1. Applicability of our general conditions of contract to goods and services we sell

All goods and services sold by us are subject to the present general conditions of contract. We do not recognize any other conditions of contract, especially conditions of purchase, set by our customers. The present general conditions of contract are applicable to all business transactions with our customers and need not be reiterated at the time of each individual transaction.

2. Documents

Documents relating to the contract, such as drawings, diagrams, and weight specifications, shall be binding only as approximations. The information contained therein shall not represent a guarantee of the characteristics of our products. The information contained therein shall not relieve the customer from reviewing, on his own responsibility, prior to using our products, such other information and recommendations as we may provide.

3. Copyright

We retain copyright in respect of all cost estimates, drawings, and supporting documents. None of these may be made available to third parties. All drawings and other documents must, upon request, be returned to us without delay if, contrary to expectation, the contract is for any reason not formally entered into or not performed.

4.Stipulations

The obligations and requirements of the parties shall be set and governed by our letter of confirmation and by the present conditions of contract. Any oral side-agreements and stipulations, including any between representatives of the parties, shall have legal effect only with our written confirmation.

5. Price quotation

Prices are quoted in EUROS and RMB. Prices are understood as ex-works, not including packaging. We retain the right to change the price if a period in excess of four months elapses between the time of signing of the contract and the performance of same and if, during this period, the factors on the basis of which the price was calculated change. If payment is delayed, any rebates, discounts, etc. shall not be guaranteed, and the gross price shall be payable. Bills of exchange and checks will be accepted only with a view to their encashment. Payment shall be deemed to have been made only when encashment occurs.

6. Minimum invoice amount/Minimum order quantity

We will apply a service charge of € 20.00 to any order the net amount of which is less than € 100.00.

7. Delivery

Delivery dates will be quoted according to our best estimate, but shall not be deemed binding. Partial deliveries shall be permissible.

8. Shipping

All shipments shall be shipped at the expense and risk of the customer. Unless otherwise expressly stipulated, we shall make shipping arrangements in accordance with our best judgment. We shall not be liable for failure to ship at the cheapest rate available. We shall obtain insurance coverage for the shipment only at the customers expense and only at his express request.

9. Transfer of risk

Risk transfers to the customer at the time of consignment of the goods with the forwarder or carrier, but no later than when the goods leave the factory or warehouse. Risk shall be understood to include the risk of confiscation. Transfer of risk shall occur in all cases, including postpaid, free-on-board, or cost-insurance-freight shipments.

10. Payment

Payment must be made within 14 days, with a 2% discount, or within 30 days, with no discount, following the invoice date. Deferral of payment will be allowed only on condition that we are not obliged to go to court to repossess forfeited goods, and so long as we learn of no other circumstances that could endanger our claim.

Should the latter case arise, all the customer's obligations, including obligations not yet contractually due and payable, shall become immediately due and payable. In such event, we shall have the right to demand immediate payment of outstanding acceptances before their due date. All costs of notices to pay, including by telephone, shall be born by the customer. The customer may offset his obligations only to the extent of claims that are uncontested or that have been formally upheld by a court of law.

11. Liability for material defects

In a departure from the provisions of the law governing claims arising from material product defects, we shall be liable as follows in case of a justified complaint:

1. We shall repair any defective parts or services or supply new parts or perform new services, at our option.

2. We may make three attempts to remove the defects enumerated in section a, foregoing. If we fail, the customer shall be entitled to the claims provided by law, except that he shall have no claim for damages except as provided in section 12 below.

3. The customer is obligated to inspect the goods delivered or services rendered by us immediately upon delivery or completion, and to submit any complaint without delay (77 HGB). Ordinary wear and tear and defects resulting from improper or negligent handling, subjection to excessive stress, or use of inappropriate operating equipment, are not covered by our liability. The same shall apply where the customer or a third party modifies or adapts our product without first obtaining our written consent.

4. We assume no liability for material defects in products supplied by third-party manufacturers. In anticipation of such an eventuality, we hereby subrogate the customer in our claims against the third-party supplier.

5. The statute of limitations for claims for alleged defects is one year, except in cases where a compulsory five-year deadline is provided by law.

12. Liability

Claims for damages due to defects or alleged violations of duty are hereby barred. This shall not apply in case of damage to life and limb or to health if the damage results from negligent violation of duty by us or from deliberate or negligent violation of duty by our legal representative or agent; nor shall it apply in case of damage resulting from grossly negligent violation of duty by us or deliberate or grossly negligent violation of duty by our legal representative or agent.

The customer's right to withdraw from the contract in case of a violation of duty that does not consist of a defect in the product or service sold or the workmanship thereof remains unimpaired. Likewise unimpaired are claims arising from the Product Liability Act.

13. Force majeure

Instances of force majeure (for example, strikes, lockouts, war, mobilization, interruption of business - regardless of the cause) shall give rise to an option for both contractual parties to cancel some or all of their obligations hereunder.

14. Place of performance

The place of performance for all reciprocal obligations hereunder shall be beGoburg. This shall also apply with reference to any checks or notes accepted with a view to encashment.

15. Place of venue/Applicability of German Law

Bayreuth shall be the sole place of venue for all causes of action directly or indirectly arising hereunder, if the customer is a fully licensed businessman. The contract shall be governed exclusively by German law, to the exclusion of UN commercial law.

16. Right to withdraw from the contract

We reserve the right to withdraw from the contract, and from any other contracts entered into by and between us and the customer, if we become aware of circumstances that allow us to surmise that the customer's financial condition has substantially deteriorated. In such a case, we shall be obligated to formally declare our intent to withdraw without delay. We further reserve this right to withdraw from the contract in case of nonpayment by the customer of any invoice that has become due and payable.

17. Retention of ownership

All goods and services delivered by us - including goods and services delivered abroad - shall remain our property until all claims of ours hereunder against the customer shall have been satisfied. Thus any pledging, any posting as security, or any other type of transfer of the goods and services is prohibited; only retailers and contractors will be permitted to re-sell or re-use the goods in the ordinary course of their business, and only on condition that they receive immediate payment or expressly retain ownership until their third-party customers make full payment.

Only to this extent do we consent to transfer of ownership to third parties. As regards such re-sale or re-use, the customer, by signing the contract with us, automatically subrogates us, for our protection, in his future purchase-price claims or contractor's-wage claims, and such subrogation shall be effective without any separate declaration of subrogation. The customer is authorized, until revocation of such authorization, to collect the new claim. If goods or services delivered by us to the customer happen to undergo finishing or happen to be incorporated into the customer's own work, we shall retain ownership of that proportion of the finished product that is represented by ratio of the value of our goods as sold to the value of the finished product.

If our goods should happen to be placed under sequester by a third party, the customer shall be obligated to inform the enforcement official of our retention of ownership. He shall be further obligated to notify us immediately - by means of a registered letter enclosing a copy of the sequester protocol, together with an affidavit of the latter's authenticity - that the goods placed under sequester are identical with the goods delivered by us, for which we have not yet been paid in full, and of which we therefore retain ownership.

The customer shall bear any associated costs. In case of any cessation of payments, the customer shall be obligated to immediately separate out any goods supplied by us that he may have on hand, as well as any outstanding claims in which he has subrogated us, and submit an itemized schedule of same to us.

Insofar as the security rights that are ours under Paragraph 1 shall exceed by more than 20% the value of all secured claims, we shall, at the customer's request, release the excess portion of the security rights in question.

18. Excess or Shortfall of quantity supplied

Taking into account possible marginal variations arising in the course of manufacture, we reserve the right to deliver a quantity up to 5% in excess or 5% short of the contractually stipulated delivery quantity.

No.1 East End of Apartment C No. 16 Cuiming Road
Yat-Sen Scientific Industrial Park, Wuqing, Tianjin, China

Version of May/2011