Jahnel-Kestermann Getriebewerke GmbH. General Terms and Conditions of Sale and Delivery

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General Terms and Conditions of Sale and Delivery

As per: March 2014

I. GENERAL – SCOPE OF APPLICATION

1. All conclusions of sales contracts and deliveries shall be executed exclusively on the basis of these Terms and Conditions of Sale and Delivery. The Terms and Conditions of Sale and Delivery shall become subject-matter of the sales and/or delivery contract concluded with us, regardless of whether we manufacture the goods ourselves or buy them from outside suppliers (sections 433, 651 BGB (German Civil Code)). Placement of an order for or acceptance of our deliveries and services by the contracting party shall be considered an acknowledgment of our Terms and Conditions of Sale and Delivery.

2. Our Terms and Conditions of Sale and Delivery shall apply exclusively even if there was no express reference to them. Deviating, conflicting or supplementary general terms and conditions or any terms and conditions of purchase of the contracting party shall not apply even if we do not expressly object to their applicability in particular cases. Such terms and conditions shall only become part of the contract if and to the extent that we expressly acknowledge them in writing. In these cases, our Terms and Conditions of Sale and Delivery shall apply supplementarily. The requirement of consent shall apply in any case, in particular even in the event that we, upon knowledge of the deviating, conflicting or supplementary general terms and conditions or terms and conditions of purchase of the contracting party, accept said party's order without reservation or make reference to correspondence which contains such terms or refers to them.The applicability of terms and conditions to the contrary cannot be deduced from the fact that we execute an order. 3. Our Terms and Conditions of Sale and Delivery shall only apply vis-à-vis enterprises (section 14

BGB (German Civil Code)), if the contract is part of the operation of the enterprise, as well as vis-à-vis legal entities under public law and special funds under public law (section 310 par. 1 BGB (German Civil Code)).

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5. Individual agreements entered into with the contracting party in a particular case (including subsidiary agreements, amendments and alterations) shall in any case take priority over these Terms and Conditions of Sale and Delivery. A written contract or our written confirmation shall be decisive for the contents of such agreements.

6. Legally relevant statements and notifications to be made after conclusion of the contract by the contracting party vis-à-vis us (e.g., setting of time limits, notifications of defects, reminders, statement of rescission or reduction of the purchase price) must be made in writing in order to be valid.

7. With the exception of agreements with our managing directors and prokurists [holders of a special statutory authority], agreements reached with our representatives and agents shall only become binding after having been confirmed by us in writing. Only upon presentation of an authority to collect, shall our representatives and agents be entitled to accept cash and cheques.

8. We shall be entitled to electronically store and process data of the contracting party that refer to the business relationship with said party in the manner defined by the Federal Data Protection Act. In doing this, we are obliged to use the data communicated to us by the contracting party for our own purposes only and not to pass them on to outside third parties.

9. References made to the applicability of statutory regulations are only made for the purpose of clarification. Therefore, even without such clarification, the statutory regulations shall apply, provided they have not been directly amended or expressly excluded in these Terms and Conditions of Sale and Delivery.

II. CONCLUSION OF A CONTRACT

1. Unless they have expressly been defined as binding, our offers shall be made without obligation and shall not be binding. The same shall apply if we made available to the contracting party catalogues, technical documentations (e.g., drawings, plans, calculations, estimates, references to DIN standards), other product descriptions or documents – also in electronic form – with regard to which we reserve property rights and copyrights.

2. Placement of the order by the contracting party shall be held to be a binding contractual offer. Unless otherwise stated in the order, we shall be entitled to accept such contractual offer within 2 weeks as of receipt by us. A contract shall be brought about only when the order placed by the contracting party has been confirmed by us in writing or if the goods have been delivered.

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been described as binding. Certain product qualities shall neither be warranted nor assured thereby.

4. Only the contract concluded in writing, including the present Terms and Conditions of Sale and Delivery, shall be decisive for the legal relationship between us and the contracting party. These documents reflect in full all agreements between the contracting parties with regard to the subject matter of the contract. Oral promises made by us before the conclusion of this contract shall not be legally binding.

5. Any alterations to and/or amendments of orders which have been placed and confirmed, in particular with regard to constituents, shades of colour, dimensions, weights or other performance data, must be made in writing in order to be valid. As long as alterations/amendments have not been agreed in writing, we shall effect performance ordered without taking the wishes for alterations/amendments in consideration. If we confirm in writing alterations/amendments requested by the contracting partner, the contracting partner must state in writing any objections against the confirmation – in particular against its completeness and the correctness of its content – within 48 hours after receipt of the confirmation. Should the contracting partner not state any objections against the confirmation within such period of 48 hours, the confirmation shall be binding between the contracting parties. In order to observe the time limit, the timely dispatch shall suffice. We shall be obliged to take into account wishes of the contracting party for alterations/amendments to the extent that this is possible for us and to be expected from us within the limits of our operational capacities. Any additional costs hereby incurred shall be paid in accordance with item III.3 of these Terms and Conditions of Sales and Delivery.

6. Notwithstanding item II.5, we reserve the right to change the manufacturing process and the product composition to the extent that such action does not lead to a detrimental change in type and quality of the product. These changes, however, must not lead to a situation where an object is delivered which, with regard to its possible use and application, deviates from what was agreed in the contract in a manner essential and/or detrimental to the contracting party.

7. Within the customary limits, excess and short deliveries shall be considered agreed.

III. PRICES

1. Unless a fixed price or another qualifying date have been expressly agreed in writing, the prices applicable on the day of delivery and, as the case may be, surcharges shall apply.

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prices shall apply ex stock or ex works excluding packaging. Unless otherwise specified, the prices are quoted in the European currency (euro).

3. If the contracting party changes, amends or discontinues orders, work, planning or similar, or changes the conditions for effecting performance, the contracting party has to reimburse all costs incurred by us thereby, and has to indemnify us from all liabilities vis-à-vis third parties. If, for reasons for which we cannot be held responsible, the contracting party withdraws from the contract before the parties begin executing the contract, we shall be entitled to demand a reasonable part of the agreed remuneration as a cancellation fee to compensate for the damage incurred by us. The contracting party shall be free to produce evidence to the effect that, due to the cancellation, we did not incur damage or that we incurred less damage than the cancellation fee charged.

4. We reserve the right to adjust prices if, after entering into the contract, without any fault on our part, the basis for the price calculation changes as a result of an increase in production costs - in particular material, manufacture and/or labour costs - or taxes and duties directly connected with the subject matter of the order are increased or introduced.

5. If, after conclusion of the contract, it becomes obvious that our claim to the purchase price is endangered by lacking financial capacity of the contracting party (e.g., because of a petition to institute insolvency proceedings), we shall be entitled in line with the statutory regulations to refuse performance and – if applicable, after setting a time limit – to rescind the contract (section 321 BGB (German Civil Code)). For contracts on the manufacture of non-fungible items (production of single parts) we shall be entitled to immediately declare our rescission of the contract; this shall be done without prejudice to the statutory regulations on the dispensability of setting a time limit. Any discounts granted shall be cancelled in the event of a delay in payment by the contracting party, institution of insolvency proceedings against the assets of the contracting party or rejection of such opening for lack of assets.

IV. REFERENCES TO APPLICATION TECHNIQUES – SUPPLYING OF INFORMATION AND RENDERING OF ADVICE – DUTY TO OBTAIN A PERMIT UNDER PUBLIC LAW

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expressly and in writing. Oral information shall not be binding. Item XII of these Terms and Conditions shall apply to a possible liability.

2. We do not accept any responsibility for the compliance with statutory regulations and regulations laid down by an authority for the use of our goods, in particular we do not accept responsibility for the procurement and granting of any required (in particular official) permits under public law. Compliance with statutory regulations and regulations laid down by the authorities for the use of our goods, in particular compliance with the duty to obtain permits under public law, shall be exclusively within the sphere of responsibility of the contracting party and shall not affect our claims. In the event we assist the contracting party in obtaining a required permit under public law, the contracting party shall pay for the expense incurred by us.

V. DELIVERY PERIODS

1. Delivery periods (deadlines) shall only be binding if they are quoted in our written order confirmation. They shall run from the date of our written order confirmation, not, however, before - all technical and commercial details have been clarified, and before

- acts of cooperation owed by the contracting party have been performed by it, in particular procurement of the permits, release, provision of materials, documents, etc., which the contracting party may have to obtain, and

- as the case may be, after receipt of an advance payment agreed on.

2. The delivery time shall be considered adhered to when, until expiry of the delivery period, the item has left our warehouse or works, or the contracting party has been notified of readiness for dispatch and the goods cannot be shipped in time without any fault on our part.

3. The occurrence of a delay in delivery on our part shall be determined on the basis of the statutory regulations. In any case, however, a reminder by the contracting party granting a reasonable period of grace shall be required. Only after a fruitless expiry of the period of grace can we be in delay in delivering the goods. If delivery periods or delivery deadlines are expressly described as “fixed” in our written order confirmation, the reminder submitted by the contracting party does not need to grant a period of grace in order to effectively state our delay in delivery.

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5. If we are not able to adhere to binding delivery periods for reasons for which we cannot be held responsible (non-availability of performance), we shall immediately notify the contracting party of this circumstance and, at the same time, communicate the anticipated new delivery period. Should performance still not be available within the new delivery period, we shall be entitled, at our discretion, to completely or partly rescind the contract without setting a prior time limit; we shall immediately reimburse the contracting party for any consideration already executed by it. A case of non-availability of performance within this meaning shall in particular be held to be a delayed delivery to us by our outside suppliers if we entered into a congruent covering transaction, if no fault can be attributed to us or to our outside supplier, or if we are not obliged to effect procurement in a particular case. In none of the cases in accordance with sentence 3 shall we be obliged to procure goods from other outside suppliers.

6. Our liability for damage caused by delay shall be exclusively based on the regulations laid down in item XII of these Terms and Conditions.

7. We shall be entitled to execute partial deliveries insofar as they are acceptable to the contracting party. This shall be the case if

- the contracting party is able to use the partial delivery within the context of the purpose defined in the contract;

- delivery of the remaining items is guaranteed;

- the contracting party hereby does not incur any considerable additional expenditure or additional costs (unless we declare our willingness to assume such costs).

Partial deliveries may be invoiced separately.

VI. DISPATCH AND PASSING OF RISK

1. Unless otherwise agreed, our deliveries shall be effected at our complete discretion ex our stock or ex our works (“place of performance”). In the event that one of the Incoterms clauses has been agreed on as a term of delivery, such clause shall apply in the version applicable at the point in time when the contract was concluded.

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stating the type and extent of such damage. Insurance of the goods against transport damage, transport loss or breakage shall be taken out only at the contracting party’s express request at the expense and on the account of the contracting party only. We shall not take back any transport packing or other packaging in accordance with the packaging ordinance, they shall pass into the ownership of the contracting party; palettes shall be excluded.

3. At the latest upon delivery of the goods, the risk of accidental loss or accidental deterioration of the goods shall pass to the contracting party. For a sales shipment, dispatch and transport shall always be effected at the risk of the contracting party. This shall likewise apply to the dispatch and transport ex stock of a third party (transfer order) or for the return of goods or empties (returnable transport packaging). For a sales shipment – also in the event of partial deliveries – the risk of an accidental loss or an accidental deterioration of the goods, as well as the risk of a delay, shall pass to the contracting party upon delivery of the goods to the forwarder, the carrier or the person or establishment otherwise earmarked to execute shipment. Insofar as an acceptance has been agreed on, it shall be decisive for the passing of the risk. In other respects too, the statutory regulations laid down in the law on contracts for work and services shall apply mutatis mutandis to an agreed acceptance. The same consequences as in the case of delivery or acceptance shall arise if the buyer is in default in accepting delivery. Should the dispatch of the consignment be delayed for other reasons for which the contracting party can be held responsible, or if the contracting party itself is responsible for the transport of the goods, the risk shall pass upon notification of the contracting party of the readiness for dispatch.

4. Should the contracting party default in acceptance, should it fail to perform an act of cooperation or should our delivery be delayed for other reasons for which the contracting party can be held responsible, we shall be entitled to demand compensation for the loss incurred thereby, including additional expenditure (e.g., cost of storage after the risk has passed). Should goods be stored in our works or warehouse, the storage costs shall amount to 0.5 % per month of the invoiced sum. This shall be without prejudice to a furnishing of proof of higher damage and to our statutory claims (in particular, reimbursement of additional expenditure, reasonable compensation, termination); however, the lump sum payment shall be deducted from any further pecuniary claims. The contracting party shall have the right to furnish proof to the effect that we did not incur any or only significantly less damage than the above-mentioned lump-sum. After a reasonable period has expired without result, we shall be entitled to otherwise dispose of the consignment kept in storage and to supply the contracting party within a reasonably extended period.

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the journey to the place of destination fail for reasons to be attributed to the sphere of risk of the contracting party, the risk shall pass to the contracting partner upon the journey having failed. This shall also apply in the event of unjustified refusal of acceptance by the contracting party. Item VI.4 shall apply mutatis mutandis.

VII. PAYMENT

1. Payments have to be effected in euro (€) and have to be made free of postage and free of charges. They may only be made to the places of payment specified by us. Admissibility of payment by bills of exchange or cheques must be expressly agreed on when the contract is concluded. Bills of exchange and cheques shall be considered payment only after redemption/cashing and will be accepted without obligation for timely presentation and protesting. Discounting and bill charges shall be borne by the contracting partner and shall become due immediately.

2. Unless expressly otherwise agreed, payments have to be made by the contracting party within 14 days as of the date of the invoice with a deduction of a 2% discount or within 30 days as of the date of the invoice net without deductions. A discount shall only be granted if the buyer has met all its obligations to pay within the specified time, including financial obligations arising from earlier deliveries. Payments shall only be considered to have been made in due time if we can dispose of the money with applicable value date on the due date on the account specified by us. If the time limit for payment has been exceeded, default interest must be paid amounting to eight percent above the base interest rate (section 247 BGB (German Civil Code)) p.a. on the outstanding invoiced amount. We reserve the right to assert higher damage in case of default. This shall be without prejudice to our claim vis-à-vis businessmen for commercial interest payable upon maturity (section 353 HGB (Commercial Code)).

3. Any offsetting by the contracting party against counterclaims or retention of payments arising from such claims shall only be permitted if and to the extent that these counterclaims are uncontested or have become res judicata. As a result of defects, payments of the contracting party may only be withheld to an extent which is in reasonable proportion to the asserted defect. If the contracting party exercises its right of retention, the contracting party shall be obliged, at our discretion, to provide security amounting to the unpaid partial amount either by bank guarantee or by depositing such amount with a notary of its choice.

4. If payment is not made in due time we shall be entitled to:

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4.2 withhold our deliveries or other performance arising from the respective order or from other orders until all our claims still outstanding from the respective order or from other orders have been satisfied in full by the contracting party;

4.3 demand appropriate security;

4.4 reclaim the goods delivered by us which are still subject to the reservation of title. If, due to lapse of time, the goods are no longer utilizable or no longer utilizable without restrictions, the contracting party shall pay to us at our request value equalization in money.

5. If, after entering into the contract, we obtain knowledge of facts evidencing an essential worsening of the contracting party‘s financial condition, which facts, based on due commercial assessment of the circumstances, may endanger satisfaction by the contracting party of our outstanding claims resulting from the respective contractual relationship (including claims arising from other individual orders under the same framework contract), which includes, in particular, a petition to open insolvency proceedings, we shall be entitled to effect performance still outstanding only against advance payment or against provision of suitable security within a reasonable period or to only effect performance concurrently with the counter-performance. If the contracting party fails to comply with our justified request in due time, we may rescind the contract or claim damages. In this situation, we shall be entitled to call for immediate payment of all amounts, which also includes any amounts for which deferment has been granted.

VIII. RESERVATION OF TITLE

1. All goods delivered shall remain our property until the remuneration owed for it, including all ancillary claims, has been paid in full. When bills of exchange or cheques are accepted, payment shall only be considered effected after their final redemption/cashing. The ancillary claims include, in particular, costs for packing, freight, insurance, bank charges, reminder charges, lawyer’s charges, court fees and other costs. For a current account, the reservation of title shall serve as security for our balance claim.

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in particular against fire, water and theft. The insurance claims are hereby assigned to us in advance. We are to be notified immediately of any damage which has occurred.

3. Handling and processing of the conditional goods shall be performed free of charge on our behalf as manufacturer as defined by section 950 BGB (German Civil Code), without binding us. Processed goods shall be held to be conditional goods as defined by item VIII.1. If conditional goods are processed together with, connected to and mixed with other goods by the contracting party, we shall be entitled to co-ownership of the new item in proportion of the invoice value of the conditional goods to the invoice value of the other goods used. If our ownership expires as a result of the goods having been connected or mixed, the contracting party shall assign as early as now to us the title due to it to the new stock or item in the scope of the invoice value of the conditional goods and shall store it for us free of charge. The co-ownership rights incurred hereby shall be considered conditional goods as defined by item VIII.1.

4. Only in the due course of business and as long as the contracting party is not in default, shall the contracting party be entitled to resell, process or connect with other items or otherwise install the conditional goods (hereinafter also referred to in brief as “resale”). Any other disposal of the conditional goods shall not be permitted. We are to be notified immediately in the event of a third-party attachment or other access to the conditional goods. All intervention costs, e.g., costs of an action in opposition to execution of a judgment, brought by a third party who claims title to the attached property in accordance with section 771 ZPO (Code of Civil Procedure), shall be borne by the contracting party in so far as such costs cannot be collected at first request from the third party (opponent in the action) and the intervention was justified. If the contracting party grants its buyer a delay in payment of the purchase price, the contracting party must reserve title to the conditional goods vis-à-vis such buyer on the same conditions on which we reserved title to the delivery of the conditional goods; the contracting party, however, shall not be obliged to also reserve title with regard to claims vis-à-vis its buyer which will only arise in the future. Otherwise the contracting party shall not be entitled to resell the goods.

5. The receivables of the contracting party from the resale of the conditional goods shall be assigned to us as early as now. They shall serve as security to the same extent as the conditional goods. The contracting party shall only be entitled and authorized to resell the goods if it is ensured that the contracting party’s claims arising from this shall pass to us.

6. If the contracting party sells at a total price the conditional goods together with other goods that were not delivered by us, the assignment of the claim arising from the sale shall amount to the invoice value for our conditional goods sold in each case.

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8. Until revoked by us, the contracting party shall be entitled to collect the claims assigned to us. We shall be entitled to revocation if the contracting party does not duly meet its payment obligations arising from the business connection with us, or if we obtain knowledge of circumstances evidencing a significant worsening of the contracting party’s creditworthiness. If the conditions for exercise of the right to revocation have been met, at our request, the contracting party has to immediately communicate to us the assigned claims and their debtor, provide all information required for collecting the claims, submit the pertinent documents to us and notify the debtor of the assignment. We ourselves shall also be entitled to notify the debtor of the assignment.

9. If the nominal value (invoice amount for the goods or nominal amount of the claims) of the security existing for our benefit exceeds the secured claims by all together more than 20%, we shall be obliged to release securities at our discretion at the request of the contracting party or of a third party impaired by such potential excess security.

10. In the event that we assert reservation of title, this shall only be considered a rescission of the contract if we expressly say so in writing. The right of the contracting partner to own the conditional goods shall expire if the contracting party does not meet its obligations arising from this or from another contract.

IX. INDUSTRIAL PROPERTY RIGHTS AND COPYRIGHT

1. Our industrial property rights

1.1 We shall reserve industrial property rights to and copyright of illustrations, samples, cost estimates, drawings as well as other documents and information of a physical or non-physical type – also in electronic form. Without our express consent the contracting party must not make available these items as such or their content to third parties; the contracting party must not disclose, use or copy such items itself or via third parties. At our request, the contracting party must without delay return such items to us in full and must destroy any copies made if it has no further need for them in the ordinary course of business or if negotiations do not result in the conclusion of a contract.

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section 69 c of the Copyright Act, in particular copying, processing or distribution, are subject to our written consent. Sublicensing shall not be permitted.

1.3 In the event that we are not awarded the order, we shall be entitled to request an adequate remuneration for the product samples manufactured by us.

2. Third party industrial property rights

2.1 In the event that third party industrial property rights or copyright are infringed in the manufacture of the goods based on samples or other instructions or information supplied by the contracting party, the contracting party shall indemnify us against any and all claims arising from such infringement of industrial property rights and copyright.

2.2 To the extent that the goods are not manufactured based on samples or other instructions or information supplied by the contracting party, we assume liability in accordance with item XII to the effect that the delivery item is free of third party industrial property rights or copyrights. Either party to the contract shall notify the other contracting party in writing without delay if claims because of an infringement of such rights are asserted against it. Should the delivery item infringe any third-party industrial property right or copyright, we shall, at our discretion and at our expense, modify or replace the delivery item such that it ceases to infringe any third-party rights, but such that the delivery item still performs the functions agreed on in the contract, or we shall procure the right of use for the contracting party by entering into a license agreement. Should we fail to do this within a reasonable period of time, the contracting party shall be entitled to rescind the contract or to reasonably reduce the purchase price. Any claims for damages of the contracting party shall be subject to restrictions in accordance with item XII of these Terms and Conditions of Sale and Delivery.

Should other manufacturers' products delivered by us infringe rights, we shall, at our discretion, either assert our claims against the manufacturers and upstream suppliers for the account of the contracting party, or we shall assign such claims to the contracting party. In such cases, in accordance with item XII, claims against us shall only exist if the judicial enforcement of the claims described above against the manufacturers and suppliers has failed or offers no prospect of success, for example due to an insolvency.

X. MOULDS – MODELS – DEVICES

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1. Unless otherwise agreed on, the production items have to be paid separately and in addition to the price agreed on with regard to the contractual items.

2. The remuneration to be paid for the production items shall become due immediately upon confirmation of the order. We shall be entitled to suspend manufacture of the production items until receipt of the remuneration due for them.

3. Unless otherwise agreed on, we shall remain owners of the production items. Notwithstanding the provisions in item X.4, we undertake to use the production items only for orders placed by the contracting party, provided that the contracting party meets its obligations to pay and to effect acceptance.

4. We may freely dispose of the production items if the contracting party releases the production items. The same shall apply two years after the last delivery of parts for which the production items have been used, provided we have announced disposal or destruction of the production items to the contracting party, and the contracting party has not opposed such move in writing within one month. In any case we shall be entitled to dispose of the production items if three years have passed since the last delivery of parts for which the production items were used.

XI. WARRANTY

1. Should there be defects in quality and defects in title (including wrong, excess or short deliveries) the statutory regulations shall apply to the rights of the contracting party specified in more detail in accordance with the following provisions. This shall in any case be without prejudice to the statutory specific provisions for ultimate delivery of the goods to a consumer (recourse to supplier in accordance with sections 478, 479 BGB (German Civil Code)).

2. We shall not accept liability for improper or unsuitable use of goods delivered.

3. The contracting party shall be obliged, immediately on receipt, to carefully examine whether the goods delivered are complete and in due condition, even if we had sent samples or specimens previously. The delivery shall be deemed approved if a notice of defects is not received in writing, per fax or e-mail within 4 working days starting from receipt of the goods at the place of destination, or, if it was not possible to recognize the defect during a proper examination, within 4 working days as of its discovery. The above provisions shall also apply to wrong, excess or short deliveries. If the contracting party does not complain about a wrong, excess or short delivery within 4 working days starting from receipt of the goods at the place of destination, such delivery shall be deemed approved.

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5. In its own interest, the contracting party shall have forwarders acknowledge any damage to the packing and any damage incurred thereby.

6. Our liability for defects shall be based mainly on the agreement made on the quality of the goods. The product descriptions specified as such, which have been made available to the contracting party before ordering or have been included in the contract in the same way as these Terms and Conditions of Sale and Delivery, shall be held to be the agreement on the quality of the goods. 7. Insofar as there was no agreement as to the quality, the existence of a defect shall be judged in line

with the statutory regulations (section 434 par. 1 sentence 2 and 3 BGB (German Civil Code)). We refuse, however, to assume liability for statements made in public by other manufacturers – as, in particular by outside suppliers – or other third parties (e.g., advertising statements).

8. In the event of a justified and timely notice of defects the contracting party shall first only have a claim to subsequent performance, which, at our discretion, can be effected through delivery of faultless products (substitute delivery) or through remedy of the defect (subsequent improvement). This shall be without prejudice to our right to refuse subsequent performance subject to the statutory conditions. In the event that subsequent performance failed or is unreasonable for the contracting party (section 440 BGB (German Civil Code)) or unnecessary because

a) we finally refuse subsequent performance,

b) we fail to effect subsequent performance by a deadline laid down in the contract or within a certain period, and in the contract the contracting party had made continuation of its interest in the performance conditional upon timely performance, or

c) particular circumstances prevail justifying an immediate rescission on weighing mutual interests (section 323 par. 2 BGB (German Civil Code)),

the customer shall immediately be entitled to reduce the purchase price or, at its discretion, rescind the contract and, instead of performance, claim damages or reimbursement of expenses incurred in vain. If the defect is insignificant, the contracting party shall not be entitled to rescind the contract. Any claims of the contracting party for damages or reimbursement of expenses incurred in vain shall exist only in accordance with items XII and XIII and shall be excluded in other respects. 9. We shall be entitled to make the subsequent performance owed conditional upon payment by the

contracting party of the purchase price due. The contracting party, however, shall be entitled to retain a partial amount of the purchase price in reasonable proportion to the asserted defect.

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for the consequences resulting from this. If we replace the item, the contracting partner has to return the defective item to us in line with the statutory regulations. Subsequent performance shall not include removal or refitting of the defective item if we did not have the obligation to fit it in the first place.

11. We shall bear the expenses required for the purpose of subsequent performance, in particular transport, travelling, labour and material costs (not removal and fitting costs). This shall not apply if expenses increase because, after delivery, the goods were taken to another place than the place of business of the contracting party, unless such transport is in line with the use of the goods in accordance with the regulations. Sentences 1 and 2 shall only apply if a defect actually exists. Should the contracting party’s request to remove defects prove to be unjustified, the contracting party shall be obliged, at our request, to reimburse us for the costs thus incurred.

12. Regardless of the scope of the subsequent performance, the mere fact that we effect subsequent performance shall not be held to be an acknowledgment of the defect asserted by the contracting party. Only our legal representatives, prokurists [holders of a special statutory authority] and holders of a commercial power of attorney, constituting in each case the required number of persons authorized to represent the company, shall be entitled to acknowledge a defect.

13. In the events in which the customer bears sole responsibility for faults, no claims, in particular no claims for damages, can be asserted. This includes in particular the following events, the list of which is not final:

- inappropriate or improper use, faulty assembly or commissioning by the contracting party or third parties;

- natural wear, faulty or negligent handling, non-adherence to regulations with regard to handling, service and maintenance of the subject matter of delivery (e.g. operating instructions), use of unsuitable operating resources;

- faulty construction work, unsuitable building ground, chemical, electro-chemical or electric influences to the extent that they have not been caused by us.

14. Should the contracting party accept defective goods even though it recognizes the defect, it shall only be entitled to claims and rights in the event of defects if the contracting party upon acceptance expressly reserves such claims and rights based on the defect recognized by it.

15. Any assignment to third parties of the contracting party’s claims based on defects shall be excluded.

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17. In the event that delivery items have a limited shelf life due to the material used, in which case the packing is provided with a date referring to their shelf life, we shall only assume liability to the effect that such delivery items have the specified quality features for the duration of their shelf life specified by such date.

18. Limitation of action in respect of the contracting party’s warranty claims shall be as laid down in item XIII.

XII. LIABILITY FOR DAMAGES

1. We shall be liable for damages due to injury to life, limb or health in line with the statutory provisions. The following regulations shall not apply to such damage.

2. In other respects, our liability due to breach of duty and our non-contractual liability shall be limited to intent and gross negligence. Any liability for gross negligence of our employees, members of staff and simple vicarious agent shall be excluded in this context.

3. The limitation of liability in accordance with item XII.2, sentence 1, shall not apply if and to the extent that infringement by us of a contractual duty were to endanger achievement of the object of the contract (infringement of so-called “cardinal duties” or “duties essential to the contract”) and thus the limitation of liability would result in undermining legal positions of the contracting party which are essential to the contract. This is the case if, as a result of the limitation of liability, such rights of the contracting party were to be taken away or limited which this contract, based on its content and object, is exactly intended to grant, or the compliance with which makes a proper performance of the contract at all possible and on the adherence to which the contracting party regularly relies and may rely.

4. For the avoidance of doubt: except for the cases under section XII.1, our liability for simple and gross negligence shall be limited to the damage typical for this type of contract, the occurrence of which damage we had to expect when the contract was concluded based on the circumstances known to us at that point in time. This shall apply, in particular, also to our liability for lack of economic success, lost profit, indirect damage, consequential harm caused by a defect and damage as a result of third-party claims.

5. Unless otherwise laid down under another point, any further liability shall be excluded regardless of its cause in law.

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BGB (German Civil Code)). None of the limitations on and exclusions of liability, however, shall apply if we fraudulently concealed a defect or have assumed warranty for the quality of the goods. 7. The contracting party shall only be entitled to rescind or terminate the contract based on a violation

of duty – which does not constitute a defect – if we are responsible for such violation of duty. An unrestricted right of termination of the contracting party (in particular in line with sections 651, 649 BGB (German Civil Code)) shall be excluded. In other respects the statutory conditions and legal consequences shall apply.

8. The limitation of action in respect of claims for damages asserted by the contracting party shall apply in accordance with item XIII.

9. The above regulations shall not shift the burden of proof to the prejudice of the contracting party. 10. This shall be without prejudice to claims for damages in accordance with the Product Liability Act.

XIII. STATUTE OF LIMITATION

1. Warranty claims of the contracting party – with the exception of such claims arising from damage to life, limb and health or based on intent or gross negligence – notwithstanding section 438 par. 1, item 3, BGB (German Civil Code) shall become statute barred on principle upon expiry of one year as of delivery of the goods to the contracting party. In so far as an acceptance has been agreed on, the limitation period begins to run upon acceptance. This shall be without prejudice to the statutory regulations on the limitation of actions for construction-related performance, malice on the part of the seller, claims in rem for return and claims with recourse to the supplier in the case of ultimate delivery to a consumer.

2. The limitation periods in accordance with item XIII.1 shall also apply to contractual and non-contractual claims for damages of the contracting party based on a defect of the goods, unless the application of the regular statutory limitation periods (sections 195, 199 BGB (German Civil Code)) would result in a shorter limitation period in a particular case. Otherwise, claims for damages of the contracting party in accordance with item XII, regardless on what legal ground, with the exception, however, of claims arising from damage to life, limb or health or gross negligence, shall become statute-barred within two years as of the beginning of the limitation period, at the latest, however, as of the passing of risk or the acceptance of the goods.

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XIV. FORCE MAJEURE

1. Unforeseeable, exceptional events for which we cannot be held responsible, such as lockouts and/or industrial disputes, operational breakdowns, interventions by law, measures taken by the authorities, interference with transportation, war, revolution or riot, aircraft hijacking and terrorist attacks as well as natural disasters or other events of Force Majeure, regardless of whether they affect us or our upstream suppliers, shall discharge us from our obligations arising from the respective contract; if the obstacles are of a temporary nature, however, we shall only be discharged for the duration of the hindrance plus a reasonable starting period. If, as a result of such events, contractually owed performance subsequently becomes impossible or unreasonable for one of the parties, both parties shall be entitled to rescind the contract. An unreasonable situation, within the meaning of the above sentence, shall exist for the contracting party if the delay due to a temporary obstacle continues for more than three months. Should the time of performance be extended for reasons of Force Majeure or should we become released from the obligation to perform due to Force Majeure, the contracting party shall not be entitled to derive claims for damages therefrom.

2. Should we see ourselves hindered from duly effecting the contractually owed performance, regardless for which reason, the contracting party must be notified in writing without delay. As soon as it is possible to assess at which point in time we will be able to resume performance, we have to communicate this to the contracting party in writing, if appropriate, even in electronic form.

XV. SECRECY

1. Even after the business relationship has been terminated, the contracting partner shall be obliged to treat confidentially all information obtained in the context of the business relationship and not to disclose in whole or in part such information to third parties. Without our consent, the contracting party shall likewise not use for its own business the information obtained. The obligation to observe secrecy shall not apply to information of which it can be proven that it is common knowledge, that the contracting party already knew about it before it had been made available to it by us, or to information the contracting party had gained knowledge of from third parties without infringement of an obligation to observe secrecy incumbent on the third party.

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its knowledge about the inventions and point out this knowledge to us as prejudicial to novelty, neither on submitting applications for proprietary rights, nor otherwise.

3. Unless the contracting party has obtained our express written consent, it shall not be allowed to refer to the business connection with us in advertising and information material.

XVI. CONCLUDING PROVISIONS

1. The law exclusively applicable to these Terms and Conditions of Sale and Delivery and to all legal relations between us and the contracting party shall be the law of the Federal Republic of Germany. The international uniform law, in particular the United Nations Convention on Contracts for the International Sale of Goods (CISG) dated 11 April 1980 or other conventions on the law governing the purchase of goods, including other, also future, intergovernmental or international agreements, even after their integration into German law, as well as the German international private law shall not apply. For the interpretation of trade terms, however, the Incoterms in the version applicable at the time when the contract is concluded shall apply supplementarily.

2. The place of performance with regard to our delivery commitment shall be based on item VI of these Terms and Conditions of Sale and Delivery. For all other obligations of both contracting parties, place of performance shall be our place of business in Bochum.

3. If the contracting party is a merchant as defined by the Commercial Code, a legal entity under public law or a special fund under public law, exclusive – also international – venue for all disputes arising from and in connection with the contractual relationship in each case (also for disputes with regard to cheques and bill) shall be our place of business in Bochum (section 38 par. 1 ZPO (Code of Civil Procedure)). Provided that the contracting party meets the requirements laid down in section 38 par. 2 ZPO (Code of Civil Procedure) and does not have a general venue within the country, the venue shall be our place of business in Bochum. However, in the events described in sentences 1 and 2, we shall also be entitled to file an action against the contracting party at another statutory venue.

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XVII. Repair and Service

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References

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