GENERAL TERMS OF SALE OF FALKEN TYRE EUROPE GMBH („FALKEN“)

As of January 2017

A. Application of the General Terms of Sale

1. These General Terms of Sale (hereafter „GTS“) shall apply to all contracts concluded by Falken only with entrepreneurs (§ 14 BGB) and legal entities (hereafter the “Buyer”). They are part of all offers and contracts for sales and services of Falken. The GTS in force and published on the website of Falken under www.falkentyre.com/terms_of_use at the time of an order shall also govern all future business relationships, even if Falken did not explicitly point out to them in each individual case.

2. All orders and contracts are binding only if made in text form (§ 126 b German Civil Code, BGB). Individual agreements (side agreements, modifications and supplements) between the parties shall prevail; however, for the content of such agreements the written confirmation of Falken shall be binding, unless a different content is proven.

3. These GTS shall apply exclusively. Differing or contrary or amending terms of the Buyer shall apply if and to the extent expressly agreed upon by Falken. Falken’s delivery without reservation despite its knowledge of the purchaser’s general terms and conditions shall not replace such express consent.

B. Conclusion of Contract

1. Falken’s offers are non-binding and subject to confirmation. This shall also apply in case Falken provides catalogues, technical documentation, other product descriptions or documents to the Buyer.

2. Buyer’s orders shall be considered binding offers for a contract. Falken may accept such offer within two (2) weeks of the date of receipt.

3. Falken may declare acceptance expressly in writing (e.g. order confirmation) or implicitly by delivery of the products.

C. Terms of Delivery

1. The time of delivery shall be agreed individually or shall be indicated by Falken upon acceptance of the order. If that is not the case, delivery shall take place in about two (2) weeks of conclusion of the contract.

2. If any agreed time of delivery will be exceeded by Falken for reasons not attributable to Falken (non-availability), Falken shall inform the Buyer without undue delay and indicate the estimated new time of delivery. If the products are not deliverable within the new time of delivery or not deliverable at all, Falken is entitled to fully or in part rescind the contract; Falken shall reimburse the Buyer without undue delay for payments already made. Non-availability shall be events of force majeure or other disturbing events at Falken, Falken’s suppliers or carriers, if neither attributable to Falken nor Falken’s suppliers or carriers.

3. Default in delivery shall be governed by the relevant statutory provisions. However, a notice of warning by the Buyer is required in all cases.

4. Falken reserves the right to make partial deliveries.

5. The risk for the loss and the damage of the products shall be transferred upon delivery of the products to the Buyer at the latest. In case of sale by dispatch, the risk for the loss and the damage of the products as well as for a delay in delivery shall be transferred upon handover of the products to the carrier or the freight forwarder.

D. Prices, Payment Terms

1. Unless otherwise individually agreed, products are invoiced on the basis of Falken’s price lists in force at the time of conclusion of the contract. Prices are exclusive of the respective statutory VAT.

2. In case the Buyer requests accelerated dispatch (e.g. air freight, express freight etc.), the Buyer bears the respective costs.

4. Upon expiry of the aforementioned payment term, the Buyer will be in default. Default interest in the amount of the statutory default interest rate shall accrue as from the due date on.

3. The purchase price is due and payable according to the agreed payment terms, or, in absence of an agreement, according to the applicable statutory provisions. Falken reserves the right to make delivery subject to advance payment, also in the course of a continuous business relationship. Falken will declare such reservation together with the acceptance of the order at the latest.

5. The Buyer shall be entitled to offset or retention only to the extent that the Buyer’s claim is undisputed or assessed in a legally binding judgment. Buyer’s rights in case of defects of the delivery (in particular those under section F.) shall remain unaffected.

6. If, following conclusion of the contract, it becomes foreseeable that the payment of the purchase price is at risk (e.g. due to buyer’s filing for insolvency), Falken reserves the right to suspend or – subject to a notification – rescind the contract.

E. Retention of Title

1. Falken retains title to the products until full payment of all claims resulting from the business relationship (secured claims).

2. As long as the secured claims have not been paid in full, the products shall not be pleged or transferred for security to any third party. The Buyer shall inform Falken without undue delay in writing, if an application for insolvency is filed or if the products are seized by third parties.

3. In case of non-payment of the purchase price when due by the Buyer, Falken is – after payment notification – entitled to rescind the contract and request possession of the products based on the rescission and the retention of title.

4. Buyer may resell and transfer title to the products and/or install the products subject to the above retention of title in the course of his regular business. For this case, the following provisions shall apply:

a) With installation of the products in other products, Falken shall become joint owner of the new products in proportion of the value of the products subject to retention of title to the new products.

b) Buyer hereby assigns to Falken all claims arising from such resale and transfer of title or resulting from the installation either in full or in proportion to the value of the joint ownership. Falken hereby accepts such assignment. As long as the Buyer fulfills his payment obligations vis-à-vis Falken, the Buyer remains entitled to collect the claims.

c) Insofar as the securities exceed the secured claims by more than ten (10) percent, Falken shall – upon buyer’s request – release securities to be chosen by Falken.

F. Warranty, Liability

1. For Buyer’s warranty claims (including claims for wrong or short delivery) the legal provisions of the German Civil Code (BGB) shall be applicable, unless otherwise established herein. In any case, the legal provisions regarding the delivery of the products in case the end customer is a consumer (Sections 478, 479 of the German Civil Code, BGB) shall remain unaffected.

2. The products are deemed to be defective if not compliant with either Falken’s written confirmation or Falken‘s product descriptions that are referred to in the order confirmation or have been made available to Buyer prior to the order or have been included in the contract in the same way as the GTCs. Falken reserves the right to technical improvement of the products. Falken is not liable for public statements of the manufacturer or other third parties (e.g. advertising).

3. Buyer’s warranty claims are subject to Buyer’s fulfillment of his obligations to inspect the products and notify Falken of any defects (Section 377 of the German Civil Code). Upon delivery of the products, the Buyer shall inspect the products for obvious defects (including identity and quantity) and shall notify Falken in writing of obvious defects within two (2) weeks of receipt of the products. In case of a hidden defect, the Buyer shall notify Falken in writing within two (2) weeks of discovery.

4. If products delivered are defective, Falken may opt to either replace or repair such products. Falken’s supplementary performance includes neither the disassembly of the defective products nor the re-assembly, unless Falken was initially obliged to assembly of the products. In case of a replacement of the products, Buyer shall return the defective products to Falken. Falken shall bear the costs incurred in connection with the supplementary performance (excluding the costs for disassembly and/or re-assembly). If the supplementary performance should fail, the Buyer may opt to either rescind the contract or to claim a price reduction. Buyer shall not be entitled to any further rights for damages.

5. In case the Buyer has been provided with wrong instructions (e.g. for assembly or installation of the products), Falken shall only be obligated to provide correct instructions.

6. Buyer’s warranty claims shall be excluded in case the defect was caused by Buyer’s inappropriate handling or use of the products.

7. Buyer’s warranty claims shall be time barred (1) year following delivery. Any claims for damages resulting from loss of life, personal injury or damage to health and any claims for damages caused with intent or gross negligence shall remain unaffected.

8. The liability of Falken – no matter for what legal cause – shall be limited to any damages caused by Falken or its vicarious agents or legal representatives with intent, gross negligence or in case of breach of duties essential to fulfillment of the contractual purpose by ordinary negligence. In such cases of ordinary negligence, Falken’s liability shall be limited in the amount to typical damage or loss which was foreseeable at the time of conclusion of the contract. The aforementioned shall not apply to claims for damages by Buyer against Falken under the German Product Liability Act and/or resulting from loss of life, personal injury or damage to the health.

G. Choice of Law, Jurisdiction

1. German law shall apply exclusively, excluding the conflict of law provisions and excluding the CISG.

2. Falken’s corporate seat shall be the place of jurisdiction for all disputes resulting directly or indirectly from the business relation between the parties. However, Falken may also file lawsuits at the general place of jurisdiction of buyer.