General Terms of Sale and Delivery Last updated: December 04, 2012 Scope The following conditions shall only apply to business persons, legal entities of public law, or public special assets. I. Applicability 1. Purchase orders shall not be binding until receipt of supplier s order confirmation. Any amendments and additions shall be made in writing. All quotations are deemed to be subject to change unless explicitly specified as firm offers. 2. In case of regular business relations subject conditions shall also be valid for any future transactions to which no particular reference is made provided that they were made available to Purchaser on the occasion of a prior confirmed order. 3. Purchaser s terms and conditions shall not apply without supplier s explicit acknowledgement. 4. In the event that any provisions are or shall become void, the validity of the remaining provisions shall not be affected thereby. II. Prices 1. In case of doubt, prices are understood to be ex works, packing included and freight, customs duties, additional importation fees excluded, plus statutory VAT. 2. Dead freights as well as additional costs for fast and express shipments shall be at purchaser s charge. 3. With regard to new orders (= follow-up orders) Supplier shall not be bound to any previously agreed prices. III. Obligation to Deliver and to Accept 1. The scheduled date of shipment shall be specified in the order confirmation. The delivery deadline GmbH
shall however not enter into effect prior to complete clarification of all details of performance and the receipt of any potentially agreed down-payment. It shall start anew if Purchaser requests that changes to his order be carried out, i.e. subject to the confirmation of such modification. 2. If the agreed delivery deadline can not be met due to Supplier s own fault and on condition that the latter did not act willfully or with gross negligence. Purchaser, after a reasonable period of extension, shall be entitled, to the exclusion of any further claims, to demand compensation for delayed completion or to withdraw from the contract. The compensation shall be limited to a maximum of 5 % of the value of te part of the delivery which was not performed according to contract. Such withdrawal shall be excluded if Purchaser himself is in default of acceptance. Purchaser s other statutory claims and rights shall not be affected thereby. 3. Reasonable part shipments as well as acceptable deviations from the order quantities up to +/- 10% shall be permissible. 4. In case of call-off orders without any agreed duration, production lot sizes or acceptance dates, Supplier shall be entitled to demand, at the latest 6 months after acknowledgement of the order a binding promise in this respect. If Purchaser fails to meet said demand within three weeks, Supplier shall be entitled to set a two-week extension period or to withdraw from the contract after its expiry and/or to claim compensation. Unless otherwise agreed, the maximum duration shall be 12 months after order confirmation. 5. If Purchaser fails to meet his acceptance obligation, Supplier, without prejudice to any other rights, shall not be bound to any self-help sale regulations but shall be entitled to freely sell the delivery item after prior notification of Purchaser. 6. In case of any events of force majeure Supplier shall be entitled to postpone shipment for the duration of the disturbance and o the extent of their effect, or to completely or partially withdraw from the unfulfilled portion of the contract. Lack of raw materials or energy, strikes, lockouts and other unforeseeable or unavoidable circumstances such as operating breakdowns shall equally be regarded as force majeure, preventing Supplier despite reasonable efforts from carrying out timely delivery; Supplier shall be required to provide according evidence. This shall also apply if said disturbances occur during such delay or because of a sub-supplier. Purchaser shall be entitled to request Supplier to declare within a period of two weeks whether or not he intends to withdraw from the contract or to deliver within a reasonable extension of time. Failing to receive any such declaration, Purchaser shall GmbH
be entitled to withdraw from the non-fulfilled portion of the contract. Supplier agrees to immediately notify Purchaser of the occurrence of force majeure as described in paragraph 1. He also agrees to minimize any impairments of Purchaser as much as possible. IV. Packaging, Shipment, Transfer of Risk, and Default of Acceptance 1. Unless otherwise agreed, Supplier shall be authorized to determine the type of packaging, shipment and shipment route. 2. Shipment shall be effected at Purchaser s account and risk. It is understood that the risk, even in case of prepaid delivery, shall be transferred to Purchaser upon shipment from the plant. In the event of any delays in shipment, for which Purchaser is deemed to be responsible, the transfer of risk shall already take place upon notification of readiness for dispatch. 3. At Purchaser s request and expenses, the goods may be insured against the risks as specified by Purchaser. V. Reservation of Ownership 1. All shipments shall remain Purchaser s property until complete fulfilment of all of Supplier s legitimate claims toward Purchaser, even if the purchase price for particularly specified claims has been paid. In case of a current account, the retention of ownership of any shipments (retained goods) shall serve as security for Supplier s balance of the invoice. If, in conjunction with the payment of the purchase price, the liability of the Supplier is deemed to be established on the basis of bills of exchange, such reservation of ownership shall not expire prior to Purchaser s honouring of the draft as drawee. 2. Processing or treatment by Purchaser shall be carried with the exclusion of acquisition of ownership according to 950 BGB [German Civil Code] on Supplier s behalf; the latter shall become co-owner of the goods thus produced in function of the ratio of the invoiced net amount of Supplier s goods to the invoiced net amount of the goods to be processed or treated which, in their capacity as reserved goods, shall serve as security for Supplier s claims according to paragraph 1. 3. During Purchaser s processing (compounding/mixing) with other goods not belonging to Supplier, the provisions of 947, 948 BGB [German Civil Code] shall apply causing Supplier s co-ownership portion of the newly created product to be considered retention goods within the sense of these conditions. GmbH
4. Purchaser shall only be entitled to resell the retention goods in the normal course of business and on condition that he, too, agrees a retention of ownership with his customers in accordance with paragraphs 1 to 3. Purchaser shall not be entitled to dispose of the retained goods in any other way, in particular with view to pledging or assigning them as security. 5. In the event of resale, Purchaser agrees at this stage already to assign to Supplier until fulfilment of all of Supplier s claims resulting from the resale of the goods, as well as any other legitimate claims toward his customers including ancillary rights. Upon Supplier s request, Purchaser shall be obliged to immediately furnish any information and documents that may be necessary for the enforcement of Supplier s rights toward Purchaser s customers. 6. If the retained goods are sold by Purchaser after processing according to paragraphs 2 and/or 3 together with other goods not belonging to Supplier, the assignment of the purchase price claim according to paragraph 5 shall only apply to the value of Supplier s goods subject to retention. 7. If the value of the securities existing for Supplier is deemed to exceed his claims by a total of more than 10%, Supplier shall be obliged, upon Purchaser s request, to accordingly release securities at Supplier s discretion. 8. Distrait or seizure of the retained goods by any third party are to be immediately notified to Supplier. Any resulting costs of intervention shall at any rate be at Purchaser s charge unless they are paid by a third party. 9. If Supplier, pursuant to the above regulations, exercises his rights of reservation of ownership by taking back retained goods, he shall be entitled to privately sell the goods or have them auctioned. The enforcement of the retention of goods and in particular the request of surrender are understood to constitute a withdrawal from the contract. The retained goods shall be taken back at the achieved proceeds, however not exceeding the agreed delivery prices. Any further rights with regard to claims for damage, in particular for loss of profit, shall remain unaffected. VI. Liability for Material Defects 1. a. The reference samples, which shall be made available from Supplier at Purchaser s request for inspection purposes, shall be authoritative for the quality and design of newly developed and/or exist- GmbH
ing products, however in customer specific material finish. Any referenced technical standards are intended to serve as performance description and not as a quality guarantee. b. For technical reasons, the printing quality in the catalogue or in any quotations may differ from the original. Mass, dimensions, weight, colouring, etc. are subject to minor deviations. 2. Any notices of defects are to be immediately submitted in writing. In the case of hidden defects, the claim is to be submitted immediately upon detection. In either case and unless otherwise agreed, all claims for defects shall be subject to a limitation period of 12 months after transfer of risks. If longer periods are described as mandatory by law according to 438 paragraph 1 N 2 BGB, 479 paragraph 1 BGB and 634a paragraph 1 N 2 BGB, such periods shall apply. 3. In the event of a substantiated complaint Supplier shall be obliged to render supplementary performance. Failing to comply with this obligation within a reasonable period of time or if such supplementary performance fails despite repeated trials, Purchaser shall be entitled to reduce the purchase price or to cancel the contract. Any further claims, in particular reimbursement of expenses or compensation claims due to defects or claims for consequential damage shall only accrue within the framework of the regulations in VII. Any replaced parts are to be returned free of charge to Supplier at Supplier s request. 4. Any rights of recourse according to 478, 479 BGB shall only exist in case of a justified exercise by the user and only within the scope of legislation, and shall not apply to any agreed goodwill regulations and shall be conditioned on the party entitled to recourse adhering to its own obligations, in particular with view to it defect notification duties. VII. General Liability Limitations In all cases in which, contrary to the above provisions, Supplier is responsible for the reimbursement of damages and expenses on the basis of any contractual or statutory claims, he shall only be held accountable if he himself, his executives or agents are considered guilty of wilful intent or gross negligence, or injury to life, body or health. Strict no-fault liability pursuant to the product liability law as well as any liability with respect to the fulfilment of any quality guarantee shall not be affected. Nor shall any liability for the violation of any essential contractual obligations be affected; such liability shall however be limited, with the exclusion of any cases according to 1, to the foreseeable contract coherent damage. No change of burden of proof to the disadvantage of Purchaser is deemed to be GmbH
connected with the preceding provisions. VIII. Terms of Payment 1. All payments shall be effected in (EURO) exclusively to Supplier. 2. Unless otherwise agreed, the purchase price for shipments and other services shall be payable with a 2% discount within 14 days or without deduction within 30 days after receipt of invoice. Any allowance for discount shall be conditioned on the payment of all previously due and undisputed invoices. 3. Exceeding the agreed date of payment shall prompt the payment of interest at the legal interest rate of 8 percent above the applicable basis interest rate according to 247 BGB provided that Supplier is not in a position to assert a higher actual damage claim. Purchaser shall be entitled to provide evidence of a lower actual damage. 4. The right to refuse checks or drafts shall be reserved. Any checks or rediscountable drafts shall only be accepted as conditional payment; any expenses incurred in this conjunction shall be at Purchaser s charge. 5. Purchaser shall be entitled to exercise a set-off or a right of retention on condition that his claims be undisputed or legally established. 6. Persistent failure to comply with the applicable terms of payment or circumstances which may give reason for serious doubts as to Purchaser s creditworthiness shall result in the immediate maturity of all outstanding Supplier s claims. In this case, Supplier shall be entitled to claim advance payment for any outstanding deliveries and to cancel the contract after unsuccessful expiry of an appropriate period of time. IX. Tools and Devices 1. Any injection moulds and deep drawing moulds or any other devices which are manufactured by Supplier himself or by a third party on his behalf, shall on principle, in view of Supplier s design engineering, be deemed his property unless otherwise agreed. 2. Supplier shall not be obliged to accept any follow-up orders. GmbH
3. As regards tool costs allocations, Purchaser agrees to pay the balance if Purchaser fails to take the agreed quantity. 4. With respect to moulds and devices, in general 50% after receipt of the reference samples shall be paid net, without any discount. Any deviations shall only be possible after prior written agreement. X. Intellectual Property Rights and Defects of Title 1. Supplier shall be the owner of any copyrights and/or any potential intellectual property rights, in particular with regard to any proprietary rights of use and exploitation of any models, moulds and devices, drafts and drawings designed by himself or by any third party on his behalf. 2. Purchaser agrees to respect said rights according to point 1, neither to produce nor to have any imitations reproduced, nor to use such goods for the preparation of samples. 3. Purchaser agrees to pay to Supplier for each case of infringement of the aforementioned obligations according to point 2 a contractual penalty of 50 times the respective invoice amount of the delivery value, a minimum however of 6,000.00 (in word: six thousand Euros). The acceptance of a continuation of breach shall not be excluded. 4. Any drawings and samples that were made available to Supplier and did not result in an order, shall be returned upon request; otherwise Supplier shall be entitled to destroy them three months after submission of his quotation. This obligation shall equally apply to Purchaser in the same manner. 5. If Supplier is required to deliver in accordance with any drawings, models, samples or by use of components supplied by Purchaser, Purchaser agrees to ensure that any potential third party protected rights in the country of destination of the goods shall not be violated. Supplier agrees to draw Purchaser s attention to any such rights known to him. Purchaser further agrees to keep Supplier harmless of any third party claims and to pay compensation for any resulting damage. If Supplier is prohibited to manufacture or to deliver by a third person claiming his copyright, Supplier shall be entitled - without verification of the legal position - to stop production and delivery until the facts have been clarified by both Purchaser and the respective third party. If Supplier is no longer in a position to continue the execution of the order, he shall be entitled to withdraw from the contract. 6. In case of any other imperfections in title, stipulation N VI shall be applied accordingly. GmbH
XII. Place of Performance and Jurisdiction 1. The place of performance shall be Bad Salzuflen, Germany. 2. The place of jurisdiction shall be Lemgo, or the regional court of Detmold, Germany. 3. Supplier shall be free to sue Purchaser at his general court of jurisdiction. Subject contract shall exclusively be governed by German law, even if Purchaser is domiciled in a foreign country. The application of the United Nations Convention of April 11, 1980 on Contracts for the National Sale of Goods (BGBl 1989 S. 586) in the Federal Republic of Germany (BGBl 1990 S. 1477) shall be excluded. GmbH