GENERAL TERMS AND CONDITIONS OF PURCHASE

CTS NETHERLANDS B.V.

1. General

1. These general terms and conditions of purchase, hereinafter referred to as ‘conditions’, of CTS Netherlands B.V., hereinafter referred to as `CTS`, will form part of all requests for quotations, orders placed/purchase orders and (resulting) agreements concerning the supply of goods and/or services, hereinafter referred to as ‘supply’, to CTS. Any deviation from, or addition to, these conditions require the express written approval of CTS.

2. CTS expressly rejects the applicability of the supplier's general terms and conditions. A supplier is understood to be a natural person or a legal entity with whom CTS enters into a contract.

3. In the event that any stipulation in these conditions, or a part thereof, should turn out to be invalid or capable of being rendered invalid, the other stipulations or the remaining part thereof will remain in full force. CTS and the supplier agree to replace the stipulation that is invalid or capable of being rendered invalid with a stipulation they would have agreed upon, if they had known that the stipulation was invalid or could be rendered invalid.

4. In case of inconsistency, prevail contracts and specifically agreed commitments above those conditions.

5. In the event that these terms and conditions have been formulated in both the Dutch and the English languages, the Dutch text will be binding in the event of a dispute regarding the content and the meaning thereof.

2. Quotations, offers, contracts and changes to contracts

1. Any costs associated with providing a quotation or making an offer, will be borne by the supplier.

2. CTS has the right to cancel an order already placed as long as the supplier fails to confirm the order in writing. In the event that the order confirmation varies from the order placed, CTS will only be contractually bound if it agrees to the variation in writing.

3. CTS has the right to make changes to contracts already entered into. CTS will notify the supplier of any changes in writing. In the event that the supplier believes that the changes will impact on the agreed price and/or delivery time, it must advise CTS within five days of receipt of the notification of change. In the absence of such advice being provided, the agreed price and delivery period will remain in force.

4. In the case of additional work, the supplier is required to provide a cost estimate in writing. The supplier is not entitled to carry out the additional work until after it has received a written acceptance from CTS.

3. The supplier's obligations and warranty

1. Where the contract refers to technical, safety, quality or other stipulations, and the relevant documentation is not attached to the contract, the supplier will nevertheless be assumed to be aware of them. These documents are binding for the supplier. In the event that the supplier has no knowledge of them, it shall immediately inform CTS. CTS will then provide the information.

2. In the event that the supplier believes that the documents provided by CTS contain text that is unclear, it shall immediately inform CTS in writing.

3. After the conclusion of the contract, the supplier, at the request of CTS, is obliged to provide a production schedule, showing at least the design, purchase and/or production of components and/or base materials, manufacture including assembly, testing and delivery dates and any other intermediate steps which may be relevant for the production, all in accordance with the stipulations of the contract, as well as a list of the persons within its organization who are responsible for carrying out the contract.

4. The supplier will pay the costs associated with obtaining, in a timely manner, the necessary permits or licenses that are required for carrying out the contract and/or necessary in the context of complying with the terms and conditions contained herein.

5. The supplier warrants that:

a. the supply will be manufactured, carried out and/or made by the supplier itself, its subsidiaries or allied companies, but not by a third party acting as a sub-contractor or otherwise, except with the prior written agreement from CTS;

b. the goods and/or services supplied will be suitable for the intended purpose;

c. the goods and/or services supplied will be exactly in accordance with the written requirements set out in the purchase order and/or specifications and/or technical requirements and/or other documentation provided by CTS;

d. the goods and services supplied will be of good quality and free of errors in design, performance and construction and/or materials, and new materials and skilled personnel will be used and deployed in carrying out the work associated with the supply of the goods and/or services;

e. the supply of goods and/or services will meet all legal and regulatory requirements that apply in the Netherlands and all (international) laws, rules and guidelines, especially including the legal European directives relating to CE markings and the EU declaration of conformity for machines/safety components, and the “manufacturer's declaration”, which has to be provided by the supplier;

f. the agreed results will be produced;

g. the supply will be accompanied by the necessary instructions and/or technical descriptions, including detailed instructions for storage and preventative maintenance, in order to enable CTS to use the supply for the purpose for which it is intended, as well as all relevant certificates, declarations, statements, installation and operating instructions, specifications, drawings, reports, tax information and other documents.

6. The supplier warrants that the spare parts for goods supplied and the maintenance required to keep the goods in good order for a period of 10 years, will be able to be procured/obtained by CTS.

4. Warranty period

1. Should it emerge within a period of 12 months after first use, or 18 months after delivery, that the goods and/or services supplied fail to meet the terms and conditions set out in Article 3 of these terms and conditions, the supplier shall be obliged - on first demand and at the option of CTS - to replace, to repair or to remedy the goods and/or services supplied, within the reasonable period indicated by CTS and without prejudice to any other of CTS's rights.

2. In the event that the supplier does not meet its obligations with regard to the warranty, CTS, with or without the assistance of third parties, is entitled to replace or repair the goods supplied and/or remedy the services provided, at the expense of the supplier.

3. The warranty described above, will apply anew to the goods replaced or repaired and/or parts of the services remedied.

5. Prices, invoicing and payment

1. The prices stated in the quotation/offer from the supplier, are fixed and will be assumed to include the cost of packaging, transport, permits, duties and insurances, but excluding VAT.

2. The supplier shall send CTS an invoice for each purchase order.

3. The supplier will not invoice CTS earlier than on the agreed date of delivery of the goods and/or services or on the date of acceptance by CTS of the goods and/or services delivered, unless otherwise agreed upon in writing.

4. The following information must be shown on the invoices:

a. total value of the goods and/or services supplied, including any

packaging costs;

b. description of the goods and/or services supplied;

c. quantity (for each line);

d. date of delivery;

e. CTS purchase order number;

f. CTS order line number (in the sequence shown on the purchase

order);

g. CTS item code for each item;

h. country of origin of the goods and/or services supplied;

i. VAT numbers of both the supplier and of CTS;

j. statistic number of the goods supplied, and

k. supplier's dispatch number.

5. Payment will be made within 60 days of receipt and approval of the invoices. Payment does not imply acceptance and does not discharge the supplier of any of its obligations towards CTS.

6. CTS will be entitled to off-set any amounts it or its affiliated legal entities and companies owe the supplier against everything that CTS is or will be owed by the supplier or the supplier's affiliated legal entities.

7. If, and insofar as CTS will be required to pay the supplier interest, such interest shall be simple interest at the refinancing rate of the European Central Bank (ECB) on the due date of the invoice.

8. Exceeding the payment terms or non-payment on the part of CTS, does not entitle the supplier to terminate or suspend the performance of its obligations.

6. Delivery and packaging

1. Delivery will be in accordance with current Incoterm DDP, to the address specified by CTS.

2. The delivery dates agreed are fixed and binding and apply to the supply of the entire order. In the event of a single failure to meet a delivery date, the supplier will be in breach of the contract without a notice of default having to be issued.

3. In the event that the supplier anticipates that the agreed delivery date will be missed, it will be obliged to inform CTS immediately and in writing of this circumstance.

4. If the missing of a delivery date is attributable to the supplier, or at any rate is within its sphere of influence or risk, CTS is entitled to deduct 5% of the price for each calendar week or part thereof, that the delay continues, up to a maximum of 20%, without prejudice to any of CTS's other rights relating to the supplier's failure to meet its obligations, including the right to cancel the contract and/or demanding fulfillment of the obligations under the contract and/or the claiming of damages.

5. Partial deliveries are not permitted, unless approved in advance in writing and, if necessary, at further terms and conditions to be determined by CTS.

6. The supplier shall, at its own expense - the cost of storage, maintenance, insurance against fire damage and/or theft and/or loss during storage or transport included therein - keep the goods in storage at its premises for a maximum period of two months counted from the time that the goods are ready.

7. Each delivery or part delivery must be accompanied by at least the certificates ordered and a packing slip stating CTS's order number and the quantity of the goods to be delivered.

8. The delivery must include proper industry standard packaging, showing the details and/or markings specified by CTS. The packaging materials must be suitable for re-use or recycling, and must comply with international and Dutch (environmental) laws and regulations. In the event that the packaging material cannot be re-used or recycled, the cost of processing it will be at the expense of the supplier.

9. CTS has the right to refuse a delivery and return it at the expense of the supplier, or store it at the location where it was delivered, if the requirements set out under 6, 7 and 8 have not been met.

10. At the request of CTS, the supplier is obliged to take back the packaging materials it has used, at its own expense and at its own risk. CTS has the right to return the packaging materials at the expense of the supplier. Any packaging materials made available on a loan basis by CTS must be returned in good condition, insured and at no cost to CTS.

7. Transfer of ownership, risk and proprietary rights

1. The transfer of ownership and risk of the supply to CTS will take place at the time of the actual delivery at the agreed location, following acceptance by CTS. In the event of payments made by CTS prior to delivery, the ownership equivalent of the amount paid for will transfer to CTS at the time that the payment is made. The supplier will identify the goods with unique identification marks and keep them for CTS. The supplier warrants that complete and unencumbered ownership will be provided.

2. In the event that CTS terminates the contract on valid grounds or demands replacement of the supply, the risks will continue to be carried by the supplier.

3. In the event that installation or assembly by the supplier is agreed with the supplier, the supplier will carry the risk until the installed or assembled equipment has been accepted by CTS.

4. If CTS provides the supplier with goods for carrying out the contract, these goods will remain the property of CTS. In such a case, the supplier carries the risk of loss or destruction of these goods. The supplier will use or allow these goods to be used only for carrying out the contract. The supplier will immediately return these goods to CTS at its own expense, after the contract has been completed or expires.

5. Items and goods that were obtained or manufactured by the supplier for the purpose of the supply of the goods and/or services, will become the property of CTS at the moment of obtaining or manufacture and will be held by the supplier on behalf of CTS.

6. Without the prior written permission of CTS, the supplier shall not use, manufacture or have manufactured by third parties, put into circulation, operate or otherwise control and dispose of, or supply to third parties, any goods that were manufactured with or are based on items (in the sense of Article 7, Paragraph 5) belonging to CTS. In the event that this prohibition is breached, the supplier will forfeit a one-off penalty of € 75,000.00 payable immediately without a notice of breach or Court intervention being required, as well as a penalty of € 2,500.00 per day or part thereof that the breach continues, without

prejudice to CTS’s right to compensation for all of the damages suffered or yet to be suffered by CTS on the aforementioned grounds and the right to terminate the contract.

8. Testing and inspection

1. The supplier shall provide CTS, at its request, with all testing and inspection certificates or audit reports that it may require.

2. CTS has the right to test and inspect or have tests and inspections of the goods and/or services to be supplied carried out at the premises of the supplier prior to delivery, or at the premises of CTS after delivery, or at the premises of CTS's customer after delivery, prior to accepting delivery. The supplier, at no additional cost to CTS, is required to provide CTS and/or third parties nominated by it, every assistance with the inspections and testing, and at the request of CTS, provide reasonable human and material assistance for testing and inspection. Testing and/or inspection does not release the supplier from any obligations with regard to warranty and/or liability.

3. All costs associated with the testing and/or inspections, with the exception of the costs relating to the inspectors appointed by CTS, will be for the account of the supplier.

4. Should it emerge during testing and/or inspection that the supply does not meet the agreed specifications, then CTS is entitled to return the entire delivery or part thereof to the supplier at the expense of the supplier. CTS may then at its option require repair or replacement, or terminate or cancel the contract, without prejudice to CTS's right to compensation for any losses suffered or yet to be suffered.

9. intellectual property rights

1. In the event that intellectual property rights apply to the goods and/or services supplied, or to the accompanying documentation, CTS will be given user rights at no cost by way of a non-exclusive, worldwide and perpetual license.

2. All intellectual property rights resulting from the goods or services supplied by the supplier, its employees or any third parties engaged by the supplier in the performance of the contract, will become the property of CTS.

3. The supplier, when requested by CTS, is required to do whatever is necessary to obtain or establish the abovementioned rights.

4. The supplier shall warrant that the supply of goods and/or services will not breach any intellectual property rights owned by third parties. The supplier will indemnify CTS against all (possible) claims from third parties that are based on any (alleged) breach of such rights and will reimburse CTS for all losses suffered by CTS as a result.

5. All drawings, specifications, models, molds, stamps, samples, software, templates, dies, calibers, etc. hereinafter referred to as: “items”, as well as brands, know-how and patents belonging to CTS, are and remain the property of CTS, at any rate no rights will be transferred in this regard.

10. Provision of information and confidentiality

1. The supplier will make available to CTS all information relating to the goods and/or services supplied, to the extent that this information may be relevant for CTS. In the event of the use of US technology in a supply subject to US Export Administration Rules, the supplier is required to inform CTS of this in accordance with the relevant stipulations.

2. The supplier is prohibited from disclosing to third parties and any employees not involved in the supply any confidential information that it has obtained in the context of a contract entered into, or to be entered into, with CTS and that is not already in the public domain, unless CTS has given prior approval for doing so.

3. Without the prior written approval from CTS, the supplier is not allowed to use CTS’s name and/or logo in advertising or in any other commercial statements.

4. In the event of a breach of the prohibitions referred to in subsections 2 and 3, the supplier will forfeit a penalty of € 75,000.00, payable immediately, as well as a penalty of € 2,500.00 per day or part thereof that the breach continues, without prejudice to any other rights that CTS may be entitled to by law, including the right to cancel the contract and/or demand performance and/or claim damages.

11. Liability

1. The supplier will be liable for all losses suffered by CTS as a result of faulty products and/or faulty design and/or failure to meet its obligations under the contract, including any acts or omissions by the supplier or its employees or sub-contractors involved in the supply of the goods and/or services, as well as all losses that by law, custom or common opinion are for the account and/or at the risk of the supplier.

2. The supplier indemnifies and holds CTS harmless against any claims by third parties, relating to losses caused by the supplier or which - in accordance with what is stipulated under sub-section 1 – is for its account or at its risk, and for damages, claims and costs that result from the supply or the performance of the services by a third party acting as a subcontractor, and against any claim related to deliveries, based on product liability legislation applicable in the

Netherlands.

3. The supplier shall take out and maintain adequate insurance to cover the liabilities referred to in this article. If requested, the supplier shall produce the insurance policy for inspection by CTS. CTS is not obliged to carry out such an inspection.

4. Except in the case of intent or gross negligence, CTS will not be obliged to pay compensation for any losses of any nature whatsoever, caused either directly or indirectly, including losses due to business interruption, damage to goods and/or property, or injury to persons, suffered by either the supplier or by third parties. Under no circumstances will CTS be liable for any consequential losses.

12. Termination of the agreement

1. Without prejudice to its other rights and without any liability, CTS has the right to cancel the contract as a whole or in part without judicial intervention and without further notice of default, if:

a. the supplier has been declared bankrupt, has applied for or been granted a moratorium of payments, goes into liquidation, its operations have been seized or handed over;

b. the supplier, for whatever reason, fails to meet one or more of the obligations that arise from the contract it entered into with CTS;

c. the delivery is rejected after inspection or re-inspection;

d. the supplier offers and/or gives an CTS employee a present or any other gratuity without the written permission from CTS in this regard.

2. In the event of a cancellation of the contract, the supplier's risk associated with the goods already supplied will remain.

3. In the event of the contract being terminated, the goods that have been transferred to the custody of the supplier, must be returned to CTS immediately and at the expense of the supplier. In the event of such termination, CTS is entitled without prior approval, to gain access to the place where the goods are located and to remove them.

4. Apart from the cases referred to in sub-section 1, CTS will be at liberty to terminate the contract with immediate effect if a drastic change of circumstances occurs, as a result of which further performance of the contract cannot in all reasonableness be asked from CTS, in which case CTS is required to pay pro rata compensation to the supplier for any delivered and accepted part of the products or services supplied.

13. Handover, sub-contracting and pledging

1. Without the prior written approval from CTS, the supplier is not authorized to sub-contract any part of the supply of the goods and/or services to third parties, nor to transfer the rights and obligations under the contract either wholly or in part to third parties, or to assign or pledge to third parties the receivables that the supplier is entitled to from CTS under the contract.

2. Should a third party be engaged by the supplier, the latter shall provide CTS, on request, with a copy of the order or the agreement with this third party (not including prices quoted). 

14. Jurisdiction and competent Court

1. Dutch law, with the exclusion of the Vienna Convention on Contracts for the International Sale of Goods, 1980 (CISG), will apply to these terms and conditions and to the agreements between CTS and the supplier.

2. All disputes between CTS and the supplier shall be settled only by the Court in Rotterdam.

15. Location and change conditions

1. These conditions are registered at the Chamber of Commerce in Rotterdam

2. Applicable is always the last registered version or the version valid at the time of the creation of the legal relationship with CTS.