General Terms of Purchasing The Active Spring Company Ltd

The following general Terms of Purchasing shall apply to any delivery of products, components or other goods and thereto possibly related services (hereinafter called “Products”) to The Active Spring Company Ltd, hereinafter called “The Buyer”, from any given supplier, hereinafter called “The Seller”.

These General Terms of Purchasing shall be mutually binding for the Seller and the Buyer unless otherwise explicitly agreed. The Buyer shall not be bound by conditions made by the Seller deviating from these General Terms of Purchasing unless such conditions have been agreed in writing between the Buyer and the Seller. Neither shall the Buyer be bound by conditions made by the Seller even though the Buyer has not objected to such conditions. Acceptance of Products by the Buyer cannot be interpreted as an implicit acceptance on the part of the Buyer of a deviation from the terms of delivery made by the Seller.

1. Incoterms

“International rules on uniform interpretation of trade terms 2000” (INCOTERMS 2000) from the International Chamber of Commerce (ICC) shall apply to the terms and conditions used in these general Terms of Purchasing.

2. Order Confirmation

Offers from the Seller shall be free of charge and not binding upon the Buyer. The Seller shall deliver Products in conformity with the order sent by the Buyer and accepted by the Seller or in conformity with the offer sent by the Seller and accepted by the Buyer. By confirming or executing orders, the Seller accepts the Buyer’s General Terms of Purchasing.

Orders from the Buyer and order confirmations from the Seller shall be in writing. Where there is no order in writing and/or an order confirmation in writing, the Buyer shall have the right to return goods received from the Seller. Return costs shall be paid for by the Seller.

3. Delivery and passing of the risk

Delivery shall be effected at the place and time specified in the order or in the order confirmation. Where nothing is otherwise agreed in order or order confirmation delivery shall be effected DDP at the destination specified by the Buyer. Where shipping instructions specified by the Buyer are not observed, the Seller shall be liable for any additional costs and any resulting loss.

All deliveries of Products shall be accompanied by a consignment note stating: the Buyer’s code and order numbers, date of order and the gross and net weights of the consignment. All invoices and other correspondence shall be duly signed and state the Buyers code and order numbers, date of order and the gross and net weights of the consignment where relevant depending on the type of delivery. Invoices shall be made in one copy unless any other form of collection of payment is agreed, such as e.g. use of e-mail and the like. The packing shall clearly state the recipient’s address and order reference.

In case of strikes, lockouts, earthquakes or any other event beyond the control of the Buyer causing lack of market potential for the Buyer’s Products, the Buyer reserves the right to postpone the receipt of the delivery for up to 3 months or wholly or partially to cancel the agreement made. As a result of such postponement or cancellation, the Buyer shall not be under any obligation to pay the Seller any compensation for any loss apart from irretrievable production costs paid by the Seller in relation to the order before the notification of the Buyer’s postponement or cancellation came to the knowledge of the Seller.

4. Delay and indication of quantity

The time of delivery specified by the buyer must be observed. Delayed delivery shall entitle the Buyer to cancel the order and claim compensation, and in that case the Buyer shall not be under any obligation to pay the Seller for work already done or goods partly delivered on the order.

If the Seller finds that he cannot deliver on time, or if delay on his part is to be considered probable, the Seller shall without delay notify the Buyer thereof in writing and at the same time state the reason for the delay and the time at which delivery is expected to be effected. If the Seller does not make such a notification, he shall, irrespective of the terms and conditions stated below, compensate the Buyer for losses and costs incurred by the Buyer.

If the Seller does not deliver the Products on time due to delayed notification, and if the Buyer does not cancel the order, the Buyer shall be entitled to liquidated damages as from the day upon which delivery should have been effected. The liquidated damages amount to 2.0% of the total order sum per week or fraction of a week of the delay. The liquidated damages cannot amount to more than 10% of the total order sum. The liquidated damages shall fall due for payment on demand in writing from the Buyer, but not before the Product has been delivered in full or alternatively at the time at which the Buyer cancels the agreement pursuant to the above. Part deliveries shall not exempt the Seller from liability pursuant to this provision.

Too large quantities or partial delivery will not be accepted and shall give the Buyer the same rights as does delay. In case of too small quantities, the whole delivery shall be considered delayed. Decisions in this respect are solely at the discretion of the Buyer’s quality control department.

5. Terms of Payment

The Buyer shall pay within one month plus 60 days from date of invoice. The credit granted by the Seller shall appear from the invoice sent.

6. Conditional Sale

The Buyer will not accept any conditional sale on the part of the Seller.

7. Drawings, descriptions, tools, etc.

Drawings, rough designs, technical information, prototypes, models and other information are always to be considered confidential and those which the Buyer has handed over to the Seller shall remain the property of the Buyer and shall be treated confidentially. The Seller shall mark all such information with the Buyer’s name.
Unless otherwise agreed in writing, all special tools and special moulds produced for deliveries to the Buyer (no matter who has paid for the tools or moulds) shall be maintained without the expenses to the Buyer and be insured by the Seller to the full replacement value, and such tools and moulds shall only be used for deliveries to the Buyer. If the Buyer shall wholly or partially pay costs for the production of tools, moulds or models such costs shall not be paid until the Buyer has approved samples thereof. Tools, moulds or models wholly or partly paid for by the Buyer shall be the property of the Buyer. The Seller shall mark any such equipment with the Buyer’s name.

The above information, tools, moulds and models must not, without the consent of the Buyer, be used for purposes other than those of the Buyer and that is why they must not, without the consent of the Buyer, be copied, reproduced, transferred to third parties or be used for deliveries to anyone other than the Buyer. Upon request the Seller shall return all material of any kind handed over by or produced for the Buyer.

In case the Seller makes use of sub-suppliers, the above information can, with the consent of the Buyer, be handed over to such sub-suppliers. In such cases, the Seller shall ensure that the sub-suppliers observe this point 7 in full.

If the Products wholly or partially consist of software developed for the Buyer, the Buyer shall acquire all rights to such software and to any accompanying source and object codes. If the Products contain software not specifically developed for the Buyer, the Buyer shall acquire a nonexclusive, royalty-free and geographically unlimited licence for use of this software. The Seller shall be under an obligation to transfer to the Buyer all necessary information and source code material etc. which are necessary for the Buyer’s use of the intellectual property rights in question. The Seller shall be under such obligation for at least 5 years from the delivery of Products to the Buyer to be able to service and maintain all material related to the intellectual property rights in question.

8. Rights of Access

The Seller and any sub-supplier shall allow the Buyer, their Customers and any relevant Authorities access to their premises (wheresoever situated), quality control records and any other relevant documents for the purposes of traceability.

All such records shall be retained by the Seller and any sub-supplier for a minimum period of 12 years.

9. The Product’s violation of third-party rights.

Upon the Buyer’s demand, the Seller shall on his own account defend the Buyer against any claim made against the Buyer by third parties as a result of the Product’s alleged violation of such third parties’ patents, copyrights or similar intellectual property rights.

The Seller shall indemnify the Buyer for any loss and all costs incurred by the Buyer as a result of the violation or the alleged violation.
The Seller shall on behalf of the Buyer and/or the Seller acquire the right to continuous use of the Products, replacement or modification of the Products so that the Products no longer violate the rights of third parties. If this is not possible, the Seller shall credit the Buyer with the Products delivered and accept all returned Products.

10. Alterations & Quality requirements

The Seller cannot without reasonable notice and without prior written acceptance from the Buyer make alterations to their Products for delivery to the Buyer even though this happens without altering agreed technical specifications.

To comply with the Company’s Quality Standard, The Seller shall notify the Buyer in the event of any changes relating to supply, the identification and revision status of specifications, drawings, process requirements, inspection/verification instructions and other technical data.

The Seller shall:

Notify The Buyer of Nonconforming product.
Obtain The Buyer’s approval for nonconforming product disposition.
Notify The Buyer of changes in product and/or process, changes of the Seller’s suppliers, changes of manufacturing facility location and where required, obtain The Buyer’s approval.
Flow down to the Seller’s supply chain the applicable requirements, including customer requirements.

IN PARTICULAR for those identified as critical the supplier must ensure adequacy of:

a. the processes, products, and services to be provided including the identification of relevant technical data (e.g., specifications, drawings, process requirements, work instructions)

b. the approval of:
1. products and services;
2. methods, processes, and equipment;
3. the release of products and services;

c. competence, including any required qualification of persons;
d. the external providers’ interactions with the organization;
e. control and monitoring of the external providers’ performance to be applied by the organization;
f. verification or validation activities that the organization, or its customer, intends to perform at the external providers’ premises;

11. Prevention of Counterfeit Products.

To prevent the use of counterfeit products the SELLER must:

plan, implement, and control processes, appropriate to the organization and the product, for the prevention of counterfeit or suspected counterfeit parts use and their inclusion in product(s) delivered to the Buyer.

NOTE: Counterfeit part prevention processes should consider:
− training of appropriate persons in the awareness and prevention of counterfeit parts;
− application of a parts obsolescence monitoring program;
− controls for acquiring externally provided product from original or authorized manufacturers, authorized distributors, or other approved sources;
− requirements for assuring traceability of parts and components to their original or authorized manufacturers;
− verification and test methodologies to detect counterfeit parts;
− monitoring of counterfeit parts reporting from external sources;
− quarantine and reporting of suspect or detected counterfeit parts.

− notify the Buyer of changes to processes, products, or services, including changes of their external providers or location of manufacture, and obtain the organization’s approval;

− provide test specimens for design approval, inspection/verification, investigation, or auditing;
− retain documented information, including retention periods and disposition requirements;

In addition the Seller must ensure that persons are aware of:
− their contribution to product or service conformity; traceability of product to and
− their contribution to product safety;
− the importance of ethical behaviour.

12. Guarantee.

For 24 months from delivery, the Seller shall guarantee that the Products delivered live up to agreed demands and are not defective or faulty due to production, construction or material defects deteriorating the Products’ suitability for normal or agreed use. Upon demand from the Buyer and at the Buyer’s sole discretion, the Seller shall credit, repair or deliver goods in replacement of defective Products without any cost to the Buyer. Products found defective by the Buyer and not wanted repaired by the Buyer shall be returned upon the Seller’s wish and at the Seller’s expense.
If the Buyer has not wanted replacement delivery of the defective Products, the Buyer can invoice the Seller for equivalent amounts. Such invoice shall at the same time include the cost of unloading and reloading, freight, customs duties (to the extent that these are not refunded by the customs authorities), possible taxes, insurance and clearance and all other possible losses suffered by the Buyer as a result of defective Products.

Decisive for the Buyer’s right of complaint is whether the defect has arisen within the guarantee period of 24 months and not the time of the Buyer’s becoming aware of the defect – nor the time of the Buyer’s complaint.
Moreover, the Seller renounces the right to protest due to the delay of the complaint.

The Seller shall be responsible for the fact that the Products delivered live up to quality and security requirements and other valid rules not only in the country of production but also in the country to which the Products are delivered or expected to be used if the place of use has been specified by the Buyer. In the case of disagreements between such standards, the standards used at the place of delivery shall apply.

13. Product Regulatory Compliance.

The Seller shall provide and maintain on file a Manufacturers’ Declaration of Conformity attesting to the products’ compliance with EU RoHS and REACH environmental directives. This Declaration shall be made available within three months of the effective date of the Contract. In addition to the above, the Seller must also provide objective evidence of proof of conformance to applicable product environmental regulations such as EU RoHS, China RoHS, REACH etc, and as specifically notified by the Buyer within fourteen days (14) days of receipt of the request from the Buyer. The Seller will provide contact information for product environmental inquiries.

14 Product Liability.

The Seller shall guarantee that the Products delivered are not defective or faulty nor have properties that can cause product liability damages. The Seller shall indemnify the Buyer for any product liability and loss which can wholly or partially be ascribed to damages or obvious risk of such a result of defective or faulty Products delivered or properties in the same. The Seller shall be under an obligation to be summoned by the court or court of arbitration hearing claims for compensation raised against the Buyer due to damage claimed to have been caused by the Products.

The Seller shall be under an obligation to take out and maintain product liability insurance with a cover considered usual considering the Seller’s business and turnover. Upon the Buyer’s demand, the Seller shall produce evidence of such product liability.

15 The Seller’s liability during stays at the Buyer’s property.

If, as part of an agreement with the Buyer, the Seller’s employees are present at the Buyer’s property, the Seller and their staff shall make themselves familiar with and observe the rules and procedures on the environment and safety laid down by the Buyer. The Seller shall indemnify the Buyer for any damage to the Buyer’s property and their staff arising as a result of the Seller’s employees’ negligent or wilful behaviour.

16 Partial invalidity.

If one or more of the terms and conditions in these General Terms of Purchasing are deemed invalid, illegal or inoperable, none of the other terms and conditions’ validity, legality or operability shall be affected or deteriorated.

17 Disputes.

Disputes arising under these General Terms of Purchasing and underlying agreement shall be settled pursuant to the law in the Buyer’s country, however, always excluding CISG and provisions on the choice of law. Disputes of any kind arising in connection with the delivery shall be settled in the courts of the Buyer’s country. Disputes shall be heard at the Buyer’s venue.

If the Buyer so requests, disputes shall be finally settled by Arbitration. In that case, the procedure shall be pursuant to the rules and regulations of Arbitration laid down by the International Chamber of Commerce (ICC). Meetings shall be held at a place specified by the Buyer and the language of the proceedings shall be in English unless otherwise agreed between the parties.