General

Written form / quotation documents

Orders shall only be binding on us if placed in writing. Verbal agreements shall only be binding on us if confirmed by us in writing. The requirement of writing applies likewise to modifications and amendments to orders.

Our property rights and/or copyrights in any illustrations, drawings, calculations and other documents shall remain reserved and may not be disclosed to third parties without our express written consent. Such documents may only be used for work involved in completing the order and shall be automatically returned to us after the order is completed. Such documents shall be kept secret from third parties; in this respect the provisions of point 10 of this contract shall apply accordingly.

No remuneration will be granted for visits or for working out offers, projects etc.

Delivery periods / liability

The agreed delivery dates shall be binding.

The supplier is obliged to inform us immediately in writing should circumstances arise or he realizes that an agreed delivery deadline cannot be maintained.

The supplier shall be obliged to pay to us a compensation in damage caused by delay unless the supplier proves that he was not responsible for such damage. Acceptance of late delivery or performance shall not imply the waiver of claims for damages. In the event a contractual penalty incurred as a result of delayed delivery, we reserve the right to deduct the incurred amount from the next invoice due.

In the event the agreed delivery dates are not complied with, for reasons for which the supplier is responsible, we shall be entitled - after expiry of a reasonable grace period set by us - notwithstanding further legal claims, and at our option, to either claim damages instead of performance and/or obtain substitute performance from a third party. The right to withdraw from the contract is not affected.

Place of performance / documents

Unless otherwise agreed in writing shall deliveries be made carriage paid.

The supplier is obliged to state our order number precisely on all shipping documents and delivery notes. Should the supplier fail to do so, we shall not be held responsible for any occurring processing delays.

Prices/terms of payment / assignment of claims / right of retention / offsetting against claims

The price specified in the order is binding unless due to an IT error (typing mistake). Unless otherwise agreed in writing, the price is quoted carriage paid, inclusive packaging. The return of packaging shall be subject to special agreement.

The period allowed for payment shall commence with the date of receipt of the invoice at the stated invoice address.

The method of payment may be selected by us at our option.

In case of payment by bank transfer or cheque, the obligation to pay is fulfilled in time as soon as the transfer order has been passed on to our bank or the cheque sent to the supplier.

All risks relating to the sending of the cheque shall be borne by the supplier. As well as bearing the risk of theft and unauthorised encashment of the cheque, the supplier shall also pay for any additional damage sustained by us as a result, and shall in particular pay charges levied by the bank for stopping cheques.

Those invoices on which the order number has not been quoted or is quoted incorrectly may not be processed by us. The supplier shall be liable for any consequences of a failure to comply with these obligations unless he proves that he is not responsible for such a failure.

Liability for defects

Unless stipulated otherwise below liability for defects shall be governed by the statutory provisions.

The supplier shall guarantee and warrant that at the time the contract is concluded all deliverables/performances comply with the state-of-the-art technology, the relevant statutory provisions and standards, regulations and directives set forth by authorities, professional associations and trade associations and that he is not aware of any imminent changes to the same. This applies in particular to all environmental protection regulations which apply in the EU, the Federal Republic of Germany and at the registered office of the supplier. The supplier shall inform us immediately about any imminent changes in such laws, regulations, guidelines and provisions about which he is aware.

In the event exceptions from these provisions are deemed necessary in individual cases, the supplier shall obtain the appropriate written consent from us. This consent shall not limit the remaining obligations arising from contracts for sale or work, including any guarantees concerning the condition of the delivery/performance.

If the supplier has reservations against the kind of execution requested by us, he shall immediately notify us of this fact in writing.

We shall notify the supplier in writing of any defects in the delivery/performance as soon as a defect is determined in the proper course of business.

The limitation period for any defects is 36 months, starting with the transfer of risk. Any defects in delivery/performance notified during the limitation period must be remedied by the supplier without delay and free of charge upon request, including all incidental expenses, at our discretion, either by rectifying the defects or by exchanging the defective parts. We reserve the right to demand new delivery/performance free of faults. Rectification of defects and any new delivery or new manufacture shall be carried out immediately and will lead to recommencement of the limitation period.

We will charge costs for transport, storage and administration in a lump-sum to the amount of 250.00 EUR plus value-added tax for every delivery where we notice defects after having accepted the delivery, unless the order value of this particular delivery amounts to at least 2,500.00 EUR (net). We are allowed to prove a higher damage.

Product liability / indemnity / liability insurance / recourse

To the extent the supplier is responsible for a damage caused by a product he shall insofar be under the obligation to indemnify us upon first demand against any claims for damages by third parties if the cause lies within his sphere of control and organization and he himself is liable in relation towards third parties.

In this context the supplier shall also undertake to reimburse any expenses resulting from or in connection with a recall action carried out according to point 7 section 1 of this contract in compliance with sections 830, 840 and 426 of the German Civil Code (BGB). As far as possible and reasonable we shall inform the supplier about the content and extent of the recall measures and give the supplier an opportunity to comment. Other statutory claims remain unaffected.

The supplier undertakes to maintain an insurance against product liability providing a minimum flat-rate cover of 1 million EUR per case of personal injury or damage to property. If we are entitled to more extensive damage claims, said rights shall remain unaffected.

Should our customer assert claims against us in connection with the purchase of consumer goods, and if this claim is based on a defect in the goods supplied by the supplier, our right of recourse shall be limited to a period of 5 years calculated from the date on which the goods were delivered to us by the supplier.

Warranty / assurances

In the event the supplier has given a warranty that the goods/work are in a specified quality, he shall be liable for damages in accordance with legal provisions, including for damages in lieu of performance.

The limitation period shall be three years, starting from the discovery of the defect or the non-existence of the respective condition.

Retention of title / tools

We shall retain the title to all items provided by us to the supplier. The processing or transforming of such parts by the supplier shall be undertaken on our behalf. In the event goods to which we retain title be processed with objects which do not belong to us, we shall acquire co-title to the new object based on the ratio of the value of our goods (purchase price plus value-added tax) to the other processed objects at the time of such processing.

In the event materials provided by us be inseparably mixed with other objects which we do not own, we shall acquire co-title to the new object based on the ratio of the value of the goods to which we retain title (purchase price plus value-added tax) to the other objects thus mixed at the time of such mixing. If objects are joined in such a way that the property of the supplier is regarded as the principal good, it shall be agreed that the supplier transfers proportionate co-title to us. The supplier shall store the exclusive property or jointly-held property on our behalf.

We shall retain the title to tools. The supplier shall only use the tools for the purpose of manufacturing the goods ordered by us. The supplier shall also have a new value insurance and an insurance against fire, water and theft and other damages to tools which are owned by us. At the same time the supplier shall hereby assign to us all future claims for compensation out of said insurance policy. We hereby accept such assignment. The supplier shall perform any maintenance and inspection work required on our tools and carry out all repairs on the same at his own expense. The supplier shall notify us immediately of any defects. In the event he culpably fails to do so, we expressly retain the right to claim compensation for damages.

If and to the extent that the security provided to us by the supplier exceeds the purchase price of all retained goods on the basis of this business relationship by more than 20 %, we shall - at the request of the supplier - be obliged to release security of our own choice.

Confidentiality

Industrial property rights

The supplier shall guarantee that the rendered deliverables/performance is free of any industrial property rights held by third parties and that the delivery and usage of the delivery items will not violate any copyrights, patents, licences or other property rights of third parties, including patent applications disclosed at the time of acceptance.

The supplier shall indemnify us against any claims by third parties concerning the violations of industrial property rights upon first written request. The supplier shall bear all costs and expenses arising to us in this context.

In the event the supplier violates point 11 section 2 of this contract, we shall be entitled to obtain the approval for the usage of the respective delivery items/performances from the party holding such rights at the supplier’s expense.

Applicable law

Exclusively German law shall be applicable. The provisions of the United Nations Convention on Contracts for the International Sale of Goods dated April 11, 1980 (UN Sales Convention) shall be excluded. Only the German text is binding.

Place of performance / venue

Unless otherwise expressly agreed the place of performance for the delivery obligation shall be our business address. This shall also apply for all payments.

November 2006