Werner Bauser GmbH, General Terms of Supply

I. General

Only the individually negotiated contractual terms and our General Terms of Supply apply to our deliveries. We do not recognize any other General Terms of Business – even if deliveries are supplied without reservations. In the event of permanent business relations or skeleton agreements, these General Terms of Supply also apply to all future supply contracts until our new Terms of Supply take effect. By acceptance of our goods, at the latest, the purchaser expresses his consent to our terms. If, after the contract has been agreed or the goods supplied, the purchaser is found not to be or no longer to be creditworthy, we are entitled to rescind the contract or require immediate payment of goods supplied. Any assignment of claims is subject to our consent. 

II. Advice

We provide all forms of advice, whether verbal or written, on the basis of our experience and to the best of our knowledge. Data and information which we provide relating to the suitability and use of our goods outside our sphere are not binding and do not exempt the purchaser from performing his own tests and trials. The purchaser is responsible for compliance with legal and public-authority regulations when using our goods.

III. Tender, Tender Documents

We can accept orders within 6 weeks. Our tenders are without commitment, if nothing to the contrary is stated in the order acknowledgement. We reserve the rights of ownership and copyrights to all documents which we may provide. Any disclosure or forwarding to third parties is subject to our written consent. If no order is placed, all documents are to be returned immediately on request. Purchaser documents can be made available to third parties with whom we intend to place supply or service contracts.
Orders must always be placed in writing; telephone orders are placed at the purchaser’s risk.

IV. Price, Price Changes

1. Our prices are always quoted "ex works" with addition of the value-added tax applicable on the date of supply, before customs, freight, packaging and insurance. Value-added tax will be shown separately in the invoice. Prices apply to each order and not in arrears or for future contracts. Repeat orders are deemed to be new orders.

2. We reserve the right to increase our prices to a reasonable extent if cost increases occur after the contract has been made, in particular as a result of collective wage agreements, market acquisition costs or material price rises. Evidence of such increases will be supplied to the purchaser on request. The purchaser does not have any right to rescind the contract unless the price increase exceeds the rise in the general cost of living by more than an insignificant amount.

V. Scope of Supply, Measuring Methods, Industrial Property Rights, Data Protection

The criterion for the content and scope of the contract is our acknowledgement of the order. Partial deliveries are permitted inasmuch as no disadvantages for use are produced thereby. They are deemed to be performance of separate contracts and are to be paid separately. In cases of delay in payment of a partial delivery, we can refuse further performance of the order. Due to production reasons, we reserve the right to supply more or less than the ordered quantity within the limits customary in the trade but not exceeding 10% more or less than the agreed purchased quantity. Technical changes are permitted if they prove necessary for production reasons or as a result of product updating or due to legal requirements or for other reasons. When the purchaser learns of changes, he must notify us immediately if he considers them to be inadmissible. In the event of tests for which certain temperatures, times and other measuring or control values are to apply, the appropriate measuring methods must be specified before the start of supply and must be approved by both parties. If no such specifications are made, our measuring methods will apply.
Orders based on drawings, sketches or other data supplied to us will be performed at the purchaser’s risk. If we infringe industrial property rights of third parties as a result of performing such orders, the purchaser will hold us harmless in relation to claims by the holders of the rights. Any more extensive damages will be paid by the purchaser.
We have the right to process data within the limits of the Federal Data Protection Act.

VI. Supply Period

1. The supply period will start no earlier than on dispatch of acknowledgement of the order. The supply period we specify cannot begin until all technical questions have been clarified in full. For observation of the supply period, all documents to be supplied by the purchaser and all necessary licences and approvals must be received in due time, plans must be clarified and approved in due time and the agreed terms of payment and other obligations must be met. If this is not the case, the supply period will be extended to a reasonable extent. The supply periods we specify are approximate periods. Although the necessary care will be taken to ensure congruent cover transactions, the supply period is specified subject to correct and punctual supply to our company.
2. The supply period is deemed to have been observed if the consignment has been dispatched within the supply period or notification of its readiness has been given. If delivery is delayed for reasons for which the purchaser is responsible, the supply period is deemed to have been observed if notification of readiness for dispatch has been given within the agreed period. For call orders, calls must always be scheduled so that the final delivery is made no later than one year after we received the order.
3. War, civil war, export restrictions or trade restrictions resulting from a change in political conditions, together with strikes, lock-outs, operation stoppages, operation restrictions and similar events which make contractual performance impossible or unreasonable for us, are deemed to be force majeure and release us from the duty of on-time supply. In such cases, we can, at our discretion, lengthen the supply period for as long as force majeure lasts or rescind the contract in whole or in part. The purchaser does not have any claim to compensation for the damages thus incurred.. 

VII. Annulment Costs

If the purchaser withdraws an order which has already been placed, we can claim 10% of the sales price for the costs incurred by handling the order and for loss of profits, without prejudice to our being able to claim actual higher damages. The purchaser has the right to provide evidence of lower damages. 

VIII. Packaging

If nothing is agreed to the contrary, we decide on the type and size of packaging. Packaging will be selected with the necessary care and at our best discretion. Non-returnable packaging becomes the property of the purchaser. 

IX. Passage of Risk and Transportation

Basically, supply "ex works" is agreed. The risk passes to the purchaser as soon as the shipment has been delivered to the party performing carriage or has left our warehouse for dispatch. Even if prepaid shipment has been agreed, supply is at the risk of the purchaser. If shipment is delayed at the request of the purchaser, the risk passes to the same when notice of readiness for dispatch is given. If nothing to the contrary has been agreed in writing, we will decide on the means and route of transportation. If goods are damaged or lost during transportation, a status report must be made immediately and we must be notified of it.
2. If dispatch or delivery is delayed at the purchaser’s request, we will claim warehouse charges amounting to 1% of the invoiced amount for every month or part of a month but totalling no more than 5%, this being subject to the reservation of evidence being supplied showing higher damages. The purchaser has the right to provide evidence of lower damages. 

X. Violation of Duties

To be able to meet our supply obligations, we require punctual and due fulfilment of the purchaser’s obligations.
If damages claims are made for reason of non-performance due to default and subsequent impossibility, our liability for simple negligence is limited to the damages caused by us which are foreseeable and typically associated with the actual transaction. Apart from this, we are only liable for intent and gross negligence. 

XI. Terms of Payment and Default in Payment

1. Invoices for supplies of goods are payable immediately. Any deduction of a discount is subject to a special written agreement. No discount will be granted for payment by bill of exchange. All payments are to be made free of charges. In the event of payment by cheque or bill of exchange, the purchaser shall pay the charges for discount or collection or other bank charges, even if this has not been expressly agreed. Payments will first be credited to costs, then to interest and then to the oldest principal debt.
2. In the event of default in payment, we can require payment of interest on arrears amounting to 8% p.a. above the then applicable base interest rate under Section 247 of the German Civil Code. Evidence of higher damages due to default can be provided. The purchaser only holds offsetting or retention rights in relation to our claims if his counter-claim is undisputed or has been legally established in a final form.
3. If we learn that bills of exchange of the purchaser have been protested or compulsory execution measures instigated against him or that there is some other deterioration in his assets, we can require immediate payment of liabilities not yet due and of liabilities paid by bill of exchange or cheque.
In these cases and if due invoices are not paid despite dispatch of a reminder, we can require prepayment or security for future supplies. 

XII. Obligations relating to Inspection and Lodging Complaints, Material Defects

1. A notice of defects under Sections 377 of the German Commercial Code is only deemed to have been made in due time if we receive it within a period of 5 working days, calculated from the date of receipt of the consignment. For concealed defects, this period starts when the defect is discovered. A notice of defects does not release the purchaser from his payment obligations. If there is a defect in the supplied item for which we are responsible, we can either, at our discretion, remedy the defect or supply a replacement within a reasonable extension period set by the purchaser. If we remedy the defect, we will only pay costs equivalent to the amount of the price agreed for supply. Even in urgent cases, the purchaser has no right to remedy the supplied item himself without obtaining our prior written consent. If the remedying of the defect or supply of a replacement proves unsuccessful, the purchaser has a right of rescission or price reduction, at his discretion. If the purchaser chooses to rescind the contract after subsequent performance has proved unsuccessful, he has no additional claim to damages as a result of the defect. If the purchaser is supplied with faulty assembly instructions, we are merely under obligation to supply proper assembly instructions, this being only if the fault in the assembly instructions prevents due assembly. Any further claims by the purchaser are ruled out, unless caused by us deliberately or through gross negligence or in cases of death, bodily damages or damages to health and in the event of malicious concealment of a defect. Thus we are not liable, in particular, for damages consequential to the defect which are incurred outside of the supplied item itself neither are we liable for loss of profits or other financial damages suffered by the purchaser. In the event of gross negligence, our compensation obligation is restricted to typical foreseeable damage.
2. In relation to the qualities of the goods, only the manufacturer's product description is deemed to have been agreed. No defect claims will be recognised in the event of no more than minor deviations from the agreed qualities. Public statements, recommendations or advertising by the manufacturer do not constitute contractual data on qualities. We do not provide the customer with warranties in the legal sense. Information in product descriptions and product specifications does not constitute a warranty of qualities in the supplied item or a warranty that the item will retain a certain quality for a certain length of time, inasmuch as such information is not classified as information on qualities as defined in Section 434 of the German Civil Code. Any possible damages claims under Sections 280 ff. of the German Civil Code are restricted to the scope of our coverage under our product liability insurance policy, which is a figure of no more than 1 million euros. This does not apply if liability is mandatory in view of damage to life, body or health. Our compensation obligation for property damage in the event of negligent causing of damages is restricted to the compensation paid by our product liability insurance policy, which is a figure of no more than 1 million euros.
3. The time limitation period for defect claims is 6 months, starting at the time of hand-over of the item. This time limitation also always applies to claims for compensation for damages consequential to defects, inasmuch as no claims resulting from tort are made and the claim is not based on damage to life, body or health.

XIII. Contractual Adjustment, Joint and Several Liability

If unforeseen events substantially alter the economic importance or content of the supplies or services or have a substantial effect on our operations, the contract will be adjusted. If this is not economically feasible, we have the right to rescind the contract. Inasmuch as our liability to pay damages is ruled out or restricted, this also applies to all claims made by the purchaser relating to culpa in contrahendo or breach of subsidiary obligations or claims of the purchaser under producer’s liability as per Section 823 of the German Civil Code. The same applies to impossibility. If our liability is ruled out or restricted, this also applies to the personal liability of our employees, collaborators, representatives and vicarious agents. 

XIV. Tools, Items provided

1. Any tools and special equipment made by us and paid by the purchaser are the latter’s property but remain in our possession. We have the right to use such tools and special equipment for other purposes or scrap them if the purchaser has not bought the goods made with them for a period of two years. To this extent, the purchaser waives compensation claims.
2. Only in the event of intent or gross negligence we will be liable for claims of the purchaser based on damage to or destruction of the purchaser's items provided to us or lent to us for processing. Liability for simple negligence is ruled out. Normal wear and tear is not covered by liability. For the items provided, the purchaser must take out "external insurance" with the required coverage. 

XV. Retention of Title

1. We retain title to the supplied item until all liabilities have been settled which result from the business relationship with the purchaser and were incurred at the time at which the contract was made, including all liabilities incurred at this time which result from follow-up orders, repeat orders or orders for spare parts.
If the value of all security rights that we hold exceeds the value of the secured claims by more than 20%, we will release an appropriate share of the security rights at the purchaser's request.
2. In the event of behaviour of the purchaser which is not in conformity with the contract, especially default in payment, we have the right to repossess the supplies. Repossession or attachment of supplies by us does not constitute rescission of the contract, unless this is expressly confirmed by us in writing. We have the right to sell the goods and the proceeds of sale are to be credited to the purchaser’s liabilities, with deduction of reasonable selling costs. The purchaser must treat the supplied goods carefully. In particular, said purchaser must insure said goods adequately at their new value against damage by fire, water, storm and tempest and burglary, this being at his own expense. Securing claims arising in the event of a loss are to be assigned to us. If servicing and inspection work is necessary, the purchaser must perform the same in due time at his own expense.
3. The purchaser is not permitted to pledge the supplied items or to surrender them as security. In the event of attachment or other intervention by third parties, the purchaser must notify us in writing immediately, so that we can file a complaint under Section 771 of the Civil Procedure Code, and must supply us with all information and documents necessary for safeguarding our rights. Enforcement officers or third parties are to be informed of our rights. If a third party is not able to reimburse to us both court and out-of-court costs of a complaint under Section 771 of the Civil Procedure Code, the purchaser will be liable for the loss we have suffered, subject to the submission of further claims for damage, alteration or destruction of the item itself.
4. The purchaser is entitled to resell the purchased item in the course of due business transactions. Up to the amount of the final invoiced total including value-added tax, he hereby assigns to us all the claims on customers or third parties which he acquires as a result of resale, irrespective of whether the item has been resold without or subsequent to incorporation. We accept this assignment. In the event of an open account relationship between the purchaser and his customer, the claim assigned to us in advance by the purchaser also relates to the recognized balance and, if the customer goes into bankruptcy, to the "causal" balance then existing. The purchaser can collect the liability even though it has been assigned. Our powers to collect the liability ourselves are not prejudiced thereby. We will not collect the liability ourselves as long as the purchaser meets his payment obligations from the proceeds received, is not in default on payment and no application for instigation of insolvency proceedings has been made.
5. Incorporation or conversion of the supplied item by the purchaser is always performed on our behalf. If the item is incorporated with other items not belonging to us, we will acquire co-ownership of the new item in the proportion of the value of our supplied item to that of the other incorporated items at the time of incorporation. In addition, the same applies to the item created by incorporation as to the item supplied subject to reservation of ownership. If mixing is performed in such a way that the purchaser’s item is to be considered as the principal item, it is deemed agreed that said purchaser will assign us proportional co-ownership. The purchaser will keep on our behalf the item thus produced and solely owned by us or of which we have co-ownership. The purchaser also assigns to us his claims against third parties which are created by combination of the supplied item with real property, this being for the purpose of securing our claims against him.

XVI. Place of Jurisdiction, Place of Performance

1. The place of jurisdiction is at the court having jurisdiction for our seat of business in Wehingen. We can also sue the purchaser at the court having jurisdiction for his seat of business.
2. If nothing to the contrary is stipulated in the contract or acknowledgement of order, our seat of business is also the place of performance.
3. Solely the law of the Federal Republic of Germany shall apply to all legal issues arising between the purchaser and ourselves, even if said purchaser has his seat of business abroad. Private international law and the United Nations Convention on the International Sale of Goods (CISG) are excluded.
4. If any single provisions in these Terms of Supply are void, the other provisions are not affected thereby. Void provisions are to be adapted to achieve the financial purpose for which they were intended. 

Wehingen, September 2002