GENERAL Terms & Conditions

Conditions of sale

1. Scope of the terms and conclusion of the contract

1. Our deliveries and services shall exclusively be carried out on the basis of the following terms and conditions. Any purchasing terms and conditions of the Customer are expressly rejected. We will not be bound by them even if the performance of the contract was unconditional.

2. All agreements reached by us and the Customer for the purpose of the execution of this contract shall be made in writing.

3. All agreements become binding on us only through our written confirmation of order.

2. Offer and offer documents

1. Our offers are subject to confirmation. And the technical descriptions and other data provided in our offers, brochures and other information are non-binding at first.

2. We reserve the ownership rights and copyrights to illustrations, drawings, calculations and other documents. They may not be made accessible to third parties.

3. If the order is to be qualified as an offer pursuant to Sec. 145 BGB (German Civil Code), we may accept it within 15 working days.

4. Any disclosures within the meaning of paragraph 1 and in public statements on our part, through manufacturers and their agents (Sec. 434, para. 1, page 3 BGB), become part of the service specifications only if they are expressly mentioned in this contract.

3. Prices, terms of payment and payment

1. Unless otherwise stated, our prices are ex works or—in cases of delivery ex warehouse—ex warehouse, excluding costs for packaging. Packaging shall be invoiced separately.

2. The legal value-added tax is not included in our prices. It is indicated separately in the invoice according to the rate applicable by law as of the date of the invoice.

3. Discounts may only be deducted following special written agreement.

4. The purchase price must be paid within 15 working days after receipt of the merchandise and invoice, either in cash or by bank giro transfer to our account. They are considered paid as of the date on which we have the amount at our disposal.

5. Other forms of payment require special written consent. The Customer will bear any thus incurring costs from both parties.

6. The Customer has a right to set off claims or retention right only if his counterclaims are recognised by declaratory judgment, undisputed or acknowledged by us. Furthermore, he shall only be entitled to retention rights insofar as they are based on the same contractual relationship.

4. Deliveries, delivery times and cooperation obligations

1. The scope of our obligation to supply is derived exclusively from this contract. We reserve the right to make alternations to construction, shape and colour in response to improvements in technology or the requirements of the law, as long as said alternations are insignificant or reasonable for the Customer.

2. If partial deliveries are reasonable for the Customer, these may be made and invoiced.

3. Our delivery obligation is subject to reservation of complete and correct delivery to us, unless we are responsible for the deficient or late delivery. If we do not receive supplies, despite having placed appropriate, identical orders with reliable suppliers, we are absolved of our obligation to supply and may withdraw from the contract.

4. In principle, delivery periods are subject to the contractual cooperation of the Customer. Compliance with our delivery obligation shall be subject to prior timely and appropriate fulfilment of the contract partner’s obligation.

5. We can start our delivery period if all technical issues have been clarified.

6. Delivery periods shall begin the day on which we confirm the order. In the event of strikes, delivery periods shall be extended by the duration of said interruption. The same applies accordingly to delivery dates.

7. The point in time at which the merchandise left the works or warehouse is the basis for the compliance with delivery periods and dates. Deadlines are deemed complied with upon notification of readiness to dispatch if the merchandise cannot be dispatched in a timely manner due to no fault of ours.

8. If, after conclusion of the contract, it transpires that the Customer does not provide sufficient guarantee of solvency and our claim to payment is jeopardised, we have the right to refuse delivery until Customer has rendered payment or provided collateral for such payment. If the payment is not made or collateral is not provided within 7 working days after a request to that effect, we have the right to withdraw from the contract.

9. If the Customer delays calling for, accepting or collecting a shipment or if he is responsible for delaying shipment or delivery, we are entitled—irrespective of further claims—to charge an inclusive fee for storage in accordance with the prevailing local storage costs, regardless of whether the goods are stored on our premises or with a third party. It is left to the Customer to prove that no loss or a smaller loss has been incurred.

5. Delay of shipment

1. Business disruptions and incidents caused by force majeure entitle us to extend the agreed delivery period by the duration of the operational failure plus an appropriate lead time and to withdraw from the contract partially or in total as the circumstances demand. Strike, lockout and other circumstances that substantially complicate the delivery or make delivery impossible shall be deemed equivalent to force majeure, no matter whether they occur at our company or at one of our sub-suppliers.

2. Either party may withdraw from the contract if the circumstances preventing delivery persist one month after expiration of the agreed delivery period.

3. Any further claims arising from failure to comply with the delivery period due to no fault of our own are excluded.

4. Paragraph 2 shall not apply if default is due to wilful action, gross negligence or to a substantial breach of contract obligations. Neither does it apply if a fixed-term business bargain was agreed.

6. Place of performance, passing of risk and transportation insurance

1. If the order confirmation does not specify otherwise, delivery ex work shall be deemed agreed. Place of performance is our respective place of business as specified in the order confirmation.

2. If the Customer so desires, we shall insure the delivery with cargo insurance. The costs incurred in this context are borne by the Customer.

7. Reservation of proprietary rights

1. The merchandise supplied shall remain in our ownership pending full settlement of all claims against the Customer that derive from the business relationship, including all future receivables from contracts concluded simultaneously or later. The same applies to cases where claims are included in a current invoice and the balance of account has been drawn and accepted.

2. The Customer is entitled to sell or process the goods in the normal course of business. Any processing the Customer undertakes for us places no obligation on us. If reserved goods are processed, combined or mixed with other goods, we always obtain a proportionate co-ownership share of the new item; in the event of processing said share is according to the ratio between the value of our reserved item (=gross invoice value including secondary costs and taxes) and the value of the new item; with regard to combined or mixed goods said share is according to the ratio between the value of our reserved item and the other goods. The Customer keeps in safe custody our thus acquired sole ownership or co-ownership.

3. The Customer hereby assigns to us all receivables that he acquires from reselling to his own customers or to third parties. He remains entitled to collect such receivables even after the assignment. Our right to collect the receivables ourselves remains unaffected; however, we will not make use of this right as long as the Customer complies with his payment obligations and other obligations properly. If requested by us, the Customer must inform us of the assigned receivables and the respective debtors, provide all information required to collect payment, hand over the associated documents and inform the debtors of the assignment.

4. In the event of a breach of contract by the Customer, in particular a delay in payment, we are entitled to withdraw and to take back the goods. For the latter purpose, the Customer hereby grants us the irrevocable right to enter his business and warehouse premises unhindered and to take the goods with us.

5. Insofar as and as long as the reservation of title exists, the Customer may neither assign as collateral nor pledge the goods or goods produced from them without our permission. Financing agreements (e.g. leasing) which entail the assignment of our reserved rights require our prior written consent, unless the contract requires the financing body to pay us immediately and directly the proportion of the purchase price to which we are entitled.

6. In the event of any pledging or other seizures by third parties, the Customer must inform us thereof immediately and in writing. The Customer is not permitted to enter any agreements with his customers, which might impair our rights.

7. We oblige to release the collateral due to us upon request of the Customer and subject to our decision to such an extent as the realisable value of our collateral exceeds the receivables to be hedged by more than 20% or their nominal value by more than 50%.

8. Qualities, dimensions and weights

1. Qualities and dimensions are determined according to German DIN standards and material sheets, unless foreign standards have been agreed upon in writing. In case such DIN standards or material sheets do not exist, the corresponding Euro standards apply; in absence of such standards, qualities and dimensions are determined according to trade usage. Any reference to such standards, material sheets or works certificates as well as any indication with regard to qualities, dimensions, weights and usability shall not be regarded as specifications, assurance of characteristics or guarantees, just as little as conformity declarations, manufacturer’s declarations and corresponding labelling such as a CE mark or GS (German certified safety) label.

2. The weight of the goods shall be determined on our or our supplier’s scales. Weight is proven by presentation of the weight note. If legally permissible, weights can be calculated according to DIN standards without weighing. The charges and discounts (commercial weights) usually used in the German steel industry remain unaffected. Any indication provided in the delivery note as to the number of pieces, bundles, etc., are not binding if and insofar as the goods are invoiced by weight. In cases where in accordance with trade usage the goods are not weighed piece by piece, the total weight of the delivery shall prevail. Differences as compared to the calculated individual weights shall be proportionally allocated to the single pieces.

9. Acceptance

1. If an acceptance procedure has been agreed, it can only take place in the supply works and our warehouse right after the Customer has been informed that the goods are ready for dispatch, respectively. The personal acceptance costs will be invoiced to the Customer according to our price list or the price lists of the supplying plant.

2. After the goods were accepted as agreed by the Customer, claims involving defects which could have been detected during the agreed acceptance inspection shall be excluded.

3. Should the acceptance not take place, not be undertaken in a timely manner or not completely due to no fault of ours, we shall be entitled to dispatch the goods without inspection or to store the goods at the cost and risk of the Customer.

10. Dispatch, partial delivery and continual delivery

1. We determine shipping route and method as well as carrier and forwarder. In accordance with the contract, goods announced ready for dispatch must be immediately retrieved. Otherwise, we shall be entitled to decide on our own to either send them at the Customer’s cost and risk or to store them at our own discretion and invoice the storage immediately.

2. The material is delivered unpackaged and not protected against corrosion. If provided by trade usage, we deliver the goods packaged. We provide packaging, protection and transportation means according to our experience and at the Customer’s cost.

3. We are permitted to make partial deliveries in reasonable amounts. Short or excess deliveries of the agreed amount are admissible as customary in the industry.

4. Calling for goods and classifications for approximately the same monthly amounts have to be specified for continuous dispatch agreements. Otherwise, we shall be entitled to set the terms on equitable discretion.

5. If the contractual quantity of individual dispatches is exceeded, we shall be entitled but not obligated to deliver the excess quantity. We may invoice the excess amount using the prices valid at the time of the dispatch and the delivery, respectively.

11. Material defect

1. With regard to material defects, the Customer has above all the obligation to examine and notify a defect according to Sec. 377 HGB (German Commercial Code).

2. The Customer obtains no further rights from material defects which do not or not significantly affect the value and serviceability of the goods for their evident use.

3. If the goods are defect at the moment of passing of risk, we shall have the right to remedy the defect. We may choose to remedy the defect by either mending the defect or replacing the material. The costs incurred in remedying the defect, in particular transportation, travel, labour and material costs, shall be borne by us. If these costs amount to more than 50% of the delivery value, we may refuse to remedy the defect.

4. In the event that we fail to remedy the defect subsequently, do not remedy the defect within a reasonable period of time or refuse to remedy the defect, the Customer shall be entitled, at his own discretion, to withdraw from the contract, to demand an appropriate reduction in the purchase price or to claim for damages instead of performance within the limits set forth in the following paragraphs.

5. If a material defect causes loss or damage, we shall be liable according to legal statutes insofar as personal injury is concerned, the damage is covered by the German Product Liability Act (PodHaftG) or is due to intent or gross negligence.

6. Insofar as the loss or damage results from a culpable breach of contractual or cardinal obligation, we shall otherwise only be liable for damages typically associated with this kind of contract.

7. The Customer may not bring forward any further claims arising from the contract and/or tort. Therefore, we are in particular not liable for losses and damages which incurred at other than the supplied goods and also not for any kind of financial losses of the Customer.

8. The aforementioned regulations do not apply to used goods. We shall only be liable for material defects if the goods are under expressed warranty or if the defect is due to intent or gross negligence.

9. The Customer shall have no warranty rights on goods which have been sold as declassed material, with regard to indicated defects and such defects one normally has to expect.

10. Sec. 478 BGB (German Commercial Code) remains unaffected by the aforementioned paragraphs 2 through 9.

12. Liability for damages

1. The aforementioned regulations shall also apply to claims for damages arising out of other breaches of contract.

2. In the event of a breach of pre-contractual obligation, or in case there exists a barrier at the time of the contract conclusion, our liability shall be limited to placing the customer in such a position in which the Customer would be if he had not relied upon the contract being valid (negatives Interesse).

3. The aforementioned regulations shall apply accordingly to our liability in tort.

4. As far as our liability is excluded or limited, this is also valid for the personal liability of our employees, workers, collaborators, representatives, bodies and assistants.

13. Limitation

1. The Customer’s right to claim remedy for new material shall be limited in time (subject to Sections 438, 479 BGB) to one year as off the delivery of goods. There shall be no warranty for used goods. Correspondingly, none of the warranty rights apply to used goods.

2. Claims for damages may only be submitted within a period of time limited to one year, subject to Sections 438, 479 BGB (German Commercial Code). Claims based on the German Product Liability Act (ProdHaftG) and claims arising out of intent and gross negligence are subject to statutory limitation.

14. Place of performance and place of jurisdiction for national contracts

1. If the order confirmation does not specify otherwise, place of performance shall be our business location in Remscheid.

2. If the Customer is a merchant in terms of German law, the place of jurisdiction shall be Remscheid. However, we shall as well be entitled to file a motion against the Customer at the court of his residence.

3. All legal relationships between us and the Customer shall be governed by the law applicable to legal relationships of domestic parties valid at our headquarters.

15. International business

1. International business with us shall be exclusively governed by German law excluding the United Nations Convention on Contracts for the International Sale of Goods (UN CISG).

2. If a Customer, who is resident of a country other than the Federal Republic of Germany, or his commissioner picks up goods or transports or sends these abroad, the Customer has to present us with the proof of export required for tax purposes. In the absence of such proof, the Customer shall pay the value-added tax on the invoice amount applicable to deliveries within the Federal Republic of Germany.

3. Deliveries from the Federal Republic of Germany to other EU member states require the Customer to indicate his VAT ID number under which he pays his taxes for profit and income. Alternatively, he shall pay for our deliveries the agreed purchase price plus the VAT amount we are legally obligated to pay.

4. ECSC products which are not explicitly intended for export to third countries may in an unprocessed condition not be delivered to countries outside the EU. The sovereign territories of Finland and Norway shall in this context be considered to be equal to the EU. The Customer shall at our request provide proof for where the goods are. If the Customer breaches this obligation, he shall have to pay a contractual fine of 30% of the agreed purchase price. We are entitled to demand compensation of the actual damages instead. The Customer shall see to it that the ECSC products are not delivered to any place or recipient other than the ones agreed to with us. If the Customer fails to meet this obligation and if he thus gains an unjustified advantage in the calculation of freight, he shall have to pay us a contractual fine in the amount of three times the value of said advantage. If he takes an unjustified price advantage, he shall have to pay us a contractual fine in the amount of three times the value of said advantage. On our request, the Customer shall provide evidence to proof that he has fulfilled the obligations.

5. With regard to their own price lists and sale conditions when selling on the goods in an unchanged condition, our Customers are obligated to comply with the regulations set forth in paragraphs 2 through 7 of decision no. 30/53 as well as with the regulations of decisions no. 31/53 and 37/54 of the European Commission in their current version.

16. General terms

1. The Customer’s rights are not transferable.

2. The ineffectiveness of individual provisions shall not affect the validity of the other provisions.

3. According to the provisions of the German General Equal Treatment Act (AGG), contractual relations between parties shall be non-discriminating. The respective party shall be solely responsible for its discriminating actions.

V03.11.2008-01

GENERAL TERMS CONCERNING WAGE LABOURS

1. Scope

1. Any wage labours carried out by us shall be exclusively subject to the general terms for wage labours at hand. Contradictory or supplementary general terms of the ordering Customer shall not apply. This holds true also for cases in which we do not explicitly contradict the conditions or unconditionally fulfil our contractual obligations.

2. In addition, the respective technical conditions for wage labours of the individual production areas shall apply. Said technical conditions may be downloaded any time under www.gustav-grimm.de or obtained from us on request.

2. Necessary information

1. Any part submitted to us for processing needs to be accompanied by a delivery note. Said note must include the following information: a. Designation of the pieces, number of items, net weight and type of packaging;

b. quality of material; c. desired processing; d. desired test method; e. additional information of provisions required for successful processing.

2. In the event that the required information is missing, incomplete or incorrect, we shall proceed to the best of our knowledge.

3. Delivery times

1. Delivery periods shall begin the day on which we confirm the order.

2. The agreed delivery period shall only be considered approximate and non-binding.

4. Passing of risk

1. If the order confirmation does not specify otherwise, the Customer shall deliver the parts and pick them up after processing at his own cost and risk.

2. If Customer wants to proceed differently, he has to bear the thus resulting costs. In any case, the risk passes to the Customer when the goods leave the factory.

5. Terms of payment

1. Unless specified otherwise, our prices are ex works and do not include costs for packaging. Packaging shall be invoiced separately.

2. The legal value-added tax is not included in our prices. It is indicated separately in the invoice according to the rate applicable by law as of the date of the invoice.

3. Discounts may only be deducted following special written agreement.

4. The purchase price must be paid either in cash or by bank giro transfer to our account within 15 working days after receipt of the merchandise and invoice. They are considered paid as of the date on which we have the amount at our disposal.

5. Other forms of payment require special written consent. The Customer will bear any thus incurring costs incurred by both parties.

6. The Customer has a right to set off claims or retention right only if his counterclaims are recognised by declaratory judgment, undisputed or acknowledged by us. Furthermore, he shall only be entitled to retention rights insofar as they are based on the same contractual relationship.

6. Warranty

1. We will process the order in a competent and accurate manner.

2. The Customer has to examine the processed item immediately after receipt, and defects are to be immediately reported to us in writing. If the Customer fails to report to us, processing shall be deemed accepted, unless it is a defect which was not recognisable during the examination procedure. In the event that such a defect is identified at a later point in time, this identification has to be reported immediately; otherwise processing shall be deemed accepted despite the defect. Defect reporting has to be done in writing and include a correct description of the identified defect.

3. In case a defect report is justified, we shall be entitled to decide whether to repair the defect or to repeat the processing procedure with an old or new equivalent part (remedy). If the remedy procedure fails or is unreasonable for the Customer, the Customer may reduce the purchase price or withdraw from the contract. No other claims are possible for the ordering Customer, except for claims identified under Liability.

4. The ordering Customer is obligated to give us enough time to remedy the defect. On request, the Customer has to either send us samples or the entire contested material, according to our decision, for examination purposes without delay.

5. The warranty period is one year as of the passing of risk.

7. Liability

1. We shall only be liable for loss and damages if liability is compulsory pursuant to applicable law, e.g., the German Product Liability Act (ProdHaftG), or in cases of injury of life, body or health, if the goods are under expressed warranty, or if damages are due to gross negligence or intent on our part.

2. Irrespective of the legal basis, we shall not be liable with regard to all other cases.

3. Liability shall in any case be limited to those losses and damages which were reasonably predictable based on the circumstances and facts available to us at the time of the contract conclusion, and limited to those losses and damages which typically occur in the context of the businesses in question. In addition, liability shall be restricted to the value of the ordered processing. Said limitation shall not apply if liability is compulsory pursuant to applicable law, e.g., the German Product Liability Act (ProdHaftG), or in cases of injury of life, body or health, if the goods are under expressed warranty, or if damages are due to gross negligence or intent on our part.

4. As far as liability is excluded or limited, the same applies to the personal liability of our employees and assistants.

8. General terms

1. If the Customer is a merchant in terms of German law, the exclusive place of jurisdiction shall be Remscheid. However, we shall be entitled to file a motion against the Customer at the place of his business headquarters / branch.

2. If the order confirmation does not specify otherwise, place of performance shall be our business location in Remscheid; also with regard to our payment obligations.

3. The ineffectiveness of individual provisions shall not affect the validity of the other provisions.

4. International business with us shall be exclusively governed by German law excluding the United Nations Convention on Contracts for the International Sale of Goods (UN CISG).

V03.11.2008-01

CONDITIONS FOR WAGE PROCESSING OPERATIONS

Unless the Customer immediately contradicts in writing to these conditions after receipt thereof, the following conditions shall apply to all incoming orders:

1. When delivering the parts to be processed, the Customer shall include a delivery note comprising information on the number of items and type of material of the delivered parts, as well as an indication of what shall be done.

2. Quotations and information on delivery periods are subject to confirmation, unless other fix terms have been agreed at the time the order was placed.

3. The Customer should organise the delivery and dispatch. If the Customer asks us to send him the goods, we will do so at his cost and risk. Transportation insurance for the goods will only be taken out on the explicit request and at the expense of the Customer. Force majeure releases us from the delivery deadline and entitles us to completely or partially withdraw from the contract. Force majeure events include unpredicted delays and complications in delivery beyond our control, in particular interruptions of operation of any kind and strikes at our premises as well as at the premises of our suppliers, and fire, traffic congestions, etc.

4. Our wage work invoices are due for net payment within 10 days after receipt.

5. In case the Costumer is in default with his cash payment of due invoices to us, we shall be entitled to detain the processed parts. In said case, we shall have the right to deliver bit by bit in turn for payment including the arrears.

6. Wage work orders shall be diligently performed.
Potential claims for damages, independent of the legal grounds, shall only be admissible to the amount of wage paid for processing the contested parts. The manufacturer shall be granted the right to choose between issuing a credit of the respective amount and remedying a respective number of damaged parts free of charge instead. Any other claims for damages are excluded.

7. The goods are stored at our premises and dispatched at the Customer’s risk. Delivered wage processing goods at our premises are not insured against fire and theft. The goods you delivered to us will be returned to you in its original packaging. We are not liable for any corrosion damages, unless you explicitly request corrosion protection. We recommend you take out a respective off-premises insurance. Claims for damages that go beyond the identified scope can only be accepted if the we granted additional insurance of the goods delivered to us in writing and in advance.

8. Remscheid, Germany, shall be the agreed place of jurisdiction. Closed hollow bodies may only be shipped and processed with aeration boreholes – otherwise: danger of explosion!

PURCHASING CONDITIONS

1. Scope of the terms in the national business

1. Our purchasing conditions apply only to our suppliers that are entrepreneurs within the meaning of Sec. 14 BGB (German Civil Code). The provisions shall also apply to all future business with suppliers.

2.Our purchasing conditions shall apply exclusively. We do not accept contradictory conditions or conditions from the Supplier which deviate from our purchasing conditions; this also holds true in the event that we unconditionally carry out the contract knowing that the supplier’s conditions are contradictory or deviate from our own purchasing conditions.

3. Any agreements between us and the Supplier made for the purpose of fulfilling the contract at hand, shall be recorded in writing either in this contract or in an amendment agreement.

4. If the contract provisions at hand do not specify otherwise, the terms and definitions of INCOTERMS 2000 shall apply.

2. Contract conclusion, contract documents and confidentiality

1. The Supplier shall be obligated to accept our order within a period of 12 working days; otherwise, was hall not be bound by our offer any longer.

2. We shall not grant any remuneration or compensation for visits, preparation of offers, projects, allocation of offers, etc. This shall also hold true for cases in which no transaction results from an offer we made.

3. Only written orders shall be legally binding. Orders placed orally or by telephone require subsequent written confirmation to be legally valid. The same applies to orally placed additional agreements and amendments to the contract. Order confirmations, delivery notes, invoices and other written correspondence shall always include our order and project number, respectively.

4. We reserve the ownership rights and copyrights to illustrations, drawings, calculations and other documents we submitted to the Supplier. The Supplier shall not be granted these rights. Without our explicit written consent, they shall not be made available to third parties. They shall exclusively be used for processing purposes of our order and have to be returned to us unrequested once our order has been carried out. They shall be kept secret from third parties.

3. Prices and terms of payment

1. The price set forth in the order is binding. In the absence of alternating written agreements, the price shall include free delivery, packaging, freight and transportation to the delivery address and location of use indicated by us, respectively. We shall be entitled but not obligated to return the packaging.

2. The respective legal value-added tax shall be included in the indicated price.

3. We shall bear the costs of an insurance of goods if we explicitly confirmed such insurance. Otherwise, the goods shall be insured by the Supplier.

4. If the Supplier reduced his prices in general, it is agreed that the price reduction shall apply accordingly to our order.

5. We cannot process invoices unless they show the order number set forth in our order. The Supplier shall thus be obligated to indicate the order number we determined in our order according to the provisions set forth therein. Furthermore, the Supplier shall be required to write a series invoice number on his invoice. The Supplier shall be responsible for any consequences arising out of any non-compliance with this obligation.

6. If nothing else has been agreed, payment shall be made within 14 days after the receipt of the invoice and delivery with a 2% discount or net within 30 days, according to our decision.

7. We shall be entitled to offsetting and retention rights in their legal scope.

4. Delivery times

1. The delivery period set forth in the order is binding. The arrival of the goods at the receiving location or location of use is decisive for compliance with the delivery period.

2. The Supplier shall be obligated to inform us immediately and in writing if any circumstances occur or if the Supplier recognises such circumstances which prevent the conditional delivery period from being met.

3. If the Supplier “subsequently” determines a delivery date other than indicated in the agreement, we shall be entitled to withdraw from the contract without us having to state reasons for doing so. The same shall apply if the Supplier fails to meet the agreed date. The Supplier shall not have the right to pursue any claims against us based on the withdrawal.

4. In the event of delay in delivery, we shall be entitled to request lump-sum damages caused by delay of 1% of the net delivery value per full week, but not more than 10% in total. Any further legal claims shall be reserved. The Supplier has the right to provide us evidence that no loss or a smaller loss has been incurred as a result of the delay.

5. Our acceptance of late delivery or services does not imply waiver of claims for damages.

5. Passing of risk and documents

1. Unless otherwise agreed in writing, delivery shall be made free house, so that the risk of any deterioration including the risk of fault remains on the part of the Supplier until the goods are delivered to the delivery address specified by us. The goods shall be shipped at the Supplier’s risk.

2. The Supplier shall be obligated to show precisely our order number on all shipping documents and delivery notes. If he fails to do so, delays in processing are unavoidable and we shall not be responsible for any such delays.

3. The Supplier shall be liable for the suitability of the packaging material. If a deviation between invoice weight and received weight is determined, the weight as determined on our calibrated or public scales shall be binding.

6. Warranty and defect examination

1. We shall be obligated to examine the goods within a reasonable period with regard to quality and/or quantity deviations. Claims shall be deemed timely, if and when it has been received by the Supplier within a period of 8 working days after the receipt of the goods. The complaint shall be deemed timely for defects of goods, services and deliveries even if such defects were not immediately recognisable or were recognisable only when the delivered goods were used the first time, as long as such defects are reported to the Supplier within 8 days after such defects had been identified. The period for examination and for making a complaint shall be extended accordingly if we forward and/or pass the goods on within the ordinary course of business and notify the supplier thereof in a timely manner.

2. The Supplier shall be liable for any material defects in the meaning of the following numbers 3 and 4, regardless of negligence or fault.

3. If at the time of passing the risk the goods are having a material defect, we shall be entitled to demand the remedy of the defect or to demand a price reduction. We may choose to remedy the defect by either repairing the defect or replacing the material. The Supplier shall bear the risks in this context.

4. If the Supplier tried in vain to remedy the defect or unjustifiably refuses to remedy the defect or did not remedy the defect within an appropriate period of time, we shall remedy the defect ourselves or have it done and demand compensation for the costs incurred.

5. The statutory right of withdrawal, the right to claim damages, in particular compensation for damages instead of performance, and the right of recourse according to Sections 478, 479 BGB (German Civil Code) shall be reserved.

6. The Supplier shall be liable for defects in title regardless of negligence or fault.

7. The warranty period shall be 24 months as of delivery of goods.

7. Product liability, indemnification and liability insurance

1. If the Supplier is responsible for product damages, he shall be obligated to indemnify us from any claims for damages of third parties upon our first request, because the cause is to be found under his control and his field of organisation and he is liable to third parties himself.

2. Where recall measures of such product defects are necessary, the Supplier shall equally be obligated to bear the respective costs within the same limits. If possible and reasonable, we shall notify the Supplier of the content and scope of the recall measures to be implemented, and give him the opportunity to comment on it.

3. Any other claims on our part remain unaffected.

4. The Supplier shall be obligated to maintain a product liability insurance with coverage totalling at least Euro 2.5 million per personal injury / property damage as a lump sum. If we are entitled to further claims for damages, said claims shall remain unaffected.

8. Industrial property rights

1. The Supplier warrants that no patents or other intellectual property rights of third parties are infringed by the Supplier’s delivery and the predictable use of the delivered goods by us.

2. Should a third party bring such claims of property right infringement against us, the Supplier shall indemnify us from any such claims upon our first request and shall compensate us for any necessary costs incurred in the course of said engagement.

3. The aforementioned provisions shall not apply if and to the extent that the Supplier manufactured the delivered goods according to our documents, samples and models or the like and did not know and did not have to know that intellectual property rights are infringed thereby.

9. Quality assurance agreement

If the Supplier provides its services as a certified company at the time of the contract conclusion, the Supplier shall be obligated to conclude a quality assurance agreement with us, which has priority over the General Purchasing Conditions at hand with regard to quality standards.

10. Reservation of title, supply, tools and confidentiality

1. If we provide the Supplier with materials, we shall reserve the right of ownership to these items. The Supplier shall process or alternate goods for us. If our reserved goods are processed with other objects which do not belong to us, we shall obtain co-ownership of the new product in proportion of the value of our item to the processed items at the time of processing.

2. If the items provided by us are inseparably mixed with other objects which do not belong to us, we shall obtain co-ownership of the new product in proportion of the value of our reserved goods to the other mixed objects at the time of the mixture. If the mixing occurs such that the Suppliers object is to be regarded as principle object, it shall be deemed agreed that the Supplier transfers proportional co-ownership to us. The Supplier shall keep the sole ownership and co-ownership for us, respectively.

3. We reserve the ownership rights to tools. The Supplier shall be obligated to use the tools exclusively to manufacture the goods we have ordered. The Supplier shall be obligated to insure our tools according to their replacement value against fire, water and theft at his own expense. The Supplier shall be obligated to perform any required maintenance and inspection services at its own costs in due time. The Supplier must notify us immediately of any malfunctions. If the Supplier negligently fails to do so, damage claims shall remain unaffected. On request, the Supplier shall have to provide us evidence for the existence of the aforementioned insurances.

4. The Supplier shall be obligated to keep any illustrations, drawing, calculations and other documents as well as information received from us strictly confidential. We reserve the ownership rights to all illustrations, drawings, calculations and other documents we submit to the Supplier. At the same time, we explicitly reserve any respective copyrights. These items shall be disclosed to third parties only with our express consent. The confidentiality obligation shall continue to apply after the contract was terminated and the obligation shall persist. The obligation becomes invalid if and when the manufacturing knowledge disclosed in the illustrations, drawings, calculations and other documents has become common knowledge.

11. Offsetting and right of retention

1. We shall be entitled to set-off against any receivables which the Supplier has against us, regardless of the legal grounds, and to make use of our right of retention, respectively.

2. The Supplier shall be entitled to set-off against us only on the basis of undisputed and legally valid claims.

12. Place of jurisdiction and place of performance

1. If the Supplier is a merchant in terms of German law, the place of jurisdiction shall be Remscheid. However, we shall as well be entitled to file a motion against the Supplier at the place of his business headquarters / branch.

2. If the order confirmation does not specify otherwise, place of performance shall be our business location in Remscheid; also with regard to our payment obligations.

13. General terms

1. The Supplier’s rights according to this contract are not transferable.

2. The ineffectiveness of individual provisions shall not affect the validity of the other provisions.

3. According to the provisions of the German General Equal Treatment Act (AGG), contractual relations between parties shall be non-discriminating. The respective party shall be solely responsible for its discriminating actions.

14. Validity concerning the international business

1. International business with us shall be exclusively governed by German law excluding the United Nations Convention on Contracts for the International Sale of Goods (UN CISG).

2. In cases of doubt, any trade terms shall be interpreted according to INCOTERMS 2000.

3. Our aforementioned provisions shall apply accordingly to our international business and shall be governed by German law.

V03.11.2008-01