General Terms and Conditions of Purchase

of HAMANN AG, Bei der Lehmkuhle 4, 21279 Hollenstedt
(hereinafter also referred to as “Customer”)

Section 1 Application
(1) All deliveries, services and offers of our Suppliers shall be made exclusively based on these General Terms and Conditions of Purchase. These are an integral part of all contracts that we enter into with our Suppliers for the goods or services offered by them. They shall also apply to all future deliveries, services or offers to us even if they are not agreed again separately.

(2) Commercial terms and conditions of our Suppliers or third parties shall not apply even if we do not object separately to them applying in a specific case. Even if we refer to a letter that contains commercial terms and conditions of the Supplier or a third party or refers to such terms, this is not tantamount to agreeing that those commercial terms and conditions shall apply.

Section 2 Orders and contracts
(1) Unless our orders und contracts expressly contain a binding time limit we shall consider ourselves bound by them one week after the date of the order or contract. The date of receipt by us of the declaration of acceptance shall determine whether acceptance is timely.

(2) We shall be entitled to amend the time and place of delivery and the type of packaging at any time by written notification made at least 10 calendar days prior to the agreed delivery date. The same shall apply to changes to product specifications provided these can be implemented in the course of the Supplier’s normal production process without significant additional effort, with the notice period in accordance with the previous sentence being at least two months in these cases. We shall reimburse the Supplier for reasonable additional substantiated costs resulting in each case from the change. If such changes result in delays in delivery that cannot be avoided in the Supplier’s normal production and business operation with reasonable efforts, the originally agreed delivery date shall be deferred accordingly. The Supplier shall notify us in writing of the additional costs it expects to incur upon careful assessment or of any delivery delays in good time prior to the delivery date but at least within five business days following receipt of our notification pursuant to sentence 1.

(3) We shall be entitled to terminate the contract at any time by written declaration indicating the reason if we can no longer use the ordered product in our business operation due to circumstances that have arisen after the contract is entered into. We shall compensate the Supplier in this case for the partial service provided by him.

Section 3 Prices, payment terms and conditions, invoice details
(1) The price stated in our order is binding.

(2) Save as otherwise agreed in writing, the price shall include delivery and shipping to the shipping address specified in the contract including packaging.

(3) To the extent that in terms of the agreement made the price does not include packaging and the fee for packaging (that is not simply lent) is not explicitly specified, this must be charged at verifiable net cost price. At our request the Supplier must take back the packaging at its own expense.

(4) Unless otherwise agreed, we shall pay the purchase price after delivery of the goods and receipt of the invoice within 14 days with a 3% discount or within 30 days net. Discounted payment is also permitted if after payment withheld due to notified defects these defects are completely remedied and payment is made thereafter within the 14-day period. Receipt of our transfer order by our Bank shall suffice to establish the timeliness of the payments owed by us.

(5) All order confirmations, delivery papers and invoices must include our order number, item number, delivery quantity, delivery date and delivery address. In the invoices the Supplier must also indicate its valid VAT ID number and tax number. If one or more of these details is missing and this causes processing by us to be delayed in our normal course of business, the payment time limits specified in paragraph 4 shall be extended by the period of the delay.

(6) In the case of late payment we shall owe late interest of five percentage points above the base rate pursuant to Section 247 of the German Civil Code [Bürgerliches Gesetzbuch – BGB].

Section 4 Delivery time and delivery, transfer of risk
(1) The delivery time stated in the order (delivery date or period) shall be binding. Early deliveries are not permitted. The Supplier shall be obligated to inform us in writing immediately if circumstances occur or become evident which mean that the delivery time cannot be adhered to. If the latest date on which the delivery must be made can be determined under the contract, the Supplier shall be in default upon expiry of said date without us being required to issue a reminder in this respect.

(2) In the case of late delivery we have full statutory rights including the right of cancellation and the right to damages in lieu of performance after the expiry of a reasonable grace period without the situation being remedied.

(3) We shall be entitled in the case of delivery delays, after giving prior written reminder to the Supplier, to require a contractual penalty of 0.5%, up to a maximum 5%, of the respective contract value for each week or partial week that delivery is delayed. The contractual penalty must be offset against the default damages to be reimbursed by the Supplier.

(4) The Supplier shall not be entitled without our prior written consent to make partial deliveries. Risk shall pass to us, even if consignment has been agreed, only once the goods are delivered to us at the agreed destination.

Section 5 Protection of title
(1) We reserve title to or copyright in orders and contracts issued by us including drawings, images, calculations, descriptions and other documents provided to the Supplier. The Supplier may not without our express consent make them accessible to third parties, disclose them, use them itself or through third parties or copy them. It must return these documents in their entirety to us at our request if they are no longer needed by it in the ordinary course of business. Any copies thereof made by the Supplier must in this case be destroyed; the only exceptions to this are copies that are kept in the context of statutory retention obligations and the storage of data for security purposes in the normal course of data protection.

(2) Tools, equipment and models which we provide to the Supplier or which are manufactured for contractual purposes and are charged to us separately by the Supplier shall remain or become our property. They must be designated by the Supplier as our property, kept carefully, safeguarded from damage of any kind and only used for the purposes of the contract. The Supplier shall notify us immediately of any significant damage to these items. It must when called upon deliver these items to us in a good condition if they are no longer being used by it to perform the contracts entered into with us.

(3) Retentions of title by the Supplier shall only apply to the extent that they relate to our payment obligation for the respective products in respect of which the Supplier retains title. Extended or renewed retentions of title are specifically not permitted.

Section 6 Warranty claims
(1) In the case of defects we have full statutory rights. By way of exception to this, the warranty period shall however be 36 months.

(2) Where there are discrepancies in quality and quantity, objection is in all cases made in a timely manner if we notify same to the Supplier within ten business days of our receipt of the goods. Where there are latent defects objection is in all cases made in a timely manner if notification is made to the Supplier within ten business days after the defect is discovered.

(3) Accepting or approving specimens or samples that are submitted does not mean that we waive our right to assert warranty claims.

(4) Receipt by the Supplier of our written notification of defects interrupts the prescription of warranty claims. In the case of replacement and remediation of defects the warranty period for replaced and repaired parts shall begin anew unless we were forced to assume from the conduct of the Supplier that the latter did not consider it was obligated to take the measure but undertook replacement or defect remediation only as a gesture of goodwill or for similar reasons.

Section 7 Product liability
(1) The Supplier shall be liable for all claims asserted by third parties for personal injury, property damage or financial losses which are attributable to a defective product delivered by him, and shall be obligated to indemnify us in respect of the resulting liability. If we are obligated due to a defect in a product delivered by the Supplier to implement a third party recall, the Supplier shall bear all costs associated with the recall.

(2) The Supplier shall be obligated, at its own expense, to maintain product liability insurance with the usual coverage amount that, unless otherwise agreed in the individual case, does not need to cover recall risk or criminal or similar damage. The Supplier shall send us whenever we so request a copy of the liability policy.

Section 8 Intellectual property rights
(1) The Supplier warrants that in connection with his delivery there is no infringement of third party intellectual property rights in countries of the European Union, North America or other countries in which he manufactures the products or has them manufactured.

(2) The Supplier shall be obligated to indemnify us in respect of all claims which third parties make against us for breach of industrial property rights specified in paragraph 1 and to reimburse us for all necessary expenses in connection with said claims. This entitlement is irrespective of any fault on the part of the Supplier.

Section 9 Spare parts
(1) The Supplier shall be obligated to keep in stock spare parts for the products delivered to us for a period of at least fifteen years following delivery.

(2) If the Supplier intends to discontinue production of spare parts for the products delivered to us for whatever reason, it shall notify us of this immediately after the decision is made to discontinue production. Said decision must, subject to paragraph 1, be made at least twelve months prior to production being discontinued. The Supplier shall also be obligated to appoint a replacement supplier for us or provide us with the know-how for the corresponding spare part (including technical drawings and corresponding documentation) at no charge so that it can be manufactured by us or by third parties.

Section 10 Confidentiality
The Supplier shall be obligated to keep confidential the terms and conditions of the order and all information and documentation provided for this purpose (with the exception of information in the public domain) for a period of four years after the contract is concluded and only to use it to execute the order. It shall return them to us immediately upon request after dealing with queries or after processing orders. The Supplier may not without our prior written consent refer to the business relationship in promotional material, brochures, etc. or exhibit delivery items that have been made for us. The Supplier shall require his sub-suppliers to comply with this Section 10 accordingly.

Section 11 Assignment
The Supplier shall not be entitled to assign its claims arising from the contractual relationship to third parties. This shall not apply where these are monetary claims.

Section 12 Place of performance, jurisdiction, applicable law
(1) The place of performance for both parties shall be Hollenstedt and Hamburg shall have exclusive jurisdiction for all disputes arising from the contractual relationship.

(2) The contracts entered into between us and the Supplier shall be subject exclusively to the law of the Federal Republic of Germany to the exclusion of the Convention on Contracts for the International Sale of Goods (UN Convention on Sale of Goods).

(3) To the extent that the contract or these General Terms and Conditions of Purchase contain gaps in the provisions, legally valid provisions to fill in these gaps shall be deemed to be agreed which the contracting parties would have agreed upon in accordance with the economic objectives of the contract and the purpose of these General Terms and Conditions of Purchase if they had known of the gap in the provision.

Status: 15 April 2011