Terms

I. General Provisions

1. General

The conclusion of contracts and the delivery of goods and services are executed exclusively on the basis of the terms and conditions below. Terms and conditions to the contrary from the customer/supplier are hereby rejected; they shall not be recognised even if we have not rejected them again upon receipt. Our terms and conditions shall be deemed accepted by the customer/supplier upon issue of an order.

2. Limitation of Liability

a) In the case of slightly negligent breaches of obligation, our liability shall be limited to foreseeable, average, direct damages typical of the contract and according to the nature of the goods. This shall also apply to slightly negligent breaches of obligation by our legal representatives or vicarious agents. We shall not be liable in the case of companies for slightly negligent breaches of inessential contractual obligations.

b) The above limitations of liability shall not apply to claims by the buyer arising from product liability. Furthermore, the limitations of liability shall not apply to injury to body or health attributable to ZMB Automation GmbH or the loss of life of the customer/supplier.

c) Claims for damages by the customer/supplier on the grounds of a defect shall be time-barred after one year of delivery of the goods. This shall not apply if we are accused of fraud.

3. Applicable Law and Place of Jurisdiction

a) The laws of the Federal Republic of Germany shall apply. The terms and conditions of the UN Convention on Contracts for the International Sale of Goods shall not apply.

b) If the customer/supplier is a registered trader within the meaning of the German Commercial Code (HGB), a legal entity under public law or a public special fund, the exclusive place of jurisdiction for all disputes arising directly or indirectly from the business relationship shall be agreed to be Heidenheim or Ellwangen/Jagst depending on the extent of the amount in dispute. The same shall apply if the buyer does not have a general place of jurisdiction in Germany or the place of residence or habitual residence is not known when the complaint is filed.

4. Partial Nullity

If any individual terms of these general Terms and Conditions should be partly or wholly ineffective, the effectiveness of all other terms and conditions or agreements shall not be affected. The wholly or partly ineffective provision shall be replaced by a provision that comes as close as possible to the ineffective one in terms of its economic results.

II. Terms and Conditions of Sale and Delivery

1. Quotation and Conclusion of Contract

a) Our quotations are non-binding and without obligation. Declarations of acceptance and all purchase orders shall require our written or telex confirmation to be legally effective. The same shall apply to additions, modifications or ancillary agreements. In the event of immediate delivery, the written confirmation may also be replaced by an invoice.

b) Drawings, images, dimensions, weights and other technical data shall only be binding if this has been expressly agreed in writing. We reserve copyright to cost proposals, drawings and other quotation paperwork.

2. Prices and Payment

a) The prices stated in our order acknowledgement shall be authoritative plus statutory value added tax. Additional deliveries and services shall be invoiced separately unless otherwise agreed. In such cases where no unit or flat rate prices have been mutually agreed, our unit prices according to the latest price list as amended shall apply. The customer shall be entitled to inspect this at any time. Apart from this, prices shall be understood to be exclusive of freight, post and packing costs - unless otherwise agreed.

b) Unless otherwise agreed, invoices from ZMB Automation GmbH shall be payable 30 days after invoice date without deduction. Payments must be made free of postal and other charges.

c) Partial deliveries and partial services may be invoiced separately.

3. Delivery Time for Goods and Services

a) Dates and delivery times shall not be binding unless otherwise agreed expressly in writing. Specific delivery times and dates given by us shall be conditional upon correct and timely deliveries by upstream suppliers and manufacturers.

b) Delivery times shall begin upon issue of our order acknowledgement but not before all details of execution have been clarified and all other conditions to be fulfilled by the purchaser have been met. Deliveries before the delivery time has expired and partial deliveries shall be permissible.

c) We shall not be responsible for delays to the delivery of goods or services due to force majeure or events which make delivery considerably more difficult or impossible for us - including in particular strikes, lock-outs, official orders, etc. – even if they occur at our suppliers or their sub-suppliers, even in the case of binding agreed times and dates. Such events shall entitle us to postpone the delivery or service by the duration of the obstacle plus a reasonable start-up time or to withdraw partly or wholly from the contract on the grounds of the part that has not been fulfilled as yet.

d) If the obstacle lasts longer than three months, the customer shall be entitled to wholly or partly withdraw from the contract - to the extent that it is not yet fulfilled - after giving notice of a reasonable period of grace (at least 14 days). If the delivery time should extend when applying c) or if we are released from our obligation the purchaser may not derive any claims for damages from this. We may only invoke the aforementioned circumstances if the purchaser has been informed without delay.

e) We shall be entitled to make partial deliveries of goods and services - where technically feasible – at any time.

f) In the event that a delay in delivery, which is clearly attributable to ZMB Automation GmbH, causes the customer to use a contractually agreed penalty, all other costs that may be incurred by the customer are covered.

4. Offsetting and Right of Retention

The customer shall only have a right to offset or a right of retention if the counter claims asserted by the customer have been established by a court of law or are undisputed.

5. Retention of Title

a) We shall reserve title to the delivered goods until full payment of all accounts receivable that have arisen or will still arise out of the business relationship with respect to the buyer, irrespective of their nature and legal basis. In the case of an ongoing account the retention of title shall be deemed to be security for payment of the balance.

b) Transformation or processing of goods supplied by us that are still our property shall be performed on our behalf without us incurring any liabilities as a result.

c) In the event of goods being installed or fitted into third party goods by the buyer, we shall become the co-owner of the new products at the ratio of the value of the goods delivered by us to the third party goods that have also been used.

d) If goods that we have supplied are mixed or combined with other items then the buyer shall hereby assign its rights of ownership or co-ownership to the mixed or new item and shall keep them safe for us with the required diligence at no charge.

e) The buyer shall be entitled to process and sell the conditional goods in proper business transactions as long as it is not in default. Pledges and transfers by way of security shall not be permitted.

f) An assignment of the buyer’s claims against his customers from the onward sale of conditional goods supplied by us shall be excluded unless it is an assignment by way of genuine factoring which we shall be notified of in any case and where the factoring proceeds exceed the value of our secured receivable. Our account receivable shall be due immediately when the credit note for the factoring proceeds is issued.

g) The buyer shall hereby assign any accounts receivable arising from onward sales or other legal basis (insurance / unlawful act) relating to conditional goods (including all balances from the ongoing account) to us in their entirety as a precaution. We revocably authorise the buyer to collect the accounts receivable assigned to us for our account in its own name. The collection authorisation may only be revoked if the buyer has not duly fulfilled its payment obligations.

h) In the event of third party seizure of conditional goods, the buyer shall indicate our ownership and we shall be informed without delay so that we can undertake judicial or extrajudicial measures in this connection in order to defend our claims. The judicial or extrajudicial costs incurred for this purpose shall be borne by the buyer.

i) The buyer must defend against third party seizure. In the event of conduct by the buyer in breach of the contract - in particular default on payments - we shall be authorised to take back the conditional goods or if applicable, demand assignment of the rights of the buyer to relinquishment of the goods by third parties. Contrary to Section 449 II of the German Civil Code (BGB), withdrawal from the contract is necessary in order to do this.

j) If we take back or seize conditional goods this shall not constitute a withdrawal from the contract – unless a consumer is involved.

k) The buyer shall undertake to return the remainder of goods it has received from us at our request at its own cost and risk if a cheque is not cashed.

l) If the value of securities retained exceeds 20 percent of our account receivable we shall release securities of our choice to that extent at the request of the buyer. The buyer shall bear the burden of proof that the retained securities exceed 20 percent.

6. Warranty

a) The warranty period shall be one year from delivery of the goods, in the case of works to a building it shall be two years.

b) The customer must notify us of any obvious defects in writing without delay but within a week of receipt of the delivered goods at the latest. Defects, which cannot be discovered even with careful inspection within this period, must be reported to us in writing without delay, but again within a week of their discovery. Otherwise the assertion of the warranty claim shall be excluded. Timely despatch shall suffice in meeting the deadline. The customer shall bear the full burden of proof for all conditions for claims, in particular for the defect itself, for the timing of the discovery of the defect and for the timeliness of the complaint.

c) If we use bought-in parts, which are purchased from third companies, the customer should initially contact the manufacturer of the bought-in parts in the event of defects on the same. We shall assign our warranty claims arising from the purchase of the bought-in parts to the customer. In the event of a defect concerning a bought-in part, the customer must inform us. We shall then supply the name and address of the manufacturer of the bought-in part. If the customer is a registered trader we may request that the customer initially files a claim at court against the manufacturer of the bought-in part on the grounds of the assigned right (defence of failure to pursue remedies), unless judicial recourse would be unreasonable and unless the claims against the manufacturer are virtually worthless due to lack of funds. If the judicial assertion of the claim fails, or if it is unreasonable due to a lack of the funds on the part of the manufacturer of the bought-in parts, the customer shall be entitled to the warranty rights according to letters a-d.

d) If the customer is not a registered trader, warranty claims in respect of bought-in parts may be asserted against us if the customer has initially contacted the manufacturer of the bought-in part to no avail, i.e. if the manufacturer rejects the warranty or delays it unreasonably or is not in a position to grant a warranty. In this respect also, we shall assign the warranty claims arising from the purchase of bought-in parts against the relevant manufacturer to the customer. The customer’s warranty claims against us shall be resurrected if recoupment from the manufacturer of the bought-in parts fails, be it that the claims against the latter cannot be enforced or that the claim is unreasonable.

e) No new warranty periods shall enter into force as a result of the replacement of parts, assemblies or whole pieces of equipment. No warranty is given for wear parts or for improper use, storage or handling of equipment. If our operating and maintenance instructions are not followed, or modifications are made to the products, parts replaced or consumables used which do not meet the original specifications then any warranty shall be cancelled.

f) The warranty for defects concerning the goods shall initially be undertaken in the form of reworking or replacement delivery.

g) If three attempts at reworking fail, the customer can in principle choose to request a reduction in payment (reduction) or a rescission of the contract (withdrawal). In the case of only slight breaches of contract, in particular in the case of only minor defects, the buyer shall, however, have no right to withdraw.

h) If the customer chooses to withdraw from the contract on the grounds of a defect in title or a material defect following failed subsequent performance, it shall have no additional entitlement to damages on the grounds of the defect. If the customer chooses damages following failed subsequent performance then the goods shall remain with the customer if this is reasonable. Damages shall be limited to the difference between the price and the value of the defective item. This shall not apply should the breach of contract have been caused fraudulently.

i) The buyer shall not receive any guarantees in the legal sense. Manufacturers’ guarantees shall remain unaffected.

7. Claim to Lump-Sum Payment and Damages

If the contractual relationship is terminated prematurely by the customer or if the contract is not performed following a reminder and setting of a period of grace with the threat of refusal, then we shall have an appropriate claim to payment for the services rendered without a requirement for separate acceptance.

In the event of services not yet rendered, we shall be entitled to a lump-sum payment of fees and damages in the sum of 15% of the value of the services not yet rendered. The customer shall have the right to prove that damages are lower than this. In this case it shall only need to pay the proven lower amount. The assertion of higher damages by us shall not be excluded.

8. Acceptance

Either contracting party may request a formal (written) acceptance of the services in the case of contracts for work and services. The request for acceptance is to be sent to the contracting partner in writing. Acceptance should take place within two weeks of receipt of the request for acceptance. If no formal acceptance takes place during those two weeks, the work shall be deemed accepted at the end of a further week. Likewise, the work shall be deemed accepted by the customer at the end of one week following delivery or commissioning if there is no written request for acceptance.

9. Due Date of Compensation for Services

In the case of services, the compensation for the work shall be due for payment upon completion.

III. Terms and Conditions of Purchase

1. Offer

a) We shall be bound by our offer to conclude a purchase agreement (purchase order) for four weeks. The contracting partner may only accept the offer within these four weeks by written declaration.

b) Calculations, drawings, plans and other documents which also belong to the offer shall remain our property. We reserve all copyright to these documents.

c) These documents may not be passed onto third parties without our written consent. If our offer is not accepted within a period of two weeks, these documents are to be returned to us without delay.

2. Prices/Terms of Payment

a) The prices quoted in the purchase order shall be binding and shall be free to door unless otherwise agreed in writing between the parties. Packing costs shall be included in the prices. Prices shall be quoted exclusively of the applicable value added tax. All invoices must show the purchase order number given by us.

b) We shall pay, unless otherwise agreed in writing, within 14 days of delivery of the goods and receipt of the invoice with 3 percent early payment discount or within 30 days without deduction.

c) We shall be entitled to statutory rights of offsetting and retention to their full extent. We shall be entitled to assign all claims arising from the purchase agreement without the consent of the supplier. The supplier shall not be entitled to assign accounts receivable arising from the contractual relationship to third parties without our prior written consent.

3. Delivery Time/Delayed Delivery

a) The delivery times or delivery date quoted by us in the purchase order shall be binding for the supplier.

b) If the supplier defaults on delivery, we shall be entitled to statutory claims.

c) In the event of delayed delivery we shall be entitled to request a lump sum of damages for the delay in the sum of 2 percent of the value of the delivery for each complete week but no more than 10 percent of the contract price.

We reserve the right to assert further statutory claims. The supplier shall have the right to prove to us that no or significantly lower damages have occurred as a result of the delay. The lump sum shall then be reduced accordingly.

d) In the case of late or impossible delivery on the grounds of force majeure, strikes, lock-outs, etc. or due to the occurrence of other circumstances which we are not responsible for, we shall be entitled to withdraw from the contract unless it is impossible to ascertain the delivery time and place of delivery elsewhere. Additional costs incurred as a result shall be borne by the contracting partner.

4. Inspection for Defects

We shall be obliged to inspect the goods within a reasonable period for deviations in quality or quantity. A complaint shall be on time as long as it is received by the supplier within a period of five working days of receipt of the goods. A complaint regarding latent defects shall be made on time if it is received by the contracting partner within five days of its discovery.

5. Warranty

a) We shall be entitled to full statutory warranty claims. Irrespective of this, we shall be entitled to request a remedy of defects or replacement delivery by the supplier at our choice. In this case, the supplier shall bear the necessary costs for the remedy of defects or replacement delivery. We reserve the right to claim damages. If, because of a certain urgency, it is no longer possible to notify the supplier of the defect and impending damage and to set it a deadline for remedying the defect, we shall be entitled to remedy the defect ourselves at the cost of the supplier.

b) Warranty claims shall become time-barred three years from delivery.

6. Retention of Title

a) If we provide parts or materials to the supplier we shall retain title to them. Processing or transformation by the supplier shall be undertaken on our behalf.

b) If items provided by us for the manufacture of the object of delivery are inseparably mixed or combined with other items that do not belong to us then we shall acquire co-ownership of the new item at the ratio of the value of the conditional goods to the other mixed or combined goods at the time of mixing or combination. If processing is undertaken such that the supplier’s item is to be regarded as the principal item, then it shall be deemed agreed that the supplier shall transfer co-ownership to us pro rata. The supplier shall keep the sole ownership or co-ownership safe for us in trust.

c) We shall retain title to tools. The supplier shall be obliged to only use tools for the manufacture of the goods we have ordered. Furthermore, it shall undertake to insure tools that belong to us against fire and water damage and theft at its own cost. The supplier shall be obliged to carry out the necessary maintenance and inspection work in good time and at its cost. It must inform us immediately of any breakdowns. Non-compliance with these obligations shall lead to claims for damages.

d) The supplier shall be obliged to keep any images, calculations, drawings and other documents and information that it has received from us strictly confidential. They may only be disclosed to third parties with our express approval. The non-disclosure obligation shall also apply after the contract has been performed.

7. Seller’s Liability/Insurance Cover

a) If third parties assert claims for damages against us on the grounds of a product defect for which the supplier is responsible, the supplier shall release us at the first request from all third party claims including the necessary costs for defending these claims. The supplier shall assume responsibility in particular if the cause lies in its sphere of control and organisation and it is also liable in external relations.

b) In this context the supplier shall also be obliged to refund any expenses according to Sections 683, 670 of the German Civil Code (BGB) which we incur as a result of or in connection with a recall action carried out by us. We shall inform the supplier, where possible and reasonable, of the content and extent of the recall actions to be carried out and give it the opportunity to comment.

c) The supplier shall be obliged to take out and maintain product liability insurance with a cover sum appropriate for the subject of the contract, at least 1 million euros per person/loss event. Any further claims for damages shall remain unaffected by this.

d) If claims are asserted against us by third parties because the delivery by the supplier has infringed a third party statutory property right , the supplier shall undertake to release us from the claims at the first request including all necessary expenses we incur in connection with the third party claim and its written defence.

We shall not be authorised to acknowledge third party claims without the written consent of the contracting partner and/or to make agreements with third parties regarding these claims.

These claims for release shall become time-barred after three years calculated from the supplier’s knowledge of claims made against us by third parties.

ZMB Automation GmbH, January 2019