1.     Scope

1.1   The following General Terms and Conditions of Purchase of AE INDUSTRY GmbH (hereinafter “AE”) shall apply to the manufacture of works and to all goods ordered from the supplier (hereinafter referred to collectively as "deliveries") as well as the performance of services (hereinafter "services").

1.2   General Terms and Conditions of the supplier that deviate from or supplement these General Terms and Conditions of Purchase shall not be binding for AE, even if AE does not expressly object to these or if the supplier declares that he only wishes to deliver according to his own General Terms and Conditions of Business, or if these are attached to his declaration of acceptance according to Item 2.1 or to the delivery note or order form, as the case may be. Nor does the acceptance of deliveries and services by AE or the payment thereof constitute an acceptance of the supplier’s General Terms and Conditions of Business.

2.     Conclusion of Contract

2.1   Orders and assignments (hereinafter collectively referred to as "orders”) from AE can only be accepted by the supplier within a period of two weeks via written declaration. The receipt of acceptance by AE shall determine the expiry of this period.

2.2   The acceptance of orders must contain all of the important order data, particularly the precise designation of the ordered deliveries and services, the order number as well as the date of the order and the delivery. The supplier is to be held responsible for delays resulting from a breach of these Terms and Conditions by the supplier.

2.3   Supplements or changes to orders require written confirmation by AE.

2.4   Without the prior written consent of AE, the supplier shall not be entitled to subcontract third parties. The unauthorized subcontracting of third parties shall entitle AE to withdraw from the contract, entirely or in part, as well as to claim compensation for damages.

3.     Prices

3.1   The agreed prices are fixed prices, and they preclude all types of additional charges and price increases.

3.2   Unless otherwise agreed, deliveries shall be DAP, INCOTERMS 2010.

4.     Terms of Payment

4.1   The supplier’s invoices are to be issued in duplicate and must contain all of the information required in the order for each delivery.

4.2   Payments from AE shall be made - unless otherwise agreed or determined by statutory regulations - by means of bank transfer, depending on the contract object, after delivery or acceptance and receipt of invoice, due net within 60 day from the end of the month on the tenth of the following month.
If a cash discount has been agreed in the order, then this deduction of cash discount shall be permissible even in the case of offsets or when justifiably exercising the right of retention based on defects. The payment shall be made subject to invoice verification.

4.3   The supplier shall not be entitled to assign his claims against AE or to have them collected by third parties without AE’s written consent, which may not be unreasonably withheld. This shall neither apply in the case of an extended retention of title nor to assignments to companies in which AE participates directly or indirectly with over 50%. Section 354 a of the HGB (German Commercial Code) remains unaffected.

5.      Date of Delivery, Place of Performance

5.1   Agreed dates or deadlines for deliveries and services are binding. Advance deliveries and services, as well as deliveries and services after the agreed date, are only permissible with the consent of AE.

5.2   The receipt at the receiving point specified by AE shall be decisive regarding the timeliness of deliveries or services. The supplier must inform AE without delay, if and as soon as it becomes evident that the former cannot meet the deadline for delivery or services. The acceptance of a late delivery or service by AE does not constitute a waiver of compensation claims.

5.3   If the delivery or service of the supplier is delayed, then AE shall be entitled to impose a contractual penalty amounting to 0.2%, yet at the most 5%, of the total contract amount for each commenced working day. In the event that the appropriate reservation of rights is not made at the time of acceptance of delivery, services or rectification, the contractual penalty can be claimed up until the date of final payment. In addition to the fulfilment, AE shall be entitled to impose a contractual penalty. AE reserves the right to assert further claims and rights.

5.4   AE shall not be obligated to accept partial deliveries or services. In the case of agreed partial deliveries, the remaining quantity that is still to be delivered must be listed in the delivery note.

5.5   The place of performance for deliveries and services of the supplier is the receiving point specified in the order. If a receiving point is neither specified nor apparent from the nature of the contractual obligation, then the agreed place of performance shall be the branch office of AE that is indicated in the order, in the absence such specification of the headquarters of AE.

6.      Dispatch, Transfer of Risk, Export Control, Offsets

6.1   The supplier must package and dispatch his deliveries properly as well as insure them, thereby observing all of the relevant packaging and shipping regulations. The supplier shall be liable for all damages incurred by AE due to improper or insufficient packaging, shipment or insurance.

6.2   Shipping documents, such as delivery notes and packing slips, are to be included in the delivery. Order numbers and required designations of AE in the order are to be indicated in all documents. At the latest on the day of dispatch, AE is to be sent a shipping notice in advance via fax or e-mail.

6.3   Additional costs incurred by AE due to failure to comply with the above regulations shall be borne by the supplier.

6.4   In the case of deliveries without installation or assembly, the risk shall pass with the receipt of the goods at the receiving point specified by AE. In the case of deliveries with installation or assembly, the risk shall pass with the acceptance to be carried out at the installation site.

6.5   The notional acceptance provided for in Section 640, para.1 (3) of the BGB (German Civil Code) shall be excluded. The acceptance by means of a completion certificate in accordance with Section 641a of the BGB shall be excluded.

6.6   The supplier shall be obligated to observe the current export control restrictions.

7.     Rights of AE in the case of defects in purchase agreements or contracts for work

7.1   The supplier shall be responsible for defects in purchase agreements and contracts for work for a period of three years from the passing of risk. To the exclusion of sentence 1, the statute of limitation for building structures and works whose outcome consists in performing planning and supervisory work is five years from the acceptance.

7.2   AE shall report defects to the supplier in writing without delay, as soon as these are detected as part of the proper course of business. In this respect, the supplier shall forego objection to the late notification of defects.

7.3   AE shall be fully entitled to the statutory claims in regard to defects. AE shall be entitled, at its discretion, to demand rectification of the defect by the supplier or the delivery of a defect-free item, or the manufacture of a new product. AE expressly reserves the right to claim damages, particularly the right to compensation for damages instead of the service.

7.4   In addition to the statutory claims, AE can remedy a defect itself, due to a defect in purchase agreements and contracts for work, after the unsuccessful expiration of a period deemed appropriate, and it can request compensation for the necessary expenses, unless the supplier is justified in refusing subsequent performance. In this respect, the statutory provision for carrying out such work oneself in the case of a contract for work (Section 637 of the BGB) shall apply accordingly to the subject of the purchasing agreement. AE can demand an advance payment from the supplier in order to remedy the defect.

8.     Rights of AE in the case of a breach of contractual obligations

In deviation from Item 7, the rights of AE in the case of a breach of contractual obligations shall be determined by the statutory regulations.

9.    Quality and Safety

The supplier is to comply with the recognized rules of technology, safety regulations and the agreed technical data and standards for his deliveries and services, and he shall be responsible for the deliveries and services being in compliance with all of the statutory requirements, particularly the environmental regulations, accident prevention regulations, other health and safety regulations as well as the safety-related rules. He shall also be obligated to point out to AE the special, not generally known handling and disposal requirements as well as to send a manufacturer’s declaration or a conformity declaration (CE) in accordance with the applicable European Union directives or other statutory regulations for each of the delivered goods. Changes of deliveries and services require the prior written consent of AE. The manner of cooperation in the field of quality, such as initial sampling and documentation, shall be regulated in the respective product specification.

10.    Provision of Material or Components

10.1  Any and all types of documents and objects made available to the supplier by AE shall remain the property of AE. They may only be used for the fulfilment of the orders. The supplier must insure the objects provided to him against loss and deterioration. The supplier shall have no right of retention regarding objects from AE.

10.2  If objects provided by AE are processed or altered by the supplier as new movable objects, then AE shall be considered as manufacturer. If there is a combination or inseparable integration into other objects, then AE shall acquire co-ownership to the new item that is proportionate to the value that the objects had at the time of the combination. If objects of the supplier are considered as the main item, then it shall be considered agreed that the supplier proportionately assigns co-ownership to AE, whereby the supplier shall store the co-owned item for AE free of charge.

10.3  The supplier shall be obligate to conduct any required maintenance and inspection work at his own expense as well as to adequately insure the objects provided to him and to provide AE with verification of this upon request.

11.    Non-disclosure

11.1  The order from AE is to be treated with confidentiality. Moreover, the supplier is to maintain secrecy regarding the not generally known commercial and technical information and documents that are made known to him through the business relationship as well as to make use of these solely for the performance of the ordered deliveries. Drawings, models, samples and similar objects may not be made available or accessible to unauthorized third parties. The reproduction of such objects is only permitted within the framework of copyright regulations, to the extent that these are required for the fulfilment of the obligations for which the supplier is responsible. Any subcontractors shall be obligated to secrecy accordingly.

11.2  Any mention, depiction or other use by the supplier of the company name or trademarks of AE as a part of advertising materials, references or other publications shall require the prior written consent of AE.

11.3  AE shall be entitled to demand the compliance with additional safety regulations.

12.    Spare Parts, Readiness to Deliver

12.1  The supplier shall be obligated to deliver spare parts to AE at reasonable conditions for the period of the normal technical service life, yet at least for ten years after the last delivery.

12.2  If the supplier discontinues delivery of the goods after expiration of the period mentioned in Item 12.1 or during this period, then he must provide AE with an opportunity to place a final order at reasonable conditions.

13.    Industrial Property Rights

13.1  To the extent that deliveries and services are protected by patents and copyrights, the supplier shall grant to AE all of those rights for reproduction, for use, for operation, for release to third parties, for adaptation, for modification or for translation, which are required for the application and use of the deliveries and services in accordance with the purpose of the order that has been placed. This granting of rights shall be considered settled with the remuneration according to Item 3.

13.2  AE shall receive unrestricted ownership of the deliveries and services, particularly those involving folders, plans, technical memos, drawings, prototypes, models or tools.

13.3  The supplier shall be obligated to indemnify AE in regard to any liabilities based on claims that the deliveries or services infringe patents, copyrights, trade secrets or other industrial property rights of third parties, to the extent that the supplier does not prove that he is not at fault. In such a case, the supplier shall be obligated to assume all of the costs and payment obligations resulting from a final verdict reached by a court or from a settlement, provided that AE informs the supplier within ten (10) days of the assertion of a claim, grants the supplier sole control and decision regarding the legal defence and the conducting of settlement negotiations as well as provides the supplier with any reasonable support upon request. Item 7.1 shall apply accordingly.

14.    Product Liability

14.1  The supplier shall be obligated to perform a detailed inspection of his deliveries for defects and to do everything in his power to prevent a product liability. If claims are asserted against AE by a third party based on the defectiveness of a product, and the defectiveness entirely or partially involves a defective delivery of the supplier, then AE shall also be entitled to indemnification in regard to third parties, instead of the compensation for all damages. The supplier’s liability for damages also includes the costs of a precautionary recall campaign for the prevention of loss, if this is feasible.

15.    Hazardous Substances, Legislation of Protection of Workers, AEO

15.1  In the case of works at the premises of AE, the supplier shall only assign employees who have the required qualifications for the work. Upon request on short notice, the supplier shall provide AE with certifications for a random examination.

15.2  The supplier shall be obligated, at his own expense, to comply with the applicable statutory provisions, particularly the safety and environmental provisions including the Ordinance on Hazardous Substances and the Electrical and Electronic Equipment Act.

15.3  The supplier shall at all times be obligated to comply with all requirements in accordance with the EU Regulation 1907/2006 of 18 December 2006 concerning the handling of chemical substances (referred to as the “REACH regulation”). In particular, he will fulfil his obligations from
Art. 31 to 33 of the regulation and moreover immediately provide AE with all information, even when not specifically requested by AE, which AE requires as part of this contract based on the REACH regulation and those for the contractual application that are significant for the products to be delivered by the supplier. A supplier with registered office outside the EU shall be obligated to observe the duties of an importer in accordance with the REACH regulation. These duties of the supplier involve important contractual duties (“cardinal obligations”), the fulfilment of which is indispensable for the contractual performance. If the supplier does not attend to such duties, insufficiently attends to these or not in a timely manner, then the supplier shall indemnify AE in regard to all claims for damages resulting for AE based on the supplier’s non-performance of these duties.

15.4  If required, each delivery must include a current version of the safety data sheet in accordance with the EC Regulation 1907/2006/EC (“REACH regulation”) and the EC Directive 67/548/EEC (“Substance Directive”) in the German and English languages.

15.5  The supplier shall be responsible for the redemption and the duty of disposal in accordance with Section 10, para. 2 of the Electrical and Electronic Equipment Act, and he shall assume any possible related costs.

15.6  The supplier shall be obligated, in the case of goods produced, stored or transported on behalf of Authorized Economic Operators (AEO), that these are delivered to them or that they assume this responsibility themselves, they are produced in secure business premises and secure loading places, stored, treated or processed and loaded, and that these are protected against unauthorized access during the production, storage, treatment or processing, loading and transport. The supplier declares the reliability of personnel assigned to the production, storage, treatment or processing, loading, transport and acceptance of such goods. The supplier shall instruct his business partners who act on his behalf that they must also implement measures in order to ensure the security of the above-mentioned supply chain.

16.    Termination of Services

16.1  In the event that the supplier is either incapable of performing or refuses to perform his contracted services, or he does not comply with the agreed requirements or conditions, AE shall be entitled to cancel the underlying order(s), provided that the supplier does not provide the corresponding service(s) according to contract within thirty (30) days, in spite of a corresponding written request for contract performance. Any possible claims for damages arising from a culpable breach of contract remain thereby unaffected.

16.2  The statutory regulations on the termination of services remain unaffected.

17.    Insurance Policies

17.1  The supplier shall be obligated to take out and maintain insurance policies with a reputable and financially stable insurance company, which provide reasonable coverage of his obligations to AE arising from orders placed by AE. In particular, the supplier shall be obligated to take out and maintain a general liability insurance policy with coverage of not less than €5,000,000 (five million) per individual case and calendar year as well as a product liability insurance policy with coverage of not less than €5,000,000 (five million) per individual case and €10,000,000 (ten million) per calendar year.

17.2  The supplier shall be obligated, at the request of AE, to provide the latter with insurance certificates without delay.

18.    Final Provisions

18.1  For all legal relationships between AE and the supplier, the law of the Federal Republic of Germany shall exclusively apply to the exclusion of the provisions of the uniform UN Convention on the International Sale of Goods (CISG).

18.2  If the supplier suspends his payments, if a preliminary insolvency administrator is appointed or if insolvency against the assets of the contractor has been filed, then AE shall be entitled to withdraw from the contract entirely or partially, or to cancel the contract. In this case, AE shall be entitled to make use of the existing facilities or the previously performed deliveries and services of the supplier in exchange for reasonable reimbursement.

18.3  The place of jurisdiction for all disputes arising from the business relationship regulated by these General Terms and Conditions of Purchase is, at the discretion of AE, the place of performance (see Item 5.5) or Mannheim. AE shall also be entitled to file suit against the supplier at any other general or particular place of jurisdiction.

18.4  Amendments and supplements to these General Terms and Conditions of Purchase as well as subsidiary agreements require the written form. This shall also apply to a waiver of this clause concerning the written form.

18.5  Should one of the previous provisions be or become ineffective, the validity of the remaining provisions shall remain unaffected.
The contract partners shall be obligated to replace the ineffective provision with one that
comes as close as possible to the intended economic effect.

As of: 202-12-01

The German version of the General Conditions of Purchase has priority.