General Conditions of Purchase of the Czech-based companies of the MAHLE Groupvalid for relationship with companies having their registered seat outside Czech Republic
1. Determining Conditionsa) The following General Conditions of Purchaseshall apply exclusively to all purchases of the Czechbased companies of the MAHLE Group (hereafter“MAHLE”) in business relationship with companies
having their registered seat outside Czech republic.
They shall apply in the same degree to the purchaseof production material (for the purpose of MAHLE’s
own series production, including in particular raw
materials, materials, components, parts) as to thepurchase of spare parts, tools or machinery as wellas other products of any kind (collectively referred toas the “Products”), in so far as the applicability of
one of the following provisions of these Conditions ofPurchase is not restricted exclusively to individual or
specified types of purchased items. By delivering its
Products to MAHLE the supplier accepts the present
General Conditions of Purchase.
b) The General Terms and Conditions of Business orother different conditions of the supplier shall not
apply unless they have been expressly approvedby MAHLE in writing. These General Conditions ofPurchase shall also apply in all cases wherein
MAHLE accepts deliveries from the supplier without
objecting to conditions of the supplier that deviate
from these General Conditions of Purchase (whether
MAHLE is aware of such conditions or not). All
references or indications by the supplier to thevalidity of its General Terms and Conditions ofBusiness are hereby expressly rejected.

	(i) a written order is transmitted from MAHLE to
the supplier, and	(ii) the supplier expressly accepts the order(order confirmation) in writing, the said confirmation being received by MAHLE within seven days
from the date of the order, or	(iii) the supplier commences delivery of theordered Products.
Any order confirmation from the supplier that differsfrom the order placed by MAHLE represents a newoffer and must be accepted by MAHLE in writing.
e) Even after the order has been confirmed by the
supplier, MAHLE shall be entitled to require at any
time that the supplier shall make changes to the
Products (in particular in terms of the Products’design and performance). In this case, the suppliershall inform MAHLE immediately of the impact of thischange requirement, in particular with regard toadditional or lower costs as well as the delivery date,
and the parties shall agree a reasonable adaptationof the contract if required.
f) If the contract or order stipulates that the Products
are determined by call-off, then these call-offs shallbe binding two days after the instruction is given to
the supplier, unless the supplier has expressed an
objection by then in writing.

c) These General Conditions of Purchase shall also
apply to all future transactions with the supplier.

3.	Prices, Most-Favoured Treatment,
Conditions of Paymentd) The provisions of these General Conditions ofPurchase shall apply in addition to all other possible
agreements that the parties conclude in addition,e.g. framework supply contract, quality agreement.

a) The price shown in an order shall be binding. In
the absence of a differing agreement, the price shall
include packaging and shall be “DAP” (Delivered atPlace) in accordance with Incoterms 2010.

2. Offer, Offer Documentsa) Inquiries from MAHLE to the supplier concerning
the supplier’s Products and delivery conditions, orrequests from MAHLE to make an offer shall in noway be binding upon MAHLE.
b) Orders from MAHLE shall only be valid and binding if placed in writing. It shall not be necessary for
MAHLE to sign orders. The written form shall bedeemed to have been observed if orders are sent by
fax, e-mail or another electronic data transmission
system.
c) Unless otherwise expressly agreed, cost estimates submitted by the supplier shall be binding andnon-remunerable.
d) A valid and binding contract shall be brought
about between MAHLE and the supplier, inclusive of
the General Conditions of Purchase, when

© MAHLE, 2014b) If terms of delivery are agreed in accordance with
Incoterms 2010, whereby MAHLE pays for thetransportation, the goods shall be transported by aforwarding agent approved by MAHLE. Unlessotherwise agreed, however, the supplier shall assume
responsibility for notification of the consignment withthe forwarding agent. The supplier shall inform
MAHLE immediately if the forwarding agent does
not collect the goods as confirmed in the notification.
c) In the event that, during the term of a contract
concerning the delivery of Products, the suppliersupplies Products that are the subject of the contract
or similar in comparable quantities to a third party
under more favorable conditions, in particular withregard to price, discounts, technology, quality, termsof payment, delivery periods or other conditions(hereafter the “Conditions”), then the supplier shallinform MAHLE of this fact immediately and automatically grant MAHLE these more favorable Conditions. The new Conditions shall apply retrospectively
from the time at which the supplier has granted
these favourable conditions to the third party.

d) The invoice shall be sent in triplicate by separate
post to the postal address of MAHLE as soon as
the goods have been delivered. The invoice must
contain the date, order number and supplier number.
If these Conditions are not fulfilled then MAHLE shallnot be responsible for any ensuing delays in processing and settling the invoice.
e) The invoice shall be paid with 3 % cash discountwithin 30 days after delivery and receipt of theinvoice, but at the latest net within 60 days after
delivery and receipt of the invoice unless otherparticular agreement is done between MAHLE andthe Supplier.
f) Payment shall be effected by MAHLE by meansof a bank transfer. Any other method of payment aswell as credit/offsetting procedures shall only apply
if agreed separately between the parties.
g) Notwithstanding § 354a HGB [German Commercial Code], the supplier shall not be entitled without
written consent from MAHLE to assign claims accruing to him from the delivery relations with MAHLE or
to have such claims collected by third parties.
h) The acceptance of the supplied goods and/or their
payment by MAHLE shall not constitute the waivingof any later assertion of claims based on defects,
damages or any other claims against the supplier.

4. Delivery Dates, Delay in Deliverya) The delivery dates agreed with the supplier shallbe binding. Depending on the agreed terms ofdelivery, compliance with the delivery period shall be
determined by the date of receipt of the Products atthe destination specified by MAHLE or the prompt
availability of the Products for collection from the
supplier’s works.
b) If the supplier is in delay in making a delivery, thenthe supplier shall incur a contractual penalty of 1 %of the purchase price of the delayed Products foreach commenced week of the delay in delivery,
extending to a maximum, however, of 5 % of the said
purchase price. This shall not affect the right toassert claims for compensation. The supplier mustalso reimburse inter alia the following costs: special
travel costs (both from suppliers to MAHLE and from
MAHLE to its customers), additional preproduction
costs, additional costs caused by special shifts, lossof production costs, replacement/conversion costs,
additional test costs and lost profit. Any contractual
penalty due shall, however, be credited against any
asserted claim for compensation.
c) MAHLE shall only accept premature deliveries
after they have been agreed in writing. If the supplier delivers the Products earlier than the agreed
delivery date, MAHLE reserves the right to return1

the Products at the supplier’s cost and risk. If
MAHLE does not return goods that are delivered
early, then the Products shall be stored until theagreed delivery date at the supplier’s cost and risk.
In the case of a premature delivery, MAHLE shall beentitled to use the agreed delivery date as the basis
for calculating the date of payment.
d) Notwithstanding lit. a) – b), if the supplier realizes
that it is not possible to comply with a delivery date orquantity agreed with MAHLE, he must inform MAHLE
immediately, stating the reasons, the anticipatedduration of the delay and the effects it will have,together with suitable measures for averting them.
e) All special journeys the supplier decides to makemust be recorded, specifying the order details/information, the reason for the special journey andmeasures for correcting these reasons and sent
to MAHLE’s Logistics Department at the beginningof a calendar month for the preceding month. The
supplier shall initiate the corrective measures immediately.
f) For each case of negligent
	(i)	deviation from delivery and packaging specifications,(ii) premature delivery or(iii) overdelivery.
MAHLE shall be entitled to assert a claim for its
additional expenses for logistics in the form of lumpsum compensation amounting to EUR 100 (notwithstanding the right to demonstrate greater damages
in individual cases). The supplier shall in each casebe entitled to demonstrate that MAHLE has incurred
no damages or fewer damages than this lump sum.

5. Force majeurea) Interruptions to delivery caused by events thatare unforeseeable and unavoidable and outside
the supplier’s sphere of influence and for which the
supplier is not responsible such as force majeure,
war or natural catastrophes shall release thesupplier from its obligations for the duration of thisinterruption and to the extent of its impact.
b) Agreed periods of time shall by extended by the
duration of such an interruption; MAHLE must be
informed of the occurrence of such an interruption
immediately and in an appropriate manner.
c) If the end of such an interruption is not fore­
seeable or the interruption lasts longer than twomonths, then each party shall have the right towithdraw from the affected contract (or the not yet
fulfilled Products) or to terminate the contract without notice.

6. Dispatch, Transfer of Riska) The delivery (including the transfer of risk) shallcomply with the trade terms (in particular Incoterms
2010) usual in the automobile industry and specified
in the order and at the place of receipt/use or© MAHLE, 2014

collection specified by MAHLE in the order. In theabsence of such a provision, the delivery shall bemade DAP (Incoterms 2010) to the place of receipt
or use specified in the order. In this case the risk istransferred at the time of delivery to the agreed placeof receipt/use.

f) Irrespective of successful initial sampling inaccordance with lit. e), the supplier shall continuallycheck the quality of the delivery items. Moreover,the parties to the contract shall each keep the otherinformed about the options for further quality improvement.

b) The supplier shall undertake to enclose therelevant delivery notes with the deliveries. All
contents in accordance with Standard VDA 4913
and in particular the order number of MAHLE andthe supplier number must be stated on the delivery
notes. If these conditions are not fulfilled, then
MAHLE shall not be responsible for any ensuingdelays in processing.

g) If the supplier and MAHLE have not reached afirm agreement as to the nature and extent of thetests as well as the test equipment and methods,
MAHLE shall be prepared, at the supplier’s request,
to discuss the tests with the supplier within the limitsof its knowledge, experience and possibilities inorder to establish the required state of the testing
technology.

7. Quality and Documentationa) The supplier shall comply with the recognizedtechnical regulations and any applicable safety
regulations. In terms of the design and char­acteristic features of the delivery item, the suppliershall comply with any drawings, samples or otherspecifications or documents received from MAHLE.
Modifications to the delivery item or a previously
approved production process or its relocation toanother site shall require a written notice in due time
to MAHLE and the prior express consent of MAHLE
in writing.
b) If the supplier delivers production material to
MAHLE, the following provisions shall also apply
unless MAHLE has made a different written request
in an individual case or has made a different agreement with the supplier.
c) The supplier shall maintain or develop a quality
management system based on the latest valid
version of ISO/TS 16949:2002. Certificates froman accredited body or second-party certificationand equivalent QM systems such as VDA Volume 6
Part 1, QS 9000 and ISO 9001 geared specificallytowards the automobile industry may be recognized
by MAHLE after prior inspection by MAHLE. The
supplier shall provide MAHLE with a copy of thelatest certificate and shall send MAHLE a newcertificate without being asked upon the expiryof the certificate’s validity date. MAHLE shall be
informed immediately if the certificate is revoked.
d) For each case of negligent non-compliance witha valid quality management system requirementin accordance with lit. c) the supplier shall incur acontractual penalty of EUR 5,000.
e) Any initial sample shall be produced in com­pliance with the latest version of VDA Volume 2“Quality Assurance of Deliveries” or PPAP (QS9000). In addition to the initial sample inspection
report, the supplier shall enter all material data in the
IMDS material database (International Material Data
System, www.mdsystem.com); the approved andaccepted IMDS entry for all relevant material data is
a component and precondition of each successful
initial sample approval.

h) In the case of Products specifically identified in
the technical documents or by means of a separate
agreement, the supplier shall moreover record inspecial drawings, when, in what way and by whom
the delivery items have been tested with regard to
the characteristics specified in the documentation
as well as the outcome of the required quality tests.
The test documents shall be retained for 15 years
and submitted to MAHLE as required. The suppliershall impose the same obligation on sub-suppliers
within the bounds of what is legally possible. By way
of instruction, reference is made to the latest version
of VDA Volume 1 “Production of Evidence”.
i) In so far as any authorities or customers of
MAHLE ask to inspect the production processes andtest documents of MAHLE in order to verify certain
requirements, the supplier shall be ready to grant
them the same rights in its company and give allreasonable assistance, unless doing so he would
infringe the supplier’s existing obligations of secrecy
towards a third party. The supplier shall impose thesame obligation on sub-suppliers within the boundsof what is legally possible.
j) In other respects, following a reasonable periodof notice and during normal business hours, and atintervals MAHLE deems necessary, MAHLE shall beentitled at any time to carry out reasonable inspections and quality audits of the premises in which the
supplier manufactures the Products. MAHLE shallhave the right to terminate the present contract by
informing the supplier in writing to this effect if the
supplier fails to comply with the agreed quality standards for a period of three months.
k) The supplier shall impose on its subcontractors
the obligations contained in the above provisions of
this item 7.

8. Hazardous Substances and Preparationsa) The supplier shall fulfill the legal regulations of
the countries of manufacture and distribution relating
to goods, materials and procedures that are subject
to special treatment, inter alia regarding their transportation, packaging, labelling, storage, hadling,
manufacture and disposal on account of laws, ordinances and other regulations or on account of theircomposition and their impact on the environment.

2b) In this case, the supplier shall provide MAHLE
with the necessary papers and documents before
the order is confirmed. In particular, all hazardous
substances and water-endangering materials may
be delivered only after presentation of an EC safety
data sheet and after approval has been given by
MAHLE. Should the requirements in accordancewith lit. a) change during the delivery relations, thesupplier shall immediately forward to MAHLE thepapers and documents relating to the changed
requirements.
c) MAHLE shall be entitled to return hazardous
substances and waterendangering materials thatwere supplied for test purposes to the supplier freeof charge.

gently not, partially, or belatedly complying with or
fulfilling the above provisions in lit. f) - i.).

9. Packaginga) The supplier shall comply with the requirementsof the latest valid Packaging Ordinance.
b) The supplier shall take back used, empty packaging free of charge. If this is not possible, the suppliershall pay the corresponding, reasonable disposal
costs incurred by MAHLE.

10. Material Defects and Recoursed) The supplier shall be liable to MAHLE for any
damage arising as a result of negligent non-compliance with the existing legal regulations.

a) Unless otherwise stated in the following provisions, the legal regulations shall apply to deliveries ofdefective goods (in particular to production material).

e) Solely for information purposes, and excluding
any responsibility for their accuracy and completeness, MAHLE provides a “Prescription List/List of
Substances Subject to Declaration” on the MAHLE
homepage (www.mahle.com).

b) On receipt of Products supplied by the supplierfor production purposes (production material)
MAHLE shall examine that the goods ordered conform with those delivered and inspect them for any
discrepancies in quantity or externally identifiabledamage in so far as and as soon as this is possible
in the ordinary course of business. MAHLE shallinform the supplier immediately of any defects
ascertained during this inspection. In all otherrespects the supplier shall waive any further incoming goods inspection and testing on MAHLE’s part.
In the case of other defects that are not ascertainedby MAHLE until the supplied goods are being processed or used for their intended purpose, MAHLE
shall inform the supplier immediately upon ascertaining the defects. In this respect the supplier shallwaive the defense of delayed complaint.

f) The supplier shall ensure that the rquirements ofthe EU chemical legislation REACH (Regulation (EC)No. 1907/2006, Official Journal of the European
Union dated 30.12.2006) – hereafter referred to as“REACH” – are complied with within the specified
time, in particular preregistration and registration.
MAHLE shall not be obliged in any way to carryout the (pre)registration. The supplier is aware that
the Products cannot be used if the requirementsof REACH are not completely and properly coplied
with.
g) The supplier must enter components (heavy
metals) relevant to the EU directive on end-of-life
vehicles (ELV – End of Life Vehicles) in the IMDS
database at its own expense; they shall then bedeemed declared.
h) On the basis of the EU directive on end-of-life
vehicles, the supplier shall undertake to ensure thefollowing:	(i) Production and furnishing of a component
related concept for draining and unloading harmful substances;	(ii) Compliance with the labelling standards of
VDA 260 for materials and components;	(iii) Provision of a utilisation concept for selectedsupplied parts after agreement with MAHLE;
	(iv) Highest possible recycling rate and use ofrenewable raw materials after agreement with
MAHLE.
i) In fulfilling its contractual obligations, the suppliershall also comply with all legal and official regulations with regard to environmental protection.
j) The supplier shall indemnify MAHLE in full
against all consequences, in particular damages
suffered by MAHLE and any claims of third parties
against MAHLE, that result from the supplier negli-© MAHLE, 2014c) If defective goods are delivered, the suppliershall first be given the opportunity to carry out remedial work, i.e. at MAHLE’s discretion either toremedy the defect or supply a new item (replacement parts). In both cases the supplier shall bear
all costs resulting to the supplier or MAHLE, e.g.
transportation costs, travelling expenses, labor andmaterial costs or costs for an incoming goods inspection over and beyond the normal scope. The
same shall apply to any costs that may be incurred
for removal and fitting. If the case of a subsequentdelivery, the supplier shall bear the cost of taking
back the defective Products.
d) If the opportunity to carry out remedial work fails,
or if such work represents an unreasonable burden
on MAHLE, or if the supplier does not make an
immediate start, then MAHLE shall be entitled towithdraw from the contract / order without setting
any further time limit and to return the Products atthe supplier’s risk and expense. In these and other,urgent cases, in particular to avert acute dangers or
avoid substantial damage, if it is no longer possible
to inform the supplier of defects and give the suppliereven a short period in which to remedy them,
MAHLE shall be entitled to remedy the faults itself or
have them remedied by a third party at the supplier’s
expense.

e) Unless otherwise specified below, claims basedon defects shall be subject to a limitation period of 30
months from the date the goods are delivered to
MAHLE. The legal regulations shall apply to material
defects in delivered items that are used according totheir intended purpose for a building or to defects of
title. If replacement parts are supplied (cf. lit. c)) the
limitation period shall commence anew upon theirdelivery to MAHLE.
f) Any further claims, in particular for damages or inconnection with warranties of the supplier, shall not
be affected.
g) For each case wherein MAHLE settles a warranty
claim, the supplier, if responsible for the defect, shallundertake to pay fixed lump-sum compensation of
EUR 100 (notwithstanding MAHLE’s right to assert
greater damages in individual cases). The suppliershall in each case be entitled to demonstrate that
MAHLE has incurred no damages or fewer damages.
h) If in its capacity as an automotive component supplier MAHLE is obliged to grant one of its customers
a longer or more extensive warranty for defects, if
the supplier delivers production material, the suppliershall then also undertake to accept this regulation in
future after first receiving written notification thereof.
i) If customers of MAHLE – usually automobile
manufacturers – apply a reference market procedure
or a similar procedure that is usual in the automobile
industry for determining and settling warranty claims
and assert claims against MAHLE for defects in
products manufactured by MAHLE that result fromdefects in the supplier’s Products, this procedure
shall also be applied to the delivery relations between the supplier and MAHLE.

11. Product Liability and Recalla) If the supplier has caused a product fault and/or(depending upon the basis upon which the claim ismade) is responsible for the fault, the supplier shallundertake to pay MAHLE compensation at first request or to indemnify MAHLE against any third party
claims, providing the cause of the claim lies within
the supplier’s control and organization and the supplier would itself be liable to a third party. If MAHLE
has contributed to the cause or fault, then the supplier shall be able to assert this contributory responsibility for the cause or this contributory fault against
MAHLE. In the relationship between MAHLE and the
supplier, each party’s share in the payment of compensation shall be in proportion to the respective
share in the fault (§ 254 German Civil Code, BGB)
and/or responsibility for the cause.
b) The obligations of the supplier in accordancewith lit. a) shall also include the payment of costs
incurred by MAHLE in calling on the services of alawyer or otherwise incurred in connection with thedefence of product liability claims. If MAHLE is subject to special regulations regarding the burden of
proof in relations with the injured party, these regulations shall also apply in relations between MAHLE

3

and the supplier provided that the circumstances
requiring proof do not fall within MAHLE’s area of
responsibility.
c) In product liability cases in accordance with lit. a),the supplier shall provide MAHLE with all necessary
information and every support within the bounds ofreason to fend off claims.
d) In so far as a recall action or program to givenotice of ownership is necessary to comply with alaw, ordinance, order or any other state requirement
or as a safety measure to avoid personal injuries ordeath or in the case of other field or service actions,the costs, including labor, transportation and verifiability costs inter alia shall be shared on the basisof the contributory fault (§ 254 BGB) / contributory
responsibility for the cause attributable to MAHLE
and the supplier.
MAHLE shall inform the supplier – in so far as this ispossible and reasonable – of the content and extent
of the recall action or other field or service actions
that are to be carried out and shall give the supplier
the opportunity to express its opinion. This shall notaffect any other legal claims.
e) The supplier shall undertake to take out andmaintain sufficient product liability insurance tocover the risks of product liability, including the riskof recall. At the request of MAHLE the supplier shallimmediately provide documentary evidence of theconclusion of such an insurance contract. If the supplier is not in a position to furnish evidence of theinsurance policies within two weeks, MAHLE shallbe entitled to conclude such insurance at the supplier’s expense.

12. Industrial Property Rightsa) The supplier guarantees that through thepurchase, ownership, offering, use, processing or
further transfer of the Products neither MAHLE nor
customers of MAHLE shall infringe any intellectual
property rights of third parties, in particular any rights
of a third party as to brand, company, name, patent,utility model, design, equipment, or copyrights(including the relevant industrial property rightapplications) (hereafter “Industrial Property Rights”)
in the supplier’s country of origin, as well as within
the German Federal Republic, the European Union,
the USA, Canada, Brazil, Argentina, Australia,
China, Korea, Thailand, Japan and India. If the supplier negligently infringes this obligation, then the
supplier shall indemnify MAHLE and its customers
at MAHLE’s first request against any third-party
claims arising from such actual or alleged infringements of property rights and shall bear all costs
and expenses incurred by MAHLE in this respect, inparticular firstly the cost of bringing an action andof defense and secondly costs resulting from observance of a possible duty to refrain.
b) Lit. a) shall not apply if the delivery item wasproduced on the basis of drawings, models orother detailed information from MAHLE and the
supplier neither was nor needed to be aware that

© MAHLE, 2014

Industrial Property Rights of third parties were
thereby infringed.
c) The parties shall undertake to inform one anotherimmediately of any infringement risks that become
known and any cases of alleged infringement and to
take reasonable action by common consent against
infringement claims.
d) The period of limitation shall be 3 years from theconclusion of the relevant contract.

13. Reservation of Title, Means of Productiona) The Products shall become the property of
MAHLE upon payment of their full purchase price.
Any extended or expanded reservation of title on thepart of the supplier to delivered Products is excluded.
b) All parts, raw materials, tools, materials or otherdevices or items provided by MAHLE or purchasedby the supplier at MAHLE’s expense (and whose
procurement costs have been reimbursed by
MAHLE or are included in and paid for in full in
the price payable for the Products) and that areassociated with the manufacturer of the Products orused for that purpose (hereafter “Means of Production”) shall remain or become the sole property of
MAHLE (hereafter “MAHLE Property”). MAHLE shallalso retain all rights to drafts, samples, drawings,
data, models or other information and documents
supplied by MAHLE (hereafter “MAHLE Documents”).
The supplier shall expressly agree that MAHLE
Property or MAHLE Documents shall not be used forthe manufacture or construction of products for thirdparty customers without MAHLE’s prior consent inwriting.
c) The supplier shall possess MAHLE Property and
MAHLE Documents as a borrower and shall store
them separately and apart from any property
belonging to other persons and clearly labelled
MAHLE Property and MAHLE Documents to indicate that they are the property of MAHLE. MAHLE
Property and MAHLE Documents shall not be
removed from the supplier’s company premises
without written instruction from MAHLE, except
for the purpose of fulfilling the contract.
d) The supplier shall undertake to insure MAHLE
Property for its replacement value and at the
supplier’s own expense at least against fire, water
damage and theft and to maintain such insurance
policies. On request, the supplier shall provide
MAHLE with documentary evidence of the existenceof appropriate insurance policies. The supplier shallcarry out any necessary maintenance work at theusual intervals and at its own expense and shallnotify MAHLE immediately of any damage or faults.
e) If MAHLE provides the supplier with products,
raw materials or other material (“Goods”) so thatthe supplier can manufacture Products, MAHLE
reserves title to such Goods. The treatment andprocessing, modification or installation or reshapingof such Goods by the supplier shall be carried out inthe name of MAHLE. If the reserved Goods areprocessed together with other items that are not theproperty of MAHLE, MAHLE shall acquire joint
ownership of the new product in proportion to thevalue of MAHLE’s Goods (purchase price plus
VAT) to the other processed items at the time of
production.
f) If the Goods provided by MAHLE are inseparably
combined or mixed with other items that are not
the property of MAHLE, MAHLE shall acquire joint
ownership to the new Product in proportion to thevalue of its reserved Goods (purchase price plus
VAT) to the other combined or mixed items at thetime of combination or mixing. If the combination or
mixing is carried out in such a way that the supplier’s
items may be considered the main item, it shall beagreed that the supplier shall assign proportional
joint ownership to MAHLE; the supplier shall storeand hold in safe custody the sole property of MAHLE
or the joint ownership of MAHLE in the name of
MAHLE.

14. Confidentialitya) The supplier shall undertake to treat in con­fidence all confidential information obtained directly
or indirectly from the other party to the contract.
Orders and all associated commercial and technicaldetails are also to be treated as confidential information. In particular, all received illustrations, drawings,
calculations, quality guidelines, samples and similar
items are to be treated as confidential. The copying
and forwarding of confidential information is only
permissible within the context of operational requirements. Confidential information may only bedisclosed to a third party with MAHLE’s prior writtenconsent.
b) The above obligations shall not apply to suchconfidential information as the supplier can prove	(i) was already generally accessible at the timeof notification or was generally acces­sible thereafter through no fault of the supplier;	(ii) was already in the supplier’s possession at
the time of notification;
	(iii) was made accessible to the supplier by athird party without any obligation as to confidentiality and non-usage, provided that this third party
has not obtained the information directly or indirectly from the supplier;	(iiii) was to be furnished to the authorities on thebasis of legal regulations.
c) The supplier shall undertake to impose the sameobligations to maintain secrecy on subcontractors.
Confidential information made known to the supplierby MAHLE shall be used exclusively for the intended
purpose.
d) The obligation to maintain secrecy shall continue
to apply for a period of three years after the delivery
relations have ended. At the end of the delivery
relations, the supplier shall undertake to return to
MAHLE all received confidential information if it isembodied or stored on electronic storage media. At

4

MAHLE’s request, the supplier shall confirm to
MAHLE in writing that it has fulfilled the obligation
arising from the last two sentences.

15. Order Development
If the supplier carries out development work for
production material or means of production (in particular tools) on MAHLE’s behalf whose costs are
reimbursed by MAHLE either separately and/orby means of the price paid for the Products (orderdevelopment), the following shall apply:a) The supplier shall reach a development conclusion that is free from the Industrial Property Rights ofany third party; Item 12 shall apply accordingly.
b) The proprietorship of all development results(including all discoveries, know-how, experiment anddevelopment reports, suggestions, ideas, drafts,
designs, recommendations, samples, models etc.)
achieved by the supplier in the context of the co­operation (hereafter “Work Results”) shall fall to
MAHLE as it arises.
c) If the work results are protectable, MAHLE shall,in particular, be entitled at its discretion to apply
for Industrial Property Rights at home and abroad in
its own name, to pursue this further and also toabandon it at any time.
d) The supplier shall claim the title of protectable
inventions made by its employees in executing thiscontract in all cases by means of a declaration
against the inventor; the right to the invention is tobe assigned to MAHLE immediately.
e) If the work results are protected by copyrightsof the supplier, the supplier shall grant MAHLE, as
well as affiliated companies of MAHLE, the exclusive, non-remunerable, irrevocable, sublicenceable,transferable right, unlimited in terms of time, placeand content to use and exploit such work results as
desired, in any manner and free of charge. If work
results take the form of software the rights of use
and utilisation shall not be restricted to the object
code. MAHLE shall in particular have a claim for thesource code and documentation to be handed over.
MAHLE may demand the hand-over at any time,even during the implementation of the development
project.
f) The supplier (as well as companies affiliated withit) is and shall remain the owner of inventions madebefore the start of the cooperation as well as Industrial Property Rights applied for or granted for them,as well as any copyrights, design rights and knowhow existing before the start of the cooperation(hereafter “Existing Property Rights”).
g) If Existing Property Rights are necessary for theutilisation or further development of development
results, MAHLE shall be granted their non-remunerable, non-exclusive, sublicenceable, transferable
and irrevocable right of utilisation unlimited in termsof time and place.

© MAHLE, 2014h) If, in the context of the services the supplieris required to perform, the supplier calls in subcontractor, the supplier shall undertake to ensure bymeans of suitable contractual agreements that
MAHLE is granted the property and utilisation rights
accorded by the regulation expressed in this Item 15.

16. Provision of Spare Parts
The supplier shall undertake to guarantee the provision of spare parts for the stipulated lifetime ofthe end products for which the Products are to be
used. The minimum period shall be 15 years after
the end of the series production of the Products. In
good time before the expiry of the minimum period,
the supplier shall grant MAHLE the option to placea concluding order for the all-time requirement.

17.	Cancellation/Rescission ofOrders/Contractsa) If one party to the contract stops payments oran application is made to open insolvency proceedings against the party’s assets, the other party shallbe entitled to withdraw from the contract on accountof the unfulfilled parts of the contract.
b) In the case of long-term contracts concerning
the delivery of Goods the provisions in lit. c) - e)shall apply with regard to their validity period andtermination.
c) MAHLE shall be entitled to terminate such contracts in writing with a notice period of 6 months andthe supplier with a notice period of 9 months.
d) In cases where the customer of MAHLE cancels
or amends its order extraordinarily or without cause,
MAHLE shall be entitled, notwithstanding its right toterminate the contract in accordance with item 17 c),
to agree mutually another arrangement with the supplier that takes account of these circumstances.
Unless otherwise agreed the following degrees ofbindingness shall then apply:	(i) The quantity determined for the month following the order (month 1) shall be deemed bindingly authorized.
	(ii) The quantity ordered for the next month(month 2) shall entitle the supplier to procure
feedstock. If this quantity is later not taken by
MAHLE, the supplier shall be entitled to invoice
MAHLE for the feedstock, whereby MAHLE may
demand delivery of the feedstock.
Quantities manufactured in excess of this and procured materials shall be exclusively at the supplier’s
risk and to the supplier’s account.
e) Each party shall have the right to terminate acontract for good cause at any time without notice.
The following cases in particular represent goodcause:
	(i) Cessation of payment on the part of one
party, the opening of insolvency proceedings
against the assets of one party or its rejection
on the grounds of the absence of assets, or theliquidation of one of the parties;	(ii) Infringement of important contractual obligations; in the case of an infringement that canbe remedied, however, only after the innocent
party has called upon the other party in writing to
remedy the infringement, has warned the party of
the impending termination for good cause andhas granted a reasonable period of grace of atleast four weeks that has expired without outcome;	(iii) One party comes under the dominant control
of one of the other party’s competitors on accountof a change in its equity holders or shareholders.
f) In the case of the cancellation or other termination of a contract, the supplier shall return MAHLE
Property and MAHLE Documents (cf. item 13 b)) as
well as all other items made available by MAHLE,
including all drawings and other documents, devices
and tools.

18. Other Provisionsa) If one of the above provisions is or becomes invalid or unenforceable, the legal validity of theremaining provisions shall not be affected. In placeof the invalid or unenforceable provision, a provision
shall be deemed to have been agreed which comesas close as possible in legal terms to that which theparties to the contract required according to theoriginal meaning and purpose of the ineffective or
unenforceable provision. This shall also apply to any
loopholes in the contract.
b) Without the prior written approval of MAHLE thesupplier shall not assign or transfer any order or thecontract, either in whole or in part.
c) The supplier shall not employ one or more
subcontractors to fulfill an order or part of an orderwithout the prior written approval of MAHLE.

19.	Place of Performance, Applicable Law,
Place of Jurisdictiona) The place of performance for the supplier’s
delivery obligations shall be the place of receipt orutilisation specified by MAHLE. The place of performance for MAHLE’s payment obligations shall be
the head office of MAHLE.
b) The law of the Federal Republic of Germany
exclusively shall apply to this contract. The Vienna
UN Convention on the International Sale of Goods(CISG) shall not apply.
c) The place of jurisdiction for all disputes arisingfrom the business relationship between the parties
to the contract shall be Stuttgart. MAHLE shallfurthermore have the right at its discretion to takeaction against the supplier at the latter’s generalplace of jurisdiction.
Status: December, 20145