Terms and conditions of purchase

of F. Hesterberg & Söhne GmbH & Co. KG

I. Relevant conditions

The legal relationship between the supplier and Hesterberg & Söhne GmbH & Co. KG as purchaser (hereinafter: FHS) shall be governed exclusively by these terms and conditions. Deviating terms and conditions of the supplier shall not become part of the contract either through acceptance of the order or through lack of objection in individual cases.

II Offers and conclusion of contract

1. offers shall be submitted to FHS without obligation and free of charge.
2. supply contracts (order and acceptance), delivery call-offs as well as amendments and supplements to the contracts/call-offs must be in writing in order to be effective – as must the waiver of this written form requirement – which is also complied with by remote data transmission. If the supplier does not accept the order/contract within 10 days of receipt, which must be confirmed to FHS in writing immediately after receipt, FHS shall be entitled to revoke it.
3. The conclusion of the contract shall establish a procurement obligation for the supplier with regard to the contractual goods/services.
4. Services deviating from the order which the supplier carries out on its own authority and additional services which have not been ordered in writing shall not establish any (further) claim for payment on the part of the supplier, not even from management without an order or unjustified enrichment. The statutory provisions shall apply to any claims for restitution. This shall not apply if FHS subsequently acknowledges deviations or additional services.5. FHS shall be entitled to demand changes to the design and execution of the order/delivery item within reasonable limits. The effects, in particular with regard to additional and reduced costs and delivery dates, are to be regulated appropriately by mutual agreement.

III Technical documentation

1. documents of all kinds provided by FHS such as samples, drawings, tracings, descriptions, models and the like shall remain the property of FHS. They may not be used for other purposes or made accessible to third parties or reproduced. They, as well as any copies made, must be returned to FHS
without special request as soon as they are no longer required for the completion of the order.
2. Documents provided by FHS within the meaning of the above paragraph 1 must be checked by the supplier immediately upon receipt for correctness and completeness, internal dimensional relationships and their feasibility. Any defects or missing documents must be reported immediately in writing. In the event of a breach of this obligation, the supplier may not subsequently invoke incorrect or incomplete transmission of information by FHS. The documents provided shall be deemed approved in this respect.
3. All documents and means of production shall be insured by the supplier against damage and loss at no cost to FHS for as long as they are in the supplier’s possession. Clause IX. Para. 9 shall apply accordingly.4. FHS’s approval of drawings, calculations and other technical documents shall neither cancel nor limit the supplier’s warranty and guarantee obligations with regard to the delivery item. This shall also apply if FHS submits proposals, unless expressly agreed otherwise in individual cases.5. After delivery of the items, the supplier must hand over to FHS the drawings, calculations and other technical documents (descriptions etc.) corresponding to the actual design in the required number in German and in standard DIN form. They must be capable of being copied and brought up to date if subsequent changes are made to the delivery item.6. The supplier is obliged to transfer ownership of these documents to FHS. The intellectual property in them shall remain unaffected unless otherwise agreed in individual cases.

IV Subcontractors

1. if a subcontractor is commissioned, the supplier undertakes to impose all obligations on the subcontractor in the same way as this contract imposes on the supplier.
2. if FHS provides assistance in the execution of the order, this shall be done under the responsibility, liability and insurance cover of the supplier. The same applies to intermediate transportation.

V. Price, payment and delivery

1. the prices are quoted free works (construction/assembly site) FHS incl. ancillary costs (packaging, loading and shipping costs etc.), insurance plus applicable statutory VAT. They are fixed prices and do not change for the duration of the execution of the order.

Unless otherwise agreed, the following conditions apply to import deliveries:
– “duty unpaid” for deliveries from EC countries,
– “duty paid and untaxed” for deliveries from third countries. Customs clearance is carried out by a forwarding agent approved by us.

2. payment shall be made within 30 days with a 3% discount or 60 days net, unless otherwise agreed in writing.
a) If early deliveries are accepted, the due date shall be based on the agreed delivery date.
b) In the event of defective delivery, FHS shall be entitled to withhold payment pro rata until proper fulfillment.
3. if partial payments have been agreed, the supplier must send FHS a written request for payment 14 days before the agreed payment date in each case. Payment is not due before this date.4. Invoices must be submitted in duplicate. In order to become due, they must fulfill the following requirements: They must comply with the statutory provisions, in particular they must show the remuneration (net invoice amount) and the tax amount due on the remuneration separately, they must contain supplier numbers, numbers and data of the order(s), the purchase agreement and / or the delivery call-off, additional data from FHS (account assignment), unloading point, numbers and data of the delivery bills and quantity of the invoiced services and deliveries
5. The delivery bills or dispatch notes must always contain the supplier number, order number and article number in addition to the usual quantity and weight details.

VI Deadlines and breaches of duty

1. the agreed dates and deadlines are binding. The continued existence of FHS’s interest in the performance of the entire contract is bound to the timeliness of the performance. This also applies in the event that the supplier has already provided partial services. The receipt of the goods at the FHS plant to be supplied shall be decisive for compliance with the delivery dates.2If the agreed deadlines are exceeded, the supplier shall pay a contractual penalty of 0.3% of the order amount for each working day of delay – in the case of partial deliveries/partial call-offs 0.3% of the order amount attributable to the partial performance due in each case; the contractual penalty may not exceed a total of 5% of the order amount – in the case of partial deliveries/partial call-offs 5% of the order amount attributable to the partial performance due in each case. The amount must be reimbursed to FHS immediately if there are no more outstanding payments from which it can be deducted immediately.FHS expressly reserves the right to assert further claims – taking into account the forfeited penalty as a minimum amount of the damage.3. The supplier shall be liable to FHS for compensation for all direct and indirect damage caused by delay. The acceptance of delayed delivery or service does not imply the waiver of claims for damages.

VII Notification of defects

FHS must notify the supplier of defects in the delivery within 2 weeks. In the case of obvious defects, the period shall commence upon handover, in the case of hidden defects upon their discovery in the ordinary course of business. In this respect, the supplier waives the objection of delayed notification of defects within the meaning of § 377 HGB (German Commercial Code).

VIII. Duty of documentation and warranty/guarantee

1. the supplier guarantees that all services rendered comply with the latest state of the art, the relevant legal provisions as well as the regulations and guidelines of authorities, trade associations and professional associations and that the technical data agreed – e.g. in quality agreements – are complied with. Irrespective of this, the supplier must constantly check the quality of the delivery items and document the test results in writing. The contracting parties shall inform each other of the possibilities for quality improvement. The test documents must be kept for 10 years and presented to FHS upon request.
2. In the case of parts specially marked in the technical documents or by separate agreement – e.g. by “D” – the supplier must also keep special records of when, in what way and by whom the delivery items have been tested with regard to the characteristics requiring documentation and what results the required quality tests have produced. The test documents must be kept for 10 years and presented to FHS upon request. In this context, reference is made to the currently valid VDA publication Volume 2 (Quality Assurance of Deliveries / Supplier Selection / Quality Agreement / Production Process and Product Release / Quality Performance in Series Production, Brief Description), the content of which is hereby made the subject of this contract
3. Insofar as authorities responsible for motor vehicle safety or similar require access to the production process and the test documents of FHS in order to verify certain requirements, the supplier undertakes, at the request of FHS, to grant the authorities the same rights in his company and to provide all reasonable support.
4Unless otherwise agreed in individual contracts (e.g. in agreed guarantees), the warranty period shall end 24 months after delivery to FHS.
5. The continued existence of FHS’s interest in the performance of the entire contract shall be linked to the timeliness of the rectification of defects. This also applies to the provision of partial services.
6If FHS demands rectification of the defect and the supplier does not comply with this within a reasonable period set by FHS, FHS may take the
necessary measures itself or have them taken by qualified third parties at the supplier’s expense and risk – without prejudice to the continuing warranty/guarantee obligation(s).
In urgent cases (e.g. In urgent cases (e.g. risk to operational safety; risk of FHS’s own default vis-à-vis other contracting parties, etc.), FHS may, after expiry of a reasonably short deadline for subsequent performance to be set to the supplier, immediately remedy the defect itself or have it remedied by qualified third parties and demand reimbursement of the necessary expenses from the supplier. The same shall apply if there is a risk of high damages. Further claims and existing warranty/guarantee obligations of the supplier remain unaffected by this.
7. If the materials used by the supplier contain substances or preparations listed in the respective valid ordinance on hazardous substances and/or its annexes, the delivery must be labeled in accordance with the ordinance. If there is no labeling, the fully completed safety data sheet (DIN 52900) must be submitted to the supplier. EC Directive 91/155/EEC of 05.03.1991 to FHS.
8. Claims for defects may also be asserted after expiry of the limitation period(s) if the supplier has been notified of the relevant defects by FHS in writing before expiry of the period. If claims within the meaning of sentence 1 are asserted, they shall become time-barred within 18 months, calculated from receipt of the written request, but not before expiry of the agreed limitation period(s).
9. If a defect is attributable to the service description, to instructions from FHS or to materials or advance services of another company supplied or prescribed by FHS, the supplier shall only be released from the warranty for a defect on condition that it has informed FHS in writing of any recognizable concerns about the service description, instructions from FHS or the advance services of other contractors before executing its delivery/service and has given FHS the opportunity to remedy the situation.
10.The supplier undertakes to comply with the applicable environmental protection regulations and statutory safety requirements in the procurement, production and/or disposal of raw materials, auxiliary materials and/or operating materials, unfinished and finished parts.

IX. Liability

1. notwithstanding any other provisions in these terms and conditions and in the contractual agreements, the supplier shall be liable for all personal injury, property damage and financial loss culpably caused by it, its employees and/or its vicarious agents. This shall also apply in the event of a breach of the confidentiality obligation pursuant to Clause XII.2. If FHS provides support in the form of the provision of labor and equipment, FHS shall not assume any liability if the supplier has the right to issue instructions. FHS shall only be responsible for the careful selection of the workers and equipment.
3. If claims are asserted against FHS on the basis of strict liability under non-mandatory law towards third parties, the supplier shall be liable to FHS to the extent that it would be directly liable. The principles of § 254 BGB shall apply accordingly to the compensation of damages between FHS and the supplier.
4. The obligation to pay damages shall also extend to measures taken by FHS to avert and prevent damage (e.g. recall action).
5. FHS shall inform and consult the supplier immediately and comprehensively if the supplier’s liability is in question. FHS shall give the supplier the opportunity to investigate any case of damage. The contracting parties shall agree on the measures to be taken, in particular in settlement negotiations.
6.The supplier is obliged to take out insurance in such a way that all interests of FHS and third parties in question are safeguarded in the event of damage
.
The supplier must provide evidence of business and product liability insurance that contains at least
the following sums insured for him, his managing directors and employees:
– € 2 million for personal injury per person and event,– € 1 million for property damage per event and
– € 100,000 for financial loss per event.

In addition, the contractor is obliged to provide evidence of environmental liability insurance with recourse cover with a minimum cover of EUR 2 million.
.
The insurance policies must cover the entire duration of the project, including the warranty/guarantee period.

7. the supplier is also obliged to provide evidence of recall cost insurance with a minimum cover of €2,000,000.
8. the supplier must inform FHS by the time the contract is concluded at the latest which additional insurance policies should be taken out in consideration of the special features of the respective order.
9. in the event that FHS suffers damage that is covered by one of the aforementioned insurance policies, the supplier hereby assigns to FHS the claims against the respective insurance company. FHS hereby accepts the assignment and will endeavor to obtain the consent of the respective insurance company. The same shall apply if a third party suffers damage which is to be settled by FHS. Any claims of FHS against the supplier shall be reduced accordingly. The supplier is revocably authorized to assert the claims against the insurance companies in its own name but for the account of FHS. The supplier undertakes to provide FHS with a copy of the complete policies. If the supplier fails to meet its obligations, FHS shall be entitled to conclude the corresponding insurance contracts in the name and at the expense of the supplier and/or to pay the premiums due and to offset the costs thus incurred against the supplier’s claims.
10. FHS shall maintain business liability insurance with the amounts of cover specified in paragraph 6. FHS shall only be liable for property damage and financial loss within the scope of this business liability insurance. FHS shall be liable for personal injury to the supplier’s personnel to the extent permitted by law. FHS may demand indemnification from the supplier against such claims insofar as they exceed the amounts covered by FHS’s public liability insurance.

X. Software

If the supplier’s scope of delivery includes software, FHS shall be granted the sole and exclusive right to use this software including its
documentation.

XI. Transfer of risk

The material risk and the risk of counter-performance shall pass to FHS upon delivery to the contractually agreed place of receipt or use.

XII. Secrecy

1. descriptions, models, matrices, templates, samples, drawings, tools and other documents of any kind or means of production, as well as confidential information provided to the supplier by FHS, may only be used by the supplier for deliveries to third parties or made accessible to third parties with the prior written consent of FHS.
Likewise, material manufactured according to templates, technical regulations, drawings, specifications, etc. developed by FHS may only be delivered to third parties with the prior written consent of FHS. The supplier undertakes to keep all commercial and technical details relating to the order secret from third parties.
2. The supplier further undertakes to impose these self-assumed obligations on all persons and companies involved in the execution of the order in the same way.
3.The contracting parties may only advertise their business relationship with prior written approval.
4. The supplier shall pay a contractual penalty of €50,000.00 (in words: fifty thousand euros) to FHS for each breach of data protection regulations or security/confidentiality agreements for which it is responsible, and €5,000.00 (in words: five thousand euros) in the event of a breach of paragraph 3. Further claims remain reserved – taking into account the forfeited penalty as the minimum amount of damages.

XIII Industrial property rights

1. the supplier shall be responsible, depending on fault, for ensuring that his work / delivery item is free of third-party property rights and that no other rights exist that would exclude contractual use in whole or in part.
2In the event of liability in accordance with para. 1, the supplier shall assume sole and unlimited liability towards those who assert an infringement of industrial property rights or other rights to the delivery / service and undertakes to indemnify FHS and its customers against claims by the holders of industrial property rights or copyrights concerned.
The supplier shall be entitled and obliged towards FHS to conduct all legal disputes arising from such claims at its own expense.
3The parties are obliged to inform each other immediately in writing if an infringement of industrial property rights is asserted against them.
4. The supplier must notify FHS of the use of published or unpublished own or licensed industrial property rights and applications for industrial property rights to the trade / delivery item.
5If the contractual use of the delivery / service is impaired by third-party property rights, the supplier shall, in the event of its liability pursuant to para. 1, have the right, at its discretion, either to modify the contractual service in such a way that it falls outside the scope of protection but nevertheless complies with the contractual agreements, or to obtain the authorization to use it in accordance with the contract without restriction and without additional costs for FHS.
If suppliers do not succeed in eliminating the impairment of the right of use in the above sense, FHS shall be entitled to withdraw from the contract in whole or in part, to demand a reduction of the remuneration (also retroactively) up to the amount of the total remuneration or to claim damages instead of the entire or partial performance.
6The warranty period regarding the supplier’s liability for property rights is 36 months from delivery.

XIV Unforeseeable events, insolvency

1. force majeure, industrial disputes (strikes and lockouts), unrest, official measures (plant closures, operating restrictions, withdrawal or restriction of operating licenses, etc.), natural disasters and other unforeseeable, unavoidable and serious events shall release FHS from the obligation to take delivery for the duration of the disruption and the extent of its effect. Claims of the parties for remuneration or compensation under the aspect of delayed completion are excluded for the duration of the disruption.
The contracting parties are obliged to provide the necessary information without delay within the scope of what is reasonable and, as far as possible, to adapt the obligations to the changed circumstances in good faith.
2If there is a significant deterioration in the supplier’s financial circumstances after the order has been placed, in particular if an application is made to open insolvency proceedings against the supplier’s assets or if the legal form of the supplier’s company changes, FHS shall be entitled to withdraw from the contract within a period of one month. The period shall commence as soon as FHS becomes aware of one of the aforementioned circumstances.

XV Provision of material by FHS

1. material provided by FHS shall remain the property of FHS and, as long as it is in the possession of the supplier, shall be insured by the supplier against damage and loss at no cost to FHS. Clause IX. Para. 9 applies accordingly. Packaging material from FHS must be returned carriage paid in perfect condition, unless it is used for the return delivery.
2. The supplier must inspect material provided by FHS for defects immediately after receipt, insofar as this is feasible in the ordinary course of business. Any defects or missing documents must be reported within 2 weeks. In the case of obvious defects, the period shall commence upon handover; in the case of hidden defects, it shall commence upon their discovery in the ordinary course of business. If defects are discovered, the defective material may not be used within the meaning of paragraph 3 below. If the supplier fails to notify us in due time and nevertheless uses the material in the sense of para. 3, he shall be liable for the resulting damage. In all other respects, the burden of proof rules of § 377 HGB shall apply.
3. If a new movable item is produced within the meaning of § 950 para. 1 BGB by processing or transforming one or more materials, FHS shall be deemed to be the manufacturer if FHS has provided one of the processed or transformed materials. If movable objects within the meaning of § 947 BGB are combined with each other or mixed or blended with each other within the meaning of § 948 BGB and if an object within the meaning of § 947 para. 2 BGB is to be regarded as the main object, then the supplier shall transfer to FHS – insofar as the main object is not the object provided by FHS in any case – in accordance with §§ 929 sentence 1, 930 BGB, the supplier hereby transfers back to FHS the co-ownership share that results from the ratio of the value that the item(s) provided by FHS had at the time of the connection and grants FHS indirect ownership in this respect in accordance with § 868 BGB.

XVI General provisions

1. this contract contains all relevant agreements between the parties. No ancillary agreements have been made.2. Should a provision of this contract be or become invalid – in whole or in part – as a result of a breach of statutory provisions, or give rise to doubts of a legal or factual nature for any reason whatsoever, this circumstance shall not result in the invalidity of the entire contract. Rather, the invalid provision shall be deemed to have been intended in such a way and shall be supplemented or recast accordingly so that it comes as close as possible to the intention of the contracting parties as expressed in this contract as a whole in a legally permissible manner.
If the invalidity of a provision is based on a measure of performance or time (deadline and date) specified therein, the legally permissible measure that comes closest to the provision shall take its place.
Each contracting party may at any time demand the cooperation of the other party necessary for the conclusion of such a substitute provision. The same applies if a loophole requiring supplementation becomes apparent during the execution of this contract. Otherwise, the statutory provisions shall apply.3. The place of performance for the delivery/service shall be the registered office of FHS. The place of performance for payment shall be Dortmund.4. German law shall apply exclusively. The applicability of the United Nations Convention on Contracts for the International Sale of Goods is excluded. The place of jurisdiction is Hagen.
5. The assignment of claims of the supplier arising from this contract requires the consent of FHS.
6. In accordance with the Data Protection Act, it is pointed out that FHS stores data about the supplier and uses it within the scope of the cooperation.

Status: 11/30/2007