1. Until complete receipt of all payments due from the business relationship, the goods shall remain the property of KRAMPEHAREX. In the event of breach of contract by the CUSTOMER, in particular in the case of late payment, KRAMPEHAREX shall be entitled to take back the goods. The taking back of the goods shall constitute a cancellation of the contract. To the extent that the goods are then utilized by KRAMPEHAREX, the proceeds of disposal – minus appropriate costs of disposal – will be set off against the CUSTOMER’s liabilities.
2. The CUSTOMER shall handle the goods carefully and shall, at his own expense, insure them adequately at replacement value against fire, water, breakage and theft damage.
3. In case of seizures or other actions by third parties, KRAMPEHAREX shall be informed immediately in writing so that a third party motion pursuant to § 771 ZPO (German Code of Civil Procedure) may be filed. In the event the third party is not in a position to reimburse KRAMPEHAREX the judicial and extrajudicial costs of such a motion, the CUSTOMER shall be liable for the loss incurred by KRAMPEHAREX.
4. The CUSTOMER may resell the goods that are subject to the retention of title in the course of regular business; however, he already now assigns all accounts receivable arising from such a resale to KRAMPEHAREX, regardless of whether the goods were resold without or following their processing. Notwithstanding the authority of KRAMPEHAREX to collect the accounts receivable itself, the CUSTOMER shall remain entitled to collect the accounts receivable even after the assignment. However, KRAMPEHAREX undertakes not to collect the accounts receivable for as long as the CUSTOMER complies with his payment obligations arising out of the proceeds collected, is not in default of payment and in particular has not filed a motion for the opening of composition or insolvency proceedings and payments have not been suspended. However, if this is the case, KRAMPEHAREX may demand that the CUSTOMER discloses the assigned accounts receivable and the respective debtors, that he provides all information and relevant documents that are necessary for collection and that he advises the debtors of the assignment.
5. In case the goods are processed by the CUSTOMER, said processing is conducted on behalf of KRAMPEHAREX which shall consequently be deemed to be the manufacturer in accordance with § 950 BGB (German Civil Code) and which acquires the ownership of the intermediate or end product. In the case of processing with other items that do not belong to KRAMPEHAREX, KRAMPEHAREX shall acquire the co-ownership of the new product in proportion of the value of the goods delivered by KRAMPEHAREX to the value of the processed third party items at the time of processing. The items created by the processing shall be subject to the same provisions as the goods delivered under reservation.
6. In case the goods are mixed with other items that do not belong to KRAMPEHAREX, KRAMPEHAREX shall acquire the co-ownership of the new product in proportion of the value of the goods delivered by KRAMPEHAREX to the value of the mixed third party items at the time of mixing. If the goods are mixed in a way so that the item of the CUSTOMER is to be regarded as the main item, it is agreed that the CUSTOMER shall assign the co-ownership on a pro-rata basis to KRAMPEHAREX. The CUSTOMER shall keep the so-created co-ownership or sole ownership for KRAMPEHAREX.
7. KRAMPEHAREX undertakes to release the collateral it is entitled to on demand of the CUSTOMER insofar as the realizable value of the collateral exceeds the accounts receivable that are to be secured by more than 20%. The selection of the collateral to be released shall be incumbent on KRAMPEHAREX.