General Terms and Conditions of Business, Delivery, Repair, and License

of Wetterauer Engineering GmbH, current as at 01 August 2004

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§ 1 Application of these Terms and Conditions

Any deliveries, services, quotations, awards of license and licensing agreements, and garage services provided or executed by Wetterauer Engineering GmbH (hereinafter referred to as 'WE') shall be rendered exclusively on the basis of these Conditions. Even if not expressly stipulated and agreed anew, these Conditions shall also apply to all future business relationships. The General Terms and Conditions shall apply to all business dealings, regardless of whether the business partners involved are merchants as provided for in the German Commercial Code [HGB] or non-commercial customers. All other General Terms and Conditions - particularly the Customers' own terms of purchase - are hereby rejected, i.e. they are not recognised as binding even in the absence of a repeated, express rejection thereof on the part of WE. Any deviations from these Conditions shall be deemed valid only if WE confirms said validity in writing.

§ 2 Recognition of these Terms and Conditions

Given the existence of an opportunity to acknowledge these Conditions, and in particular by opening secured packages or breaking open licence seals or notification slips attached to the product, the Customer recognises these Conditions even if they come to the Customer's attention only upon delivery or the performance of a service. Upon provision of services by WE directed towards the delivery, modification or adjustment of computer or control data and review of the same, with or without changes to hardware, the Customer expressly acknowledges and covenants to follow the licencing provisions contained in these Conditions.

§ 3 Offer and acceptance

Offers made by WE are subject to alteration at any time. The Customer shall be bound by the terms of its orders or of its commission for a period of 4 weeks. A declaration of acceptance issued by WE shall be valid only if confirmed in writing or by fax/e-mail. This shall also apply for modifications, supplements and collateral agreements. These shall become valid only if confirmed in writing by WE. Delivery and/or invoicing shall take the place of a written confirmation of order by WE. In light of the special nature of services provided by WE, the placement of orders by the Customer shall also be deemed to entail an authorisation to conduct test drives in the Customer's vehicle.

§ 4 Images, descriptions, performance data and other particulars

Images and descriptions in quotations, brochures and publications by WE are used for general explanatory purposes and can be subject to modification as technical data as WE endeavours at all times to continue to develop its products for the benefit of the Customer and of technological progress. Performance data, speed information, measurements and weights, fuel-consumption and savings information are to be viewed as approximate values only and are non-binding. They shall not be construed as representing any assurances with regard to specific characteristics unless expressly confirmed in writing in response to a contract-related query. The data provided relate to reference vehicles; deviations from the specific purchaser vehicle are possible and not the responsibility of WE. WE shall not be bound to the terms of documentation provided by us containing obvious errors, typographical or computational mistakes. The Customer hereby covenants to bring such errors to the attention of WE. The same shall apply to the case of missing documents.

§ 5 Pricing

In the event of any defects, errors or transport damage to the delivery goods, following receipt of the goods the Customer covenants to issue a written complaint to WE, and in the case of mail-order purchase to the forwarding agent as well. Visible differences in quantity are to be reported immediately upon receipt of the goods - not later than within 2 days of receipt where differences are not readily apparent - in writing to WE. When the object of purchase is sent to a buyer, immediately following receipt thereof the buyer shall inspect the shipment for external intactness and shall report any complaints immediately upon acceptance vis-à-vis the mail-order company. Upon receipt of a shipment already showing external signs of damage, the Customer shall be under obligation to have the damage acknowledged by means of either a protocol drawn up for the purpose or a damage-reprot confirmation by the forwarding agent. Violation of this provision shall extinguish the Customer's right to new or subsequent delivery.

§ 6 Acceptance and inspection of work and delivery performance

Prices are net ex WE plus packaging, shipping and freight insurance costs and plus any VAT applicable under law. The prices that apply shall be the prices that were in effect on the day the contract was concluded. If more than four months' time has lapsed between conclusion of the contract and the delivery date, the list price in effect on the delivery date shall apply. For supplemental services and deliveries, the WE prices in effect when the contract was concluded shall apply. Use of the performance test stand shall be subject to the prices and invoicing specifications posted on display in the garage at WE.

When the vehicle is taken over from the garage at WE, the work performed it shall be considered as accepted in accordance with § 640 I of the German Civil Code [BGB] unless the Ordering Party objects upon takeover of the vehicle, identifying specific defects. The Ordering Party shall be considered in arrears with its takeover of the vehicle if the vehicle is not picked up within eight days following notification of completion. If a vehicle is not fetched following expiration of the deadline, WE shall be entitled to assess typical local parking fees for stallage of the vehicle in accordance with § 304 of the German Civil Code.

§ 7 Delivery - delivery deadlines

The delivery deadlines communicated to the Customer by WE are always non-binding unless express alternative arrangements to the contrary have been made. WE shall be in arrears with completion and/or delivery only if it is responsible for the delay. WE reserves the right to make changes in form or design for technical reasons insofar as this does not unreasonably alter the work for the Customer. No arrears shall obtain in the case of force majeure or labour dispute.

§ 8 Shipping and transfer of risk

Where ordered goods are to be shipped to the recipient, WE shall bear the risk of damage or destruction only until the goods are transferred over to the shipping company. WE reserves the right to choose the form of shipping used. If the shipment should be delayed for reasons for which the Buyer is responsible, the risk of accidental or slightly negligent damage to, or of accidental or slightly negligent destruction of the item in question shall transfer over to the Customers upon shipment of the goods. Assumption of the cost of transport as may be agreed in the isolated case shall be of no consequence with regard to the transfer of risk.

§ 9 Special remarks - TÜV inspection - expert opinion

If, changes in vehicle performance data should result due to services provided by or the use of products by WE, the vehicle's general operating permission shall be extinguished. As a result of such changes, the vehicle will no longer satisfy the requirements of German road-traffic registration regulations [StVZO] and may lose its insurance protection. Under the provisions of law, the customer is also under obligation to notify the registration office and its motor-vehicle insurer of any such changes and, if necessary, arrange a technical vehicle inspection (e.g. through the TÜV). If the Customer should nevertheless operate the vehicle in public road traffic, the Customer does so at its own risk. WE expressly accepts no liability whatsoever for damage to the Customer or to third parties brought about as a result of failure to observe these remarks and the applicable provisions of law.

In the event that the provision or delivery of a TÜV expert opinion or of some other technical explanations to facilitate entry of modifications to the vehicle-registration document has been arranged by contract, this shall expressly constitute no guarantee that these changes will in fact be entered by TÜV or some other technical organization. In particular, the TÜV expert opinion does not constitute an engine or vehicle guarantee, nor an assurance of the usability or suitability of the product or service in the country envisioned by the Customer.

§ 10 Special remarks - warranty

The Customer has been informed of and hereby acknowledges that the services, products and tuning measures offered by WE, along with the changes made as part of a tuning measure to the vehicle, the engine, the control device or the control data will lead to a change in the Customer vehicle's performance data. The customer is hereby informed that the engine and, depending on the circumstances, other vehicle assemblies and vehicle parts are subject to greater strain and load, and that the physical principles involved can result in greater wear and tear on the Customer vehicle. In particular, excess strain and sustained output, along with any increase in the Customer vehicle's peak speed, can have implications for the service life of the vehicle, its engine and its systems. It is expressly noted that modifications of model and performance can extinguished the manufacturer's warranty for the vehicle in question. For this reason, WE offers the opportunity to conclude an additional warranty agreement. Accordingly, WE provides a warranty of 12 months and unlimited mileage from delivery for parts it delivers. Further claims by the Customer, particularly with regard to the control unit, the engine or other vehicle assemblies and parts, for the costs of removal and installation, and for damage not involving the object of delivery (particularly for damage done as a result of defects, whether material or immaterial in nature), shall be - to the extent legally permissible - precluded. Precluded within the limits of law, furthermore, shall be damage done as a result of defects due to positive breach of contract, or as a result of the right of warranty. This shall apply in particular for assertion of downtime and rental-car expenses incurred. At the discretion of WE, the warranty shall be honoured in its garage in Koblenz in the form of replacement free of charge, or of free subsequent improvement of the parts recognised by WE as faulty. Parts that have been replaced shall be the property of WE. A contract-based warranty shall apply to parts installed as part of the subsequent improvement or rectification of defects, to remain in effect until the warranty period for the purchased item expires. The Buyer shall report any errors to WE in writing and without delay. Once the error has been identified, WE shall be given an immediate opportunity to carry out subsequent improvements. If a error cannot be eliminated, or if additional attempts to make subsequent improvements should be unreasonable, the Party to the Contract may demand replacement or reduction of the object of the Contract. Due to the special nature of the transaction, there shall be no entitlement to substitute delivery in the case of tuning services. The Party to the Contract is hereby expressly notified that the engine is also subject to greater strains as a result of the higher kW output due to installation of a control chip. WE shall be liable for further damage to the engine or to the remaining parts of the vehicle only insofar as this damaged has been caused by faulty - meaning not properly functioning - parts installed by WE. Where a new control chip is installed, WE shall thus expressly be responsible only for such damage to the vehicle as has been brought about by a defective chip. Liability for damage resulting solely as a result of increased strain upon the engine is hereby precluded. The Customer shall bear the burden of demonstrating that the parts installed by WE were indeed faulty. Beyond this, responsibility for damage done as a result of defectts will not be accepted if this is causally related to the fact that an error in a part installed by WE was not immediately reported, and an opportunity to rectify the situation was not immediately forthcoming, or if maintenance provisions of the vehicle manufacturer and supplemental maintenance instructions and warnings issued by WE have not been observed, or if parts not authorised by WE have been installed in the vehicle, or if the parts installed by WE have been installed in another vehicle. If the test bench is used, WE accepts only liability for non-accidental conduct. Any further fault in accordance with § 276 para. 1 cl. 2 of the German Civil Code shall devolve to the burden of the Customer. This shall also extend to technical failure of the testing equipment as such, and to gross negligence on the part of WE.

§ 11 Cost estimates

Cost estimates shall be binding only if issued in writing and labelled as binding. If, in the course of work, it should emerge that the actual costs are likely to exceed the cost estimates by more than 10 %, WE shall bring this fact to the Ordering Party's attention. If the Ordering Party should cancelled the order as a result, WE shall be entitled to charge for that portion of the work already completed, and for expenses not included in the remuneration amount.

§ 12 Retention of title

Even once installed, the object of the contract shall remain the property of WE pending payment in full of all claims. As long as title remains in the hands of WE, all modifications devolving to the detriment of WE, sales, mortgages, grants of security or other relinquishments of the object of the contract to third parties shall be prohibited in the absence of written consent by WE.
Throughout the period of retention of title, the goods shall be carefully looked after and kept in good condition. The Party to the Contract shall insure the object adequately and transfer the rights arising out of the insurance contract over to WE. If the Party to the Contract should fail to fulfil this obligation, WE shall be entitled to conclude an insurance policy at the Contracting Party's expense and to charge this expense to the Buyer.
In the event of payment arrears or violation of security obligations with regard to the object, the surrender of the object may be demanded. Following written announcement with a reasonable deadline, the object of purchase may be sold privately for the best possible price, the proceeds realised offsetting the purchase price. If the Seller should demand the surrender of the object of purchase, the Party to the Contract shall be immediately obliged to surrender the object to the Seller, unless a right of retention thereto established by the purchase agreement obtains. At the insistence of the Party to the Contract, at its expense the services of an expert can the enlisted to ascertain the real value of the object of purchase. The value ascertained as a result shall be binding upon the Parties.
All of the costs arising out of an assertion of right of retention and out of retrieval of the object of purchase shall be borne by the Party to the Contract. If the goods delivered should be destroyed, damaged or pledged, this fact must be reported to WE without delay and a report issued of the whereabouts of the goods.

§ 13 Terms of payment

Shipment shall be made in exchange for cash-on-delivery or advance payment. If shipments are delivered per invoice pursuant to special agreement, the invoice amount shall fall due, in full, immediately upon receipt. If WE has completed repairs on a vehicle, payment shalll be made upon acceptance as provided for under § 6 of the General Terms and Conditions, or not later than 8 days following notification of completion, either in cash or via cash cheque. In the event of arrears of payment, WE shall be entitled to assess interest in the amount of 2 % above the Bundesbank discount rate unless WE or the Customer should demonstrate that the actual damages due to delay either exceed or are inferior to this amount. The aforementioned interest rate can be set without submission of an interest certificate by the company bank of WE. If the Customers should fail to make payment within a reasonable subsequent period, WE shall be entitled to assert its rights under § 326 of the German Civil Code, and in particular to lodge claims for damages for non-fulfilment. In any event, the magnitude of the damages shall amount to 15% of the agreed amount subject to payment, unless WE can demonstrate greater or the Customer lesser damages. In addition, WE shall be entitled, at its option, to assert the agreed payment amount as damages, or to demand the return of the object of purchase.

§ 15 Right of retention

For every claim, WE shall be entitled to a right of retention and lien with regard to the object that has come into the possession of WE as a result of the contract. WE shall be entitled to a realisation of pledged property by way of private sale. A written announcement to the Ordering Party's last address known to WE shall be deemed sufficient for the threat of sale.

§ 16 Copyright/documents

WE shall retain rights of copyright to the objects it delivers, particularly to tuned passenger-car chips, cost estimates, sketches and drafts. Any imitation, copying, reading-out of data, or any provision of these objects to a third party for any purpose whatsoever shall result in a contractual penalty in the amount of EUR 10,000.00, for the payment of which the Customer hereby covenants for each case of violation, irrespective of any additional damages claims that may be lodged. WE shall store documents of the Contracting Party submitted to it, free of assumption of risk.

§ 17 Place of fulfilment and legal venue

The place of fulfilment for delivery and payment, and the legal venue for all matters including cheque, bill of exchange and collection proceedings shall be the headquarters of the company, located at Ernst-Abbe-Straße 4 in 56070 Koblenz, Germany. Contracts concluded with non-German parties shall be governed by the laws of the Federal Republic of Germany.

§ 18 Invalidity of individual provisions

The invalidity of individual provisions shall not result in the invalidity of the entire Contract. Provisions within these Terms and Conditions that are, either wholly or in part, invalid, shall be replaced by such provisions as come closest to fulfilling the actual and economic aims of the invalid provision.

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