Purchasing Conditions

1. Scope

1. 1. Unless agreed otherwise in writing, the following Conditions apply exclusively to our orders, including if the supplier makes reference in his quotation, order confirmation, on delivery or invoicing to conditions formulated in a different way or any other conditions. If special conditions are agreed for specific orders or attached to the order, they shall take precedence over these General Purchasing Conditions which are then complementary.
   2. Acceptance of delivery or performance of a service does not constitute acceptance on our part of the supplier’s general terms and conditions. In particular, silence on receipt of order confirmations with contradictory content shall not be considered to be acceptance.
   3. On acceptance and completion of the order, the supplier accepts our Purchasing Conditions, which also apply to all future contracts and orders. The Conditions also apply if no explicit reference is made to them in subsequent transactions.
   4. Otherwise, the statutory provisions apply.

2. Ordering

1. 1. Our orders require the written form, the text form (e-mail) or the transmission by means of electronic data interchange (e.g. EDI).
   2. The supplier shall check the factual accuracy of the order in particular and point out any errors or points of confusion in writing.
   3. In the case of orders with no indication of price, we reserve the right to withdraw if the prices given on the supplier’s confirmation or invoice do not meet with our approval.
   4. The delivery date required shall be checked carefully by the supplier. Obstacles to delivery and performance shall be reported to us immediately.

3. Delivery and delivery period

1. 1. The delivery date is specified on the order. The delivery period commences on the date the order is placed. The confirmed quantities shall be delivered sealed to the address given on the order on the delivery date. Advance and part deliveries are not permitted unless we have given our consent to them.
   2. Agreed delivery and performance periods and delivery dates are binding and shall be regarded as fixed deadlines. The date of delivery is the day of receipt of the goods in our company building in St. Ingbert; if a different shipping address is specified, it is the date of receipt at that address; in the case of services, it is the date of completion of the work or acceptance of it.
   3. The ordered goods are a debt to be discharged at the creditor’s premises. If the supplier is in default, we are entitled at our discretion to reject acceptance of the delivery or service, irrespective of any further legal claims. In particular, we are entitled to demand compensation in place of performance on unsuccessful expiry of an appropriate grace period. If we demand compensation, the supplier has the right to demonstrate that he is not responsible for the breach of obligation. Acceptance of the delayed delivery or service does not constitute relinquishment of the right to claim compensation.
   4. The supplier shall inform us in writing of any reasons for which, in his view, we are responsible which could lead to dates for delivery/performance of services being missed. If the supplier fails to notify us in this way, he may not have recourse to those circumstances in the event of a delay in delivery/performance of a service. The supplier is obliged to notify us immediately in writing if, in his view, there are difficulties in procuring material or completing the order which could put compliance with the delivery/performance date at risk.
   5. If the supplier is notified that the ordered goods are advertised/promotional goods, for which advertising appears and which are offered on the internet / in specialist publications or similar, delivery on time is essential. If the agreed delivery date cannot be met, a contractual penalty of 15% of the total order value shall be due in any case, taking account of the principle of fault. This does not include costs for reminders, replacement procurements or compensation, which also includes claims under competition law. These shall be charged separately.
   6. Additional costs for expedited shipping to comply with a delivery date shall be met by the supplier.
   7. Cover procurement from third parties (substitute purchase):
      1. 1. If the agreed delivery date is not met, the supplier undertakes to pay us the difference between the price paid to him and a higher cost price that we have to pay for a substitute purchase or, in the absence of evidence, a contractual penalty of 10% of the order value as minimum compensation.
         2. If, as part of the cover procurement, we have to arrange for replacement goods to be manufactured by third parties, the supplier shall refrain from pursuing any existing proprietary rights in his favour.

4. Packing and shipping

1. 1. Unless otherwise agreed in writing, shipping is always at the cost and risk of the supplier.
   2. The goods shall be loaded in packaging that prevents damage during transport and unloading. The shipment shall be insured against transport damage, theft and incorrect loading by the supplier at his cost.
   3. Shipping notices must provide precise information about the contents, specifying the individual weights, the items, etc. Shipping notices, delivery notes and all of the written correspondence must include the article number and delivery location. Delivery notes and invoices must include the order number and the name of the person who placed the order. The gross weight must also be indicated on the package.
   4. In the case of shipments consisting of multiple packages, it must be clear on each package how many packages make up the entire shipment. The shipment must also be sorted, i.e. goods of the same sort shall be supplied in one plastic bag and this shall be marked with the quantity and the Herweck article number.
   5. In the event of failure to comply with our shipping regulations, the supplier shall be charged a flat rate of €100.00 plus VAT for each individual case (shipment) for the costs incurred by us.
   6. Goods that are not delivered directly from the manufacturer must be in strictly neutral packaging without reference to the suppler. This also applies to operating instructions, labels, check slips, etc.
   7. Acknowledgement of delivery notes, specifications, assembly and time sheets constitutes only a factual confirmation of the services provided or received. The acknowledgement does not include any declaration relating to legal transactions, in particular it does not constitute acceptance of deviations from the agreed scope of the order. The packages must be unopened at the time of delivery. As a result of this, the precise quantity of goods delivered cannot be checked on acceptance of the goods.
   8. The supplier guarantees that all transport and product packaging is licensed according to the statutory provisions with a certified dual system, and that the corresponding contributions have been paid properly.

5. Invoice and payment

1. 1. Immediately on delivery or performance, the supplier shall issue us with an invoice with all of the order details, including the name of the person who placed the order, the order number, the order date, the numbers of the individual items, etc. The payment period shall commence at the time at which both the invoice, properly issued in duplicate, and the goods are received by us or the service has been performed in full, in the case of part deliveries on receipt of the entire delivery. Deductions are also permitted if the ordering party offsets or retains payments of appropriate amounts on the grounds of defects; the payment period shall commence on complete rectification of the defects.
   2. Part invoices shall be marked as such.
   3. Payment shall be made on the 25th of the month following receipt of the invoice and the goods in accordance with para. 5, with a discount of 3%. (1).
   4. The invoice must meet the requirements of § 14 of the German Value Added Tax Act.
   5. Initiation of the payment process, in particular issuance of payment instructions to the bank, is sufficient for compliance with the deadline.
   6. Payments shall not constitute acceptance that the delivery or service is in accordance with the contract.
   7. The supplier is not entitled to assign his claims against us or to arrange for them to be collected by third parties without our prior written consent.

6. Prices

1. 1. If the supplier lowers the list prices, he shall grant us a stock offset for the goods concerned that were delivered within 90 days of the price cut taking effect, in the amount of the price difference between the new price and the price paid by us, provided that these goods are still in their original packaging in the Herweck warehouse. If sale of an item is discontinued, we are entitled to return those items delivered to us in the 90 days before their sale was discontinued and that are in our warehouse on the relevant date to the supplier in return for a credit note for the original purchase price.
   2. Products that have been in stock with us for more than five months shall be taken back by the supplier from the warehouse on request at their purchase price.
   3. If the supplier reduces his prices or improves his conditions in the period between placement of the order and delivery, the prices and conditions that are valid on the date of delivery shall apply.
   4. Notification of price increases shall be given with a notice period of 14 days. Confirmed orders are excluded from price increases in any case.
   5. The supplier shall inform us if he offers another purchaser better purchase conditions or lower prices than he offers to us. If we are able to demonstrate that the supplier has failed to meet this information obligation (e.g. by providing a quotation in which the same quantity of an ordered article is offered below our list price), he undertakes to take back the goods still in our warehouse at their purchase price.
   6. Prices always include packaging costs.
   7. All prices for services from suppliers that are not based in the Federal Republic of Germany are understood to be exclusive of value added tax. Invoices with separate calculation of value added tax shall not be accepted (zero arrangement). At the request of the supplier, we shall certify to him that the value added tax has not been retained but has been paid.
   8. In addition, all of the licence fees charged by the supplier in addition to the price of the goods shall be deducted now and in future.

7. Warranty

1. 1. The supplier shall deliver the goods such that they have the characteristics required by the order, correspond exactly with the drawings and specifications and do not have faults that exclude or diminish their suitability for their intended use.
   2. Statutory warranty claims for material and legal defects (in particular, goods that cannot be sold in Germany) remain available to us without limitation. The warranty is for 24 months from the legal transfer of risk to Herweck.
   3. In the event of resale of the delivered item, warranty claims shall expire at the earliest 2 months from the time at which we have settled the customer’s claims resulting from defects in the delivered item, notwithstanding the provision above.
   4. The delivered goods are checked for identity and quantity defects. In addition and depending on the results of the general quality assessment, we shall conduct quality-related incoming goods tests by sampling at regular intervals. Complaints about recognisable defects that are visible externally shall be made by us within one week of receipt of the goods. The return of defective goods is deemed to be a complaint about defects. Goods delivered to us in damaged packaging may be sent back by us to the supplier without further inspection at his cost and risk on the grounds that they are not in accordance with the contract and are defective.
   5. All damage to and defects in the goods that are not identifiable on appropriate incoming goods inspection are deemed to be concealed defects. This also includes quality defects, variations in dimensions, weights and quantities, and legal defects in most cases. Complaints about concealed defects may be made within one week of their discovery.
   6. Defects about which a complaint is made and which include the absence of agreed characteristics shall be rectified immediately and free of charge (including ancillary costs) by the supplier on request. If this is not possible or if acceptance of repaired parts is unreasonable for us, the supplier shall accept return of the defective parts free of charge.
   7. In urgent cases, but only when the urgency is so great that notification of the supplier and setting of a grace period is no longer possible, we may carry out the repairs ourselves or arrange for third parties to do so. Minor defects may be rectified by our own technicians in the interests of everyone (savings on shipping costs, correspondence, etc.) with the prior consent of the supplier and the expenses charged to the supplier without affecting the supplier’s guarantee and warranty obligations.
   8. The supplier shall indemnify us against compensation claims by third parties resulting from defects in the goods and pursued against us, in particular in connection with liability for faulty products. The supplier shall take out adequate insurance against this risk.
   9. As a matter of principle, we are entitled to reduce the invoice amount by the value of the goods returned plus any expenses and compensation claims.
   10. The supplier shall guarantee that the goods are not covered by third-party proprietary rights that prevent or restrict their contractual use. The supplier shall indemnify us to this extent against any third-party claims on the basis of existing third-party proprietary rights and reimburse us for any costs arising from defending ourselves against such claims, including the costs of legal representation, unless the supplier was not aware of the conflicting proprietary rights and the supplier cannot be expected to have been aware of them, having exercised the due care and attention of a normal business person.
   11. The supplier shall treat our order and the work associated with it in confidence as a business secret.
   12. The supplier’s legal right of retention of title as is usual in the industry is fundamentally accepted. We are entitled to sell the goods in the normal course of business.
   13. If the supplier imports the goods, he is liable for proper payment of customs duty and tax, for compliance with the applicable statutory regulations on import and for the provision of a valid import licence if import quotas apply.
   14. The supplier guarantees that the articles delivered to us comply with all applicable statutory regulations in Germany. This means, in particular, that for all products delivered, the manufacturer, any intermediary or the supplier himself has met the specifications of the applicable EU REACH chemical regulation, the German Battery Ordinance, German Packaging Ordinance, the RoHS Directive and the German Act Governing the Sale, Return and Environmentally Sound Disposal of Electrical and Electronic Equipment (Electrical and Electronic Equipment Act – ElektroG) and implemented them in a legally compliant way. The supplier is obliged to assist us in the event of an inspection by the relevant Federal Environmental Agency or any other body authorised in this connection, in particular by presenting all necessary documents for inspection (evidence).
   15. The supplier guarantees that any copyright fees due for all delivered articles have been paid to the relevant collecting societies. Reference shall be made to the copyright fees included on the supplier’s invoice in accordance with § 54 of the German Copyright Act. Insofar as we demonstrate with relevant documents (in particular, delivery documents) that articles for which copyright fees have been charged have been exported out of the area covered by the German Copyright Act, the supplier shall reimburse the copyright fees charged to us for the articles concerned.

8. Product liability

1. 1. Insofar as the supplier is responsible for damage to the product, he is obliged to indemnify us against third-party compensation claims on first request, to the extent that the cause is in his sphere of control and organisation, and he is personally liable in relation to third parties.
   2. In this context, the supplier is also obliged to reimburse any expenses that result from or in connection with a recall action carried out by us.

9. Drawings, samples, models, moulds, etc.

1. 1. Drawings, samples, models, moulds, etc. that are provided to our supplier remain our property and shall be returned to us without request on fulfilment of the order. Documents of this sort may not be passed on to third parties or used for purposes other than contractual purposes without our written consent. They shall be safeguarded to prevent unauthorised access or use. Subject to other rights, we may demand their release if the supplier breaches this obligation.
   2. The existing business relationship with us may be used for advertising purposes only with our written consent.

10. Liability

Herweck is liable for damage to the supplier in accordance with the statutory provisions only if it is caused intentionally or through gross negligence, results from a culpable breach of material contractual obligations or is the consequence of damage to health, physical injury or loss of life.

11. Place of performance and jurisdiction

1. 1. The place of performance is St. Ingbert, unless we have specified a different receiving address. The place of jurisdiction is St. Ingbert. The place of jurisdiction for disputes before the regional court and higher regional court is Saarbrücken. German law applies exclusively, even if the supplier’s registered office is abroad. Application of the UN Convention on the International Sale of Goods is excluded.
   2. If a different location is specified on the order as the supplier/shipping address, the supplier’s service shall be performed there.

12. General provisions

1. 1. The data required in the context of the business relationships shall be saved and processed in accordance with the statutory data protection provisions.
   2. These Conditions shall continue to apply in full, even if sections of them become legally invalid. The invalid sections shall be replaced by regulations that come as close as possible to the original version in terms of their commercial outcome.

Herweck AG · 66386 St. Ingbert
As of March 2011