CREATING POWER SOLUTIONS

General Conditions

General Terms of Delivery of Motorenfabrik Hatz GmbH & Co. KG to Companies

Updated 1st November 2016

Section 1 Validity

(1) All deliveries, services and offers of the Motorenfabrik Hatz GmbH & Co. KG (hereinafter referred to "Hatz") shall be provided solely and exclusively on the basis of these General Terms of Delivery. These shall be integral part of all contracts concluded between Hatz and its contractual partners (also referred to hereinafter as "Customer") for the deliveries or services offered by Hatz. They also apply to all future deliveries, services, and offers made to the Customer even if these are not the subject of a further special contract.

(2) Business conditions of the Customer or of third parties do not apply, even in cases where Hatz does not separately contradict the validity of such business conditions. Even when Hatz makes reference to written documentation that contains the business conditions of the Customer or of a third party, or alludes to such a business condition, this does not constitute agreement with the application of such business conditions.

Section 2 Offers and Conclusion of a Contract

(1) All offers made by Hatz are subject to change and are non-binding provided that they are not expressly identified as being binding or do not contain a definite deadline for acceptance. HATZ may accept orders or commissions within fourteen days after receipt.

(2) The sole authoritative document for the legal relationships between HATZ and Customer is the purchase agreement including these General Terms of Delivery. It fully reflects all agreements be-tween the contracting parties relating to the object of the contract. Oral promises of Hatz made prior to conclusion of this contract are not legally binding and oral agreements of the contracting parties will be replaced by the contract unless the contracting parties expressly state they will con-tinue to be binding in each case.

(3) Any supplements and modifications of the agreements reached including these General Terms of Delivery require the written form in order to be effective. To comply with the written form, trans-mission by fax or e-mail is sufficient; otherwise transmission by means of telecommunications is not sufficient.

(4) Information from Hatz on the object of the delivery or service (e.g. weights, dimensions, practical values, strength, tolerances, and technical data) as well as our representations of the same (e.g. drawings and illustrations) are not guaranteed characteristics of condition, rather they are descriptions or identifications of the delivery or service. Discrepancies which are customary in the trade and which are the result of legal provisions or which represent technical improvements, as well as the replacement of components by parts of equivalent value, are permissible insofar as they do not detract from the applicability for the purpose contractually envisaged.

(5) Hatz retains the ownership of and copyright on all offers and cost estimates as well as the drawings, illustrations, calculations, brochures, catalogs, models, tools, and other documents and resources provided by Hatz to the Customer. The Customer is not entitled to make these items accessible to third parties, neither as such nor with regard to their content, to disclose them, use or reproduce them, or allow their use or reproduction without the express approval of Hatz. Upon request of Hatz, the Customer must return these items in their entirety to Hatz and destroy any cop-ies made if the Customer no longer needs them in the ordinary course of business or if negotiations do not result in conclusion of a contract.

Section 3 Prices and Payment

(1) The prices apply for the scope of services and delivery listed in the order confirmation. Additional or special services will be charged separately. Prices are stated in EUROS ex works plus packaging, the legally applicable value added tax, customs fees in the case of exports, as well as fees and other official charges.

(2)  Insofar as the prices agreed are based on Hatz's list prices and delivery is not to be made until more than four months after the conclusion of the contract, HatzZ's list prices valid at the time of delivery apply (in each case minus an agreed percentual or fixed discount).

(3) Invoiced amounts are to be paid within fourteen days without discount unless agreed otherwise in writing. Decisive for the date of payment is the receipt thereof by Hatz. Checks count as payment only after they have been cashed. If the Customer does not pay by the due date, interest will then be charged on the outstanding amounts at a rate of 5% p.a. as of the due date. In the case of default, interest will be charged at the rate of 10 % p.a. on the amounts standing; the assertion of a higher interest rate and further damages remain unaffected.

(4) Offsetting with counterclaims of the Customer or the reservation of payments due to such claims is only permissible to the extent that the counterclaims are undisputed or were legally established.

(5) Hatz is entitled to effect or render outstanding deliveries or services only against advance payment or provision of a security if, after conclusion of the contract, Hatz gains knowledge of cir-cumstances of a nature that considerably reduce the Customer's creditworthiness and due to which the payment of Hatz's outstanding claims from the respective contractual relationship (including those from other individual orders subject to the same framework agreement) by the Customer is put at risk.

Section 4 Delivery and Delivery Time

(1) Deliveries are provided ex works.

(2) Terms and deadlines announced in advance by Hatz for deliveries and services are only binding if they been expressly promised or agreed as fixed terms or fixed deadlines. Insofar as shipment has been agreed, the delivery terms and delivery deadlines relate to the point of handover to the forwarding agent, forwarding carrier, or other third party commissioned for the transport.

(3) Notwithstanding its rights with respect to default on the part of the Customer, Hatz may ask the Customer for an extension to the delivery and service terms by the period of time for which the Customer fails to meet its contractual obligations.

(4) Hatz is not liable for the impossibility of delivery or for delays in delivery insofar as these have been caused by force majeure or other events which were not foreseeable at the time of conclusion of the contract (e.g. operational disruptions of all types, difficulties in procurement of materials or power, transport delay, strikes, lawful lockouts, deficiencies in employees, energy or raw materials, difficulties in acquiring the necessary official approvals, official measures or non-delivery or incor-rect or late delivery by suppliers) for which Hatz is not responsible. Insofar as such events make it considerably more difficult or impossible for Hatz to provide the delivery or service and the obstacle is not merely of a temporary duration, HATZ is entitled to withdraw from the contract. In the case of obstacles of a temporary duration, the terms for supplies and services will be extended or the delivery and completion deadlines will be postponed by the period of the obstruction plus an appropriate running-in period. Insofar as the Customer cannot be expected to accept the delivery or service as a result of the delay, the Customer may withdraw from the contract by means of an immediate written notification to Hatz.

(5) Hatz is entitled to partial deliveries if
–    the partial delivery is usable by the Customer in the context of the contractual intended use,
–    the delivery of the remainder of the ordered goods is ensured, and
–    this does not incur any considerable extra expense or additional costs to the Customer (unless Hatz declares it is prepared to accept these costs).

(6) If Hatz is in default with a delivery or service or if a delivery or service is impossible for the Hatz regardless of the reason, then Hatz's liability is limited to compensation in accordance with Section 8 of these General Terms of Delivery.

Section 5 Place of Fulfillment, Shipment, Packaging, Transfer or Risk, Acceptance

(1) The place of fulfillment for all obligations arising from the contractual relationship is the registered office of HATZ, unless agreed otherwise. Should Hatz also be responsible for the installation, the place of fulfillment is the location at which the installation is to take place.

(2) The mode of shipment and packaging are subject to the dutiful discretion of Hatz.

(3) The risk is transferred to the Customer at the latest with handover of the object of delivery (whereby the commencement of the loading process is decisive) to the forwarding agent, freight carrier, or other third party specified for carrying out shipment. This also applies in case of partial deliveries or if Hatz has assumed other services (e.g. shipment or installation). If shipment or handover is delayed as a consequence of circumstances caused by the Customer, the risk will be transferred to the Customer on the day when the object of delivery is ready for shipment and Hatz has notified this to the Customer.

(4) The Customer shall bear storage costs after notification of the readiness for collection, after default of acceptance by the Customer or after transfer of risk. In case of storage by Hatz, for each full week the storage costs amount to 0.25% of the invoice amount of the objects to be delivered. The right to pursue and provide evidence of additional and lower storage costs remain reserved.

(5) The shipment will be insured by Hatz against theft, breakage, transport, fire and water damage, or other insurable risks only on the express wish and at cost of the Customer.

(6) If an acceptance must take place, the object of purchase shall be regarded as accepted if

– the delivery and, insofar as Hatz is also responsible for the installation, the installation is completed,

– Hatz has notified the Customer of this with reference to the notional acceptance according to this Section 5 (6) and has requested that the Customer accept the goods,

– twelve working days have passed since the delivery or installation or if the Customer has started using the object of purchase (e.g. taken the delivered equipment into operation) and in this case six working days have passed since delivery, and

– the Customer has not effected acceptance within this period for a reason other than a defect notified to Hatz which makes use of the object of purchase impossible or essentially impairs use.

Section 6 Warranty, Material Defects

(1) The warranty period is one year from delivery or, insofar as acceptance is necessary, as from acceptance.
In addition, the aforementioned warranty period is limited to 2,000 hours of operation for engine deliveries.

(2) The delivered goods are to be carefully examined immediately after deliver to the Customer or to third-parties appointed by the Customer. They shall be regarded as being approved if Hatz does not receive a written notification of defects pertaining to visible defects or other defects in the course of a prompt, thorough examination within seven working days following delivery of the object of delivery or otherwise within seven working days of discovery of the defect or any earlier point in time at which the defect was detected by normal use of the object of delivery without close inspection in the specific form as specified in Section 2 (3). Upon request of Hatz, the rejected object of delivery shall be return shipped to Hatz under Carriage Paid To shipping terms. In the case of justified notification of defects, Hatz will reimburse the costs of the most economical way of shipment; this does not apply if the costs increase because the object of delivery is in a place other than the place of intended use.

(3) In case of material defects of the delivered objects, Hatz shall first be obligated and entitled to repair or deliver substitutes at Hatz's choice to be made within an appropriate period of time. In the case of failure, i.e. impossibility, unreasonableness, refusal or inappropriate delay of the repair or substitute delivery, the Customer may withdraw from the contract or reduce the purchase price by a reasonable amount.

(4) If Hatz is to blame for a defect, the Customer may demand compensation under the conditions stipulated in Section 8.

(5) In case of defects in components from other manufacturers, which Hatz cannot remedy for reasons of licensing law or for factual reasons, Hatz will then assert its warranty claims against the manufacturer and supplier on the Customer's account or transfer the title to this to the Customer at the choice of Hatz. Warranty claims against Hatz only exist for defects of this kind under other conditions and in accordance with these General Terms of Delivery if legal enforcement of the abovementioned claims against the manufacturer and supplier was unsuccessful or has no prospect of success, for example, because of insolvency. For the duration  of the legal dispute, the period of limitation is suspended as regards the Customer's warranty claims against Hatz.

(6) The warranty becomes invalid if the Customer modifies the object of delivery without the approval of Hatz or allows a modification to be made by third parties and remedying of the defect is made impossible or unreasonably more difficult because of this. In each case the Customer must bear the additional costs of remedying defects caused by the modification.

(7) A delivery of used objects agreed in individual cases with the Customer is carried out under exclusion of any warranty for material defects.

Section 7 Property Rights

(1) In  accordance with this Section 7, Hatz warrants that the object of delivery supplied is free of commercial property rights and third party copyrights. Each contracting partner will immediately inform the other contracting partner in writing in the event that claims are made against it due to violation of such rights.

(2) In the event that the object of delivery violates a commercial property right or copyright of a third party, HATZ will then either alter of replace the object of delivery at its own costs in such a way that rights of third parties are no longer violated, but so that the object of delivery continues to fulfill its contractually agreed functions, or obtain the right of use for the Customer by concluding a license contract. If Hatz is not successful in this within an appropriate period, the Customer may withdraw from the contract or reduce the purchase price by a reasonable amount. Any claims for damages by the Customer are subject to the limitations in section 8 of these General Terms of Delivery.

(3) If products of other manufacturers which are delivered by Hatz are in violation of the law, Hatz shall at its own discretion either assert any claims against the manufacturers and sub-suppliers on the account of the Customer or assign them to the Customer. Claims against Hatz only exist in these cases in accordance with this Section 7 if legal enforcement of the such claims against the manufacturer and previous supplier was unsuccessful or is has no prospect of success, for example, because of insolvency.

Section 8 Liability for Damages in Case of Culpability

(1) Hatz’s liability for damages, regardless of the legal grounds but in particular due to impossibility, delay, defective or incorrect delivery, contractual infringement, of duties during contract negotiation, and action in tort is, insofar as there is a question of blame in each case, limited in accordance with this Section 8.

(2) Hatz is not liable in the event of simple negligence by its agents, legal representatives, employees, or other vicarious agents insofar as this does not amount to an infringement of essential contractual obligations. Essential contractual obligations are obligations to deliver the object of delivery free of material defects on time as well as consulting, duties of protection and care which allow the Customer to use the object of delivery as contractually intended or which serve the purpose of protecting the life and limb of personnel of the Customer or the protection of the Customer's property against considerable damage.

(3) Insofar as Hatz is liable for damages on the grounds of and in accordance with Section 8 (2), this liability is limited to damage which Hatz has foreseen when the contract was concluded or which should have been known to Hatz with due diligence. Furthermore, indirect damage and consequential damage resulting from defects in the object of delivery are only eligible for compensation insofar as such damage is typically to be expected with intended use of the object of delivery.

(4) In the event of liability for simple negligence, Hatz's liability for compensation for property damage and any resulting further financial damage is limited to an amount of EUR 8,000,000.00 per claim (corresponding to the current limit of liability of Hatz's product liability insurance or liability insurance), even if this is a case of a breach of essential contractual obligations.

(5) The above liability exclusions and limitations apply to the same extent in favor of Hatz's agents, legal representatives, employees, and other vicarious agents.

(6) Insofar as Hatz provides technical information or acts as an adviser and this information or advice is not part of the due and contractually agreed scope of services, this is carried out free of charge and with exclusion of any liability.

(7) The restrictions of this Section 8 do not apply to Hatz's liability for willful conduct, for guaranteed quality features, for injuries of life, body, or health, or under the product liability law.

Section 9 Reservation of Title

(1) The following agreed reservation of title serves as security for all and any demands of Hatz against the Customer, existing now and in the future, arising out of the supply relationship existing between the contracting partners (also including payment balance claims from a current account relationship limited to this supply relationship).

(2) The goods delivered by Hatz to the Customer remain Hatz's property until all secured demands have been paid in full. The goods as well as the goods included in the reservation of title pursuant to this clause are hereinafter referred to as reserved goods.

(3) The Customer shall store the reserved goods for Hatz free of charge.

(4) The Customer is entitled to process and sell the reserved goods in normal business dealings up to commencement of judicial recovery (paragraph 9). Pledging as collateral and transferring by way of security are not permissible.

(5) If the reserved goods are processed by the Customer, the Customer hereby transfers its future ownership of the newly produced objects or – insofar as the processing is carried out with materials provided by multiple owners – transfers joint ownership of the newly produced objects in the ratio of the value of the reserved goods to the value of the newly produced object as security to HATZ. If the reserved goods are combined or inseparably mixed with other objects to form an integral object and if one of the other objects is to be regarded as the main object, then, insofar as the main object belongs to it, the Customer transfers the proportional co-ownership of the integral object to Hatz in the ratio stated in Line 1 of this clause.

(6) In the event that the reserved goods are resold, the Customer hereby transfers the resulting claim against the purchaser – in the case of joint ownership by Hatz of the reserved goods, in proportion according to the ratio of joint ownership – to Hatz by way of security. The same applies for other claims which take the place of the reserved goods or which arise with reference to the reserved goods, such as insurance claims or claims arising from actions in tort in case of loss or destruction. Hatz revocably authorizes the Customer to collect the demands assigned to HATZ in its own name. HATZ may only revoke this power of collection in case of judicial recovery.

(7) If a third party takes possession of the reserved goods, in particular through garnishment, the Customer will immediately point out the ownership by Hatz and inform Hatz of this to allow it to assert its rights of ownership. Insofar as the third party is not in a position to compensate Hatz for judicial or extra-judicial costs incurred in this regard, the Customer is liable to Hatz for these costs.

(8) On request by the Customer and at it's choice, Hatz will release the reserved goods as well as the objects or claims standing in their stead, insofar as their value exceeds the amount of the secured claims by more than 50%.

(9) If Hatz withdraws from the contract (case of judicial recovery) because the Customer acts in a way contrary to the contractual obligations – in particular default in payment – Hatz is entitled to demand return of the reserved goods.

Section 10 Concluding Provisions

(1) When the Customer is a merchant, legal entity within public law, or a special fund under public law, the place of jurisdiction for all any and disputes arises out of the business relations between Hatz and the Customer is then the registered office of HATZ or the registered office of the Customer according to the choice of Hatz. For any legal action taken against Hatz, the exclusive place of jurisdiction is the registered office of Hatz. Mandatory legal provisions on sole places of jurisdiction remain unaffected by this ruling.

(2) The relations between Hatz and the Customer are subject exclusively to the laws of the Federal Republic of Germany. The United Nations Convention on Contracts for the International Sale of Goods dated 11 April 1980 (CISG) does not apply.

(3) Insofar as one of the provisions of the contract or these General Terms of Delivery be or become void, ineffective, or unenforceable, this will not affect the effectiveness of the remaining terms. The parties undertake to agree replacement of the void, ineffective, or unenforceable provision by an effective and enforceable provision which comes as close as possible to the commercial aims of the void, ineffective, or unenforceable provision. This also applies accordingly in the case of a gap in the contract.

Note:

The Customer takes note of the fact that Hatz stores data arising from the contractual relationship pursuant to Article 28 of the German Federal Data Protection Act for the purposes of data processing and reserves the right to transmit the data to third parties (such as insurance companies) as far as this is necessary for fulfillment of the contract.

ANNEX 1

DECLARATION OF INCORPORATION IN THE SENSE OF THE EC MACHINERY DIRECTIVE 2006/42/EC, Annex II, Part 1, Section B

The HATZ engine is a partly completed machinery in the sense of the EC Machinery Directive 2006/42/EC and is manufactured in accordance with the generally accepted rules of technology. Through the installation and final assembly, additional hazards arise due to the interaction between the HATZ engine and the complete machine.Therefore a separate risk assessment of the complete machine must be carried out by the manufacturer.He must also create operating instructions for the complete machine on this basis.
The product may only be put into operation if it is installed or completely mounted in the machine or the equipment for which it is intended, and this fully meets the requirements of the EC Machinery Directive.
During installation and commissioning, the documents provided by HATZ (manual for diesel engine with declaration of incorporation, assembly instructions, wiring diagram if necessary) must be heeded.

Motorenfabrik Hatz GmbH & Co. KG, Ruhstorf a. d. Rott