their application is expressly objected to in an individual case.

We do not accept contrary or deviating terms and conditions of contract partners. They do not become the contents of the contract even if we do not object to them expressly.

3. Ancillary Agreements, Delivery Dates

Ancillary agreements to the contract, in particular delivery dates outside the written contract, shall not be valid unless they are confirmed in writing. This shall not apply to agreements made after the conclusion of the contract.

4. Delivery, Force Majeure

Our offers are without commitment until the formation of the contract.

Partial deliveries in acceptable quantities shall be permissible. The buyer shall accept call-off items at the agreed time. If the date is not complied with the remaining items can be delivered and invoiced without a demand for delivery.

Complaints concerning surplus or short shipments of up to 10% of the ordered goods will not be accepted. This percentage shall increase to 20% in case of deliveries from special material productions or products in the „TOP Protect Series“.

In case of force majeure and other unforeseeable extraordinary circumstances and where there is no fault – e.g. in case of difficulties procuring materials, breakdowns, strike, lockout, lack of transport, official intervention, difficulties with energy supplies and similar, –including those that occur at our sub-contractors, – any delivery period shall be extended to a suitable extent if we are prevented from fulfilling our obligations on time. This shall not apply if we are responsible for a takeover, duty of care or duty to prevent.

If the above-mentioned circumstances make it impossible for us or unreasonable to expect us to deliver we shall be exempted from the obligation to deliver.

If the delay to delivery lasts longer than two months the party to the contract shall be entitled to withdraw from the contract.

If the delivery period is extended or we are exempted from the obligation to deliver or the contract partner withdraws from the contract, the latter may not derive any claims for damages from this provided that the above-mentioned reasons obtain.

We shall only be entitled to have recourse to the above-mentioned circumstances if we notify then to the contract partner without delay.

5. Shipping and Transfer of Risk

Unless otherwise agreed the place of performance for our obligations shall be the location of our registered office. Our deliveries are carried out in accordance with §447 of the German Civil Code (BGB), insofar as we take over the shipping. This shall not apply insofar as we deliver with our own vehicles or for mail order purchases.

Insurance against transport damage will only be taken out at the express wish and for the account of the contract partner.

Unless otherwise agreed the costs of transport and packaging will be invoiced separately.

We take back packaging in the framework of the Packaging Regulations. The contract partner agrees to deliver the packing at his expense cleaned, free of foreign bodies and where applicable sorted in accordance with different types of packaging. In case of non-compliance with this obligation we shall be entitled to charge the contract partner for the extra costs caused by cleaning and sorting.

6. Price Increases

If the contract is concluded in accordance with our standard prices and if the material and processing costs that form the basis of our calculations increase between the conclusion of the contract and acceptance of delivery through circumstances beyond our control we shall have the right to increase our prices in accordance with the increased costs.

7. Samples, Estimates

Sketches, drafts, test set, test printing, test tools, samples and other preliminary work that we prepare at the request of the customer shall be invoiced if an order does not materialise. We are also entitled to invoice extensive draft work or samples in cases in which a contract is awarded.

If corrections result from subsequent changes these shall be invoiced on the basis of the time taken. We do not assume any liability for errors that the customer fails to see in the correction.

8. Safekeeping of the Customer's Property

Insofar as the customer makes patterns, raw materials, dies, plate cylinders, semi-finished and finished articles or other items available to us we shall handle them with care. We shall only be liable for damage in case of intention or gross negligence. Safekeeping beyond the date of delivery shall only be carried out against separate payment and liability shall only be assumed for intention or gross negligence.

We are prepared to insure the items at the request and for the account of the customer.

9. Copyright, Confidentiality

We reserve title to and copyright in illustrations, drafts, drawings, samples and other documentation that we hand over to our contract partner in connection with the processing of the order. They may not be made accessible to third parties without our consent and on demand shall be returned to us without delay.

Unless otherwise expressly agreed the information that the contract partner provides us in connection with the order and its processing shall not be regarded as confidential.

Insofar as the copyrights of third parties are infringed by our work the customer shall indemnify us against all claims by third parties based on such infringements if we acted without knowledge of the copyrights of third parties.

10. Terms of Payment

All prices are understood to be net of VAT at the respective valid rate.

Unless otherwise agreed are invoices shall be payable within 14 days with a 2% discount or within 30 days net of deductions.

If unusually large volumes of materials or preliminary services are provided we shall be entitled to request a suitable advance payment.

We reserve the right to refuse bills. Bills are accepted only on account of payment. Discount and bill charges shall be for the account of our contract partner and shall be due immediately.

Default interest will be charged at 8% p.a. above the base rate. We reserve the right to claim greater default damage.

It shall not be permissible to set off against our claims with counterclaims that we have not expressly accepted or that have not been established finally and conclusively.

If our contract partner is culpably in default with his payment obligations we shall be entitled to withhold our own delivery and service obligations under the contract. We shall be entitled to request the contract partner with a suitable time limit to provide security for payment claims arising from the contract. If this time limit expires without results we may withdraw from the contract or make the contract partner's complete payment obligations due and payable. In the latter case we agree to discount the amount that is not yet due with the contractual interest at which we refinance ourselves.

11. Guarantee for Defects

We provide a guarantee that our products and services are free of defects for a period of one year from delivery.

Minor deviations from the pattern with regard to dimensions and colour shall not be deemed to be defects. This shall also apply to slight differences between the proof and the printed edition.

We do not assume any guarantee for the suitability for the customer's intended purpose; the customer agrees to check the suitability itself beforehand.

If defects to the goods or services we provide occur within the guarantee period we shall have the option of subsequent performance by means of reworking or a replacement delivery. Until after the subsequent performance has failed twice the contract partner is not entitled to the option of either reducing the payment (reduction of the purchase price) or withdrawing from the contract.

Insofar as we replace parts in the scope of reworking this shall not lead to an extension of the guarantee period.

The contract partner agrees to examine the goods immediately upon receipt, insofar as this is suitable in the normal course of business, and to notify us without delay if a defect is found. If this is not done the goods are deemed to be accepted unless the defect such that it was not or would not have been detected on an inspection.

If a defect of this kind is detected subsequently it shall be notified without delay after detection; if this is not done, the goods shall be deemed to be accepted in spite of this defect. The rights of the contract partner are safeguarded by sending the notification on time.

Defects of part of a delivery shall not entitle to a complaint regarding the whole of the delivery unless the part of the delivery that is free of defects would not be of interest to the contract partner.

This shall not affect claims of our contract partner under §478 of the German Civil Code (BGB); however, §378 of the German Commercial Code is excluded.

12. Damages, Rescission for Breach of Obligation, Guarantee

Claims for damages by the contract partner for breaches of duties beyond the guarantee claims are excluded.

Damage resulting from injuries to life and limb or health is excluded from the above if we are responsible for the breach of the obligation as well as other damage that results from an intentional or grossly negligent breach of duty on our part. A breach of obligation on the part of a statutory representative or vicarious agent shall be deemed to be the same as one on our part.

The above-mentioned limitation of liability shall also not apply if damages are claimed for a breach of a material contractual obligation for which we are responsible. However, in this case our liability shall be limited to the damage that is typical for the contract and can reasonably be foreseen.

If we are responsible for a breach of an obligation the contract partner shall be entitled to withdraw from the contract subject to the statutory conditions insofar as the matter does not concern a defect.

If we have assumed a guarantee we shall be liable within the framework of the statutory provisions.

None of the above shall affect our liability under the Product Liability Act.

13. Reservation of Title

We reserve title in all delivered goods (reserved goods) until full payment of all claims against the contract partner for whatever legal reason arising from the whole of the business relationship.

The reservation of title shall also cover the accepted balance insofar as we post claims against the contract partner in a current invoice (current account reservation).

In the event of culpable behaviour by the contract partner in contravention of the contract, in particular default of payment, we shall be entitled to take back the reserved goods.

The contract partner agrees to insure reserved goods against the risk of accidental loss, in particular theft, fire, breakages and water damage, and to submit verification of the insurance policy to us on demand. Insofar as they are necessary he shall carry out repairs, service and maintenance of the reserved goods at his own expense.

The contract partner is entitled to resell the reserved goods in the due course of business. In case of resale he hereby assigns to us the receivables and other rights (including VAT) to which he is entitled under the resale as against his buyer or third parties together with all ancillary rights independently of whether the reserved goods were resold with or without processing. We accept this assignment. Even after the assignment the contract partner shall be entitled to collect the receivables to which he is entitled under the resale subject to the proviso that he duly complies with his contractual obligations, in particular payment obligations, and does not default.

He shall keep monies received as a trustee and remit them to us as long as our claim exists.

If the contract partner processes, reshapes or finishes the reserved goods with others this shall always be done on our behalf and we shall be entitled to co-ownership in the new items in the ratio of the value of the finished reserved goods to the other goods at the time of processing or finishing. The contract partner hereby assigns any rights of co-ownership that accrue to him through combining, blending or mixing the supplied goods with other items; we accept this assignment. The contract partner shall safeguard the goods for us with the attention of a conscientious businessman.

The contract partner hereby assigns the claims to which he is entitled under the resale or for any other legal reason regarding the reserved goods in the amount of the co-ownership share as security for all our claims under the business relationship; we accept the assignment.

At our request the contract partner shall notify his assigned debtors of the assignment, request them to make payments only to us and to make all documents and information available that are required to pursue the claim. We also have the option of disclosing the assignment ourselves.

Claiming rights under the agreed reservation of title in case of default of payment by our contract partner, including the demand for surrender of possession, shall not be deemed to by a withdrawal from the contract unless we have expressly stated this. Seizure of the reserved goods by us is always deemed to be withdrawal from the contract.

In case of seizure or other attachment by third parties of the reserved goods or the assigned debts the contract partner shall notify us immediately in writing enclosing the documents that are required for intervention.

If the third party is not in a position to reimburse us for the court costs or out-of-court costs of an action under s. 771 of the German Civil Procedure Rules the contract partner shall be liable for our loss.

14. Software

Neither we nor our suppliers shall be liable to pay compensation for any loss (excluded without restriction are loss of expected profit, interruption of business, loss of commercial information or of data or other financial loss) that occurs as a result of using the software program PrintStar or the inability to use this program, even if we have been informed of the possibility of losses of this kind. Our liability shall in any case be limited to the amount that was actually paid for the product. This exclusion shall not apply to losses that were caused intentionally by us or through our gross negligence. This shall not affect claims that are based on mandatory statutory provisions governing product liability.

15. Right of Return for Standard Article TOP PROTECT OFFICE

If a standard article in the TOP PROTECT Office series does not meet all the expectations of the contract partner this article may be returned within 14 days. Precondition is the goods are unused and returned free of charge in perfect condition in the original packaging.

We are unable to accept returns of TOP PROTECT OFFICE products with individual embossing or special formats or special materials that are not listed in the current price list.

16. Release Clause

If the realisable value of the securities to which we are entitled under No. 12 exceeds in its entirety our total claims under the business relationship by more than 120% the contract partner shall have the option to demand reassignment of existing securities up to the amount of the excess.

17. Data Protection

In accordance with our obligation under the Data Protection Act we hereby state that our contract partner's data that we require to carry out the business process will be stored electronically.

18. Venue

The venue for all disputes between the parties arising from the contractual relationship is Solingen, the location of our registered office.

19. Applicable Law

The mutual obligations under the contract shall be subject exclusively to the laws of the Federal Republic of Germany.

Solingen, 1 October 2004

ELTEX Industriekennzeichnung GmbH