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Conditions of purchase of KAMEI GmbH & Co. KG, Heinrichswinkel 2,
D-38448 Wolfsburg
Effective 1 April, 2008

1. Determining terms and conditions
The legal relationships between the supplier and KAMEI GmbH & Co. KG (KAMEI) are determined by these conditions and any other arrangements that have been made. Changes and supplements must be made in writing. Other general terms and conditions do not apply, even if they were not explicitly discounted in individual cases.

2. Order
2.1. Delivery contracts (order and receipt), delivery schedules and any changes and additions made to them must be in writing. Delivery schedules can also be made using remote data transmission.
2.2. If the supplier does not accept the order within three weeks of having received it, KAMEI has the right to revoke it. At the latest, delivery schedules are binding if the supplier does not object to them within two weeks of receipt.
2.3. KAMEI can request changes in the design and execution of the delivery item to the extent that this is reasonable for the supplier. The consequences of this, especially in terms of increased and reduced costs and delivery dates, must be addressed by mutual agreement.

3. Payment
3.1. Payment is made within 14 days less 3% discount. Should deliveries be received earlier, the time of payment is determined by the agreed-upon delivery date.
3.2. Payment can be made by bank transfer or cheque.
3.3. Should the delivery be incorrect, KAMEI is entitled to withhold payment proportionately to the value until the delivery has been completed properly.
3.4. Without previous written consent from KAMEI, which may not be refused unreasonably, the supplier does not have the right to assign claims against KAMEI or allow third parties to collect them. Upon presentation of an extended retention of title, this consent is considered granted.
Should the supplier assign their claim against KAMEI in contravention of paragraph 1 to a third party, the assignment nonetheless remains effective. However, KAMEI may choose whether payment is made to the supplier or the third party.

4. Reporting deficiencies
KAMEI must report deficiencies in the delivery to the supplier immediately and in writing as soon as they are detected under the circumstances prevailing in the proper course of business. To this extent, the supplier waives the objection to delayed notification of deficiencies.

5. Obligation to secrecy
5.1. The contractual partners undertake to treat all commercial and technical information which is not public and which becomes known to them as a result of their business relationships as business secrets.
5.2. Drawings, models, templates, patterns and similar items must not be transferred to unauthorised third parties or be made accessible in any other manner. The reproduction of such objects is permitted only within the framework of operational requirements and copyright provisions.
5.3. Subcontractors shall be obligated respectively.
5.4. The contractual partners may advertise using their business connection only after receiving written agreement.

6. Delivery dates and periods
Dates and periods that have been agreed upon are binding. Compliance with the delivery date or delivery period is determined by the receipt of goods on the part of KAMEI. If the delivery is not arranged as being “Free at factory gate” the supplier must supply the goods on time, taking into consideration the typical time for loading and shipping.

7. Delay in delivery
7.1. The supplier is obligated to compensate KAMEI for any damage caused by delay. This does not apply to profits lost and damage incurred as a result of interruption of operation.
7.2. In the event of slight negligence, compensation for damage is limited to increased freight costs, retrofitting costs, and – after fruitless extension of the deadline or in the case of loss of interest in the delivery – additional costs for covering purchases.

8. Force majeure
Force majeure, labour disputes, upheavals, official measures and other unforeseeable, inevitable and serious events exempt the contractual partners from their duty to perform for the length of the disruption and to the extent of its effect. This is also the case if these events take place at a time when the contractual partner in question is experiencing delays. The contractual partners undertake to provide the required information immediately and adjust their obligations to the changed conditions in good faith and within reasonable bounds.

9. Quality and documentation
9.1. For their deliveries, the supplier must comply with the recognised technical regulations, safety regulations and the agreed-upon technical data. Changes to the delivery item require previous written consent on the part of KAMEI. Notwithstanding the above, the supplier must continually inspect the quality of the delivery items. The contractual partners shall inform each other about possible ways to improve quality.
9.2. If the type and extent of the inspections as well as the inspection devices and methods have not been stipulated by the supplier and KAMEI, KAMEI is prepared to discuss the inspection with the supplier to determine the level of inspection technology required in each case upon request of the supplier and within the scope of their knowledge, experience and capacities. Upon request, KAMEI shall also inform the supplier about relevant safety regulations.
9.3. In the case of vehicle parts that are specially labelled in technical documents or through a separate agreement (for instance, with “D”), the supplier also must record the following in special records: when, in which manner and by whom the delivery items were inspected with regards to the characteristics which are subject to documentation and the results of the required quality tests. The inspection documents must be stored for ten years and presented to KAMEI if necessary. The supplier shall place upstream suppliers under obligation to the same extent in the framework of legal possibilities.
9.4. Should authorities responsible for vehicle safety, exhaust regulations and similar issues require insights into the production process and the inspection documents of KAMEI to verify certain requirements, the supplier declares their willingness to give these authorities the same rights in their operations and provide all reasonable support upon request from KAMEI.

10. Liability for deficiencies
10.1. Should defective goods be delivered, KAMEI may demand the following if the respective legal requirements and the following requirements listed exist and if nothing else has been agreed upon:
a) Before the beginning of production (processing or assembly), KAMEI shall first give the supplier the opportunity to sort out and remove deficiencies or perform an additional (replacement) delivery, unless this is unacceptable for KAMEI. If the supplier cannot accomplish this or perform this without delay, KAMEI can withdraw from the contract without specifying a further deadline and return the goods at the supplier’s risk. In urgent cases, KAMEI may remove defects in agreement with the supplier or have a third party perform this task. The supplier must bear any costs that result. If the same goods are delivered with deficiencies multiple times, after issuing a written warning, KAMEI is entitled to withdraw in the event of another defective delivery. This also applies to the extent of delivery that has not been fulfilled.
b) According to section 439, paragraphs 1, 3, and 4 of the German Civil Code, if the error is detected only once production has started despite compliance with the obligation as stated in paragraph IV (reporting deficiencies), KAMEI can request cure and replacement of the transportation costs required for the purposes of the cure (excluding towing charges) as well as costs for dismantling and assembly (labour costs; material costs to the extent stipulated) or reduce the buying price.
c) In the event of a culpable violation exceeding the delivery of deficient goods (for example, in the event of a duty to inform, advise or inspect), KAMEI can request compensation for the consequential damage and for the consequential damage KAMEI has reimbursed to their customers in accordance with the law, as defined in article XI. Consequential damage is defined as the damage sustained by KAMEI as a result of the supply of faulty goods to legally protected interests other than the goods themselves. KAMEI is entitled to further claims regarding expenses and damages resulting from the delivery of deficient goods on the basis of section 437 of the German Civil Code or directly on the basis of the regulations mentioned therein only if this has been contractually stipulated. Article XV, paragraph 1 shall be observed for new arrangements to be made.
10.2. KAMEI must immediately provide the supplier with the parts they must replace, and this shall happen at the supplier’s expense.
10.3. Claims resulting from liability for defects lapse once 24 months have passed since the first-time registration of the vehicle or installation of replacement parts and 30 months after the delivery to KAMEI at the latest.
10.4. Claims resulting from defects are not valid if the error resulted from a violation of operating, maintenance and installation instructions, inappropriate or improper use, incorrect or negligent treatment and natural wear or interference with the delivery item on the part of KAMEI or third parties.
10.5. In the event of deficient deliveries, KAMEI’s claims resulting from the product liability act, impermissible treatment and management without authorization shall not be affected by this article X. Guarantees of quality and durability must be designated in detail as such expressly and in writing.

11. Liability
If no other liability regulations have been stipulated elsewhere in these conditions, the supplier is obligated to compensate for damage that arises for KAMEI directly or indirectly as the result of a deficient delivery, because of a violation of official safety regulations or because of any other legal grounds that can be ascribed to the supplier only as stated below.
11.1. The obligation to compensate for damage exists only if the supplier is responsible for the damage they have caused.
11.2. If claims are made against KAMEI on the basis of non-negotiable liability to third parties regardless of blame, the supplier shall assume such liability to KAMEI as if the supplier were also directly liable.
The policies of section 254 of the German Civil Code are applied as necessary for compensation for damage concerning KAMEI and the supplier. This also applies in the event of a direct claim on the part of the supplier.
11.3. The obligation to pay compensation is ruled out if KAMEI has effectively restricted their liability to their customer. In that process, KAMEI shall make every effort to arrange liability restrictions to the benefit of the supplier as well and to the extent that this is legally permitted.
11.4. Claims on the part of KAMEI are ruled out if the damage can be ascribed to violations of operating, maintenance and assembly instructions attributable to KAMEI, inappropriate or improper use, incorrect or negligent treatment, natural wear or incorrect repair.
11.5. The supplier is liable for KAMEI’s measures to prevent damage (such as product recalls) to the extent that they are legally obligated.
11.6. KAMEI shall inform and consult the supplier immediately and comprehensively should they wish to exercise this right as specified in these regulations. KAMEI must give the supplier an opportunity to inspect the damage case. The contractual partners shall reach an agreement concerning the measures to be taken, especially in the event of settlement negotiations.
11.7. The policies listed in article VII, paragraph 1 must be used accordingly if the supplier is not insured or is insured insufficiently.

12. Property rights
12.1. The supplier is liable for claims resulting from the violation of property rights and applications for protective rights (property rights) during contractual use of the delivery items, of which at least one of the family of property rights has been published either in the native country of the supplier, by the European Patent Office or in one of the following countries: the Federal Republic of Germany, France, Great Britain, Austria or the USA.
12.2. It exempts KAMEI and their customers from all claims resulting from the use of such property rights.
12.3. This does not apply if the supplier has produced the delivery items based on drawings, models or other equivalent descriptions or specifications provided by KAMEI and if the supplier does not know or, in connection with the products they have developed, may not know that property rights are violated as a result.
12.4. If the supplier is not liable according to paragraph 3, KAMEI exempts them from all claims from third parties.
12.5. The contractual partners undertake to inform each other immediately of violation risks and purported instances of violation that become known and to give one another by mutual agreement the opportunity to counteract any relevant claims.
12.6. Should KAMEI make such a request, the supplier shall disclose the use of published and unpublished internal and licensed copyright and copyright applications pertaining to the delivery object.
12.7. The policies concerning restriction of liability contained in article VII paragraph 1 shall be applicable accordingly.

13. Use of KAMEI’s production resources and confidential data
Models, matrices, templates, patterns, tools and other production resources that KAMEI gives to the supplier or pays for in full may be used for deliveries to third parties only with previous written consent on the part of KAMEI.

14. Retention of title
The supplier retains ownership of all goods it has supplied until they have been paid for in full; in this regard, all shipments shall be considered as part of one contiguous supply transaction. In the case of open invoices, the retention of title is considered security for the supplier’s claim to the balance.
If KAMEI combines the goods with other items to form a single item and this other item is to be considered the main item, KAMEI undertakes to transfer proportionate joint ownership to the supplier to the extent that the main item belongs to the supplier. If KAMEI resells the delivered goods in accordance with the regulations, KAMEI herewith assigns to the supplier all claims against their customers, including any ancillary rights, until all of the supplier’s demands are completely settled.
For well-grounded reasons, KAMEI undertakes to provide notification of assignment to third-party purchasers if requested to do so by the supplier and provide the supplier with the information and documents which are required to assert the supplier’s rights.
The supplier shall release the securities they have retained if their value exceeds the claims which are being protected by a total of more than 20%.

15. General provisions
15.1. The amount of damages to be paid by the supplier according to articles VII, X, XI, and XII shall be determined by having due regard to the following and adequately in favour of the supplier: the economic situation of the supplier; the nature, scope, and duration of the business relationship; possible causative or responsible contributions by KAMEI according to § 254 of the German Civil Code; and a particularly disadvantageous installation situation of the part supplied. In particular, the amount of compensation, costs and expenses to be borne by the supplier must bear reasonable relationship to the value of the part supplied.
15.2. If one of the contractual partners suspends payments or files for bankruptcy proceedings or for extra-judicial insolvency proceedings, the other party shall be entitled to withdraw from the part of the contract which has not already been performed.
15.3. Should one of the provisions of these conditions and other arrangements that have been made be or become invalid, the validity of the remainder of the contract shall not be affected as a result. The contractual partners undertake to replace the invalid provision with a regulation that comes as close as possible to it in terms of economic effect.
15.4. If no other arrangements have been made, the law of the Federal Republic of Germany shall apply exclusively.
15.5. Application of the United Nations Convention dated 11 April 1980 concerning contracts involving international sale of goods is ruled out.
15.6. The place of fulfilment is the headquarters of KAMEI. An alternative may be arranged for the delivery.
15.7. The place of jurisdiction is the headquarters of the plaintiff or another responsible court.