General Engagement Terms
for Wirtschaftsprüfer and Wirtschaftsprüfungsgesellschaften
[German Public Auditors and Public Audit Firms]

as of January 1, 2017

1. Scope of application

(1) These engagement terms apply to contracts between German Public Auditors (Wirtschaftsprüfer) of GermanPublic Audit Firms (Wirtschaftsprüfungsgesellschaften) – hereinafter collectively referred to as “German PublicAuditors” – and their engaging parties for assurance services, tax advisory services, advice on business mattersand other engagements except as otherwise agreed in writing or prescribed by a mandatory rule.(2) Thirdparties may derive claims from contracts between German Public Auditors and engaging parties only when thisis expressly agreed or results from mandatory rules prescribed by law. In relation to such claims, theseengagement terms also apply to these third parties.

(2) Dritte können nur dann Ansprüche aus dem Vertrag zwischen Wirtschaftsprüfer und Auftraggeber herleiten, wenn dies ausdrücklich vereinbart ist oder sich aus zwingenden gesetzlichen Regelungen ergibt. Im Hinblick auf solche Ansprüche gelten diese Auftragsbedingungen auch diesen Dritten gegenüber.

2. Scope and execution of the engagement

(1) Object of the engagement is the agreed service – not a particular economic result. The engagement will beperformed in accordance with the German Principles of Proper Professional Conduct (Grundsätzeordnungsmäßiger Berufsausübung). The German Public Auditor does not assume any management functionsin connection with his services. The German Public Auditor is not responsible for the use or implementation ofthe results of his services. The German Public Auditor is entitled to make use of competent persons to conductthe engagement.

(2) Except for assurance engagements (betriebswirtschaftliche Prüfungen), the consideration of foreign lawrequires an express written agreement.

(3) If circumstances or the legal situation change subsequent to the release of the final professional statement,the German Public Auditor is not obligated to refer the engaging party to changes or any consequencesresulting therefrom.

3. The obligations of the engaging party to cooperate

the engagement are provided to the German Public Auditor on a timely basis, and that he is informed of allevents and circumstances that may be of significance to the performance of the engagement. This also appliesto those documents and further information, events and circumstances that first become known during theGerman Public Auditor’s work. The engaging party will also designate suitable persons to provide information.

(2) Upon the request of the German Public Auditor, the engaging party shall confirm the completeness of thedocuments and further information provided as well as the explanations and statements, in a written statementdrafted by the German Public Auditor.

4. Ensuring independence

PublicAuditor’s staff. This applies throughout the term of the engagement, and in particular to offers of employment orto assume an executive or non-executive role, and to offers to accept engagements on their own behalf.

(2) Were the performance of the engagement to impair the independence of the German Public Auditor, ofrelated firms, firms within his network, or such firms associated with him, to which the independence requirements apply in the same way as to the German Public Auditor in other engagement relationships, theGerman Public Auditor is entitled to terminate the engagement for good cause.

5. Reporting and oral information

To the extent that the German Public Auditor is required to present results in writing as part of the work inexecuting the engagement, only that written work is authoritative. Drafts are not-binding. Except as otherwiseagreed, oral statements and explanations by the German Public Auditor are binding only when they areconfirmed in writing. Statements and information of the German Public Auditor outside of the engagement arealways non-binding.

6. Distribution of a German Public Auditor’s professional statement

(1) The distribution to a third party of professional statements of the German Public Auditor (results of work orextracts of the results of work whether in draft or in a final version) or information about the German PublicAuditor acting for the engaging party requires the German Public Auditor’s written consent, unless the engagingparty is obligated to distribute or inform due to law or a regulatory requirement.
(2) The use by the engaging party for promotional purposes of the German Public Auditor’s professionalstatements and of information about the German Public Auditor acting for the engaging party is prohibited.

7. Deficiency rectification

(1) In case there are any deficiencies, the engaging party is entitled to specific subsequent performance by theGerman Public Auditor. The engaging party may reduce the fees or cancel the contract for failure of suchsubsequent performance, for subsequent non-performance or unjustified refusal to perform subsequently, or forunconscionability or impossibility of subsequent performance. If the engagement was not commissioned by aconsumer, the engaging party may only cancel the contract due to a deficiency if the service rendered is notrelevant to him due to failure of subsequent performance, to subsequent non-performance, to unconscionabilityor impossibility of subsequent performance No. 9 applies to the extent that further claims for damages exist.

(2) The engaging party must assert a claim for the rectification of deficiencies in writing (Textform) [Translator’sNote: The German term “Textform” means in written form, but without requiring a signature] without delay.Claims pursuant to paragraph 1 not arising from an intentional act expire after one year subsequent to thecommencement of the time limit under the statute of limitations.

(3) Apparent deficiencies, such as clerical errors, arithmetical errors and deficiencies associated withtechnicalities contained in a German Public Auditor’s professional statement (long-form reports, expert opinionsetc.) may be corrected – also versus third parties – by the German Public Auditor at any time. Misstatementswhich may call into question the results contained in a German Public Auditor’s professional statement entitlethe German Public Auditor to withdraw such statement – also versus third parties. In such cases the GermanPublic Auditor should first hear the engaging party, if practicable.

8. Confidentiality towards third parties, and data protection

(1) Pursuant to the law (§ [Article] 323 Abs 1 [paragraph 1] HGB [German Commercial Code:Handelsgesetzbuch], § 43 WPO [German Law regulating the profession of Wirtschaftsprüfer:Wirtschaftsprüferordnung], § 203 StGB [German Criminal Code: Strafgesetzbuch]) the German Public Auditor isobligated to maintain confidentiality regarding facts and circumstances confided to him or of which he becomesaware in the course of his professional work, unless the engaging party releases him from this confidentialityobligation.

(2) When processing personal data, the German Public Auditor will observe national and European legalprovisions on data protection.

9. Liability

limitationsof liability, in particular the limitation of liability pursuant to § 323 Abs. 2 HGB, apply.

(2) Insofar neither a statutory limitation of liability is applicable, nor an individual contractual limitation of liabilityexists, the liability of the German Public Auditor for claims for damages of any other kind, except for damagesresulting from injury to life, body or health as well as for damages that constitute a duty of replacement by aproducer pursuant to § 1ProdHaftG [German Product Liability Act: Produkthaftungsgesetz], for an individualcase of damages caused by negligence is limited to € 4 million pursuant to § 54 a Abs. 1 Nr. 2 WPO.

(3) The German Public Auditor is entitled to invoke demurs and defences based on the contractual relationshipwith the engaging party also towards third parties.

(4) When multiple claimants assert a claim for damages arising from an existing contractual relationship with theGerman Public Auditor due to the German Public auditor’s negligent breach of duty, the maximum amountstipulated in paragraph 2 applies to the respective claims of all claimants collectively.

(5) An individual case of damages within the meaning of paragraph 2 also exists in relation to a uniform damagearising from a number of breaches of duty. The individual case of damages encompasses all consequencesfrom a breach of duty regardless of whether the damages occurred in one year or in a number of successiveyears. In this case, multiple acts or omissions based on the same source of error or on a source of error of anequivalent nature are deemed to be a single breach of duty if the matters in question are legally or economicallyconnected to one another. In this event the claim against the German Public Auditor is limited to € 5 million. Thelimitation to the fivefold of the minimum amount insured does not apply to compulsory audits required by law.

(6) A claim for damages expires if a suit is not filed within six months subsequent to the written refusal ofacceptance of the indemnity and the engaging party has been informed of this consequence. This does notapply to claims for damages resulting from scienter, a culpable injury to life, body or health as well as fordamages that constitute a liability for replacement by a producer pursuant to § 1 ProdHaftG. The right to invokea plea of the statute of limitations remains unaffected.

10. Supplementary provisions for audit engagements

(1) If the engaging party subsequently amends the financial statements or management report audited by aGerman Public Auditor and accompanied by an auditor’s report, he may no longer use this auditor’s report.

If the German Public Auditor has not issued an auditor’s report, a reference to the audit conducted by theGerman Public Auditor in the management report or any other public reference is permitted only with theGerman Public Auditor’s written consent and with a wording authorized by him.

(2) If the German Public Auditor revokes the auditor’s report, it may no longer be used. If the engaging partyhas already made use of the auditor’s report, then upon the request of the German Public Auditor he must givenotification of the revocation.

(3) The engaging party has a right to five official copies of the report. Additional official copies will be chargedseparately.

11. Supplementary provisions for assistance in tax matters

(1) When advising on an individual tax issue as well as when providing ongoing tax advice, the German PublicAuditor is entitled to use as a correct and complete basis the facts provided by the engaging party – especiallynumerical disclosures; this also applies to bookkeeping engagements. Nevertheless, he is obligated to indicateto the engaging party any errors he has identified.

(2) The tax advisory engagement does not encompass procedures required to observe deadlines, unless theGerman Public Auditor has explicitly accepted a corresponding engagement. In this case the engaging partymust provide the German Public Auditor with all documents required to observe deadlines – in particular taxassessments – on such a timely basis that the German Public Auditor has an appropriate lead time.

(3) Except as agreed otherwise in writing, ongoing tax advice encompasses the following work during thecontract period:
a) preparation of annual tax returns for income tax, corporate tax and business tax, as well as wealth taxreturns, namely on the basis of the annual financial statements and on other schedules and evidencedocuments required for the taxation, to be provided by the engaging party
b) examination of tax assessments in relation to the taxes referred to in (a)
c) negotiations with tax authorities in connection with the returns and assessments mentioned in (a) and (b)
d) support in tax audits and evaluation of the results of tax audits with respect to the taxes referred to in (a)
e) participation in petition or protest and appeal procedures with respect to the taxes mentioned in (a)
In the aforementioned tasks the German Public Auditor takes into account material published legal decisionsand administrative interpretations.

(4) If the German Public Auditor receives a fixed fee for ongoing tax advice, the work mentioned underparagraph 3 (d) and (e) is to be remunerated separately, except as agreed otherwise in writing.

(5) Insofar the German Public Auditor is also a German Tax Advisor and the German Tax Advice RemunerationRegulation (Steuerberatungsvergütungsverordnung) is to be applied to calculate the remuneration, a greater orlesser remuneration than the legal default remuneration can be agreed in writing (Textform).

(6) Work relating to special individual issues for income tax, corporate tax, business tax, valuation assessmentsfor property units, wealth tax, as well as all issues in relation to sales tax, payroll tax, other taxes and duesrequires a separate engagement. This also applies to:
a) work on non-recurring tax matters, e.g. in the field of estate tax, capital transactions tax, and real estate salestax;
b) support and representation in proceedings before tax and administrative courts and in criminal tax matters;
c) advisory work and work related to expert opinions in connection with changes in legal form and other re-organizations, capital increases and reductions, insolvency related business reorganizations, admission andretirement of owners, sale of a business, liquidations and the like, and
d) support in complying with disclosure and documentation obligations.

(7) To the extent that the preparation of the annual sales tax return is undertaken as additional work, thisincludes neither the review of any special accounting prerequisites nor the issue as to whether all potentialsales tax allowances have been identified. No guarantee is given for the complete compilation of documents toclaim the input tax credit.

12. Electronic communication

Die Kommunikation zwischen dem Wirtschaftsprüfer und dem Auftraggeber kann auch per E-Mail erfolgen. Soweit der Auftraggeber eine Kommunikation per E-Mail nicht wünscht oder besondere Sicherheitsanforderungen stellt, wie etwa die Verschlüsselung von E-Mails, wird der Auftraggeber den Wirtschaftsprüfer entsprechen in Textform informieren.Communication between the German Public Auditor and the engaging party may be via e-mail. In the event thatthe engaging party does not wish to communicate via e-mail or sets special security requirements, such as theencryption of e-mails, the engaging party will inform the German Public Auditor in writing (Textform) accordingly.

13. Remuneration

(1) In addition to his claims for fees, the German Public Auditor is entitled to claim reimbursement of hisexpenses; sales tax will be billed additionally. He may claim appropriate advances on remuneration andreimbursement of expenses and may make the delivery of his services dependent upon the completesatisfaction of his claims. Multiple engaging parties are jointly and severally liable.

(2) If the engaging party is not a consumer, then a set-off against the German Public Auditor’s claims forremuneration and reimbursement of expenses is admissible only for undisputed claims or claims determined tobe legally binding.

14. Dispute Settlement

The German Public Auditor is not prepared to participate in dispute settlement procedures before a consumerarbitration board (Verbraucherschlichtungsstelle) within the meaning of § 2 of the German Act on ConsumerDispute Settlements (Verbraucherstreitbeilegungsgesetz).

15. Applicable law

The contract, the performance of the services and all claims resulting therefrom are exclusively governed byGerman law.