General Conditions of Purchase of the Luxembourgian-Based Companies of the MAHLE Group1)

Determining Conditionsa) The following General Conditions of Purchaseshall apply exclusively to all purchases of the
Luxembourgian-Based companies of the MAHLE
Group (hereafter ”MAHLE“). They shall apply in thesame degree to the purchase of production material(for the purpose of MAHLE’s own series production,
including in particular raw materials, materials, components, parts) as to the p urchase o f spare parts,
tools or machinery as well as other products of any
kind (collectively referred to as the ”Products”), in so
far as the applicability of one of the following provisions of these Conditions of Purchase is not restricted exclusively to individual or specified types of purchased items. By delivering its Products to MAHLE
the supplier accepts the present General Conditionsof Purchase.
b) The General Terms and Conditions of Businessor other different conditions of the supplier shall not
apply unless they have been expressly approved by
MAHLE in writing. These General Conditions of Purchase 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 isaware of such conditions or not). All references orindications by the supplier to the validity of its General Terms and Conditions of Business are hereby
expressly rejected.
c)These General Conditions of Purchase shallalso apply to all future transactions with the supplier.
d) 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.

2)

Offer, Offer Documentsa) Inquiries from MAHLE to the supplier concerning the supplier’s Products and delivery conditions,or requests from MAHLE to make an offer shall in
no way be binding upon MAHLE.
b) Orders fro m M A H LE shall only be valid andbinding if placed in writing. It shall not be necessary for M A H LE to sign orders. The written formshall be dee me d to ha ve bee n observed if orders
are sent by fax, e-mail or another electronic datatransmission system.
c) Unless otherwise expressly agreed, cost estimates submitted b y the supplier shall be binding
and non-remunerable.
d) A valid and binding contract shall be brought
about between MAHLE and the supplier, inclusive of
the General Conditions of Purchase, when(i) a written order is transmitted from MAHLE to
the supplier, and© MAHLE, 2018(ii) the supplier expressly accepts the order, or(iii) the supplier co mmences delivery of the ordered 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) Eve n after t he orde r has be e n c o nfir me d b y
the supplier, MAHLE shall be entitled to require atany time that the supplier shall ma k e cha nges 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
this change requirement, in particular with regard toadditional or lower costs as well as the delivery
date, and the parties shall agree a reasonable ad aptation of the contract if required.

e) The invoice shall be paid with 3 % cash discount within 30 days after delivery and receipt of
the invoice, b ut at the latest net wit hin 6 0 days
after delivery and receipt of the invoice.
f) Payment shall be effected by MAHLE by
me a ns of a bank transfer. A n y other met ho d o f
payment as well as credit/offsetting procedures
shall only apply if agreed separately between theparties.
g) Notwithstanding § 354a HG B [German Co mmercial Code], the supplier shall not be entitledwithout written consent from MAHLE to assign
claims accruing to him from the delivery relations
with MAHLE or to have such claims collected bythird parties.

f) If the contract or order stipulates that theProducts are determined by call-off, then these calloffs shall be binding two days after the instruction isgive n to the supplier, unless the supplier has expressed an objection by then in writing.

h) The acceptance o f the supplied go ods and/or
their payment by MAHLE shall not constitute thewaiving of any later assertion of claims based o n
defects, damages or any other claims against the
supplier.

3)

4)

Prices, Most-Favoured Treatment,
Conditions of Paymenta) The price shown in an order shall be binding.
In the absence of a differing agreement, the priceshall include packaging and shall be ”DDP” (Delivered Duty Paid) in accordance with Incoterms 2010.
b) If terms of delivery are agreed in accordancewith Incoterms 2010, whereby MAHLE pays for thetransportation, the goods shall be transported by aforwarding agent approved by MAHLE. Unless otherwise 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 notcollect the goods as confirmed in the notification.
c) In the event that, during the term of a contract
concerning the delivery of Products, the supplier supplies Products that are the subject of the contract orsimilar in comparable quantities to a third party undermore favorable conditions, in particular with regard to
price, discounts, technology, quality, terms of payment, delivery periods or other conditions (hereafterthe ”Conditions”), then the supplier shall inform
MAHLE of this fact immediately and automaticallygrant MAHLE these more favorable Conditions. The
new Conditions shall apply retrospectively from thetime 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 numbe r and supplier nu mber. If these Conditions are not fulfilled, then
MAHLE shall not be responsible for any ensuingdelays in processing and settling the invoice.

Delivery Dates, Delay in Deliverya) The delivery dates agreed wit h the suppliershall be binding. Depending o n the agreed termsof delivery, compliance with the delivery period
shall be determined by the date of receipt of the
Products at the destination specified by M AH LE
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,
then the supplier shall incur a contractual penaltyof 1 % of the purchase price of the delayed Products for each c o mme nc e d w e e k of the delay indelivery, extending to a maximum, however, of
5 % of the said purchase price. This shall notaffect the right to assert claims for compensation.
The supplier mus t also re i mb urse inter alia thefollowing costs: special travel costs (both fromsuppliers to MAHLE and from MAHLE to its customers), additional preproduction costs, additionalcosts caused by special shifts, loss of production
costs, replacement/conversion costs, additional
test costs and lost profit. Any contractual penalty
due shall, ho we ver, b e 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 theagreed delivery date, M A H LE reserves the rightto return the Products at the supplier’s cost andrisk. If MAHLE does not return goods that aredelivered early, then the Products shall be stored
until the agreed delivery date at the supplier’s costand risk. In the case of a premature delivery,
MAHLE shall be entitled to use the agreed delivery date as the basis for calculating the date ofpayment.

1General Conditions of Purchase of the Luxembourgian-Based Companies of the MAHLE Groupd) Notwithstanding lit. a) – b), if the supplier realizes that it is not possible to co mp ly w ith adelivery date or quantity agreed with MAHLE, it
must inform MAHLE immediately, stating the reasons, the anticipated duratio n o f the dela y a n d
the effects it will have, together with suitablemeasures for averting them.
e) All special journeys the supplier decides tomake must be recorded, specifying the order details/information, t he reason for the special journey and measures for correcting these reasonsand sent to MAHLE’s Logistics Department at the
beginning o f 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
M A H L E shall be entitled to assert a claim for its
additional expenses for logistics in the form of lumpsum compensation a mounting to EU R 100 (notwithstanding the right to demonstrate greater damages in individual cases). The supplier shall in eachcase be entitled to demonstrate that M AHLE has
incurred no da ma ges or fewer dama ges tha n thislump sum.

5)b) The supplier shall undertake to enclose the relevant delivery notes with the deliveries. All contentsin accordance with Standard V D A 4 9 8 7 and in particular the order number of MAHLE and the supplier
number must be stated on the delivery notes. If these
conditions are not fulfilled, then MAHLE shall not
be responsible for a ny ensuing delays in processing.

7)b) Agreed periods of time shall by extended by the
duration of such an interruption; M A H LE 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 foreseeable or the interruption lasts longer than two months,
then each party shall have the right to withdraw fromthe affected contract (or the not yet fulfilled Products) or to terminate the contract without notice.

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 collection specified b y M A H L E in the order. In the absence of such a provision, the delivery shall be madeDDP (Incoterms 2010) to the place of receipt or use
specified in the order. In this case the risk is© MAHLE, 2018

check the quality of the delivery items. Moreover,the parties to the contract shall each keep the otherinformed about the options for further quality improvement.
g) If the supplier and MAHLE have not reached afirm a gree ment a s to the nature a nd extent o f thetests as well as t he test eq uip me nt a n d me t hod s,
MAHLE shall be prepared, at the supplier’s request,
to discuss the tests with the supplier within the limits of its knowledge, experience and possibilities inorder to establish t he required state of the testing
technology.

Quality and Documentationa) The supplier shall comply with the recognizedtechnical regulations and any applicable safety regulations. In terms of the design a nd characteristicfeatures of the delivery item, the supplier shall comply with any drawings, samples or other specifications or documents received from MAHLE. Modifications to the delivery item or a previously approved
production process or its relocation t o another 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 mad e a different
agreement with the supplier.

Force majeurea) Interruptions to delivery caused by events thatare unforeseeable and unavoidable and outside thesupplier’s sphere of influence and for which the
supplier is not responsible such as force majeure,
war or natural catastrophes shall release the supplier from its obligations for the duration of this interruption and to the extent of its impact.

6)transferred at the time of delivery to the agreed
place of receipt/use.

c) The supplier shall maintain or develop a quality
ma nage me nt system based on the latest valid version of IATF 16949. Certificates fro m a n accredited body or second-party certification and equivalent
QM systems such as VDA Volume 6 Part 1 and I SO
90 01 geared specifically to- wards the automobile industry ma y be recognized by MAHLE after
prior inspection by MAHLE. The supplier shall provide MAHLE with a copy of the latest certificate andshall send MAHLE a new certif- icate witho ut being
asked up o n the expiry of the certificate’s validity
date. MAHLE shall be informed immediately if thecertificate is revoked.
d) For each case of negligent non-compliancewith a valid quality management system requirement in accordance with lit. c) the supplier shall incur
a contractual penalty of EUR 5,000.
e) An y initial sa mp le shall be produced in co mpliance with the latest version of VDA Volume 2”Quality Assurance of Deliveries” or PPAP(AIAG). In addition to the initial sample inspection report, the supplier shall enter all material datain the IMDS material database (International Material Data System, www.mdsystem.com); the approved and accepted IMDS entry for all relevantmaterial data is a compo ne nt a nd precondition o feach successful initial sample approval.
f) Irrespective of successful initial sampling inaccordance with lit. e), the supplier shall continuallyh) In the case of Products specifically identified in
the technical documents or by means of a separate
agreement, the supplier shall mo reo ver 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 o n 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
M A H LE ask to inspect the production processes
and test documents of M AHLE in order to verify
certain requirements, the supplier shall be readyto grant them the sa me rights in its company andgive all reasona b le assistance, unless do ing s o
he would infringe the supplier’s existing obligations of secrecy towards a third party. The supplier shall impose the same obligation on subsuppliers within the bounds of what is legally possible.
j) In other respects, following a reasonable periodof notice a nd during normal business hours, andat intervals MAHLE deems necessary, MAHLE
shall be entitled at any time to carry out reasonable inspections and quality audits of the premises
in which the supplier manufactures the Products.
MAHLE shall have the right to terminate the present contract by informing the supplier in writing
to this effect if the supplier fails to comply with theagreed quality standards for a period of threemonths.
k) The supplier shall impose on its subcontractors
the obligations contained in the above provisionsof this item 7.

8)

Hazardous Substances and Preparationsa) The supplier shall fulfil the legal regulations of
the countries of manufacture and distribution relating to goods, materials and procedures that are
subject to special treatment, inter alia regard-

2

General Conditions of Purchase of the Luxembourgian-Based Companies of the MAHLE Grouping their transportation, packaging, labelling, storage, handling, ma nufacture and disposal o n account of laws, ordinances and other regulations oron account of their composition and their impact
on the environment.
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 ma y be delivered only after presentationof an EC safety data sheet and after approval has
been given by MAHLE. Should the requirementsin accordance with lit. a) change during the delivery relations, the supplier shall immediately forward to MAHLE the papers and documents relating to the changed requirements.
c) MAHLE shall be entitled to return hazardous
substances and water-endangering materials that
we re supp lied for test p urposes t o the supplier
free of charge.
d) The supplier shall be liable to MAHLE for any
damage arising as a result of negligent no ncompliance with the existing legal regulations.
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).
f) The supplier shall ensure that the requirements of the EU chemical legislation REAC H(Regulation (EC) No. 1907/2006, Official Journalof the European Union dated 30.12.2006) – hereafter referred to as ”REACH” – are complied withwithin the specified time, in particular preregistration and registration. MAHLE shall not be obliged
in any way to carry out the (pre)registration. The
supplier is aware that the Products cannot be
used if the requirements o f REACH are not completely and properly complied 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 o w n e xpense; the y shall then bedeemed declared.
h) O n the basis of the E U directive on end-oflife vehicles, the supplier shall undertake to ensure the following:(i) Production and furnishing o f a componentrelated concept for draining a nd unloading
harmful substances;(ii) Compliance with the labelling standards of
VDA 260 for materials and components;(iii) Provision of an utilisation concept for selected supplied parts after agreement with MAHLE;(iiii) Highest possible recycling rate and use ofrenewable raw materials after agreement with
MAHLE.

© MAHLE, 2018i) In fulfilling its contractual obligations, the supplier shall 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 negligently not, partially, or belatedly complying with or
fulfilling the above provisions in lit. f) i.).

9)

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

10) Material Defects and Recoursea) Unless otherwise stated in the following provisions, the legal regulations shall apply to deliveries ofdefective goods (in particular to production material).
b) On receipt of Products supplied by the supplier for 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 other respects the
supplier shall waive any further incoming goods inspection and testing on MAHLE’s part. In the case ofother defects that are not ascertained by M A H LE
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 shall waive the defense ofdelayed complaint.
c) 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 (replaceme nt 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 inco ming goods inspection over and beyo nd the norma l scope. The
same shall apply to any costs that ma y 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 wo rk represents a n unreasonableburden on MAHLE, or if the supplier does notmake an immediate start, then MAHLE shall beentitled to withdraw from the contract / order without setting a ny further time limit and to return the
Products at the 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 supplier even a short period in which
to remedy them, M AHLE shall be entitled to remedy the faults itself or ha ve t he m re med ied b y athird party at the supplier’s expense.
e) Unless otherwise specified below, claims
based o n defects shall b e subject to a limitation
period o f 30 mo nt hs fro m the date the goods aredelivered to MAHLE. The legal regulations shallapply to material defects in delivered items that areused according to their intended purpose for abuilding or to defects of title. If replacement parts
are supplied (cf. lit. c)) the limitation period shallcommence anew upon their delivery to MAHLE.f)f) Any further claims, in particular for damages
or in connection with warranties of the supplier,shall not be affected.
g) For each case wherein M AH LE settles a warranty claim, the supplier, if responsible for the defect, shall undertake to pay fixed lump-sum compensation of EUR 100 (notwithstanding MAHLE’s
right to assert greater dama ges in individual cases). The supplier shall in each case be entitled todemonstrate 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 fordefects, if the supplier delivers production material,
the s upp lier shall t he n a lso und e rta ke to accept
this regulation in future after first receiving written
notification thereof.
i) If customers of M AHLE – 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 b y MAHLE that
result from defects in the supplier’s Products, thisprocedure 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 upo n the basis upon which theclaim is made) is responsible for the fault, the supplier shall undertake 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 organizationand the supplier wo uld itself be liable to a third3

General Conditions of Purchase of the Luxembourgian-Based Companies of the MAHLE Groupparty. If M A H LE has contributed to the cause or
fault, then the supplier shall be able to assert thiscontributory responsibility for the cause or this contributory fault against MAHLE. In the relationshipbetween MAHLE and the supplier, each party’s
share in the payment of co mpensation shall be inproportion to the respective s ha re 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
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 thebounds of reason to fend off claims.
d) In so far as a recall action or progra m to givenotice of ownership is necessary to comply with alaw, ordinance, order or any other state require me nt or as a safety measure to avoid personal injuries or death or in the case of other field or service actions, the costs, including labor, transportation and verifiability costs inter alia shall be sharedon the basis of 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 thisis possible 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 thesupplier the opportunity to express its opinion. This
shall not affect 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 suppliershall immediately provide documentary evidence ofthe conclusion of such an insurance contract. If the
supplier is not in a position to furnish evidence of
the insurance policies within two weeks, M AH LE
shall be entitled to conclude such insurance at the
supplier’s expense.

12) Industrial Property Rightsa) The supplier guarantees that through the purchase, 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© MAHLE, 2018of a third party as to brand, company, name, patent,utility model, design, equipment, or copyrights (including the relevant industrial property right applications) (hereafter ”Industrial Property Rights”) in the
supplier’s country of origin, as well as within theGerman Federal Republic, the European Union, theUSA, 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 ofproperty rights and shall bear all costs and expenses incurred by MAHLE in this respect, in particular
firstly the cost of bringing a n action and of defense
and secondly costs resulting fro m observance of a
possible duty to refrain.
b) Lit. a) shall not apply if the delivery item wasproduced on the basis of drawings, models or otherdetailed information from MAHLE and the supplierneither was nor needed to be aware that Industrial
Property Rights of third parties were thereby infringed.
c) The parties shall undertake to inform one another immediately of any infringement risks that
become k now n and any cases of alleged infringeme nt a nd to take reaso nab le act io n b y c o m m o nconsent against infringement claims.
d) The period of limitation shall be 3 years fromthe conclusion 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 o rother devices or items provided by MAHLE orpurchased by the supplier at MAHLE’s expense (andwhose procurement costs have been reimbursed by
M A H LE or are included in and paid for in full in
the price payable for the Products) and that are associated with the manufacture of the Products or used
for that purpose (hereafter ”Means of Production”)
shall remain or become the sole property of MAHLE(hereafter ”MAHLE Property”). MAHLE shall also
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
for the manufacture or construction of products forthird-party customers without MAHLE’s prior consent
in writing.
c) The supplier shall possess MAHLE Property
and M A H L E Documents as a borrower and shallstore the m 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 M AH LE Documents shall not be remo ved from the supplier’s co mpa ny premises
without written instruction from MAHLE, except forthe 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 existence of appropriate insurance policies. The supplier shall carry out
any necessary maintenance work at the usual intervals and at its own expense and shall notify 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, M A H L E
reserves title to such Goods. The treatment andprocessing, modification or installation or reshaping o f such Goo ds b y the supplier shall be carriedout in the na me of M A H LE . If the reserved
G o o d s are processed toget her w it h other items
that are not the property of MAHLE, M A H LE shallacquire joint ownership of the new Product inproportion to the value 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 acquirejoint ownership to the new Product in proportion to
the va lue o f its reserve d G o o d s (p u rchase priceplus VAT) to the other combined or mixed items at
the time of combination or mixing. If the combination or mixing is carried out in such a way that the
supplier’s items ma y be considered the main item,
it shall be agreed that the supplier shall assign
proportional joint ownership to MAHLE; the supplier sha ll s to re a n d h o l d in sa fe c us t o d y t he so leproperty of M AHLE 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 fro m the other party to the contract.
Orders a nd all associated co mme rc i a l a nd technical details 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
ma y only be disclosed to a third party with
MAHLE’s prior written consent.

4General Conditions of Purchase of the Luxembourgian-Based Companies of the MAHLE Groupb) The above obligations shall not apply tosuch confidential information as the supplier can
prove(i) was already generally accessible at the timeof notification o r was generally accessible
thereafter through no fault of the supplier;(ii) w a s already in the supplier’s possession
at the time of notifiction;(iii) was made accessible to the supplier b y athird party without any obligation as to confidentiality and non-usage, provided that thisthird party has not obtained the information directly or indirectly from the supplier;(iiii) was to be furnished to the authorities o n
the basis of legal regulations.
c) The supplier shall undertake to impo se thesame obligations to maintain secrecy on subcontractors. Confidential information mad e known to
the supplier by 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 thedelivery relations ha ve ended. At the end of thedelivery relations, the supplier shall undertake toreturn to MAHLE all received confidential information if it is embodied or stored on electronic storage media. At MAHLE’s request, the supplier shallconfirm to MAHLE in writing that it has fulfilled theobligation 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) o n M AHLE’s behalf whose costs are
reimbursed b y M AHLE either separately and/or bymeans of the price paid for the Products (order development), 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, experimentand development 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, M A H LE
shall, in particular, be entitled at its discretion to
apply for Industrial Property Rights at ho me andabroad in its own name, to pursue this further andalso to abandon 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.

© MAHLE, 2018e) If the W o rk Results are protected b y copyrights of 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 oftime, place and content to use and exploit s uc hWork Results as desired, in any manner and free ofcharge. 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 the source code and documentation to be handed over. MAHLE may demand thehand-over at any time, even during the implementation of the development project.
f) The supplier (as well as companies affiliatedwith it) is and shall remain the owner of inventions
ma d e before 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 know-how existing before the start of the cooperation (hereafter ”Existing Property Rights”).
g) If Existing Property Rights are necessary forthe utilisation or further development of developme nt results, M A H L E shall be granted their nonremunerable, non-exclusive, sublicenceable, transferable and irrevocable right of utilisation unlimited
in terms of time and place.
h) If, in the context of the services the supplieris required to perform, the supplier calls in subcontractor, the supplier shall undertake to ensure b y
mea ns of suitable contractual agreeme nts that
MAHLE is granted the property and utilisationrights 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 o f
the end products for which the Products are to be
used. The minimu m 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 place a
concluding order for the all-time requirement.

17) Cancellation/Rescission of Orders / Contractsa) If one party to the contract stops payme nts 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 M A H LE cancels or amends its order extraordinarily or withoutcause, MAHLE shall be entitled, notwithstanding its
right to terminate the contract in accordance with
Item 17 c), to agree mutually another arrangementwith the supplier that takes account of these circumstances. Unless otherwise agreed the following degrees of bindingness 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(mo nt h 2) shall entitle the supplier t o procure
feedstock. If this quantity is later not taken b y
MAHLE, the supplier shall be entitled to invoice
MAHLE for the feedstock, whereby MAHLE may
demand delivery of the feed-stock.
Quantities manufactured in excess of this and procured materials shall be exclusively at the supplier’s risk and to the supplier’s accounte) Each party shall have the right to terminate a contract for good cause at any time without notice. The
following cases in particular represent good cause:(i) Cessation of payment on the part of one party,
the opening o f insolvency proceedings againstt he assets o f o n e p art y o r its reject ion o n t hegrounds of the absence of assets, or the liquidation of one of the parties;(ii) Infringement of important contractual obligations; in the case of an infringement that can be
remedied, however, only after the innocent party has called upo n the other party in writing to
remedy the infringement, has warned the partyof the impending termination for good cause a nd
ha s gra nte d a reas o na b le pe rio d o f grace of atleast four weeks that has expired without outcome;(iii) O ne party co mes under the dominant control of o ne o f the other party’s co mpetitors o naccount of a change in its equity holders or
shareholdersf) In the case of the cancellation or other termination o f 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 o f theremaining provisions shall not be affected. In placeof the invalid or unenforceable provision, a provision shall be dee med to have been agreed whic hco mes as close as possible i n legal t erms to thatwhich the parties to the contract required accord-5General Conditions of Purchase of the Luxembourgian-Based Companies of the MAHLE Group19) Place of Performance, Applicable Law,
Place of Jurisdiction

UN Convention on the International Sale of Goods(CISG) shall not apply.

b) Without the prior written approval of MAHLE
the supplier shall not assign or transfer any order
or the contract, either in whole or in part.

a) 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.

c) The supplier shall not employ one or more
subcontractors to fulfil an order or part of an orderwithout the prior written approval of MAHLE.

b) The law of the Federal Republic of Germa ny
exclusively shall apply to this contract. The Viennac) The place of jurisdiction for all disputes arisingfrom the business relationship between the parties
to the contract shall be Stuttgart. M A H LE shallfurthermore have the right at its discretion to takeaction against the supplier at the latter’s generalplace of jurisdiction

ing to the original meaning and purpose of the ineffective or unenforceable provision. This shall also
apply to any loopholes in the contract.

© MAHLE, 2018

Status: May, 20186