General Terms and Conditions of Purchase

1. Standard Conditions

1.1

The legal relationship between the Seller and the Buyer shall be governed exclusively by the following Agreement.

1.2

Any terms and conditions of the Seller, including but not limited to any terms and conditions accompanying any subsequent order confirmation of the Seller that conflict with and/or contain additions to this Agreement, are hereby expressly excluded and rejected. Orders placed by the Buyer can be accepted by the Seller only without any modifications even if any modifications would change the order immaterially.

1.3

The Buyer’s acceptance, without reservation of products, including documentation or other goods (hereinafter collectively referred to as "Goods") or services or the Buyer’s payment without objection shall in no event constitute acceptance of the Seller’s general terms and conditions and/or any other terms and conditions of the Seller.

1.4

All Goods and services to be supplied by the Seller within the framework of any purchase order and this Agreement are hereinafter referred to as “Deliverables”.

1.5

This Agreement shall also apply to all future transactions (the agreements) with the Seller unless specifically agreed otherwise in writing to be valid and signed by the parties. The provisions of this Agreement referring to this Agreement shall apply to the agreements accordingly, unless the context indicates otherwise and vice-versa. In case of any discrepancies between the provisions of this Agreement and the agreement the provisions of this Agreement shall prevail, unless the provisions of the agreement are more favorable for the Buyer, where the provisions of the agreement shall prevail.

2. Conclusion and Scope of the Agreement, Timetable, Deferral, Project Manager

2.1

The Agreement shall enter into force upon any kind of legally valid acceptance by the Seller, including but not limited to the acceptance by electronic order confirmation, or in any event upon commencement of performance by the Seller.

2.2

The Seller commits to performing or, as the case may be, complying with all provisions of, this Agreement in full, functionally, properly and operable, and to rendering performance of the following in accordance with the agreed timetables set forth ona purchase order or otherwise. In rendering performance, the Seller shall ensure that the Buyer’s day-to-day business operations are not impaired.

2.3

The Seller shall deliver a complete and functional system in exact accordance with the specifications of the Buyer; any planning, delivery and assembly that is required for proper performance of the Agreement shall be deemed a Deliverable. This shall apply, in particular, if such materials or services are not expressly mentioned in the request and/or specifications or reflected in the drawings.

2.4

Any change of the agreed Deliverables after conclusion of the Agreement shall require the written confirmation of the Buyer.

2.5

The Seller shall review the Buyer’s requirements and, even before rendering performance, shall promptly warn the Buyer of any impediments to the proper performance of this Agreement. The Seller shall be liable for any non-performance or improper performance of said obligations irrespective of its fault in this respect.

2.6

The Seller warrants that the Goods delivered by the Seller are free of any defects (including without limitation from any title defects e.g. any lien, other interest in property or otherwise), satisfy the warranted characteristics, and meet the requirements and the contractually contemplated purpose of the Buyer. The Seller guarantees a thorough pre-shipment inspection to allow delivery with no defects. Notwithstanding any inspection by Seller, Buyer and its customers reserve the right to perform any inspection deemed necessary at any time.

2.7

The place of delivery may differ from the location where the Goods ultimately are utilized. The relevant place shall be that specified in the Buyer’s purchase order.

2.8

The Buyer may request at any time reasonable changes to the Deliverables with respect to construction and implementation. In the event such change proposed by Buyer will cause an increase in price and/or schedule, Seller will provide Buyer with substantiating data of such increase and the Parties will negotiate an equitable adjustment in price and or schedule.

2.9

Unless otherwise agreed, the Seller, within ten (10) business days after signing of the agreement, shall present a detailed, logically integrated timetable that clearly describes the Seller’s Deliverables within the already agreed timetable. Such timetable must be sufficient for critical path analysis and shall be prepared in German or English, using MS-Project software or equivalent.

The timetable shall be prepared in such a manner that it, in particular,

• allows the possibility of comparing targets and actual results; 
• allows the possibility of monitoring milestones;
• contains a list of all material decision points as to which the Buyer is required to make decisions and declarations;
• contains all planning lead-times.

2.10

The Buyer can at any time make a written request for a postponement of the delivery of Deliverables and such request cannot be unreasonably withhold by the Seller. In such case, the Seller, at its own risk, shall maintain possession of Deliverables if they have already been prepared for delivery. In no event will any such postponement result in additional costs to the Buyer, provided that the duration of such a postponement does not exceed 6 (six) months. If costs should be incurred after such 6 (six) months period of time, the parties shall negotiate in good faith resolution to the issue.

2.11

The Seller shall appoint an employee as account or project manager respectively. Such account or project manager shall direct the coordination and management of the Seller’s performance to the Buyer under this Agreement. Upon request, the account or project manager shall be present at the place where the Deliverables ultimately are utilized, and he or she shall be authorized to make and accept legally binding declarations on behalf of the Seller. Upon request of the Buyer, the account or project manager shall be replaced for good cause.

2.12

All obligations shall be personal to the Seller. The Seller can subcontract obligations under the contractual relationship between the Buyer and Seller in whole or in part only with the Buyer’s prior written to be valid consent. Seller shall be liable for acts and omissions of any third party as for its own acts or omissions even if the Seller has chosen such third party with due diligence. Notwithstanding anything in this Agreement or in law to contrary, should the Seller fail to receive such consent, the Seller shall be liable for all damage incurred by the Buyer (including without limitation accidental loss of or damage to Deliverables), unless the Seller proves that such damage would occur even if the Seller performed its obligation personally.

3. Prices, Payment

3.1

The agreed prices are fixed prices. The prices are DAP (INCOTERMS 2020). The prices include packaging and exclude statutory VAT. All other local taxes or charges that are imposed on or charged to the Buyer shall be borne by the Seller. The Buyer has the right to deduct any applicable withholding tax from the purchase price.

3.2

Cost estimates and/or bids are binding and shall not be compensated, unless otherwise agreed in writing to be valid and signed by the parties. If the Seller has undertaken to perform assembly or installation, the Seller shall bear all applicable ancillary costs, unless otherwise agreed.

3.3

Absent any agreement to the contrary, the Buyer shall make payment (“Target Payment Date”) either within sixty (60) days without discount, or within thirty (30) days at a 3% (three percent) discount of gross payment as of the receipt of the invoice and the receipt of the Goods or, as the case may be, the provision of the Deliverables. Payment shall be subject to verification of the invoice by Buyer.

3.4

In the event that shipments are accepted earlier than agreed, the Target Payment Date shall be based on the originally agreed delivery date.

3.5

Upon request, the Seller shall provide the calculation documentation for the prices pursuant to paragraph 3.1 for the purpose of examining their reasonableness. Changes in the form of price reductions at the Seller’s procurement market shall be passed on to the Buyer in full. The Seller shall promptly inform the Buyer of such changes.

3.6

Invoices that do not conform to these conditions and/or statutory accounting regulations will excuse the buyer from its obligation to make payment until any discrepancies are eliminated.

3.7

On explicit request of the Buyer, the Seller, within ten (10) business days after this agreement becomes effective, shall furnish a performance bond in the amount of ten percent (10 %) of the gross contract price from a bank with a rating as set forth in paragraph 10.2. Such performance bond shall meet the requirements set by the Buyer.

3.8

After completion of the functioning assembly section or system and acceptance pursuant to paragraph 8.3, on explicit request of the Buyer the Seller shall deliver within ten (10) business days of receipt of the Buyer’s request an unconditional, on first demand and irrevocable warranty bond in the amount of ten percent (10 %) of the delivered gross price for the benefit of the Buyer from a bank with a rating as set forth in paragraph 10.2 as security for the performance of the Seller’s warranty obligations. Such warranty bond shall meet the requirements set by the Buyer. If the Seller expressly requests, the parties can also agree to the Buyer’s retention of ten percent (10 %) of the delivered gross price in lieu of the Seller furnishing a warranty bond until the date such warranty bond would be valid.

3.9

The validity of the bond shall expire only after performance has been completed and accepted by the Buyer and all contractually owed obligations, including warranties, have been properly performed by the Seller but in no case earlier than on the date the period of warranty expires.

3.10

All costs and expenditures in connection with the creation of the above-referenced bonds or any other security shall be borne by the Seller, unless expressly provided otherwise in this agreement.

3.11

Unless otherwise agreed, ten percent (10 %) of invoiced progress gross payments shall be retained by the Buyer until defect-free acceptance. Without prejudice to any additional rights the Buyer may have in accordance with this Agreement or law, the failure to comply with the provisions of this Agreement (including without limitation the provisions on the Seller’s obligation to furnish a performance or warranty bond) shall entitle the Buyer to an additional retention of five percent (5%) of the agreed contract gross price until performance has been completed and accepted by the Buyer and all contractually owed obligations, including warranties, have been performed by the Seller but in no case earlier than until the date the period of warranty expires.

3.12

No later than 30 (thirty) days after acceptance, the Seller shall issue a final invoice for the entirety of the Deliverables. The Buyer shall be entitled to rely on the comprehensiveness of such final invoice. Accordingly, the Seller, by delivering its final invoice, already will offer the Buyer to waive any and all claims, regardless of the legal basis thereof, that are not set forth in the final invoice. Such offer cannot be revoked by the Seller. The Buyer may accept such offer in any kind of legally valid manner, including without limitation, by not rejecting such offer within one (1) day of receipt the final invoice. Notwithstanding the foregoing, the Seller undertakes to not take any legal action against the Buyer with respect to the claims that are not set forth in the final invoice. In the event that the Seller fails to comply with the 30-days (thirty) deadline of paragraph 3.12 sentence 1, the Buyer can prepare such final invoice in the name of the Seller and deliver it to the Seller. Said authorization cannot be revoked. If the Seller fails to object to such final invoice within 10 ( ten ) days of receipt, the invoice shall be deemed approved by the Seller. A fax transmittal confirmation shall constitute sufficient evidence of receipt.

4. Shipment, Deadlines, Delays, Substitute Performance, Liquidated Damages, Notice of Dispatch

4.1

The seller shall deliver in accordance with the Buyer’s delivery requirements. The relevant event for compliance with the shipping schedule or deadline is the receipt of the Goods, including complete documentation, at the agreed place of delivery.

4.2

The Seller shall hold the Goods ready in due time, taking into account the usual time required for loading and shipping. Otherwise, the Seller shall coordinate with the Buyer’s freight contractor, in particular it shall notify him that the Goods are ready for collection, in cases where no DAP/DDU/CFR/CPT has been agreed.

4.3

Partial shipments are impermissible unless the Buyer has expressly agreed thereto.

4.4

If the Seller fails to meet agreed deadlines, the Seller shall be in default, irrespective of the reason of such failure. In such case, the statutory provisions shall apply, unless provided otherwise below.

4.5

The acceptance without reservations of a late shipment or performance does not imply waiver of the Buyer’s rights to damages for the late shipment or service.

4.6

If the Seller anticipates difficulties that could prevent it from making timely shipment or performance at the agreed quality, the Seller shall promptly inform the Buyer in writing and signed by the parties with a statement of reasons.

4.7

In the event of a default, the Buyer shall set a reasonable deadline for subsequent delivery (“Extension”). Irrespective of the foregoing, the Seller shall compensate the Buyer for all losses, lost profits, indirect damages, costs and expenses arising out of the delayed performance.

4.8

If, in the event of default, the Seller fails to meet the Extension, the Buyer shall have the right to order the delayed Goods from or to engage third parties (without prejudice to any other rights or claims). Any costs and expenses incurred in connection with the foregoing shall be borne by the Seller. For the avoidance of doubt the default to meet the Extension shall be deemed a material breach of this Agreement.

4.9

In exigent circumstances, particularly to ward off acute risks or to avoid greater losses, the Buyer can act within the meaning of paragraph 4.8 without prior notice.

4.10

Unless otherwise agreed, the Buyer has the right to demand, and Seller shall pay liquidated damages of one percent (1%) of the total gross contract amount per calendar day of the delay, up to a maximum of ten percent (10 %) of the total gross contract amount. In the event that certain documents are required to be delivered by certain dates as part of the Deliverables, the Buyer shall have the right to demand liquidated damages in the amount of EUR 500.00 (five hundred) for each document that is not delivered on time. In addition to the liquidated damages, the Buyer may demand, and the Seller shall pay additional damages exceeding the liquidated damages if the damage incurred by the Buyer is higher than the liquidated damages. Such additional damages shall be determined as a difference between the damage incurred by the Buyer and the liquidated damages. In addition to the liquidated damages and/or additional damages, the Buyer may demand, and the Seller shall be obligated to perform its obligations. The liquidated damages shall be calculated for each commenced day of delay. Should the agreement set forth the milestones and the final date for the performance of all obligations, the Buyer may demand, and the Seller shall pay liquidated damages for non-compliance with milestone and the final date, separately. In case of the Seller’s non-compliance whether with milestone or the final date or otherwise, the Buyer in addition to any other rights it may have in accordance with this Agreement or law may withdraw from the agreement in whole or in part and demand the liquidated damages and/or additional damages as set forth above.

4.11

Notice of shipment shall be provided to Buyer three (3) days in advance of shipment of Goods.

4.12

In the event of shipment of Goods prior to the agreed date (“Premature Shipment”) or shipment of Goods in an amount greater than that agreed for such date (“Excess Delivery”), the Buyer shall have the right to return such Goods at the cost and risk of the Seller. Storage shall be at the Seller’s expense. The risk of loss of or damage to Goods shall be incurred by the Seller except where the loss of or damage to Goods has been caused due to the Buyer’s intentional fault.

5. Confidentiality

5.1

All information made available by the Buyer (including characteristics that can be inferred from the objects, documents, drawings or software furnished to the Seller, and other knowledge or understanding) shall be kept secret vis-à-vis third parties for as long and insofar as it is not demonstrably publicly knowledge. Such information shall remain the exclusive property of the Buyer and shall be made available only to such persons in the Seller’s employ who must be engaged for the purpose of rendering performance to the Buyer and who also shall be bound to secrecy. Except for shipments to the Buyer itself, such information may not be duplicated, disclosed, disseminated or used for commercial purposes without the prior written to be valid consent of the Buyer. Upon request of the Buyer, all information originating with the Buyer (including copies and notes) and objects provided to the Seller on a loan basis shall be promptly and completely returned to the Buyer or destroyed, and a corresponding written declaration shall be provided.

5.2

The Buyer retains the rights to all such information (including copyrights and the right to apply for protection of intellectual property rights). Insofar as the Buyer has received such information from third parties, this reservation also applies for the benefit of such third parties.

5.3

Goods that have been produced pursuant to documentation created by the Buyer such as drawings, models and the like, or that have been produced pursuant to the Buyer’s confidential specifications or through the use of the Buyer’s tools or reproductions of its tools may not be used by the Seller itself, nor may they be offered or delivered to third parties. This shall also apply by analogy to print jobs.

6. Inventions, Intellectual Property Rights

6.1

The Seller hereby grants the Buyer, an assignable, sublicensable and worldwide license to make, have made, sell, import, export and use any protectable inventions in the context of the legal relationship between the Seller and the Buyer, particularly with respect to research and development activities. The Seller shall ensure organizationally that it can perform its obligation to utilize and assign such rights.

6.2

The Seller understands that the Buyer’s products can be deployed worldwide. The Seller warrants that all Deliverables are free of third-party intellectual property rights and any other rights and, in particular, that no third-party patents, licenses or other intellectual property rights will be infringed by delivery and use of the Deliverables. Without prejudice to any additional rights the Buyer may have in accordance with this Agreement or law, the Seller shall indemnify the Buyer for, and hold the Buyer harmless against, any claims made against the Buyer in connection with this provision (including legal expenses). The Buyer shall have the right to obtain licenses for the use of the respective Deliverables from the rights holders at the Seller’s expense to the extent this is proportional, e.g. compared to the costs for return and reimbursement of the goods.

6.3

The Seller grants the Buyer the irrevocable right to freely dispose of the Deliverables, including, in particular, the right to resell them to third parties.

6.4

The parties shall promptly notify each other of any risks of infringement and alleged cases of infringement of which they become aware.

6.5

The Buyer as so-called legal acquirer shall have the right to use software that is included in the Deliverables (e.g. reproduce, change, reverse engineering or black box analysis), including documentation, with the agreed performance characteristics, in accordance with the contractual use to the fullest extent permitted by copyright law, including without limitation, in order to repair any defects in said software or upgrade thereof. The Seller undertakes irrevocably to support the Buyer without additional charge and provide the Buyer with information (including without limitation source code and/or object code) to the extent it will be necessary to use said software in accordance with contractual use. Notwithstanding the foregoing the Seller hereby additionally grants the Buyer an assignable, sub-licensable and worldwide license to (i) create a backup copy without express agreement (backup copies can be used simultaneously with said software) and (ii) make said software or its copies available to third parties in any way, including without limitation lease thereof to third parties and (iii) create any derivative works from the said software and permit for performance of derivative copyrights.

6.6.

The Seller hereby grants the Buyer, an assignable, sublicensable and worldwide license to use the works created by the Seller in connection with performance of the obligations under the agreement in the following fields of exploitation (i) work recording and reproducing making copies of works using specific technologies, including printing, reprography, magnetic recording or digital techniques; (ii) work master-copy or copy handling: trading, lending, or leasing; (iii) making the works or copies of them available to third parties (but without the obligation to distribute): e.g. in a way that everyone can have access to the work or copy of it at the place and time selected by the person; (iv) making any changes in the works and permission for performance of derivative copyrights.

6.7

The price for the relevant Deliverables shall include royalties for all relevant licenses and for all fields of exploitation set forth in this Agreement. All licenses shall be perpetual. The Seller shall not have right to terminate licenses to the fullest extent permitted by law. In case in accordance with law the Seller shall have right to terminate license such termination shall be made in writing to be valid with thirty (30) years notice at the end of year.

7. Packaging, Shipping Documentation, Invoice, Source of Goods, Export Declaration and Export Restrictions

7.1

The Goods shall be packaged in a manner suitable for transport, with the production flow and handling procedures designed to prevent improper handling, damage, exceeding storage life, and other quality impairments. The Seller shall ensure that stock movements follow the FIFO (First-In-First-Out) principle. Additionally, the Seller shall implement measures to clearly mark products and/or transport containers for easy identification, eliminating any potential confusion or mixing.

The Seller shall be solely responsible for the correctness and completeness of the shipping documents. Particularly concerning hazardous materials, the Seller must ensure that both the packaging and its labeling, as well as the mode of transport and its labeling, adhere to the applicable regulations governing the respective carrier (road, rail, inland waterway or ocean, or air). The Seller shall comply with specific labeling and/or protective requirements specified in the purchase order or other relevant documents, such as specifications or Engineering drawings. 

Furthermore, the production status and inspection decision must be clearly recognizable on all production or partial lots. The Seller is expected to define procedures that prevent any compromise to the quality of the Goods throughout the production and transportation process. Adherence to these requirements is essential for maintaining product integrity and meeting the specified standards.

7.2

The Seller shall issue to the Buyer a confirmation of shipment and a separate invoice for each shipment. They shall contain the seller number, date and number, amount and the Buyer’s and Seller’s item numbers, the number and date of the shipping documentation, gross and net weight listed separately, supplemental data of the Buyer specified in the purchase order (such as unloading point, project number) as well as the agreed price/quantity units. Each shipment must be accompanied by a packing list with a precise index of contents, including the order number.

7.3

If the invoice relates to several purchase orders, the information required by paragraph 7.2 shall be listed separately for each purchase order.

7.4

Seller shall furnish the Buyer with the customs tariff number and, upon request, shall furnish, at its costs and without any additional fee, certificates of origin for the Goods. Additionally, the Seller shall always clearly identify on the shipping documentation Goods that did not originate in the EU as “non-EU originating Goods”.

A Seller not resident in the EU, shall also furnish the Buyer with the customs tariff number and the preference substantiation for the respective Goods and, upon request, shall furnish, free of charge, a Certificate of Origin and/or Conformity (CoC) for the Goods. The Seller shall indemnify the Buyer for all costs that arise as a consequence of untrue, incomplete or erroneous statements or documents as to the origination of Goods and/or their conformity. In the case of purchase orders outside of customs unions (i.e., not within the EU, NAFTA, Mercosur, etc.), the Seller shall include an export declaration.

7.5

The Seller shall clearly inform the Buyer of any export restrictions in bids, in advance of entry into any purchase orders and on invoices. This shall include, in particular, the designation in accordance with the respective applicable national export controls, especially the German, U.S. and Japanese export controls, information as to the relevant export list numbers and an indication - insofar as involving Goods subject to U.S. export controls - the American Export Control Classification Number (ECCN) or with respect to items subject to the U.S. International Traffic in Arms Regulations (“ITAR”), the USML Category.

8. Force Majeure, Passing of the Risk, Acceptance

8.1

Force majeure, labor disputes, operational disruptions, riots, official measures, pandemics, and other unavoidable events shall excuse the Buyer from its obligations for the duration of the events. Save to section 15.6 of this Agreement, additionally, the Buyer shall have the right – without prejudice to its other rights – to withdraw from the agreement, in whole or in part, to the extent that the events result in a substantial diminution of the Buyer's needs and are not of insubstantial duration.

8.2

The Seller shall bear the risk until acceptance by the Buyer or its representative at the place at which the Goods are required to be delivered in accordance with the agreement (place of delivery). If the Seller has agreed to perform the assembly, installation and/or startup, the Seller shall bear the risk until acceptance by the Buyer or its representative. If the purchase order, in addition to the place of delivery, also specifies a place where the Deliverables ultimately are utilized, then the passing of the risk extends to the place where the Deliverables ultimately are utilized.

8.3

Formal acceptance of the Deliverables must occur. This shall apply, in particular, if formal acceptance was contractually agreed. Formal acceptance shall be deemed to have occurred when the Buyer delivers to the Seller a signed acceptance protocol. If a trial operation has been agreed, formal acceptance shall occur only after the parameters have been achieved within the agreed timeframe. The provisions of paragraph 9 shall apply to the correction and consequences of quality defects.

8.4

If a commencement of work has been agreed prior to such acceptance pursuant to paragraph 8.3, the Buyer shall be notified at least ten (10) days prior to the scheduled commencement. The Seller shall be present at the startup and at the acceptance. The Buyer can demand that a third-party expert carry out the respective tests and inspections. The Buyer shall not sustain costs for the foregoing.

8.5

If the Buyer use parts of the Deliverables prior to acceptance, the Seller shall not be liable for losses that are sustained through the fault of the Buyer. The Seller shall repair the deterioration caused by the use prior to acceptance. No passage of the risk to the Buyer shall occur through the use.

9. Warranty, Liability

9.1

The statutory provisions shall apply with respect to quality or title defects including but not limited to non-conformance with agreed specifications (e.g. as to quantity) as well as other design defects (hereinafter referred to as “Quality Defects”), unless provided otherwise below. In addition the Seller shall grant to the Buyer a warranty of quality of the Goods, in particular that the Goods will be free of Quality Defects, on the terms and conditions set forth below (the “warranty”) (no additional certificate or warranty card shall be required).

9.2

A Quality Defect shall exist if the delivered Deliverables do not conform to the agreed Deliverables.

9.3

The acceptance of the Goods is subject to inspection for freedom from Quality Defects, particularly as to accuracy, completeness and serviceability. The Buyer has the right to inspect the Goods to the extent and as soon as doable in accordance with the ordinary course of business. The Buyer shall promptly complain of any discovered Quality Defects. In this respect, however parties agree that the Buyer shall retain rights it may have in accordance with this Agreement or law due to Quality Defects even if the Buyer fails to inspect the Goods or promptly complain of any discovered Quality Defects. As to number of pieces, weights and measures, the amounts determined by the Buyer in any incoming Goods inspection shall be controlling, subject to other proof. Nothing within this section 9.3 shall limit the Buyer’s rights to later notify defects which he has not discovered at inspection or acceptance (irrespective of the reason thereof) and to claim any and all respective damages and costs.

9.4

Under the warranty the correction can take the form of a repair or replacement. In the event of a replacement, the Goods shall be delivered anew.

9.5

The warranty shall expire 72 (seventy two) months after the delivery of the Goods to the place of delivery, unless otherwise agreed in writing to be valid and signed by the parties or where longer warranty periods are provided for by law.

9.6

If, within one year, a Quality Defect arises since the passage of the risk, it shall be presumed that the defect already existed at the time of the passage of the risk.

9.7

If at the Buyer’s opinion a correction can be made, the Buyer may under the warranty at its discretion (a) carry out the correction itself in the name and at the risk and costs of the Seller, or engage a third party to carry out the correction in the name and at the risk and costs of the Seller or only at the risk and costs of the Seller or (b) give the Seller a reasonable period within which the correction must be made. For the avoidance of doubt, the Buyer may exercise its rights set forth in letter (a) above without an obligation to give first the Seller a reasonable period within which the correction must be made. If the Seller fails to correct a notified Quality Defect by expiration of the deadline, the Buyer can carry out the correction itself in the name and at the risk and costs of the Seller, or engage a third party to carry out the correction in the name and at the risk and costs of the Seller or only at the risk and costs of the Seller. The aforesaid authorizations cannot be revoked by the Seller as they have been granted in order to secure rights the Buyer may have against the Seller due to the Quality Defect. For the avoidance of doubt in addition, the Buyer shall have the right to terminate this Agreement for good cause pursuant to section 15 of this Agreement

9.8

For the duration of a repair or replacement of a significant defect, owed according to these provisions, the deadline pursuant to paragraph 9.5 sentence 1 shall be tolled until the Seller has fully satisfied the right to subsequent performance and the deadline pursuant to paragraph 9.5 sentence 1 shall run anew.

9.9

The Seller shall remedy any breach of a duty and the damage caused by such breach. In addition, the Buyer shall have under the warranty or statutory provisions the right to reduce the purchase price or withdraw from the agreement in whole or in part. Additional rights or claims for damages shall remain unaffected. In particular, the Seller shall bear all of the costs and expenditures of the Buyer incurred pursuant to paragraphs 9.1 to 9.8 as a consequence of defective delivery of Goods, particularly the costs of transport, infrastructure, labor, materials and/or costs of a quality inspection that exceed those of an ordinary inspection, as well as the costs that the Buyer is required to pay to its customers.

9.10

In the event the Buyer is entitled to the supplementary performance, such as replacement or repair, the Seller shall, unless otherwise agreed, make in particular, but without limitations of any of the Buyer’s rights, lump-sum reimbursement to the Buyer for the below positions at the following amounts:

(a) Travel expense charge: EUR 0.50 per kilometer traveled and

(b) Labor charge: EUR 50.00 per work hour and employee.

The labor charge will be prorated for each commenced quarter hour. In addition to the lump-sum reimbursement, the Buyer may demand, and the Seller shall pay additional damages exceeding the lump-sum reimbursement if the damage incurred by the Buyer is higher than the lump-sum reimbursement. Such additional damages shall be determined as a difference between the damage incurred by the Buyer and the lump-sum reimbursement. In addition to the lump-sum reimbursement and/or additional damages, the Buyer may demand, and the Seller shall be obligated to perform its obligations.

9.11

If the Buyer takes back products manufactured and/or sold by the Buyer as a consequence of the defectiveness of the Goods delivered by the Seller, or if the Buyer sustained a diminution of the purchase price for such reason, or if any other claim was asserted against the Buyer, the Buyer retains a right of recourse against the Seller.

9.12

As long as a Quality Defect exists, the Buyer can withhold payment due to the fault of the Seller.

9.13

The Seller shall also hold harmless the Buyer and its customers against third-party claims for Quality Defect. In particular the Seller shall upon the Buyer’s request correct the Goods transferred by the Buyer to its customer, if such customer demands from the Buyer the correction of said Goods due to Quality Defect.

9.14

Notwithstanding the provisions of paragraph 9.5 sentence 1, for Goods that are affixed to the ground (immovable objects), the warranty shall expire only seventy two (72) months after the delivery of the Goods to the end customer. In addition in case of acceptance of the Goods by the end customer, the warranty shall expire only seventy two (72) months after the acceptance, free of defects, by the end customer, unless otherwise agreed. All other provisions shall continue to apply.

9.15

The Seller guarantees that all Deliverables, including components, are free from counterfeit or unauthorized parts. The procurement process shall be exclusively conducted through authorized distributors or Original Equipment Manufacturers (OEMs) to ensure the authenticity of components.

The Seller commits to implementing robust processes for detecting and eliminating counterfeit components. In the event that counterfeit components are discovered, the Seller will promptly notify the Buyer. The Seller agrees to provide full cooperation in investigations and corrective actions.

Any use of counterfeit components by the Seller constitutes a material breach of the agreement. In such cases, the Buyer reserves the right to pursue legal remedies as deemed appropriate.

The Seller's commitment to sourcing exclusively through authorized channels is crucial for ensuring the overall quality, safety, and the trust of the Buyer in the delivered products.

The Seller acknowledges that sourcing components outside authorized channels requires obtaining express consent from the Buyer. This explicit acknowledgment emphasizes the importance of transparency and collaboration in maintaining the integrity, quality, and trustworthiness of the Deliverables.

10. Other Liability

10.1

If a product liability claim is asserted against the Buyer, the Seller shall indemnify the Buyer and compensate for all damage incurred by the Buyer insofar as and to the extent that the damage was caused by a defect in the Goods delivered by the Seller, irrespective of the Seller’s fault in this respect. Insofar as the cause of the damage was within the Seller’s responsibility, the Seller shall bear the burden of proof. In such cases, the Seller shall bear all costs and expenses, including the costs of any legal action or product recall.

10.2

The Seller commits to procuring a business liability insurance policy, including coverage of product liability financial losses and recall costs. The insurance policy must be issued by a company rated at least at the level indicated for one of the following rating agencies (A.M. Best: A/A-, Moody’s: Aa, Standard & Poor’s: AA). The amount of coverage for personal injury or property damage, as well as for product liability financial losses and recall costs must equal at least to EUR 10 (ten) million (without any limitations). The insurance certificate shall be presented to the Buyer upon request.

10.3

The Buyer’s liability whether in contract, tort, or otherwise for damage incurred by the Seller shall be limited up to the net price (VAT excluded) for Deliverable or missing Deliverable in connection with which Deliverable (or missing Deliverable) damage has occurred. The Buyer shall not be liable for lost profits or any other indirect damages. These limitations shall not apply to damage caused by the Buyer’s intentional misconduct.

10.4

Without prejudice to the other rights the Buyer may have in accordance with this Agreement or law, in case of the Seller’s delay in delivery of Deliverables, the Buyer may suspend payments for Deliverable undelivered on time or for any other Deliverables (whether delivered under the same purchase order or not), unless and until all overdue amounts are settled.

11. Assignment of Claims

11.1

The Seller cannot assign, set off or transfer for third-party collection, its claims against the Buyer without the Buyer’s prior written consent, which may not be unreasonably withheld.

11.2

The Buyer may withhold payment or declare a set-off in the case of counterclaims.

11.3

This shall apply to all counterclaims of members of the Buyer’s

company group.

11.4

The Buyer shall be entitled to assign any and all claims against the Seller (including without limitation rights under warranty) to third-parties to the extent not explicitly prohibited by law.

12. Title, Provision of Tools

12.1

Retention of title by the Seller shall require an express separate agreement in order to be valid.

12.2

The materials and tools contributed by the Buyer shall remain the property of the Buyer and may be used only for their intended purpose. The processing of materials and the assembly of parts shall be undertaken on behalf of the Buyer. The Buyer shall be the co-owner of the products manufactured from the Buyer's materials in the proportion that the value of the tools and materials contributed by the Buyer bears to the value of the complete product, unless otherwise provided for by law.

12.3

Upon request, the Seller shall clearly mark the contributed tools as the property of the Buyer. Additionally, the Seller shall use the contributed tools exclusively for the manufacture of the ordered Goods. The Seller shall insure the tools contributed by the Buyer at their replacement value and at its own expense against fire, water damage and theft. The Seller shall carry out any necessary maintenance and inspection tasks at its own expense and in a timely manner. The Seller shall notify the Buyer promptly of any faults.

12.4

Upon request, the Seller shall promptly return contributed material and/or tools to the Buyer. The Seller shall have no right of retention.

12.5

Buyer shall, at its option, have the right to set off against and apply to the payment or performance of any obligation, sum or amount owing at any time to Buyer hereunder or under any order, all deposits, amounts or balances held by Buyer for the account of Seller and any amounts owed by Buyer to Seller, regardless of whether any such deposit, amount, balance or other amount or payment is then due and owing.

13. Quality and Documentation, Audit

13.1

The Seller shall comply with the scientific and technical state of the art, both for the Buyer’s country as well as the country of the place specified in the purchase order where the Goods ultimately are utilized, and shall also comply with all relevant legal regulations applicable to Deliverables, including without limitations legal regulations regarding design, manufacturing and trade of the Goods or safety regulations and the agreed technical data, both for the Buyer’s country as well as the country of the place specified in the purchase order where the Goods ultimately are utilized. The Seller must organize and substantiate an appropriate quality management system. Specifically but not limited to, the Seller shall, to the extent applicable to the purchased Deliverables, comply with the standard set by DIN EN ISO9001, EN 61340-5-1 as well as CE, UL, CSA and TÜV. Non-compliance with this paragraph shall be considered as Quality Defect.

13.2

The Seller shall deliver a CE-conformity declaration, including the respective documentation, together with the first shipment.

13.3

The Seller must indicate in its quality records with respect to all Goods when, how and by whom their defect-free manufacture was ensured. Such records shall be retained for (ten) 10 years and presented to the Buyer upon demand. The Seller shall bind its suppliers to the same extent.

13.4

Plans, final planning documents, technical calculations and spare parts lists shall be provided by the Seller upon request.

13.5

The Seller shall afford to the Buyer or the representative of the Buyer upon request, at regular business hours – also without prior notice – the opportunity to inform itself with respect to the Seller’s production and business facilities or its quality assurance management system and the respective status of manufacture of the Goods. This right also extends to the Seller’s subcontractors and sup-pliers, whom the Seller shall bind accordingly

14. Safety, Environmental Protection, Social Standards and Human Rights

14.1

Persons who in performance of the agreement carry out work at the Buyer’s or third-party factory premises shall comply with the respective plant rules. The Seller shall hold exclusive liability for accidents sustained by such persons, unless this Agreement provides for otherwise. The Buyer’s liability for accidents sustained by such persons on the factory premises is excluded unless caused by an intentional misconduct of the Buyer’s employees.

14.2

Packaging shall be designed in such a way that it is easily separable and recyclable, mixed packaging should be avoided, and materials using renewable resources should be used. Corresponding product and materials information shall be made available.

14.3

The Seller acknowledges that minimum social standards shall be observed in the manufacture of the ordered Goods. Furthermore, the Seller commits that the principles of Norm SA 8000 (Standard for Social Accountability) will be followed, particularly with respect to the prohibition of child labor, discrimination of any kind, and inhumane working conditions.

14.4

The Seller commits not to employ any persons illegally. The Seller is responsible for the conclusion of employment agreements as well as for the procurement of visas and work permits. In the event of a violation, the Seller shall indemnify the Buyer for, and hold the Buyer harmless against, any claims made against the Buyer in connection with this provision (including legal expenses).

14.5

The Seller commits to complying with all local environmental laws in the manufacture of the Goods, and shall furnish substantiation thereof upon request

14.6

The Seller warrants that it will strictly comply with the provisions on restriction of the use of certain hazardous substances in electrical and electronic equipment insofar as they are relevant to the delivered Deliverables. The Seller shall maintain appropriate supporting documentation to be able to substantiate compliance with the prohibited materials regulation of such provisions. The Seller shall label Deliverables to be supplied by the Seller without cost to the Buyer in accordance with applicable German law including, in particular, the Waste Electrical and Electronic Equipment Act. According to the provisions of such Act, which also implements EU Directive 2002/96 EC (“Waste Electrical and Electronic Equipment”), the manufacturer of certain electrical and electronic equipment is required to provide for the return, processing and disposal of the equipment after the end of its useful life. Insofar as the shipped Deliverables are subject to the Waste Electrical and Electronic Equipment Act and unless otherwise expressly agreed, the Seller shall be responsible for the proper return, processing and disposal of al Deliverables delivered under this Agreement after the end of the useful life of such Deliverables in accordance with applicable law and assume the costs thereof. The Seller shall accept return of Deliverables at the respective location to which it was delivered and assume the costs thereof. Insofar as the Buyer is responsible under applicable law, in certain cases, for the disposal of Deliverables after the end of its useful life, the Seller shall assume the costs necessarily incurred for the return, processing and disposal of Deliverables delivered by the Seller.

14.7

The Seller shall not offer gifts or other benefits.

14.8

The Seller shall also strictly comply with the requirements of the Buyer’s “Code of conduct for Suppliers and Service Providers of the AURELIUS Group” as well as the US Foreign Corrupt Practices Act (“FCPA”).

14.9

For the avoidance of doubts any breach of paragraphs 14.3 to 14.8 shall be deemed a material breach of this Agreement and authorize the Buyer to seek all available damages.

14.10

The Seller is expressly committed to ensuring compliance with Material Compliance standards, including but not limited to regulations such as REACH, RoHS, Conflict Minerals, and other relevant standards. Non-compliance with these Material Compliance standards constitutes a deviation from the agreed specifications for the delivered deliverables. Material Compliance is integral to the overall conformity requirements of the component. The Seller must guarantee Material Compliance, undertaking the responsibility to promptly update the Buyer with necessary documentation whenever new revisions of the regulations become available. Any failure to meet the specified Material Compliance standards, including the provision of required documentation, triggers obligations beyond quality concerns. In such instances, the Seller commits to indemnify and hold harmless the Buyer from any and all liabilities, damages, costs, and expenses, including legal fees, arising from or related to non-compliance with Material Compliance standards.

15. Concluding Provisions, Termination

15.1

Any amendments or supplements of this Agreement shall be made in a written form to be valid. Any declaration of termination or withdrawal must be in written form to be valid. The parties can deviate from the foregoing pursuant to prior written to be valid agreement.

15.2

The Seller shall establish a consignment warehouse if necessary or upon request of the Buyer. In such case, the parties shall enter into a separate agreement.

15.3

The contractual relationship is governed by the laws of Germany to the exclusion of that jurisdiction’s conflict of laws rules and the UN Convention on the International Sale of Goods (CISG).

15.4

If an insolvency proceeding is initiated with respect to the Seller, or if a petition is filed for a judicial or extrajudicial reorganization its assets, the Buyer shall have the right to withdraw from the unperformed part of the agreement.

15.5

If a provision of this Agreement for purchase orders and other matters agreed to should be or become invalid, the validity of the remaining provisions shall be unaffected thereby. The invalid provision shall be replaced by a provision that most closely approximates the economic effect of the invalid provision.

15.6

This Agreement shall be valid for indefinite period of time. The Seller may terminate this Agreement upon 6 months prior notice. The Buyer has the right to terminate this Agreement at any time without cause upon two (2) weeks prior notice. In addition the Buyer may terminate this Agreement with immediate effect if the Buyer's end customer withdraws (cancels) its order, or if the Buyer’s investment plans are frozen, or the good cause as defined in section 15.7 below exists or any other good cause exists. In case of termination of this Agreement due to cause resulting from the Buyer’s fault, however, the Seller shall be entitled to reasonable compensation of the costs incurred up to such time, insofar as such costs can be plausibly proved and provided that they do not exceed the price for Deliverables that would have been paid by Buyer, unless this Agreement provides for otherwise. Without prejudice to the other provisions of this Agreement or law, the Buyer shall have right to withdraw from the agreement but not later than within twelve (12) moths from the date on which the agreement enters into force, unless the agreement provides for otherwise (a written form to be valid for amendment of this Agreement is not required in this respect).

15.7

The Seller shall not be entitled to compensation or reimbursement of the price or part thereof, however, if the Buyer terminates this Agreement.

Good cause for termination exists, in particular, if

(a) force majeure, labor disputes or business disruptions that are not the Buyer’s fault occur, which impede performance of this Agreement over a period of more than one ninety (90) calendar days, or

(b) the initiation of an insolvency or reorganization of its assets proceeding against the Seller is imminent, or

(c) there are material changes to the legal status or ownership or control relationships with the Seller so that the Buyer can no longer be reasonably expected to abide by this Agreement (particularly in the case of an interest obtained by a competitor of the Buyer), or

(d) the Seller is not in a position to deliver the Deliverables in the required amount, quality, at competitive prices or on the agreed delivery date, or if remediation has been unsuccessful, or

(e) the Seller is in material breach of this Agreement.

15.8

In the event of termination for good cause, the Buyer shall have the right to take possession of all documentation, tools, facilities or other items required in connection with the provision of the owed performance of the Seller, to use such items in the manner and scope as the Buyer considers expedient, and/or to take them in partial satisfaction of any claim and Seller shall fully cooperate to effect the transfer of such items to the Buyer.

15.9

The exclusive jurisdiction and venue shall be the Buyer’s domicile if the Seller is a merchant. The Buyer, however, reserves the right to assert its claims before any other court of competent jurisdiction.