Conditions of sale and delivery for TFL Ledertechnik GmbH and subsidiaries and joint ventures af TFL Ledertechnik GmbH

1. Applicability

a.These general conditions of sale and delivery shall apply to all our sales, deliveries and services, unless these terms are excluded or modified by written agreement. They shall also apply to all future business with the Buyer even if not expressly referred to in each single case.

b.We hereby reject any terms different from ours, including in particular terms and conditions of purchase of the Buyer, even if we should not contradict them expressly upon receipt of an order or confirmation referred to Buyer´s terms and conditions.

2. Conclusion of contract

a.Our quotations are not binding offers. They may be altered or withdrawn by us, no order or offer shall be binding on us without our written acceptance or written confirmation. Silence in response to offers or orders of the Buyer may not be construed as acceptance or confirmation.

b.Information, drawing pictures, technical data, weights and measures as well as performance data included e.g. in brochures, which are part of a quotation, are not binding unless expressly defined as binding in writing. The same applies to the properties of specimen and samples. Any information with respect to the suitability and application of the goods shall not relieve Buyer from undertaking his own investigations and tests unless otherwise agreed in writing.

The following details shall be stated in all correspondence: the purchasing department, the complete order number, the date of the order and Buyer´s reference.

3. Prices

a.Our prices in quotations and contracts are ex-works (EXW) unless otherwise stated or agreed in writing. In case of general change of our prices for the goods subject of the contract between conclusion of the contract and dispatch, we are entitled to apply the new prices. In case of a price increase the Buyer may withdraw from the contract by giving notice within 10 days after notification of the intended price increase. Prices include standard packaging in accordance with our packaging practice.

4. Qualities, reference to standards, guarantee

The quality of goods shall be determined by our product specifications unless otherwise agreed in writing. Any reference to standards such as DIN – or EN-standards, to similar rules, to works certificates or to inspection documents as well as reference to grades, classification, sizes, weights or usage of the goods or classification under the European Chemicals Regulation REACH or comparable regulation shall not be regarded as warranty or fitness for a special purpose nor as a guarantee. None of the product descriptions or data furnished by us and/or agreed upon may be interpreted as guarantees unless they have been expressly and in writing been designated as guarantees.

5. Terms and dates of delivery

a.Any confirmation as to delivery time shall only be approximate.

Delivery time shall commence with the date of our order confirmation and are subject to the timely clarification of any details of the order as well as of the fulfilment of any of the Buyer´s obligations, e.g. to produce official certifications, to provide letters of credit and payment guarantees or to effect agreed advance payments.

b.Any agreed delivery time shall be considered to be met if and in so fare the goods are ready for dispatch at such time.

c.If the delivery is delayed for reasons under our control, the Buyer after setting a reasonable grace period, may withdraw from the contract if and in so far as the goods have not been delivered by this date. Damage claims for delay and non-performance are excluded to the extent legally permitted.

d.Incidents beyond our control such as interruption of production, shortage of raw materials, traffic blocks, official regulations, war, industrial conflicts and other cases of force majeure shall release us from our performance obligations for the duration of the event and to the extent of its effects. Events of this kind shall entitle us to withdraw from the contract entirely or in part without the Buyer having any right to compensation.

Transport insurance shall principally be taken out by Buyer, unless agreed otherwise.

6. Dispatch, transfer of risk, partial delivery, continuous delivery

a.If, for a reason for which the Buyer is responsible, take-over or dispatch of the goods are delayed, we shall be entitled, at our discretion and at Buyer´s risk and expense, to put the goods into storage and to take all further measures deemed suitable to preserve the goods notified ready for shipping are not called up in due course, and to invoice the goods. The statutory regulations in respect of default in acceptance shall remain unaffected.

b.We are entitled to execute partial deliveries of reasonable quantities. We shall not be obliged to take back packaging, protective equipment and transport aids unless agreed upon in writing or provided by compulsive law. Containers, IBC and other transportation means and aids which, according to agreement, may only be used in accordance with our instructions and shall not be used for any products not delivered by us.

c.The risk of loss or damage shall pass to the Buyer when the goods are ready for dispatch, unless otherwise agreed in writing. In case of reference to INCOTERMS, the passing of risk shall occur in accordance with the Incoterm referred to.

d.Where the contract provides for continuous deliveries, the Buyer shall divide the quantities and grades of the goods into approximately equal monthly shipments. Otherwise we shall be entitled to specify them at our own fair and just discretion. Where the particular calls for delivery exceed the contractual quantity, we shall be entitled, but not committed, to deliver the surplus quantity and invoice it at the prices applicable at the time of the call or the delivery.

In case we undertake to deliver the goods to the Buyer, we shall determine the way and means of dispatch as well as the carrier and forwarding agent unless otherwise agreed in writing.

7. Defects and warranty

a.The Buyer shall immediately notify us in writing of any defects of the goods at the latest seven days after their delivery. Defects which, even upon careful inspection, cannot be discovered within this period must be notified to us in writing immediately upon their discovery, at the latest, however, before the elapse of any agreed or statutory warranty period. In such cases the Buyer must suspend any processing or manufacturing of the goods.

b.If and in so far, the Buyer’s claim for defects is justified and has been made in time, we may, upon our discretion, remedy the defect or deliver non-defective goods (“replacement”). In cases where the defect is only minor or where the goods have already been resold, processed, or transformed, Buyer may only reduce the purchase price adequately.

c. We will reimburse the Buyer his expenditures in connection with replacement only in so far as such expenditures are reasonable and proportional to the purchase price of the goods, in no case more than 150 % of the purchase price. The buyer is obliged to check the goods for defects. This inspection excludes all claims for such defects that could have been detected during the usual type of testing and inspection, unless otherwise agreed. If the Buyer, due to his own negligence, has no knowledge of the defect, then he may claim only such defects which are subject to a guarantee. If the Buyer fails to give us immediately the opportunity to inspect the defect, especially if he fails - upon our request - to immediately make the goods or samples hereof available to us, he will lose all of his warranty rights. Goods shall not be returned to Seller without his prior written consent.

8. General limit of liability, limitation period

a. a. Our liability for breach of contractual or extra-contractual obligations, in particular for non-performed or deferred deliveries, for breach of duties prior to the contract as well as for tortuous acts - including our responsibility for our managerial staff and any other person employed in performing our obligations - shall be restricted to damages caused by our wrongful intent or by our gross negligence and shall in no case exceed the foreseeable losses and damages characteristic for the type of contract in question.

b. b. The aforesaid restriction shall not apply to such cases where we breach our fundamental contractual obligations and where such a breach of contract will endanger the contractual purpose: it shall neither pertain to damages to file, to the body and to health caused by our fault nor to any cases where we have guaranteed certain characteristics of the goods. Nor shall such clause affect our statutory liability laid down in applicable Product Liability legislation. Any contractual claims of the Buyer in connection with the delivery of the goods shall fall under the statute of limitations within a period of one year after the goods have been delivered to the Buyer, however at the latest with the expiry of the shelf life.

9. Payment and settlement of accounts

a. a.Unless agreed different in writing payment shall be effected without any delay and without any deduction upon receipt of the invoice and must be paid in the currency and to a bank account indicated in the invoice. Periods for payment shall begin on the specified dates. Date on receipt of payment in Seller´s bank will be considered to determine time of payment.

b. c.If the Buyer´s payments are in arrears we are entitled to charge interest at the legal interest rate provided for by German law. We reserve the right to claim compensation for any further loss resulting from delay in payment.

c. d.If it becomes apparent that payment by the Buyer might be jeopardised as a result of a deficiency in his creditworthiness (including but not limited to the withdrawal, revocation, reduction or refusal of credit insurance by our regular credit insurance companies) we may suspend the performance of any future delivery unless the Buyer provides adequate assurance of his payment. If we have already dispatched the goods before the grounds described become evident, we may prevent the handing over of the goods to the Buyer even though the Buyer holds a document which entitles him to obtain them. We also may withdraw from the contract or demand compensation for non-performance if the Buyer should not comply with his obligations within a reasonable time.The Buyer is not allowed to make any set off based on alleged claims which are not expressly recognized by us or established by legally binding court decision.

d. f.All receivables from the business relationship with the company can be assigned to a factoring partner. This includes, in particular, the right of the factoring partner to assert and collect the claims against the customer from third parties. The customer is informed that the assignment of the receivables to the factoring partner has no influence on the existing contractual conditions between the customer and the company. For this purpose, the customer's data may be passed on.

10. Retention of title

a. a.All items supplied (goods subject to retention of title) shall remain our property until all our claims against the Buyer in connection with the business relationship in question including future contracts have been fulfilled. This shall also apply in the case of payments being effected in respect of specific invoices or claims. The Buyer is permitted to process the goods subject to retention of title or to combine or connect them with other objects. Such processing shall take place on our account but without creating any obligation for us. The supplier shall hold the new item thus created in safekeeping and treat it with care. The new item is deemed to be “goods subject to retention of title”.

b. b.The parties agree that if the goods are connected or combined with other items which do not belong to us, we shall, under all circumstances, acquire co-ownership of the new item in proportion to the ratio of the value of the goods subject to retention of title that have been connected or combined with other items to the value of the other items in question at the time of the connection or combination thereof. The new item thus created is in this proportion, deemed “goods subject to retention of title”. In case our property rights should expire through processing, combining, mixing. The Buyer shall already now transfer onto us his ownership rights in respect of the new stock or items in the amount of the invoice concerning the goods reserved, and the co-ownership rights in respect of new stock or items shall be regarded as “goods subject to retention of title”.

c. The Buyer may sell the “goods subject to retention of title” only in routine business on his usual terms and conditions and only if he is not in arrears with his payment obligations, provided that the claims from resale shall be transferred to us in accordance with the following provisions.

d. c.The Buyer hereby assigns and transfers his claims resulting from resale of the reserved goods to us already now. The claims serve the purpose of protection to the same extent as the reserved goods. If the reserved goods are sold by the Buyer together with other goods not under reserve of title in our favour, transfer of the claims related to the resale shall be effected only in proportion to the value of the reserved goods resold individually. In the case of sale of goods in which we have only shared ownership, transfer of the claims shall be effected in proportion only.

e. d.The Buyer is authorized, until revocation of such authorization, to collect upon claims arising from the resale which have been assigned and transferred to us. We shall revoke the authorization only for good cause, particularly in the case of default in payment or deficiency in the creditworthiness of the Buyer. The Buyer shall not be entitled to assign or transfer his claims to third parties, including but not limited to the sale of receivables to factoring banks, except with our prior written consent. At our request the Buyer is obliged to immediately advise his customers of the transfer of receivables onto us – unless we do it ourselves – and to provide us with information and documents necessary for collection. The Buyer has to inform us immediately about any seizure of goods or other impairments by third parties.

11. Place of Performance, venue and applicable law

The place of performance for the payment shall be the registered office of the company in Germany. The place of jurisdiction shall be Freiburg i.Brsg., Germany or – at our discretion – at the Buyer´s principle place of business or his registered office. All legal relationships between us and the Buyer shall be governed by the laws of the Federal Republic of Germany including the application of the provisions of the United Nations Convention on Contracts for the International Sale of Goods of 11 April 1980.