General terms and conditions

General business and delivery commitments

Terms and Conditions for the Supply of Engines and Spare Parts in Business Transactions with Companies and Legal Entities under Public Law Motoren Franke GmbH, Status 01.01.2008

I. Scope, data and information

The following terms and conditions apply to all offers, deliveries and services of Motoren Franke GmbH hereinafter referred to as the "Supplier" regarding original DEUTZ engines (new engines) and original DEUTZ parts, as well as other new and used engines and spare parts hereinafter referred to as the "Object of Delivery".

Any deviating terms and conditions of the customer shall not become part of the contract, even if the supplier accepts the order.

(3) The supplier reserves the property rights and copyrights to samples, cost estimates, drawings and other information of a physical and non-physical nature - also in electronic form -; they may not be made accessible to third parties and may only be used by the customer for the intended use of the delivery item.

II. scope of delivery

The written order confirmation of the Supplier shall be authoritative for the scope of delivery and services regarding the delivery item; in the case of an offer by the Supplier with a time commitment and acceptance in due time, the offer shall be authoritative if no timely order confirmation has been received.

2. collateral agreements and amendments require the written confirmation of the supplier. Weight, dimension, performance and consumption values stated by the supplier as well as other information on the delivery item are only approximate reference values, irrespective of the type or location of their reproduction. Only those characteristics of the delivery item which are described in writing in an express guarantee declaration and which are legally validly granted by the Supplier shall be deemed to be guaranteed within the meaning of § 443 BGB (German Civil Code).

The Supplier reserves the right to make design and shape changes to the delivery item provided that the delivery item itself is not significantly changed and the changes are reasonable for the Purchaser.

Other services such as installation, assembly or commissioning of the delivery item are not included in the scope of delivery. At the Purchaser's request such services shall be offered and invoiced separately by the Supplier in accordance with the General Terms and Conditions for Work Services.

III. prices

The prices are ex works of the supplier (EXW, Incoterms 2000) plus packaging and value added tax at the respective statutory rate.

IV. Payments and securities

Payment shall be made without any deduction to the Supplier's account in the following amount: 1/3 down payment after receipt of the order confirmation, 1/3 as soon as the Purchaser has been informed that the main parts of the delivery item are ready for dispatch and the remaining amount is to be paid within one month of transfer of risk.

The Purchaser shall only be entitled to withhold payments or set off counterclaims if such counterclaims are undisputed or have been finally determined by a court of law.

3. if the customer is in default of payment with an instalment in the case of agreements on partial payments, the outstanding partial payments shall become due immediately. The remaining debt shall also become due if bills of exchange with a later due date are outstanding. The supplier may withdraw from the contract or claim damages for non-performance without prejudice to his rights under the retention of title. Default interest shall be charged at 8% p.a. above the base interest rate, but at least 12% p.a.; it shall be higher or lower, but not below the statutory interest rate, if the Supplier proves a burden with a higher interest rate or the Purchaser proves a lower burden.

The Purchaser undertakes, at the Supplier's request, to provide possible securities for open claims of the Supplier.

V. Delivery time

1 The delivery period begins with the legal validity of the order. If the customer fails to fulfil all obligations incumbent upon him up to this point in time, in particular the timely provision of necessary official certificates or approvals as well as the payment of the contractually agreed down payment, the delivery period shall be extended accordingly. This shall not apply if the Supplier is responsible for the delay.

Compliance with the delivery period shall be subject to correct and punctual self-delivery by the Supplier.

3. the delivery period shall be deemed to have been observed if the delivery item has left the factory or notification of readiness for dispatch has been given by the end of the delivery period. If dispatch of the delivery item is delayed for reasons for which the customer is responsible, the customer shall be charged the costs of the delay starting one month after notification of readiness for dispatch.

If non-compliance with the delivery period is due to force majeure, industrial disputes or other events beyond the Supplier's control, the delivery period shall be extended accordingly. The Supplier shall not be responsible for the aforementioned circumstances even if they arise during an already existing delay. The Supplier shall notify the Purchaser of the beginning and end of such circumstances as soon as possible.

The Purchaser may withdraw from the contract without setting a deadline if the entire performance becomes finally impossible for the Supplier prior to the passing of risk. In addition, the Purchaser may withdraw from the contract if, in the case of an order, the execution of part of the delivery becomes impossible and he has a justified interest in refusing the partial delivery. If this is not the case, the Purchaser shall pay the contract price attributable to the partial delivery. The same shall apply in the event of the Supplier's inability to perform. Section XI.2 of these Terms and Conditions shall apply in all other respects. If the impossibility or inability to perform occurs during the delay in acceptance or if the Purchaser is solely or predominantly responsible for the circumstances of the impossibility or inability to perform, he shall remain obliged to provide consideration.

If the Supplier is in default and the Purchaser suffers damage as a result thereof, the Purchaser shall be entitled to demand a lump-sum compensation for default. Such compensation shall amount to 0.5 % for each full week of delay, but in total not more than 5 % of the value of that part of the total delivery which cannot be used on time or in accordance with the contract as a result of the delay. If the Purchaser grants the Supplier in default - taking into account the statutory exceptions - a reasonable deadline for performance and if the deadline is not met, the Purchaser shall be entitled to rescind the contract within the framework of the statutory provisions. Further claims arising from delay in delivery shall be governed exclusively by Section XI, subject to the provisions of Section XII of these Terms and Conditions.

The Purchaser shall be in default with a payment if he does not pay after a reminder from the Supplier, which is issued after the due date. Irrespective of this, the Purchaser shall be in default if he does not make payment at a date specified in the order on a calendar basis. The statutory provision according to which the customer is automatically in default thirty days after receipt of an invoice shall remain unaffected. If the customer remains more than 6 weeks in arrears with the acceptance of the contractual object or the fulfilment of his payment obligation after notification of availability, the supplier shall be entitled, after setting a grace period of 14 days, to withdraw from the contract or to claim damages for non-performance. If the supplier claims damages for non-performance, he may claim 15 % of the sales price as compensation. The damage shall be set higher or lower if the Supplier proves higher damage and the Purchaser proves lower damage. If the Supplier does not exercise this right, he shall, without prejudice to his other rights, be entitled to dispose freely of the subject matter of the contract and to replace it with a similar subject matter within a reasonable period of time in accordance with the terms of the contract.

VI Passing of risk and acceptance

The risk shall pass to the Purchaser when the delivery item has left the Supplier's works, even if partial deliveries are made or the Supplier has assumed other services, e.g. shipping costs or delivery and installation. At the Purchaser's request and expense, the Supplier shall insure the consignment against theft, breakage, transport, fire and water damage and other insurable risks.

If dispatch is delayed or fails to take place due to circumstances for which the Supplier is not responsible, the risk shall pass to the Purchaser on the day of notification of readiness for dispatch. The Supplier undertakes to take out the insurances required by the Purchaser at the Purchaser's expense.

Delivered items, even if they have minor defects, shall be accepted by the Purchaser without prejudice to the rights under Section IX.

4. partial deliveries are permissible, unless unreasonable for the purchaser.

VII Retention of title

The Supplier shall retain title to the delivery item until receipt of all claims of the Supplier against the Purchaser arising from the business relationship, including claims arising in the future from contracts concluded simultaneously or later. This shall also apply if individual or all claims of the Supplier have been included in a current account and the balance has been struck and acknowledged. In the event of breach of contract by the Purchaser, in particular default in payment, the Supplier shall be entitled to take back the delivery item after issuing a reminder and the Purchaser shall be obliged to surrender it. All costs of repossession shall be borne by the Purchaser. The repossession and attachment of the object by the Supplier shall only be deemed withdrawal from the contract if the Supplier expressly declares this. In the event of attachments or other interventions by third parties, the Purchaser shall notify the Supplier immediately in writing and provide all necessary information. The Purchaser may not pledge the delivery item or assign it by way of security.

If, in connection with the payment of the purchase price by the Purchaser, the Supplier's liability under a bill of exchange is established, the retention of title including its agreed special forms and other securities agreed to secure payment shall not expire before the payment of the bill of exchange by the Purchaser as drawee.

The Purchaser shall be entitled to resell the delivery item in the ordinary course of business. However, he already now assigns to the supplier all claims with all ancillary rights which accrue to him from the resale against the customer or against third parties, irrespective of whether the reserved goods are resold without or after processing. The purchaser is authorised to collect these claims even after assignment. The supplier's authority to collect the claims himself remains unaffected; however, the supplier undertakes not to collect the claims as long as the purchaser duly meets his payment obligations. The supplier may demand that the customer informs him of the assigned claims and their debtors, provides all information necessary for collection, hands over the relevant documents and informs the debtors of the assignment. If the delivery item is resold together with other goods which do not belong to the Supplier, the Purchaser's claim against the customer shall be deemed assigned in the amount of the delivery price agreed between the Supplier and the Purchaser.

The supplier undertakes to release the securities to which he is entitled to the extent that their value exceeds the claims to be secured by more than 20%, insofar as these have not yet been settled.

VIII Delivery and installation

(1) If installation is one of the Supplier's obligations, he shall not be required to begin installation until the foundations have been completely dry and set and all other construction work has been completed so that installation and commissioning can take place. In the case of installation in a ship, the Supplier need not begin installation until the foundations necessary for installation have been completed and the ship has been launched. If this work is not completed on time, the deadlines agreed for installation and commissioning shall be extended accordingly.

Unless otherwise expressly agreed, the delivery item shall be transferred from the Supplier's workshop to the place of use at the expense and risk of the Purchaser.

If the Supplier undertakes installation or commissioning, he shall provide the necessary fitters with the fitters' tools at the expense of the Purchaser and in accordance with the Supplier's special terms and conditions for such services. Tools, lifting equipment, scaffolding, equipment, building materials, welding sets, cylinder gas for piping work, etc. shall be supplied by the Purchaser at his own expense and risk, including the provision of a suitable lockable storage room for the installation tools; he shall be liable for the unskilled workers provided by him.

If, through no fault of the Supplier, there is a delay or interruption in the transfer, installation or commissioning of the delivery item or if the fitter is prevented from working, the Purchaser shall bear all additional costs incurred as a result of the delay, interruption or obstruction. This shall not affect the obligation to comply with the agreed payment deadlines.

Work and services that go beyond the scope of delivery according to the order confirmation and delivery contract may only be carried out by the fitter if the customer has placed a special order for this and only at a special charge.

6. if the supplier has also taken over the trial operation or test drive, the normal working hours shall apply. If the assembler is employed beyond this with regard to special circumstances, the extra hours shall be charged separately as overtime.

7. overtime hours may only be worked by the fitter if the customer expressly requests this and confirms this in writing to the supplier and the fitter. They will be charged to the customer.

IX. Liability for defects in the delivery

The supplier is liable as follows for defects in the delivery, which also include the lack of specified performance values such as electrical power, thermal power, fuel and lubricating oil consumption:

Regulations concerning DEUTZ new engines and original DEUTZ parts. All those parts which within 24 months (original parts 12 months) from commissioning or installation, or 30 months from the date of delivery (original parts 18 months), depending on which point in time is reached first, as a result of a circumstance prior to the transfer of risk to the customer - in particular due to faulty design, poor construction materials, or defective workmanship - shall be repaired or replaced free of charge at the supplier's reasonable discretion and at the supplier's discretion, and which prove to be unusable or significantly impaired in their usability. In the case of original DEUTZ engines, the further warranty period from the 13th month after commissioning shall only apply until the following operating hour limits have been reached, calculated from the time of commissioning:

Additional regulations concerning DEUTZ new engines (small engines):

The engine components (main components) crankcase, crankshaft, camshaft, connecting rod and blank cylinder head of the following engine series are to be repaired or replaced free of charge at the supplier's discretion within 36 months of commissioning or installation, or 42 months from the date of delivery, whichever is reached first, as a result of a circumstance prior to the transfer of risk to the customer, in particular due to faulty design, poor construction materials or defective workmanship, which is found to be unusable or significantly impaired in its usability. For the above-mentioned components, the further warranty period from the 13th month after commissioning shall only apply until the following listed operating hour limitations have been reached, calculated from commissioning:

General regulations

If the delivery item is resold by the customer, the date of commissioning shall be the date of delivery to the customer at the latest. The Supplier must be notified immediately in writing of any obvious defects. Replaced parts shall become the property of the Supplier. The supplier's liability for essential third-party products shall be limited to the assignment of the liability claims to which he is entitled against the supplier of the third-party product.

The right of the customer to assert claims arising from defects shall in all cases expire 6 months from the time of the timely notification of defect, but at the earliest upon expiry of the warranty period.

No warranty shall be assumed for damages arising from the following reasons, unless such reasons are the responsibility of the Supplier:

Unsuitable or improper use, faulty assembly or commissioning contrary to the supplier's regulations, installation of spare parts other than the supplier's original parts, natural wear and tear, faulty or negligent handling, unsuitable operating materials, replacement materials, defective construction work, unsuitable subsoil, chemical, electrochemical or electrical influences.

4. after consultation with the supplier, the purchaser shall give the supplier the necessary time and opportunity to carry out all repairs and replacement deliveries which the supplier deems necessary at his reasonable discretion, otherwise the supplier shall be released from his liability for defects. Only in urgent cases where operational safety is at risk and to prevent disproportionately large damage, in which case the supplier must be notified immediately, or if the supplier is in default with remedying the defect, shall the purchaser have the right to remedy the defect himself or have it remedied by third parties and demand reimbursement of the necessary costs from the supplier.

Of the direct costs arising from the repair or replacement delivery, the Supplier shall bear the costs of the replacement part including dispatch and the reasonable costs of dismantling and installation to the extent that the complaint proves to be justified, as well as the costs of any necessary provision of the Supplier's fitters and assistants if this can be reasonably demanded in the individual case. Otherwise the Purchaser shall bear the costs.

6. the delivery of a replacement part and/or the repair shall not extend the original warranty period for the delivery item.

7. any modifications or repair work carried out improperly by the Purchaser or third parties without the prior approval of the Supplier shall invalidate the liability for the consequences arising therefrom.

8. further claims of the purchaser arising from defects of the delivery item, in particular a claim for compensation for damages which have not occurred to the delivery item itself, are excluded subject to the provisions of section XI.4 and section XII.

9. regulations concerning other new and used engines and spare parts. The supplier is liable for material defects as follows:

All those parts or services which show a material defect are to be repaired, replaced or provided again free of charge at the discretion of the supplier, provided that the cause of the defect already existed at the time of transfer of risk. Claims for subsequent performance shall become statute-barred 12 months after the statutory commencement of the limitation period; the same shall apply to rescission and reduction. This period shall not apply if longer periods are prescribed by law in accordance with §§ 438 para. 1 no. 2 (buildings and items for buildings), 479 para. 1 (right of recourse) and 634a para. 1 no. 2 (construction defects) BGB (German Civil Code) in the case of intent, fraudulent concealment of the defect and non-compliance with a quality guarantee. The statutory provisions on suspension of expiry, suspension and recommencement of the periods shall remain unaffected.

X. Liability for ancillary obligations

If, through the fault of the supplier, the delivered item is not delivered by the customer as a result of omitted or faulty execution of proposals and consultations before or after conclusion of the contract as well as other contractual ancillary obligations, the supplier shall be entitled to in particular operating instructions and maintenance of the delivery item cannot be used in accordance with the contract, the following provisions shall apply to the exclusion of the provisions of Sections IX, XI and XII shall apply mutatis mutandis to all further claims of the Purchaser.

XI. Purchaser's right to rescission and other liability of the Supplier

1. the customer may withdraw from the contract if the entire performance becomes finally impossible for the supplier before the transfer of risk. The same shall apply in the event of the Supplier's inability to perform. The Purchaser may also withdraw from the contract if, in the case of an order for similar items, the execution of part of the delivery becomes impossible in terms of quantity and he has a justified interest in refusing a partial delivery; if this is not the case, the Purchaser may reduce the consideration accordingly.

If there is a delay in performance within the meaning of Section V. of the Terms and Conditions and the Purchaser grants the Supplier in default a reasonable period of grace with the express declaration that it will refuse acceptance of the performance after expiry of this period, and if the period of grace is not observed, the Purchaser shall be entitled to rescind the contract.

If the impossibility occurs during the delay in acceptance or through the fault of the purchaser, the latter shall remain obliged to pay consideration.

The Purchaser shall also have a right of rescission if the Supplier allows a reasonable grace period granted to it for the repair or replacement of a defect for which it is responsible within the meaning of the Terms and Conditions to elapse fruitlessly through its fault. The purchaser's right of withdrawal also exists in the event of impossibility or inability of the supplier to repair or replace the goods.

5. the supplier shall be liable in the event of infringement of property rights of third parties in connection with the delivery or performance of the supplier to the exclusion of further claims as follows. Liability shall be limited to industrial property rights granted in Germany. The Purchaser shall be released from claims for compensation and costs imposed by a final and absolute judgement and the Purchaser shall be reimbursed for the lawyer's fees incurred. The right of the purchaser to withdraw from the contract due to impossibility remains unaffected.

Subject to the provisions of Section XII, all other further claims of the Purchaser, in particular for termination or reduction as well as for compensation of damages of any kind, including such damages that have not occurred to the delivery item itself, shall be excluded.

XII Limitation of liability limitations

The exclusions of liability and limitations of the claims of the customer in these conditions do not apply in the case of intent, gross negligence of legal representatives or executive employees, or culpable breach of essential contractual obligations. In the event of culpable breach of essential contractual obligations, the Supplier shall be liable only for reasonably foreseeable damage typical of the contract, except in cases of intent and gross negligence on the part of legal representatives or executive employees. Furthermore, the exclusions and limitations of liability of the Purchaser's claims in these terms and conditions shall not apply in cases where liability is assumed under the Product Liability Act for personal injury or property damage to privately used objects in the event of defects in the delivery item. The exclusions and limitations of liability shall also not apply if defects were fraudulently concealed or their absence was guaranteed or if life, body and health were culpably injured.

XIII. partial ineffectiveness

A contract concluded on the basis of these conditions shall remain binding in its remaining parts even if individual conditions are ineffective. This shall not apply if adherence to the contract would mean unreasonable hardship for one of the contracting parties.

XIV Place of performance, law and jurisdiction

The place of performance shall be the supplier's supplying plant. For all disputes arising from the contractual relationship, including for actions in documentary and bill of exchange proceedings, the court having jurisdiction for the supplier's head office shall have exclusive jurisdiction. German law shall apply; these terms and conditions as well as the other provisions in the contract between the contracting parties shall prevail. The application of sales law rules arising on the basis of international agreements (uniform sales law or UN sales law) is excluded.