Standard Terms & Conditions of Business

I. Standard Terms & Conditions of Sale

1. General Provisions

a) The scope of deliveries and services (hereinafter: Deliveries) shall be exclusively governed by the written mutual agreements of the parties. Buyer’s Standard Terms & Conditions of Business apply only to the extent that the supplier or the service provider (hereinafter: Supplier) has expressly agreed in writing to their applicability.

b) Supplier reserves unrestricted ownership and exploitation rights granted under copyright to all cost estimates, drawings and other documents (hereinafter: Documents). Such Documents may not be made accessible to third parties unless Supplier has given its prior consent, and, in the event the order is not placed with Supplier, they must be returned to Supplier without delay upon Supplier's request. Sentences 1 and 2 above shall apply mutatis mutandis to Buyer’s Documents; these Documents may, however, be disclosed to third parties to whom Supplier was permitted to subcontract Deliveries.

c) Partial deliveries are permitted to the extent reasonably acceptable to Buyer.

2. Prices and Terms of Payment

a) All prices are quoted ex works including packaging and are subject to applicable statutory value-added tax (VAT).

b) If Supplier has assumed mounting or installation, and unless otherwise agreed upon, Buyer assumes all necessary ancillary costs, such as travel expenses, transportation costs, and per diem allowances in addition to the payment of the agreed-upon remuneration.

c) Payments must be made free of charge to Supplier’s point of payment.

d) Buyer may offset only against claims which are undisputed and have been established as final and absolute.

3. Retention of Title

a) Supplier reserves title to the purchased item until receipt of all payments under the delivery contract. Should Buyer conduct itself in a manner that violates the contract, including, but not limited to, default in payment, Supplier is entitled to repossess the purchased item. Repossession by Supplier of the purchased item is not deemed to constitute a rescission of contract unless Supplier expressly declares the rescission in writing. A seizure of the purchased item by Supplier by way of execution shall always constitute a rescission of contract. Upon repossession of the purchased item by Supplier, Supplier is entitled to sell or dispose of such purchased item. The proceeds of sale or of disposition must be set off against Buyer’s liabilities after deduction of reasonable costs caused by such sale or disposition.

b) Buyer is obligated to handle the purchased item with due care; Buyer has in particular the obligation to sufficiently insure such item at replacement value at its own expense against damage from fire, water, and theft. Any maintenance and/or inspection work that becomes necessary must be performed on schedule by Buyer at Buyer’s expense.

c) In the event of a levy of execution or any other third party action, Buyer must notify Supplier without delay in writing to put Supplier in the position to file suit pursuant to Section 771 German Code of Civil Procedure [ZPO]. Should the third party not be in a position to compensate Supplier for judicial and extrajudicial costs of a lawsuit pursuant to Section 771 ZPO, Buyer is liable for the loss incurred by Supplier.

d) Buyer is entitled to resell the purchased item in the ordinary course of business; Buyer already assigns to Supplier now any receivables in the amount of the invoiced final amount of its claim (including value-added tax) accrued to Buyer from the resale of the purchased item against its purchasers or any third party, regardless of whether the purchased item is resold without or after processing. Buyer is entitled to collect these receivables even after having assigned them as provided above. Supplier’s authority to collect the receivables itself at any time remains unaffected thereby. Supplier undertakes, however, not to collect the receivables for as long as Buyer complies with its payment obligations from the proceeds taken in, is not in default of payment, and has in particular not filed a petition for the institution of insolvency proceedings or ceased to make payments. However, should any of these occur, Supplier is entitled to demand from Buyer that it inform Supplier of the amount of the receivables assigned and the named of the debtors thereof, and provide all information required for collection of such receivables, that it surrender all documents required for this purpose and that it disclose the assignment to the debtors (third parties).

e) Any processing or remodeling of the purchased item by Buyer is always carried out for Supplier. If the purchased item is processed together with other items not belonging to Supplier, then Supplier acquires co-ownership to such new item on a pro-rata basis of the value of the purchased item (invoiced final amount, including V.A.T.) in proportion to the other items processed at the time of processing. Everything else that is applicable to the purchased item subject to retention of title applies as well to the item created by processing.

f) If the purchased item is inseparably amalgamated with other items not belonging to Supplier, then Supplier acquires co-ownership to such new item on a pro-rata basis of the value of the purchased item (invoiced final amount, including V.A.T.) in proportion to the other items amalgamated at the time of amalgamation. If Buyer’s item is to be considered the main item due to the manner of amalgamation, it shall be agreed that Buyer assigns co-ownership of such item to Supplier on a pro-rata basis. Buyer keeps the new item created in such manner owned or co-owned by Supplier in safe custody for Supplier.

g) Buyer also assigns to Supplier any claim for securing Supplier’s receivables from Buyer that accrue against a third party by connecting the purchased item with a piece of real property.
h) Upon Buyer’s request, Supplier undertakes to release the security vested in it to the extent that the realizable value of such security exceeds the receivables to be secured by more than 20%. Supplier is free to choose the security to be released.

4. Delivery Dates, Delay/Default

a) The observance of deadlines for deliveries is subject to the timely receipt of all Documents to be provided by Buyer, of the required permits and clearances, in particular with regard to drawings/plans, as well as the observance of the agreed-upon terms of payment and any other obligations by Buyer. If these conditions are not met in a timely manner, the deadlines are to be reasonably extended; this, however, shall not apply if Supplier is responsible for the delay.

b) If the non-observance of the deadlines is due to force majeure, such as mobilization, war, riots, or similar events, e.g. strike, or lock-out, the deadlines are to be reasonably extended.

c) If Supplier is in default in delivery, Buyer– to the extent it is able to substantiate that it has suffered a loss or damage due to such default – is entitled to claim compensation for each full week of default in the amount of 0.5% of the price for such portion of the Deliveries that could not be taken into useful operation due to said default.

d) Claims for damages by Buyer due to late delivery as well as claims for damages in lieu of performance beyond the limits set forth under c) above are excluded in all cases of late delivery, even in cases where a date set for Supplier to make delivery has expired. This shall not apply in cases of willful misconduct, gross negligence, or wrongful death, personal injury or harmful health effects where liability is mandatory. Buyer is entitled to rescind the contract within the statutory provisions only in cases where the late delivery is Supplier’s responsibility. The above stipulations shall not effect a shift of the burden of proof to the disadvantage of Buyer.

e) Buyer is obligated to declare within a reasonable period of time upon Supplier’s request whether Buyer will rescind the contract due to late delivery and/or demand compensation for damages in lieu of performance, or insist on delivery.

f) If the shipment or delivery is delayed upon Buyer’s request for more than one month after notice of readiness for dispatch, Buyer may be charged for each month or any fraction thereof storage fees in the amount of 0.5% of the price of the delivery items, but not exceeding a total of 5%. The parties are free to submit evidence of higher or lower storage costs.

5. Transfer of Risk

a) Even where shipment freight prepaid has been agreed upon, risk shall be transferred to Buyer in the following manner:

- For Deliveries without mounting or installation, at the time such Deliveries were dispatched and picked up. At Buyer’s request and expense, Deliveries will be insured by Supplier against the usual transport risks.

- For Deliveries with mounting or installation, on the day of adoption into Buyer’s own facilities, or after flawless test run if this has been agreed upon.

b) In the event that the dispatch, the delivery, the commencement, the execution of mounting, installation and/or commissioning, the adoption into Buyer’s facilities or the test run is delayed for reasons for which Buyer is responsible, or if Buyer is in default of taking reception for any other reason, the risk shall pass upon Buyer.

6. Mounting, Installation, and Commissioning

a) Unless otherwise agreed upon in writing, the following provisions shall govern the mounting, installation and commissioning:

aa) Buyer must assume at its expense and provide in a timely manner:
- All ancillary work provided by industry outsiders, including the specialists and auxiliaries needed for this purpose, materials and tools, protective clothing and protection devices that are necessary due to specific requirements of the installation site.

ab) Prior to the installation work, Buyer must provide without specific request all necessary information regarding the location of hidden electric wiring, gas pipes and water conduits and similar installations.

ac) If the mounting, installation and commissioning are delayed due to circumstances for which Supplier is not responsible, Buyer assumes all reasonable costs for waiting periods and additional trips of Supplier and its personnel that become necessary.

7. Receiving

Buyer may not refuse to take receipt of Deliveries due to immaterial defects.

8. Defects of Quality

Supplier is liable for defects of quality as follows:

a) All parts or services showing a defect of quality within the period of limitation, regardless of the time of operation thereof, must – at Supplier’s discretion – be rectified, replaced or performed again free of charge to the extent that the cause of such defect was present already at the time of transfer of risk.

b) Claims arising from defects of quality become time-barred after twelve (12) months. This shall not apply in cases where the German Civil Code [Bürgerliches Gesetzbuch “BGB”] provides for longer periods as well as in cases of wrongful death, personal injury, or harmful health effects, deliberate or grossly negligent violation of Supplier’s duty, or malicious nondisclosure of a defect. Statutory provisions regarding the suspension of expiration of the limitation period, and the suspension and recommencement of the limitation period remain unaffected.

c) Claims arising from defects are subject to Buyer having properly complied with its obligation to examine the delivered item(s) and give notice of defect pursuant to Section 377 German Commercial Code [Handelsgesetzbuch “HGB”].

d) If Buyer has given notice of a defect, it may retain payments only to an extent that is commensurate with the defect of quality. Buyer may retain payments only where the notice of defects leaves no doubt as to the validity thereof. If the notice of defect is unjustly given, Supplier has the right to claim reimbursement from Buyer of expenses incurred by Supplier.

e) Supplier must always first be provided the opportunity to rectify the defect within a reasonable period.

f) Should the rectification of defect within the meaning of the law (Section 440 sentence 2 BGB) fail, Buyer is entitled, notwithstanding any claims for damages as set forth in Clause 11 hereof, to rescind the contract or to reduce the remuneration.

g) Claims based on defects are excluded for immaterial deviations from the agreed-upon quality and insubstantial impairment of usefulness, for natural wear and tear, or loss or damage arising after the transfer of risk as a result of faulty or negligent handling, excessive use, inappropriate equipment, or exceptional outside influence not covered under the contract, as well as non-reproducible software bugs. If Buyer or third parties improperly carry out alterations or repair work, such alterations or repair and the resulting consequences are not eligible for claims arising from defects.

h) Claims by Buyer for the reimbursement of expenses necessary for the rectification of defects, including, but not limited to, transportation costs and fares/toll, expenses for labor and materials, are excluded if such expenses and costs are higher because the object of the delivery was subsequently forwarded to a location other than Buyer’s premises, unless this forwarding is consistent with its intended use.

i) Buyer has a right of recourse pursuant to Section 478 BGB only to the extent it has no agreements with its buyer beyond the statutory claims arising from defects. The provisions of paragraph h) shall apply accordingly to the extent of the Buyer’s right of recourse against Supplier pursuant to Section 478 (2) BGB.

j) Claims for damages in all other respects are governed by Clause 11 (Other Claims for Damages). Further or additional claims arising from defects of quality by Buyer against Supplier and its agents or subcontractors other than the claims stipulated in this Clause 8 are excluded.

9. Industrial Property Rights and Copyrights, Defects in Title

a) Unless provided otherwise, Supplier is obligated to provide the Deliveries free from industrial property rights and third party copyright (hereinafter: Property Rights) only in the country where the point of delivery is located. Should a third party file justified claims against Buyer due to the infringement of Property Rights arising from Supplier’s Deliveries used in accordance with the contract, Supplier is liable to Buyer within the period set forth in Clause 8 b) as follows:

b) Buyer’s claims are excluded to the extent Buyer is responsible for the Property Rights infringement.

c) Claims by Buyer are also excluded to the extent that the Property Rights infringement was due to particular specifications issued by Buyer, a use not foreseeable by Supplier, or by Buyer altering the Deliveries or using them together with products not provided by Supplier.

d) In the event of Property Right infringements, the provisions set forth in Clause 8 d), e) and i) shall apply mutatis mutandis to Buyer’s claims stipulated under paragraph a) above.

e) In the event of other defects in title, the provisions set forth in this Clause 8 shall apply mutatis mutandis.

f) Further or additional claims arising from defects in title by Buyer against Supplier and its agents or subcontractors other than the claims stipulated in this Clause 9 are excluded.

10. Impossibility of Performance; Contract Adjustment

a) To the extent Delivery is impossible, Buyer is entitled to claim damages unless Supplier is not responsible for such impossibility of performance. Buyer’s right to claim damages is, however, limited to 10% of the value of that portion of the Deliveries that could not be taken into useful operation due to said impossibility. This limitation shall not apply in cases of willful misconduct, gross negligence, or wrongful death, personal injury or harmful health effects where liability is mandatory. The above stipulations shall not effect a shift of the burden of proof to the disadvantage of Buyer. Buyer’s right to rescind the contract remains unaffected thereby.

b) Should unforeseeable events within the meaning of Clause 4 b) considerably change the economic relevance or the substance of the Delivery, or substantially affect Supplier’s business, the contract shall be reasonably adapted in good faith. If this is not economically justifiable, Supplier is entitled to rescind the contract. If Supplier wishes to exercise this right, it must notify Buyer accordingly without delay after becoming aware of the extent of such event, even if an extension of the delivery term had initially been agreed upon with Buyer.

11. Other Claims for Damages

a) Claims for damages and compensation of expenses of Buyer (hereinafter: “Damage Claims”) regardless of the legal basis thereof, including, but not limited to, violations of contractual obligations and tort are excluded.

b) This shall not apply in cases of mandatory liability, e.g. under the Product Liability Act, in cases of willful misconduct, gross negligence, wrongful death, personal injury or harmful health effects, and violation of essential contractual obligations. Damages for the violation of essential contractual obligations are, however, limited to damage that is foreseeable and typical for this type of contract unless there is gross negligence, or mandatory liability due to wrongful death, personal injury or harmful health effects. The above stipulations shall not effect a shift of the burden of proof to the disadvantage of Buyer.

c) Any Damage Claims to which Buyer may be entitled under this Clause 11 become time-barred upon expiration of the period of limitation applicable to defects of quality pursuant to Clause b) hereof. In the event of Damage Claims under the Product Liability Act, the statutory limitation provisions shall apply.

12. Place of Jurisdiction, Applicable Law

a) The exclusive venue for all disputes arising directly or indirectly from the contractual obligations, and if Buyer is a party of commercial character, is Supplier’s registered office and principal place of business. Supplier is, however, also entitled to bring an action at the place of Buyer’s registered office and principal place of business.

b) German substantive law, exclusive of the United Nations Convention on Contracts for the International Sale of Goods (CISG), shall apply to the legal relationships in connection with this contract.

13. Binding Character of Contract

If any one or several provisions of these Terms & Conditions should be legally ineffective in whole or in part, the validity of the remaining provisions shall not be affected thereby. Such ineffective provision shall be replaced retroactively by a provision as similar as possible in substance, that most closely matches the purpose aimed at by that provision.

Last updated 05/2008

II. Standard Terms & Conditions of Purchase

1. These terms and conditions are an integral part of all contracts concluded with our suppliers and contractors (hereinafter uniformly referred to as “Supplier”), including current or future business relations. Any deviating agreements, in particular contradictory terms and conditions of business of our Suppliers, require our express written consent to become an integral part of a contract.

2. Quotations, Orders

a) The offers submitted to us by Supplier must be binding and delivered to us free of charge.

b) Our orders and other statements are binding on us only if and when we have made them in writing.

3. Supplies and Services

a) Supplier must provide its supplies and services in good merchantable quality, brand-new and in proper packaging for the respective product, and deliver them on schedule to the place of receipt/use stated in the order. Unless any further requirements are specified in the order, Supplier warrants to provide the delivery/service in good merchantable quality and - insofar as DIN, VDE, VDI or equivalent standards exist - in accordance with the latter, as well as in accordance with the legal and technical rules applying at the designated place of receipt/use of the delivery item/service.

b) In the case of contracts which (also) comprise/include software and consultancy services and also in the case of changes to such contracts, Supplier must without delay agree upon specifications with us in which the supplies and/or services to be provided by Supplier are stipulated in detail. Prior to conclusion of the contract, the parties will clarify whether the relevant specification is to be prepared by Supplier before or after conclusion of the contract.

c) Supplier agrees to supply the program documentation, in particular the source code, if the user software has been developed especially for us.

d) Supplier must transfer to us any rights of ownership and any existing industrial property rights in the goods delivered to us without delay but no later than upon full payment of the price agreed upon for the relevant delivery item/service. As early as upon delivery, Supplier must transfer to us – to the extent legally admissible – an exclusive right of use that is consistent with and permits the contractually required use of the delivery item/service.

4. Pricing

a) All prices are quoted as fixed prices excluding VAT.

b) The prices include the payment for all supplies and services entrusted to Supplier (including any necessary certificates, drawings, valuations etc. in the language required by and agreed upon with us).

c) All prices are quoted free delivery to the place of use specified by us; in the case of general cargo free arrival station.

d) Any additional services are to be paid for by us only if Supplier has been commissioned by us accordingly in writing prior to commencement of work by Supplier.

5. Dates, Deadlines

a) The delivery periods agreed upon with Supplier begin to run upon conclusion of contract. Dates for delivery and completion must be strictly complied with.

b) As soon as the non-compliance with a time limit becomes obvious, Supplier must inform us without delay in writing of the reason and the expected duration by which the time limit will be exceeded. Notwithstanding this, the failure to meet any deadline initiates the statutory consequences of default.

6. Liquidated Damages

a) In the event of a culpable failure to meet agreed upon dates and deadlines, Supplier must pay to us liquidated damages amounting to 0.1% of the price of the contractually agreed supply and/or service, for each calendar day of default by Supplier; this amount, however, is limited to 5% of the agreed-upon price even if several dates/deadlines stipulated in the respective contract have been exceeded.

b) Claiming further damages are not affected thereby.

7. Production Inspections, Final Checks, Weight

a) We reserve the right during production and prior to delivery to check the quality of the material used by Supplier, the accuracy of measurements and quantities of the parts manufactured and the observance of other regulations at Supplier's works or at its subcontractor's works.

b) We are entitled to reserve the right to carry out a final check of the completed delivery item/service at Supplier's works either ourselves or through a third party commissioned by us. The costs of such checks will be charged to Supplier, with the exception of the costs for the personnel deployed by us.

8. Packing, Dispatch, Acceptance

a) Supplier must provide suitable packaging at its own expense.

b) On the day of departure of the consignment, Supplier must send us a notice of dispatch quoting our order number, the quantity shipped and the exact description of the goods. Each consignment is to be accompanied by a packing slip in neutral form which must contain the same information as the notice of dispatch. If the packing slip is missing, we are entitled to refuse acceptance of the consignment at the expense of Supplier and/or to charge Supplier with any resulting additional costs incurred by us.

c) We are not obligated to accept part, excess or short deliveries which have not been agreed upon. The specified dimensions and weights established upon receipt of the goods will serve as the relevant criteria.

d) In the case of force majeure, strikes and lockouts as well as other unforeseeable circumstances beyond our control, we are entitled to postpone the receipt or acceptance of the relevant delivery item/service.

9. Risk, Furnished Equipment, Retention of Title

a) Unless otherwise agreed in writing, the risk of accidental loss and accidental deterioration of the delivery item/service shall be borne by Supplier until delivery and/or acceptance at the place of receipt/use specified in our order.

b) Supplier is liable for the loss of and damage to goods furnished to it. Supplier must inform us without delay about any impairment of such goods.

c) Goods furnished by us are treated and processed on our behalf and remain our property at every stage of treatment and processing. In the event of processing with other goods not belonging to us, we are entitled to joint ownership in the new product produced in proportion of the value of goods furnished by us to the value of all goods used in the production as well as Supplier's expenditure for the processing of same. To this extent, Supplier holds the goods for us free of charge. The same applies should our property be lost through blending/commingling or combination.

d) Supplier may use all documentation and data we make available to it only for the purpose of preparing offers and performing the supply/service ordered. Supplier must keep them in safe custody and protect them against access by third parties. Said documentation and data must be returned to us - together with all transcripts or copies thereof – without delay and without further request after handling of our inquiry or after execution of the delivery ordered. Supplier may not use, copy or make available to third parties the aforementioned documentation and data for any purpose outside the scope of the contract.

10. Invoices and Payments

a) After performance of the contractual supply and/or service, Supplier submits invoices to us for each order separately, quoting the order number and date, call number and date and including a copy of the delivery note. The value added tax must be shown separately on the invoice. In the absence of these details or if they are inaccurate or incomplete, the payment to which Supplier is entitled will not fall due.

b) As of 01 July 2002, Supplier agrees to include in all invoices not only the VAT identification number, but also - clearly visible - the taxpayer identification number allocated to it by its competent local tax office.

c) We make payment after receipt of the delivery item and the auditable invoice (cf. Clause 10 lit. a)) within 30 days with 3% discount, within 60 days with 2% discount or within 90 days without discount. A delivery executed prior to the agreed date does not affect the period of payment linked with this date.

In derogation of Sec. 286 (3) German Civil Code [BGB], we will be in default only if the conditions set forth in Sec. 284 (1) or (2) BGB shall apply. If and to the extent Supplier fails to provide evidence of a higher damage caused by delay, this damage is limited to 5% per annum of the outstanding claim for payment.

11. Assignment, Set-Off, Retention

a) Without our written approval, Supplier is not entitled to assign claims directed against us, either in whole or in part, to third parties. For assignments of future debts as part of a reservation of title by subcontractors of Supplier, the approval is given only subject to the provision that a set-off by us with counterclaims acquired subsequent to notice of such assignments is admissible.

b) Set-off with counterclaims of Supplier is admissible only insofar as these claims are not disputed and due or have been established as final and absolute.

c) The rights of retention and to refuse performance may be exercised by Supplier only if its counterclaim is based on the same contractual relationship.

12. Defects

a) Supplier warrants that the delivery item/service has the contractually agreed upon quality, corresponds to the state of the art in research and technology and does not have any defects which cancel or reduce its value or suitability for its ordinary use/purpose or that specified in the contract. In addition, Supplier is liable for the fact that neither the delivery nor the use of the delivered item/service infringe third party rights, including, but not limited to, patents or other industrial property rights.

b) In the case of a defective delivery item/service, we are entitled - without limitation - to the statutory claims arising from defects subject to the provision that the period for prompt notice of claims provided in Sec. 377 German Commercial Code [HGB] is restricted exclusively to the identity and quantity of the goods as well as externally recognizable damages or defects. In the case of hidden defects, in particular those appearing during processing or commissioning of the delivery item/service, the period for claims commences only in accordance with the circumstances of the ordinary course of business.

c) The period of limitation regarding claims based on defects of quality and in title is governed by statutory provisions.

13. Damages and Liability

a) Claims for damages and for compensation of expenses (hereinafter jointly referred to as “Damages") by Supplier against us are excluded, regardless of the legal basis thereof, unless they are based on the provisions of the Product Liability Act, on the deliberate or grossly negligent violation of contractual or legal obligations on our part, on injuries to health and bodily injuries of Supplier due a breach of duty for which we are responsible, the assumption of a warranty for a specific quality or the violation of essential contractual obligations by our company. In the event of a violation of essential contractual obligations, Supplier's claim for damages against us is limited to foreseeable damage which is typical for this type of contract, unless it is based on willful misconduct or gross negligence, or our company is liable for injuries to health or bodily injuries or due to the assumption of a warranty for a specific quality. A breach of duty by our legal representative or person employed in performing our obligation is deemed a breach of duty by us.

b) In the development and production of the delivery item/service, Supplier shall observe the state of the art in research and technology and comply with all mandatory legal provisions, it shall carry out a detailed functional and quality check prior to delivery and adequately document all measures taken to fulfill these obligations, and it shall keep this documentation for a period of 15 years and allow us to inspect such documentation at any time upon request.

c) Should a claim for damages be raised against us by third parties as a result of a defect in the product, Supplier shall hold us harmless and indemnify us against such claims insofar as the damage has been caused by the raw materials or partial products delivered by Supplier or by the services rendered by Supplier. In all other respects, Supplier is liable in accordance with the statutory provisions.

14. Protection of Data Privacy, Security, and Maintenance of Secrecy

a) We are entitled to store the data relating to our Supplier electronically and to process and use these data for the purposes of our business, in accordance with the statutory provisions.

15. Place of Fulfillment, Jurisdiction, Applicable Law

a) The place of fulfillment for all supplies and/or services to be rendered by Supplier is the place of receipt or use specified by us in each case.

b) The exclusive venue for all disputes arising directly or indirectly from the contractual obligations, and if Buyer is a party of commercial character, is Supplier’s registered office and principal place of business. Supplier is, however, also entitled to bring an action at the place of Buyer’s registered office and principal place of business.

c) The laws of the Federal Republic of Germany, exclusive of the United Nations Convention on Contracts for the International Sale of Goods, shall apply.

16. Binding Character of Contract

Last updated 05/2008