GENERAL TERMS AND CONDITIONS (GTC)

General Terms of Sale and Delivery of Keramische Werkstatt Margaretenhöhe GmbH (General Terms of Sale)
As at 01 May 2013

§ 1 General Provisions, Scope of Application

(1) Our General Terms of Sale and Delivery [hereinafter: General Terms of Sale] apply exclusively. We do not recognize terms of the Purchaser that conflict with or diverge from these General Terms of Sale unless we give our express written consent to their application. Our General Terms of Sale also apply where, having knowledge of conflicting or divergent terms used by the Purchaser, we effect the delivery to the purchaser without reservations.

(2) Consumers in the sense of these General Terms of Sale are natural persons with whom we establish business relations without such relations being attributable to the commercial or independent professional activities of such persons. Businessmen in the sense of these General Terms of Sale are natural or legal persons or partnerships having legal capacity, with whom we establish business relations and who are acting in performance of their commercial or independent professional activities Purchasers in the sense of these General Terms of Sale are both consumers and businessmen.

(3) All agreements entered into between ourselves and the Purchaser in performance of this Agreement are laid down herein in writing. Amendments, supplements or other agreements are only binding if they are issued or confirmed by us in writing. Arrangements made orally or by telephone have to be confirmed subsequently in writing in order to be valid. The same applies to oral covenants and to amendments of this Agreement.

§ 2 Conclusion of Agreement

(1) The product description information such as illustrations, descriptions, data on measurements, weight and use provided in our brochures and similar documents and on our internet site or provided together with another offer, is subject to change unless it is explicitly designated as being binding. Minor divergences from such product description information shall be deemed approved and shall not affect the performance of agreements if the Purchaser can be reasonably expected to accept them. The Purchaser is aware that the products we manufacture are hand-made individual objects and hence unique specimens. Therefore, technical modifications and modifications in form, colour and/or weight within the bounds of what is reasonable remain reserved.

(2) When ordering a product the Purchaser declares in binding form that he intends to purchase the product ordered. We are entitled to accept the contractual offer thus made, within two (2) weeks of having received it. Acceptance may be declared to the Purchaser either in writing by sending an order confirmation or by delivering the goods while at the same time providing an invoice.

(3) Where a consumer orders products electronically, we will confirm receipt of the order without undue delay. The confirmation of receipt does not constitute binding acceptance of the order. However, the confirmation of receipt can also include a declaration of acceptance. Should we accept the offer, we undertake to fulfill the Purchaser's order at the terms of our catalogue. We are entitled to withdraw in the event of clerical, printing and/or calculation errors in our catalogue.

(4) Where a consumer orders products electronically, the text of the contract will be stored by us and sent to the customer by e-mail on request, together with the present General Terms of Sale. In this respect the provisions of § 10 (Data Privacy Protection) apply.

§ 3 Prices and Terms of Payment

(1) The current prices in force at any time in our current catalogues, price lists etc. as amended, shall apply.

(2) Unless stated otherwise in our order confirmation, our prices apply ex works exc1usive of the costs of packaging and transport to the dispatch address or destination indicated by the Purchaser and exclusive of the costs for customs formalities and customs duties. These costs are not included in the price and will be invoiced separately. The costs for packaging and transport are listed in the packaging
and transport costs list attached hereto as a schedule, in its current version as amended. In each case the packaging and transport costs list valid at the time of delivery shall apply.

(3) VAT at the rate payable at any time is not included in our prices for businessmen; if VAT is payable on the basis of statutory provisions, it will be shown separately on the invoice provided. The prices for consumers include VA T at the rate payable at any time.

(4) The Purchaser will not incur additional costs due to an order placed by telecommunications means, e.g. by data transmission, e-mail or by way of machine readable data carriers.

(5) The deduction of a cash discount is subject to a specific written agreement.

(6) Unless otherwise indicated in the order confirmation, the purchase price (net amount without deductions) is due for payment within seven (7) days of the invoice date. After this set period the Purchaser will be in default on payment. A consumer shall pay interest on the money owed while in default, at the rate of 5 above the basic interest rate announced by the European Central Bank. A businessman shall pay interest on the money owed while in default, at the rate of 8 above the basic interest rate. We reserve the right to prove and claim higher damages against the businessman due to default. A charge of EUR 5.00 shall be made for each warning notice issued.

(7) As a matter of principle, deliveries abroad shall only be made against advance payrnent.

(8) All payrnents to us shall be made in Euro alone.

§ 4 Set-off, Right of Retention

The Purchaser is only entitled to set-off possibilities if his counter-claims have been established by final judgment, are undisputed or have been recognized by us. The Purchaser may only exercise a right of retention if his counter-claim is based on the same contractual relationship.

§ 5 Delivery and Delivery Period

(1) The delivery periods indicated are approximate and non-binding. No guarantee can be assumed for compliance with such periods since our products are handcrafted unique specimens.

(2) In the event that we have agreed in writing on binding delivery periods or delivery dates, we are liable pursuant to the statutory provisions to the extent that a delay in delivery is caused by an intentional or grossly negligent breach of contract for which we can be held responsible. Fault on the part of our representatives or persons employed in the performance of our obligations [Erfüllungsgehilfen] shall be attributed to us. Insofar as the delay in delivery is not caused by an intentional breach of contract for which we can be held responsible, our liability for damages is limited to the foreseeable damage typically sustained. The same applies to a culpable breach of a material contractual duty.

(3) With respect to businessmen, in case of a delay in delivery we shall assume liability for each full week of the delay at the rate of 0.5 per week of the declared value of the goods to be delivered, up to a maximum of 5 of the declared value of the goods, within the context of flat-rate cornpensation for the delay.

(4) Other statutory claims and rights of the Purchaser shall remain reserved.

(5) Force majeure and industrial disputes release the contracting partners from their performance obligations for the duration of the disturbance and within the scope of its effects. The contracting partners shall, within the bounds of what can be reasonably expected, immediately provide the requisite information and adjust their obligations to the changed circumstances in accordance with good faith.

(6) We are also entitled to make partial deliveries to the businessman.
At the Purchaser's request and to the extent we have given our corresponding consent in writing, we may also make partial deliveries ourselves. The provisions in sub-sections (1)-(5) above apply mutatis mutandis to partial deliveries.

§ 6 Information on Revocation for Consumers

(1) Consumers are entitled to revoke a declaration of intent for the conc1usion of the Agreement, within 2 weeks of receipt of the goods. The declaration of revocation does not have to state reasons and has to be declared in writing (also by e-mail), or by returning the goods, to the seller:
Keramische Werkstatt Margaretenhöhe GmbH
Bullmannaue 19
45327 Essen
Tel.: +49-201-30 50 80
Fax: +49-201-30 30 31
E-Mail: kontkt@kwm1924.de
Posting/Mailing in due time will suffice to comply with the set period. In contrast, the aforesaid revocation right of consumers does not exist where goods manufactured according to a consumer's specifications are supplied. Goods are manufactured according to a consumer's specifications, in particular, where the consumer selects other colors, shapes, etc. for a product which are not shown in our catalogue.

(2) When exercising the revocation right a consumer is under an obligation to return the goods if they can be sent by parcel post. When exercising the revocation right, the consumer shall bear the postage where the value of the order is up to EUR 40.00, unless the goods delivered do not correspond to the goods ordered. The consumer does not have to bear the costs of returning goods with an order value of over EUR 40.00.

(3) The consumer shall compensate the value of deterioration resulting from use of the goods in accordance with their intended purpose. The consumer may carefully and cautiously inspect the goods. The loss in value caused by use going beyond mere inspection so that the goods can no longer be sold as "new" shall be borne by the consumer. In such a case we may retain the loss in value caused by use of the goods purchased.

§ 7 Retention of Title

(1) All deliveries are made subject to retention of title, meaning that we will retain title to the goods until full payment of the purchase price by the Purchaser.

(2) In business transactions with businessmen, we will retain title to the goods until all payments arising from business relations with the businessman have been received.

(3) The Purchaser shall treat our goods with care. In addition, businessmen have to take out sufficient replacement value insurance for the goods that are owned by us against damage through fire, water or theft. The rights under such insurance shall be assigned to us. We hereby accept such assignment. Prior to the transfer of ownership the goods may not be pledged or transferred as security. The Purchaser shall notify us immediately in writing of any pledge or other attachment of the goods by third parties, and of any damage to or destruction of the goods. The same applies to a change of possession of the goods and a change in the Purchaser's place of residence.

(4) We shall be entitled to give notice of termination of the agreement with immediate effect or to rescind the agreement and demand that the Purchaser surrender the goods, should he default wholly or partly on a payment or discontinue his payments, or if other legitimate doubts arise about the Purchaser's ability to pay or his creditworthiness, if there is a petition for the commencement of insolvency proceedings or if such proceedings are opened or commencement thereof is refused for lack of estate.

(5) A businessman is entitled to re-sell the goods within the course of ordinary business. In case the goods delivered subject to a retention of title are re-sold, the businessman now already assigns to us his purchase price claims against a customer or a third party arising from such re-sale, in their full amount.

(6) We reserve the right to collect the claim ourselves as soon as the businessman fails to satisfy his payment obligations from the proceeds received, for the reasons indicated in sub-section 4 above. In that case the businessman shall notify us of the claims assigned and the relevant debtors, shall provide all information required for collection, hand over the relevant documents and inform the debtors of the
assignment.

§ 8 Passing of Risk, Packaging Costs

(1) Unless otherwise stated in the order confirmation, where the Purchaser is a businessman delivery ex works is deemed to have been agreed. The risk of accidental loss or accidental deterioration of the goods shall pass to the businessman upon delivery; in case of a sale by delivery to a place other than the place of performance [Versendungskauf], upon delivery of the object to the haulage company, the carrier or any other person or third party entrusted with the consignment. Transport packaging and all other packaging in accordance with the regulations on packaging will not be taken back. The businessman shall arrange for disposal of the packaging at his own expense. At the businessman's request we will take out transportation insurance for the delivery. The relevant costs shall be borne by the businessman.

(2) In contrast, for consumers the risk of accidental loss or accidental destruction of the object sold shall not pass to the consumer until delivery of the object, also in case of a sale by delivery to a place other than the place of performance [Versendungskauf] .

(3) Default on acceptance by the Purchaser shall be equated with delivery.

§ 9 Warranty

(1) With regard to businesses:
(a) Claims of a businessman based on defects require the businessman to notify us in writing of all recognizable, obvious defects, shortfalls or incorrect deliveries, within seven (7) working days after the delivery. Recognizable external transportation damage and shortfalls have to be notified by telephone immediately after delivery of the goods and have to be confirmed in writing. In case of rail delivery or delivery with vehicles of short- or long-distance haulage or by other common carriers, the businessman shall complete the necessary formalities - e.g. official railway ascertainment of the facts - with respect to the carrier. Otherwise assertion of the warranty claim is excluded. Posting in due time will suffice to comply with the set period. The businessman bears the full burden of proof for all prerequisites of a claim, especially regarding the defect as such, regarding the time at which a defect is ascertained and regarding timely notification of the defect.
(b) If a justified notification of defective goods in the sense of Sec. 434, German Civil Code [BGB], is provided in due time, we will at our discretion rectify the defect or delivery a product that is free of defects. If the defect is rectified, we will bear all expenses necessary for rectification purposes, in particular, all transport, route, working and material expenses, insofar as such expenses do not increase because the object purchased was taken to a place other than the place of performance.
In the event that a new, defect-free product is delivered, the businessman is aware that there can be divergences in form, color and/or weight etc. vis-ä-vis the defective product provided, since the products are hand-crafted unique specimens.
(c) If rectification or the delivery of are placement product [Nacherfüllung] is unsuccessful or is not perforated within a reasonable period, if it is refused or cannot reasonably be expected of us due to disproportionately high costs, the businessman may require rescission of the agreement or a reduction in the price.
(d)Where seconds are concerned, qualities of the goods leading to their qualification as seconds do not constitute defects.
(e) We are under no obligation to exchange goods that are free of defects. There is no exchange possibility for products manufactured to customers' specifications and/or for special orders. The statutory claims with respect to material defects shall remain unaffected.
(f) The businessman's claims based on material defects shall become statute-barred one (1) year after delivery of the goods where new products are delivered. In contrast, where second-hand products or seconds are delivered, claims based on defects are excluded.
(g) We assume liability for damage caused by injury to life or limb or health, and for a breach of material
contractual obligations that is caused culpably by us, our statutory representatives or persons employed in the performance of our obligations. This also applies to mandatory liability pursuant to the German Product Liability Act. In addition, we assume liability for damage caused intentionally or through gross negligence by us, our statutory representatives or persons employed in the performance of our obligations. To the extent that we are not accused of an intentional breach of contract, liability for damages shall be limited to the foreseeable, typically sustained damage. The same applies to an unintentional breach of material contractual obligations.
(h) Unless otherwise agreed above, liability is excluded.

(2) With regard to consumers:
(a) If there is a defect in the product purchased for which we can be held liable, the consumer may require subsequent performance (rectification of the defect or de1ivery of a defect-free product). however, we are entitled to refuse the subsequent performance chosen by the consumer if it can only be provided at disproportionately high costs.
(b) In case of rectification of a defect, we shall bear all expenses for the purpose of rectifying the defect, in particular, transportation, route, working and material costs insofar as such costs do not increase because the object purchased has been taken to a place other than the place of performance. If a new, defect-free product is delivered, the consumer is aware that there can be divergences in form, color and/or weight etc. vis-a-vis the defective product delivered, since the products are hand-crafted unique specimens.
(c) Where seconds are concerned, qualities of the goods leading to their qualification as seconds do not constitute defects.
(d) We are under no obligation to exchange goods that are free of defects. There is no exchange possibility for products manufactured according to customers' specifications and/or special orders. The statutory claims based on material defects shall remain unaffected.
(e) If the subsequent performance is unsuccessful, on principle a consumer may choose to require a reduction of the purchase price or withdraw from the agreement.
(f) If a consumer chooses to withdraw from the agreement due to a defect in title or a material defect after subsequent performance has failed, he shall not be entitled to damages for the defect as well. If the consumer chooses damages after subsequent performance has failed, the goods shall remain with the consumer if he can be reasonably expected to accept this. The damages shall be limited to the difference between the purchase price and the value of the defective product. This does not apply if we have fraudulently caused the breach of contract.
(g) We assume liability for damage caused by injury to life or limb or health, and for a breach of material contractual obligations that is caused culpably by us, our statutory representatives or persons employed in the performance of our obligations. This also applies to mandatory liability pursuant to the German Product Liability Act. In addition, we assume liability for damage caused intentionally or through gross negligence by us, our statutory representatives or persons employed in the performance of our obligations. To the extent that we are not accused of intentional breach of contract, liability for damages shall be limited to the foreseeable, typically sustained damage. The same applies to an unintentional breach of material contractual obligations.
(h) Unless otherwise agreed above, liability is excluded.
(i) The claims of consumers based on material defects shall become statute-barred two (2) years after delivery where new products are delivered. Claims based on material defects where second-hand products or seconds are delivered shall become statute-barred one (1) year after delivery.

(3) Other Liability
(a) More extensive liability for damages than that provided for in subsections 1 and 2 above is excluded, irrespective of the legal nature of the claim made. This applies, in particular, to damages claims based on culpa in contrahendo, other breaches of obligations and to claims in tort for compensation for property damage pursuant to Sec. 823, German Civil Code [BGB], or for lost profits.
(b) To the extent that our li ability for damages is exc1uded or limited, this also applies with regard to the personal liability for damages on the part of our employees, workers, staff members, statutory representatives and/or persons employed in the performance of our obligations.
(c) The Purchaser will not receive guarantees from us in the legal sense of the term.

§ 10 Data Privacy Protection

The data required for processing of business transactions will be collected and stored, and will be processed and used when processing the order. The Purchaser expressly consents to such collection, processing and use of personal data. Naturally, all personal data will be treated confidentially, please see our data privacy protection notice on our website www.kwm1924.de and the explanations provided there. You may object to further use of your data for our own advertising purposes by sending us a notice at any time. Having received your notice of objection, we will discontinue any further mailing of advertising material.

§ 11 Partial Invalidity

Should individual parts of these General Terms of Sale of Keramische Werkstatt Margaretenhöhe GmbH be or become invalid, this shall not affect the validity of the remaining provisions hereof.

§ 12 Place of Performance, Language, Place of Jurisdiction, Governing Law

(1) If the Purchaser is a businessman, a legal person of public law or a special fund governed by public law, the exc1usive place of jurisdiction for any disputes hereunder is our company seat. The same applies where the Purchaser has no general place of jurisdiction in Germany, or where the domicile or place of habitual residence is unknown at the time a lawsuit is filed.

(2) The language of the agreement is German. In so far as the contracting partners and other documents and material shall be drawn up in the German language.

(3) Unless otherwise specified in the order confirmation, our company seat is the place of performance.

(4) If the Purchaser is a businessman, our company seat is the place of jurisdiction. However, we reserve the right to assert our claims before any other permitted place of jurisdiction.

(5) The laws of the Federal Republic of Germany apply to the exclusion of the UN CISG of 11 April 1980.