General Purchasing Conditions (E 2006)


1. Scope

Only the following General Purchasing Conditions apply for the entire current and future legal relations between August Krempel Soehne GmbH + Co. KG ("KREMPEL") and the supplier.

With the acceptance of an order by the supplier, at the latest with the shipment of the ordered goods or fulfilment of the services ordered, the supplier recognises the sole legal validity of these General Purchasing Conditions. The General Purchasing Conditions apply to the procurement of both movables ("supplies") as well as contracted work and services (“services“).

Orders are only binding when these have been established in written form. Orders expressed verbally or by telephone, supplements and any amendments to orders already placed require in order to be effective, that the contents of such agreements be in written form.

2. Conclusion of a contract

Acceptance of our orders shall be confirmed in writing within 3 days of the order being issued. If the supplier does not accept the order within this period of time, then KREMPEL is entitled to withdraw from the order. Withdrawal shall be in written form. Any acknowledgement of the order arriving later than this time limit or where the contents differ from the order placed, will be considered as being a new quotation and has to be approved in writing by KREMPEL in order to be become effective.

Call-forward notices for supplies will become binding after 2 weeks at the latest if the supplier has not objected in writing to such within this period of time.

3. Prices

If no special agreement has been reached, prices are understood as being ex our works, including packaging, to the address we stipulate. The agreed prices are fixed prices for the entire volume of the order, irrespective of whether the goods are received in one shipment or in part instalments.

Compliance with customs requirements and regulations for supplies from abroad, including payment of any customs duties which might be levied, is the responsibility of the supplier if DDP has not been agreed.

4. Target dates and time limits for supplies and services

Target dates for supplies and services are considered met when the goods have been received at the delivery address by the foreseen point in time or the services have been completed by the agreed target date. In the event of the target date not being met and the time limit being exceeded, KREMPEL reserves the right, following elapse of an appropriate extension of the time limit, to revoke the agreement. The supplier is furthermore obliged to pay compensation for damage caused by delayed performance in the form of contract penalties. Such compensation for the goods not delivered shall be to the value of 0.1 % of the delivery value for each business day, max. 5% however, of the total delivery value.

As soon as such a situation becomes apparent, the supplier is obliged to inform KREMPEL in writing without delay of the expected duration for all situations - and to justify these - which might impair the timely fulfilment of supplies or services. KREMPEL reserves the right to extend the target date for delivery.

For each supply or service, the supplier shall include appropriate delivery paperwork stating the supplier ID and the purchase order number. The delivery paperwork shall furthermore agree exactly with the wording in the order and order acknowledgement, and include all other information of relevance.

Should acts of God, outbreak of war, natural disasters, strikes, lock-outs, measures from authorities and other unforeseen serious unavoidable events lying outside KREMPEL’s sphere of influence for which KREMPEL cannot be held responsible, lead to the supply not being accepted / delivered, or the services not being provided or being accepted, then KREMPEL is exempted from any obligation to accept for the duration of the interference and to the extent of the effects from the interference. KREMPEL will adapt in loyalty and good faith its obligations to changes in situations. This can mean that KREMPEL might renounce delivery in whole or in part of supplies still outstanding even once the interference has been rectified, or may demand continuation of supplies or services.

5. Supplies in instalments, excess supplies, short supplies, supplies ahead of schedule

KREMPEL is not obliged to accept supplies in instalments which have not be previously agreed. If supplies in instalments have been agreed, KREMPEL can determine the sequence for these. KREMPEL is entitled to use supplies in instalments without acknowledging conformity with the contract for the supplies by doing so.

Authoritative for the condition, type, quantity and weight of a delivery, are the values established at receiving inspection at the KREMPEL premises.

KREMPEL is entitled to reject excess supplies and short supplies falling outside customary commercial tolerances. Supplies deviating by more than 5 % from the ordered quantity require approval in writing beforehand from KREMPEL in each case.

KREMPEL is not obliged to accept any supplies shipped ahead of schedule.

6. Special requirements for services

The supplier provides his services as his own responsibility by means of his own personnel, material and tools. The supplier has always to provide the services himself. Any forwarding to a sub-contractor is only possible provided approval in writing has been obtained beforehand from KREMPEL. KREMPEL is obliged to provide the supplier with the information, documents and materials available to KREMPEL which are necessary for the supplier to complete the agreed services.

7. Dispatch, packaging and passage of risk

Binding for the shipment is the delivery address given in the order. Supplies shall be shipped free delivery address (unless otherwise agreed between the parties for the particular case).

Passage of risk for goods received is together with the transfer of the supply customary for supplies delivered free delivery address.

KREMPEL can specify the type of packaging and the mode of dispatch. If this is not the case then the supplier shall select the most favourable and most suitable type of packaging and mode of dispatch specific for each of the commodities. In the event of negligent non-observance of this requirement, all the costs incurred for replacement of damaged goods, additional freight, disposal and similar costs shall be at the expense of the supplier.

8. Contractual amendments / technical changes

Amendments to the contents of the contract – in particular with regard to quantity and date for supplies or services – shall be regulated by common consent between KREMPEL and the supplier and be documented in writing.

KREMPEL can request technical changes at any time to the goods which have already been ordered. After receiving a request for changes, the supplier shall submit without delay a proposal for any increase or reduction in costs, as well as indicating any changes in schedule, etc. The supplier will not implement any technical changes without first having received written approval for such from KREMPEL.

9. Payment conditions

The currency for the invoice submitted by the supplier shall principally be Euro or shall be in the currency stipulated in the purchase order. The price called out in each case in the purchase order (acknowledgement of the order) for the supply or services is a fixed price and applies for the shipment or services delivered free delivery address or place where the services will be performed. Unless otherwise agreed, the price includes packaging, freight, import duty, carriage, insurance and similar.

The VAT (value added tax) shall be given as a separate position on the order acknowledgement and the invoice both as a percentage and an amount in the given currency. The invoice must furthermore include all information of relevance to the delivery paperwork.

If no other special agreement has been made, payment of invoices shall be either 14 days with a discount of 3 % deducted, 30 days with a discount of 2 % deducted or 60 days without any deductions, in each case as of receipt of the supplies or the invoice.

If payment in advance has been agreed with a supplier, then the supplier shall provide suitable security, the choice of which shall be made by KREMPEL. A special agreement in writing shall be concluded regarding the granting of security.

In the event of discrepancies in a shipment, KREMPEL is entitled to withhold payment proportional to the value for such time until satisfactory fulfilment of the supply is established.

KREMPEL is entitled to offset demands by the supplier from KREMPEL with all demands which KREMPEL has from the supplier. Any offsetting of demands by the supplier from KREMPEL is only permitted in the cases of undisputed demands and claims which have become res judicata.

10. Quality and documentation

The supplier shall maintain both now and in the future, a quality assurance system meeting as a minimum, the requirements of DIN ISO 9001 and/or expanded by ISO TS 16949.

The applicability and effectiveness of the system, can be inspected by KREMPEL by conducting audits at the supplier’s premises. Following appropriate notification in advance, the supplier shall grant access to the individual manufacturing steps and allow review of the processes and quality documentation.

For those products per EU Directives, appropriate conformity declarations etc. constitute part of the supply. Products which carry CE identification are considered as already approved for unrestricted trade. All goods delivered to KREMPEL must conform with the currently valid legal requirements of the EU regarding contained prohibited materials and substances, and those which have to be declared.
When goods are produced for KREMPEL to delivery specifications for these, production of the goods may only then be commenced once agreed type samples have been checked and approved by KREMPEL. The supplier shall comply with the agreed technical data for the supplies. Modifications to the delivery item require written approval beforehand from KREMPEL. Regardless of first testing and inspection and approval, the supplier has to continuously check the quality of the delivery items. The contractual partners shall inform one another of possibilities for making quality improvements. Should type and scope of testing or test equipment or test methods not yet be agreed between the supplier and KREMPEL, then the supplier shall be willing when requested to do so, to discuss the tests with KREMPEL within the scope of his knowledge, experience and possibilities, and to establish the state of testing techniques necessary in each case.

KREMPEL can, within the scope of that which can be expected from the supplier, request changes to the delivery item in both specification and execution, whereby the effects, and in particular those requirements any increase or decrease in costs as well as the delivery target dates, shall be appropriately regulated by mutual agreement.

The supplier is obliged to maintain outgoing-lot controls based on the test criteria which have been agreed with KREMPEL. A test certificate documenting the test results shall accompany each supply.

11. Notice of defects in supplies and acceptance of contracted work

In accordance with the proper course of business, KREMPEL will check purchased goods without delay upon delivery of these for possible non-conformances or discrepancies in the quality; the supplier will be notified without delay or within 5 working days at the latest, of obvious defects after receiving the supply, and of any hidden defects when such are detected.

A formal acceptance procedure shall be followed when the supplier is providing contracted work. The formal acceptance will not be waived by any use, further processing or dispatch by KREMPEL of the item affected by the contracted work being provided, or by notification by the supplier that the contracted work has been completed.

12. Liability for defects

The supplier is liable for
- Conformance with the technical requirements in the documents, drawings and
   lans from KREMPEL,
- Agreement between the goods supplied and the type samples approved by
  KREMPEL,
- The properties attested in the test certificate,
- Free-of-defects and the suitability of the materials used and/or the procured
  parts,
- Any properties missing in goods which abolish or reduce the value or suitability
  for the contractually foreseen use.

a) When non-conforming goods or discrepant portios of these are detected by KREMPEL before the start of production, then the following shall apply:
The supplier shall supply without delay, new contractually agreed products, or the defective goods
shall be reworked by the supplier provided this is technically possible. The choice shall be made by KREMPEL. Any screening or other kinds of rework shall be performed by the supplier in
concurrence with KREMPEL.
All costs incurred by the supply of non-conforming goods (screening costs, transportation
charges, costs for rework, etc.) shall be borne by the supplier.

b) If non-conformance is detected once production has started by KREMPEL, then the conditions of Clause 12 a) shall first apply. The following will apply as well:
If the non-conformance is detected before the final products are shipped to the customers of KREMPEL, then besides the costs for rework – provided rework is possible - the supplier will bear the costs for the replacement supply as well as all costs for assembly and disassembly attributable to the non-conformance together with any rework costs.
If the non-conformance is only detected after the final products have been shipped to customers of KREMPEL, then the supplier shall also bear a part of the costs proportional to the supplier’s causation contribution of the supplier for the costs incurred for the recall campaign. KREMPEL will inform the supplier of such non-conformances once these are known as well as the subsequent course of proceeding.

KREMPEL can carry out the rework either itself or have this carried out by a third party, or procure
replacements from a third party when:
- The supplier is behind schedule with the replacement supply or with the rework,
- The non-conformance is established before the start of production and this manufacturing is required in urgent cases as protection against considerable disadvantages. The supplier will be informed of this without delay. Any costs incurred will be borne by the supplier.

Legal claims by KREMPEL remain unaffected by this; this applies in particular for claims for compensation, withdrawal from the contract or a reduction in the selling price because of defects.

The period of limitation for the rights of KREMPEL with regard to defects in supplied goods ends when 24 months have elapsed since use at KREMPEL, or after 36 months from delivery to KREMPEL, whichever is shorter.

For other supplies and services the supplier shall provide these free of material defects and deficiencies in title. In the event of violation by the supplier, the rights of KREMPEL as well as the applicable period of limitation are established by legal provisions.

In addition to the legal provisions, KREMPEL is entitled to himself rectify defects in the delivery item or factory service at the supplier’s cost, or to replace such by a substitute procured elsewhere, provided there is the urgency for this, the subsequent attempted fulfilment has failed, or the supplier himself does not comply with the demand from KREMPEL for fulfilment within an appropriate period of time.

The acceptance of the services and payment for the same shall not be considered as acknowledgement of being an adequate and proper supply.

13. Product liability – exemption – redemption – liability insurance

In so far as the supplier is responsible for damage to the product, the supplier is obliged to replace all damage incurred by KREMPEL, or to exempt KREMPEL from claims by third parties for compensation in the first instance, to the extent that the cause had been in his own area of sovereignty and organisation and he himself would be liable in the external relationship. In the case of a contributory fault or comparative negligence, the principles of § 254 of the BGB Civil Code shall apply.

Within the scope of the supplier’s liability for cases of damage, the supplier is also obliged to reimburse any expenses per §§ 683, 670 of the BGB Civil Code as well as in accordance with § 830, 840, 426 of the BGB Civil Code, which arise from a recall campaign performed by KREMPEL.

The supplier is obliged to maintain product liability insurance with a minimum coverage of EUR 2.0 million – flat rate – for personal injury / material damage; if KREMPEL is entitled to further claims for compensation, then these remain unaffected.

The supplier is obliged, when requested to do so, to provide evidence in writing of such insurance coverage. Should the supplier not be able to demonstrate this insurance protection within a period of 2 weeks, then KREMPEL is entitled to conclude such insurance at the supplier’s expense.

14. Documents from KREMPEL, and confidentiality obligations

All rights of ownership and copyright are reserved by KREMPEL for diagrams, drawings, plans, calculations, materials, models, drafts, specimens, fixtures and other auxiliaries, items and documents from KREMPEL; such may not be made accessible to third parties without explicit permission in writing from KREMPEL, may not be copied or be used for any other purpose than the one specified by KREMPEL and are only to be used to carry out the order from KREMPEL.

The parties are obliged to treat all commercial and technical knowledge and information not otherwise obvious which become known to them through the business relationship as industrial secrets and not to make such knowledge and information accessible to third parties.

These obligations are not applicable for the case that the supplier provides authorised persons with such information.

Neither are these obligations applicable for such information:
- which is publicly known without there being any neglect of duty by the supplier
  or an authorised person;
- which the supplier has received or regularly receives from a third party, when
  the third party is not bound to confidentiality towards KREMPEL;
- which are known to the supplier independent of KREMPEL.

Regarding the confidentiality of information, the supplier is obliged to practise that care which as a minimum would apply to matters of his own, and, whatever the circumstances, the minimum care called for in communication.

All of the above-mentioned items are, when required to do so by KREMPEL, to be insured by the supplier against fire and theft for the time these are in the possession of the supplier.

The supplier is obliged to bind any sub-contractors he might engage, to the requirements called out above.

15. Property rights

The supplier is liable for all claims arising from use in accordance with the contract of the delivery item or services from any violation of industrial property rights and applications for protected privileges from third parties (referred to in the following as "property rights") in Germany, in members states of the European Union and in North America.

The supplier exempts KREMPEL and its customers from claims by third parties for violation of property rights. Any licence fees shall be borne by the supplier.

These obligations are not applicable if the supplier was not able to recognise a violation of property rights by the products or services supplied.

So as to counteract any liability claims, the parties are obliged to inform each other without delay once a risk of violation is known and if there has apparently already been a violation of property rights.

The limitation of time is ten years, commencing as of the date the contract was concluded.

16. Retention of ownership – provision of materials – tools

The ownership of the delivered goods passes over to KREMPEL on completion of payment. Any extended or expanded retention of ownership by the supplier is ruled out.

In the case that KREMPEL has furnished the supplier with parts for a commissioned order, KREMPEL retains the right of ownership of these parts. Processing and transformation by the supplier are undertaken on behalf of KREMPEL. If reserved goods are processed, separately or together, with other items not belonging to KREMPEL, then KREMPEL acquires co-ownership of the new item in the ratio of the value of the KREMPEL property to the other processed items at the time of processing.

In the case that the supplier has fabricated tools for KREMPEL, the ownership passes over on complete payment of these to KREMPEL and/or its customers. The tools shall be accordingly identified by the supplier.

17. Notice to terminate orders / contracts

The following regulations apply for duration and notice of termination in the case of longer-running contracts for the supply of goods or for contracts to provide services:

Either party is entitled to terminate such contracts by giving 3 months notice of termination in writing.

In cases where the KREMPEL client / customer terminates orders with KREMPEL either as an ordinary or an extraordinary termination, KREMPEL is entitled to reach a different agreement with the supplier for the facts by mutual consent.

Each party can terminate a contract at any time, in writing and for a major reason, without complying with the notice to terminate. A major reason is given in the following cases in particular:

- Stoppage of payment by a party, the opening of insolvency proceedings for
  the assets of a party or the rejection of the these because of insufficiency of
  assets, or the liquidation of one of the parties
- Violation of major contractual obligations
- One party falls under the controlling influence of a competitor or other party
  through one of its company members or shareholders.

In the case of notice to terminate or termination of the contract, the supplier shall return all items, including all drawings and other documents, fixtures and tools which have been furnished by KREMPEL.

18. Concluding provisions

The forwarding of an order to a third party including the assignment of the thereby resulting rights and demands requires written approval beforehand from KREMPEL. In the event of non-observance of this requirement, KREMPEL reserves the right to withdraw from the contract by giving declaration in writing and / or to demand compensation for damages.

If the supplier stops making deliveries or if insolvency proceedings are opened for the supplier’s assets, then KREMPEL is entitled to withdraw from that part of the contract which has not been fulfilled.
Place of execution for all claims resulting from the legal relationships with the supplier, i.e. for all supplies, services and payments is the place to where the goods shall be delivered in accordance with the contract.

Applicable for these purchasing conditions and the entire legal relationships between KREMPEL and the supplier is the Law of the Federal Republic of Germany to the exclusion of the agreement of the United Nations on the international selling of merchandise from 11.04.1980 (CISG).

Place of jurisdiction for all disputes arising directly or indirectly from the contractual relationship is the court competent for KREMPEL. KREMPEL is however entitled to file a complaint against the supplier at any other jurisdiction venue as well.

Changes and supplements to the contract and / or these General Purchasing Conditions, as well as any subsidiary agreements require that these be in written form.

The parties are aware of the risk that individual or several clauses of these purchase conditions can prove to be ineffective or void and contrary to a current concept of a party. In such cases as well, the parties desired to exclude all doubt as to the effectiveness of the basic contract and these purchasing conditions. Even in the event of ineffectiveness and invalidity of single or several clauses of these purchase conditions, the contract and these purchasing conditions therefore remain effective not only in doubt but at all times as well. The same applies should the contract and these purchasing conditions be shown to be lacking in some provision. The parties will bridge or substitute the ineffective or invalid provision by an appropriate regulation fulfilling the commercial purpose of contractual and purchasing conditions.



Version: 31.10.2006