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I. Scope

1. These general terms and conditions of supply ("Terms and Conditions of Supply") shall constitute an integral part of every supply agreement made by us and shall govern exclusively. Other terms, in particular general terms and conditions of the customer, shall not apply, irrespective of whether or not we have expressly rejected them in the individual case. These Terms and Conditions of Supply shall also govern exclusively even if - with knowledge of other terms and conditions - we effect contractual performance without reservation.

2. Special agreements, arrangements and undertakings, in particular by members of CITO staff, shall only be deemed valid when we have confirmed them in writing, e.g. in our order confirmation or the agreement.

II. Offers, Conclusion of an Agreement and Modifications of the Scope of Performance

1. In general, our offers are non-binding. If we have designated an offer expressly and in writing as binding, then it shall be binding for a period of ten business days from the date of our offer.

2. By placing an order for products, the customer gives a legally binding declaration of intent to purchase the products ordered. The customer's written order constitutes a binding offer. We shall be entitled to accept the offer to conclude an agreement embodied in such order within two weeks from the time of our receipt thereof. Our acceptance may either be given in writing by confirmation of order or by delivering the products to the customer, except where the parties have made a written agreement.

3. We reserve all rights of ownership and copyright to all cost estimates, drawings, samples, gauges and tools. They may not be used, duplicated or provided to third parties for other purposes.

III. Call Orders

1. Where call orders have been issued, the acceptance period shall be six months from the date of confirmation of the order, unless the parties have made a written agreement to the contrary.

2. Upon expiry of this period, we shall be entitled, at our option, to invoice the customer for the remaining products or to cancel the remaining order, charging the customer for costs incurred.

IV. Prices

1. Our general price quotations (e.g. brochures, Internet) are non-binding and subject to change. Unless otherwise agreed, the most recent version of our price lists shall apply.

2. In the absence of any agreement to the contrary, our prices are quoted EXW CITO Schwaig, Incoterms® 2010, with respect to the specified quantity, net of the legal rate of VAT in effect from time to time.

3. Our prices are quoted net of shipping and packing charges, unless otherwise agreed in writing.

4. We reserve the right to make corresponding changes to our prices where, following conclusion of the agreement and prior to our delivery of the products, there are changes in our costs, in particular due to wage agreements, changes in the prices of raw materials, other changes in prices of our sub-suppliers or currency rate fluctuations for which we do not bear responsibility and which were not sufficiently foreseeable. Upon request, we shall furnish evidence to the customer of the reasons underlying the price changes.

V. Terms of Payment, Default

1. In the absence of any agreement to the contrary, our invoices shall be due for payment within 30 days from the date of the invoice or at the time of any default of acceptance; the customer shall have no warranty-related right of retention. Upon expiry of this 30-day period, the customer shall be deemed in default of payment; we are not required to issue any separate demand for payment.

2. Upon any default by the customer, we shall be entitled to demand default interest of eight percentage points over the base interest rate applicable under sec. 247 German Civil Code. We hereby reserve the right to assert further damages.

3. In the case of initial orders, CITO may make deliveries contingent on prepayment. Otherwise, the date on which the amount of the invoice is received in such account as we have specified shall govern with respect to timeliness of payment.

4. Where, following conclusion of an agreement with the customer, it becomes apparent that as a result of the customer's financial condition, its performance of its contractual obligations is at risk (in particular in the case of a cessation of payments, an application for insolvency, measures of attachment or judicial execution, the assertion of protests of bills of exchange or cheques and returned direct debits; the foregoing shall also include such by or vis-à-vis third parties), we shall be entitled - at our option - either to demand prepayment of the purchase price before effecting delivery or to perform only upon the furnishing of reasonable security. The foregoing shall also apply if, as a result of a default or delay of payment by the customer, there are well-founded doubts as to the customer's solvency or creditworthiness.

5. In cases covered by Clause V.4, we shall, in addition, be entitled to withhold deliveries to the customer until such time as all payments under outstanding receivables from that customer have been received or until the customer furnishes reasonable security. However, with respect to receivables which are not yet due, including receivables as to which we bear an obligation of advance performance under contracts previously made and with respect to receivables lacking any internal natural or commercial nexus with the delivery in question, this shall only apply to the extent that we have a justified interest in doing so.

6. Where the customer fails to effect prepayment or to furnish security under Clause V.4 within two weeks' time, we shall be entitled to cancel the contract in question.

VI. Delivery of Products, Transfer of Risk and Shipment

1. In the absence of any agreement to the contrary, our deliveries shall be EXW CITO Schwaig, Incoterms® 2010. The risk passes at such time as the products are handed over to the customer or to the forwarder. It shall be deemed the equivalent of handing over where the customer is deemed in default of acceptance.

2. Even in the case of sale to destination according to customer's instructions the risk passes at such time as the products are handed over to the forwarder. In the case of sale to destination according to customer's instructions and in the case of absent instructions by the customer to us in this regard, it shall remain our prerogative to select the routes of despatch, the means of transport and other temporary protective measures, while we are not obliged to select the most cost-effective mode of shipping. In the case of sale to destination according to customer's instructions the costs of postage and freight shall be borne by the customer in the absence of any agreements to the contrary. We shall effect shipping on behalf of and for the account of the customer; we shall be deemed authorised by the customer for this purpose.

3. The customer shall bear the costs of packing unless otherwise agreed; we shall charge the customer for them at our own cost. In the case of deliveries effected to a customer located within Germany, we shall credit the customer for 2/3 of these packing charges if it is possible to re-use the packaging and if it is returned to us free-of-charge.

4. The customer shall adhere to the export control obligations when taking over the products and, where required, arrange for an authorisation of the export.

VII. Delivery Periods and Delivery

1. Delivery dates or delivery periods quoted by us are non-binding unless they are agreed to be binding in the individual case. In the event of non-binding delivery periods or delivery dates, we shall not be deemed in default prior to the expiry (to no avail) of such reasonable delivery period as the customer has set for us in writing. The customer may not set the expiry of any such period for any earlier date than four weeks from the expiry of our non-binding delivery period or non-binding delivery date. Moreover, our delivery dates and delivery periods are quoted subject to the reservation that the customer must have provided all requisite documents and details, government approvals and releases.

2. We do not enter into agreements providing for absolute fixed date deals.

3. If, due to circumstances for which we do not bear responsibility, we are unable to effect delivery on time, the delivery period shall be deemed extended by the duration of such events.

4. We shall not be deemed in default of delivery if for reasons which are not within the scope of our responsibility our sub-suppliers fail to effect supplies to us correctly or timely.

5. We shall be entitled to effect partial deliveries provided that it is not unreasonable to expect the customer to accept them; in particular where the delivery of the remaining ordered products has been assured and the customer does not expend any substantial additional time or investment or incur any material additional costs as a result thereof (except where we give the customer notice that we are prepared to assume such costs). We may issue separate invoices for each partial delivery.

6. When effecting delivery to the customer, certain deviations in quantities may arise relative to what is stated in our order confirmation, provided that such deviations are reasonable to the customer. Over- or under-deliveries of up to 10% shall be deemed reasonable and we may effect such over- or under-deliveries.

VIII. Retention of Title

1. We reserve title to the products delivered by us until such time as the purchase price has been fully paid and all receivables under the parties' current business relations have been fully settled.

2. In the event of a contract breach by the customer, in particular in the event of default of payment, we are entitled to recover products we have delivered subject to reservation of title ("Reserved Goods"). In the event of a default of payment, we shall not be required to set any prior deadline. For purposes of recovering Reserved Goods, we may enter upon the customer's business premises during regular business hours. Our further claims shall remain unaffected by the foregoing.

3. Following our recovery of Reserved Goods, we shall be authorised to effect reasonable realisation thereon following a prior warning; the proceeds of realisation shall be credited to the receivables of the customer, minus reasonable costs of disposition.

4. Wherever the customer re-sells Reserved Goods for financing purposes or in the ordinary course of its business, it is deemed to undertake to maintain our reservation of title in effect vis-à-vis the customer's purchaser. The customer hereby assigns to us until full settlement of all of our receivables and up to the amount of the final invoice amount (including VAT) any and all receivables to which it is entitled on the basis of re-sale vis-à-vis its purchaser or a third party, together with all ancillary rights, and the foregoing assignment is deemed irrespective of whether the Reserved Goods were resold without any further processing or after further processing by the customer.

5. At the time of re-sale, the customer shall give its purchaser notice of having assigned its claims to payment. The customer is not authorised to sell Reserved Goods to purchasers who have refused or restricted assignment of any claims for payment asserted against them. Where the Reserved Goods have been processed with other items of property not belonging to the customer, then the assignment shall be deemed only pro rata to the extent of our co-ownership share in the item of property which has been subject to further processing, pursuant to Clause VIII.9.

6. The customer shall continue to be entitled to collect the receivables following assignment.
Our right to effect collection of the receivables ourselves shall remain unaffected by the foregoing. However, we shall not collect the receivables for so long as the customer complies with its payments obligations from the proceeds it has generated, suffers no default of payment and in particular, has not been subject to any application for the opening of insolvency proceedings and has not ceased making payments. Where one of the these conditions exists, we may demand that the customer disclose to us the assigned receivables and the obligors thereunder, furnishes us with all details required for our collection thereof, delivers to us the associated documents and discloses the assignment to its obligors. At such time as any such conditions arise, the customer’s right to collect the receivables shall cease.

7. In all other respects, the customer may neither sell the Reserved Goods, nor encumber them nor transfer ownership therein for provision of security, without our prior written consent. In the case of attachments, seizures or other dispositions by third parties with respect to the Reserved Goods, the customer shall point out our ownership therein and shall notify us without delay. To the extent the third party is not in a position to reimburse us for the judicial and extrajudicial costs of an action under sec. 771 German Code of Civil Procedure, the customer shall be liable for such outlay as we incur.

8. The customer shall treat the Reserved Goods with care. In particular, the customer shall arrange for sufficient fire, water damage and theft insurance cover for the Reserved Goods at their replacement value.

9. Processing or transformation of the Reserved Goods by the customer is at all times deemed to be undertaken for our benefit. Where the Reserved Goods are processed or transformed together with other items of property not belonging to us, we shall be deemed to acquire a right of co-ownership in the new item of property pro rata in proportion of the value of the Reserved Goods relative to the other items of property which have been processed or transformed as of the time of their processing or transformation; in all other respects, the same rules shall apply to the new item of property created in this way as apply to the products delivered subject to a reservation of title.

10. Where the Reserved Goods are inseparably commingled or combined with other items of property not belonging to us, we shall be deemed to acquire a right of co-ownership in the new item of property pro rata in proportion to the value of the Reserved Goods relative to the other items of property which were so commingled or combined as of the time of their commingling or combination. Where the commingling or combination takes place such that the item of property of the customer should be regarded as the primary item of property, the customer is deemed to transfer co-ownership to us on a pro rata basis. The customer shall preserve the sole ownership assets or co-ownership assets created in this way for our benefit.

11. The customer shall take reasonable measures and provide us with comprehensive support to protect our rights under this Clause VIII in an appropriate manner (where necessary by means of other security interests) in the country in which the Reserved Goods are located.

IX. Quality of the Products, Warranty Rights, Liability

1. The details contained in catalogues, brochures, circulars, advertisements, illustrations and comparable public statements with respect to the performance, dimensions, weights, prices and the like of our products shall be deemed non-binding and, in particular, they shall not constitute any contractual statements of quality with respect to the products where they are not expressly incorporated into the parties' agreement.

2. Generally, in terms of the quality of the products, our specific product description shall constitute the sole agreement.

3. Dimensions and other specifications are subject to production-related margins and tolerances. We reserve the right to make technical modifications, and modifications in respect of form, colour and/or weight, to the extent reasonable whilst maintaining equivalent quality and the same price.

4. Guarantees, in particular guarantees as to quality, shall be binding for us only in the scope in which they (i) are contained in an offer or an order confirmation, (ii) are expressly designated as "guarantee" or "guarantee as to condition", and (iii) expressly stipulate our obligations resulting from such guarantee.

5. To the extent the manufacturer assumes a guarantee as to quality of the products or for the fact that the products shall continue to have a particular quality for a particular period of time, then, notwithstanding the customer's other existing claims against CITO, the customer shall exclusively have rights against the manufacturer under the guarantee under the terms and conditions indicated in the declaration of guarantee and related advertising.

6. The prerequisite for the customer's claims for defects is that it inspects the products upon delivery and effects proper notification of defects to us. Notifications of defects shall be made in writing and provide specific details of the respective defect. Obvious defects shall be notified to us in writing without undue delay, but at the latest within one week of delivery, hidden defects without undue delay, but at the latest within one week of being discovered. The acceptance of the products may not be refused for defects that are not of a material nature. Claims for defects for which notice is given out of time shall be precluded. Where the customer fails to comply with these obligations, its claims for defects shall be precluded.

7. The customer shall bear the full burden of proof for any and all conditions precedent to asserting its warranty rights, in particular with respect to the existence of the defect itself, with respect to the time of discovery of the defect and with respect to the timeliness of its notice of the defect. Upon our request, the customer shall return the defective products to us in their original packaging or in comparable proper packaging.

8. We may remove a defect, at our choice, through rectification or replacement delivery. Rectification or replacement delivery (collectively subsequent performance) shall be made without acknowledgement of a legal obligation. For repaired products the remainder of the original limitation period shall run from the return of the repaired products; the same shall apply for replaced products.

9. We shall be granted at least a 20 day period for rectification. We are entitled to multiple attempts at rectification to the extent this is reasonable to the customer.

10. We may refuse subsequent performance due to disproportionate expense.

11. If subsequent performance fails finally, the customer may, at its option, either demand reduction of the purchase price or rescission. However, in the event of a breach which is only minor, in particular in the case of defects which are merely minor, the customer shall not be entitled to rescission.

12. Further claims for defects of any kind whatsoever are excluded, without prejudice to any restricted claims for damages subject to the provisions of Clause X.

13. The customer shall bear the reasonable costs of any assertion of warranty rights which are not well-founded (e.g. where the product was not defective); the same shall apply where we have erroneously granted warranty rights without bearing any obligation to do so.

14. The limitation period for claims for defects is one year from delivery. This shall not apply in the following cases: (i) fraudulently concealed defects, and (ii) defects for which a guarantee for the quality of the product was given (in this respect the guarantee provisions or limitation period resulting for the specific guarantee shall apply, where applicable); in the case of claims for damages, this shall also not apply in the following cases: (i) injury of life and limb, (ii) intent, and (iii) gross negligence by our officers or executives.

X. Liability and Limitation of Liability

1. In the case of slight negligence our liability shall be limited to damages arising from a breach of material contractual obligations without fulfilment of which proper performance of the agreement is not possible at all and to which the contractual party may ordinarily rely and be confident that they will be complied with. However, in such case, our liability shall be limited to such damages which are typical and foreseeable. This limitation of liability shall also apply to damages caused by gross negligence of our employees or agents who are not officers or executives of our company.

2. In the cases of Clause X.1, our liability shall be limited to EUR 50,000.

3. In the cases of Clause X.1, the limitation period shall be two years from the date on which the claim arose and the customer became aware thereof. Regardless of customer’s awareness, the limitation period shall be three years from the damaging event. For claims for defects the limitation period of Clause IX.14 shall apply.

4. The above limitations of liability shall also apply in the case of the customer’s claims for damages against our officers, executives, employees or agents.

5. The above limitations of liability shall apply to all claims for damages, irrespective of their legal basis, except for claims for damages of the customer (i) for intent, (ii) under the German Product Liability Act, (iii) for fraudulently concealed defects, (iv) for defects for which a guarantee for the quality of the product was given, (v) for injury of life and limb or (vi) for gross negligence of our officer or executives.

XI. Force Majeure

1. Where, due to force majeure such as troop mobilisations, war, terrorism, civil unrest, natural catastrophes, fire or other unforeseeable circumstances for which we do not bear responsibility such as strikes or legal lock-outs, business or transport disruptions, difficulties in procuring raw materials or insufficient supplies by our sub-suppliers, we are prevented from performing our contractual obligations, the delivery periods we have agreed shall in each case be deemed extended by the duration of the impediment plus a reasonable preparatory period. We shall likewise be deemed to bear no responsibility for the above-referenced circumstances where they arise during a previously existing default. We shall provide notice to the customer of the commencement and the anticipated end of any such circumstances at the earliest possible date.

2. Where the impediment continues for six weeks or longer, both parties shall be entitled to rescind the agreement.

XII. Counterclaims, Assignability

1. Set-off and exercise of a right of retention by the customer due to contested counterclaims or counterclaims which are not final are excluded.

2. Without our prior written consent, the customer is not permitted to assign its rights and obligations in connection with our deliveries in whole or in part. We are permitted to assign the rights and obligations in connection with our deliveries, in particular, we may assign them to affiliated entities within the meaning of sec. 15 German Stock Companies Act.

XIII. Final Provisions

1. All legal relations between us and the customer shall be governed by the laws of the Federal Republic of Germany. The provisions of the United Nations Convention on the International Sale of Goods shall not apply.

2. The place of performance for the contractual performance to be rendered by the parties is Nuremburg; exclusive place of jurisdiction for all disputes between the parties shall be Nuremberg, Germany.

3. If individual terms of the agreement with the customer, including these Terms and Conditions of Supply, should be or become invalid in whole or in part, the validity of the remaining provisions hereof shall not be affected thereby. The contractual provision which is invalid in whole or in part shall be deemed replaced by such provision as comes the closest to the commercial effect of the invalid provision.