General Conditions of Purchase of Würth Line China Verson A

WLC-F-1.2-04 Version A

I. Scope

(1) The present General Conditions of Purchase ("conditions of purchase") apply to all business transactions with business partners and suppliers of Würth ("supplier") concerning the delivery of movable property ("goods" or "product(s)") and/or services, regardless of whether a supplier directly provides these goods and/or services or purchases them from third parties.

(2) “Würth” hereunder refers to any of the following legal entities or branches under Würth Line China:

• Würth (China) Co., Ltd,

• Würth (China) Co., Ltd, Shenyang Branch

• Arvid Nilsson Logistics & Trade (Shanghai) Co., Ltd,

• Arvid Nilsson Logistics & Trade (Shanghai) Co., Ltd, Zhejiang Branch

• Würth (Chongqing) Hardware & Tools Co., Ltd,

• Würth (Chongqing) Hardware & Tools Co., Ltd. Chengdu Branch

• Würth (Guangzhou) International Trading Co., Ltd,

• Würth (Guangzhou) International Trading Co., Ltd. Guangzhou Branch

• Würth (Guangzhou) International Trading Co., Ltd. Shenzhen branch

• Würth (Tianjin) International Trading Co., Ltd,

• Würth (Tianjin) International Trading Co., Ltd. Wuqing Branch

• Würth (Tianjin) International Trading Co., Ltd. Beijing Branch

• Würth (Tianjin) International Trading Co., Ltd. Qingdao Branch

• Würth (Shenyang) Hardware & Tools Co., Ltd,

• Any company (legal entity or branch) affiliated to the above

(3) These conditions of purchase, as in effect at any given time, shall apply as framework agreement to any future contracts on the sale and/or the delivery of movable property and/or services with the same supplier without Würth having to expressly refer to these condi-tions of purchase in each individual case.

(4) The present conditions of purchase shall apply exclusively. Any conflicting, diverging or supplementary terms and conditions of the supplier are excluded, unless the extent of their incorporation into a contract is expressly defined and agreed to by Würth in writing. This reservation of consent shall apply even if Würth accepts deliveries from the supplier without reservation while being aware of the supplier's terms and conditions.

(5) Separate, individual agreements concluded with the supplier (including any supplements, changes and amendments) shall take precedence over the provisions in these conditions of purchase. However, these individual agreements require written form and/or Würth's written confirmation to be effective.

(6) Any legally relevant representations and notices to be made to Würth by the supplier after conclusion of the contract (incl. deadlines, reminders, rescission of a contract) need to be made in writing to be effective.

(7) References to statutory provisions are for clarification purposes only. Even without such references, legal regulations and statutory provisions generally apply without limitation unless they are expressly changed or excluded in these conditions of purchase.

(8) These conditions of purchase are available in Chinese and in English. In the event of contradictions or lack of clarity, the Chinese version shall prevail.

II. Conclusion of a contract

(1) Orders by Würth may not be considered placed unless submitted or confirmed in writing. Any deliveries made without written order will not be accepted. Würth's failure to respond to offers, inquiries or other declarations of the supplier may only be deemed consent if this has been expressly agreed in writing in advance. Supplier shall point out obvious mistakes (e.g. typing or spelling errors) and/or incomplete orders or missing order documents to Würth without delay so they can be revised or completed. Otherwise, the contract shall not take effect.

(2) A written order confirmation by the supplier is generally not required by Würth, unless the supplier needs to change the order in terms of quantities, prices or delivery dates. However, if expressly requested by Würth, supplier shall confirm the order in writing within a period of one (1) week while process the order without reservation and without delay.

Any delayed or changed order acceptance shall be deemed a new offer requiring ac-ceptance by Würth. The same shall apply to any acceptance of an extended or limited or otherwise changed order.

(3) Supplier shall provide all offers, designs, drafts and samples free of charge. At Würth's request, supplier shall take these back at its own expense and without delay.

III. Delivery times and delays in delivery

(1) The delivery date given by Würth in the order is binding. In the event the supplier can reasonably foresee that the agreed delivery times cannot be met, the supplier shall notify Würth in writing without delay of the reasons for and the length of the expected delay, how-ever this does not release the supplier from the liability for late delivery. Before the agreed delivery date, partial deliveries or early deliveries may only be made with the prior written consent of Würth.

(2) Should the supplier fail to render the agreed performance or fail to do so within the agreed delivery time, or should supplier default on the delivery, Würth's rights - especially those to rescission of the contract and damages - shall be subject to statutory requirements. However, nothing in this paragraph shall exclude or in any way limit the provisions in para-graph 3.

(3) In the event the supplier defaults on a delivery, Würth may claim a contractual penalty in the amount of RMB 500 per delayed customer delivery and delayed article. In this respect, the supplier waives the defense of treating consecutive violations of this provision as one violation for the purpose of this provision. Würth may claim this contractual penalty in addi-tion to actual performance of the contract as minimum damages in accordance with statutory requirements; Würth reserves the right to claim additional damages. In the event Würth accepts the delayed performance, the contractual penalty will be claimed upon final payment at the latest.

(4) Würth will continue to claim full delivery, unless the supplier fully compensates Würth for the delivery at Würth's request. Acceptance of the delayed delivery shall not be construed as a waiver of any damages or contractual penalty claims.

IV. Delivery, transfer of risk, packing

(1) Unless agreed otherwise in individual cases, all deliveries shall be made free of charge (DDP named place of destination acc. to INCOTERMS 2010) to the destination named in the order. Unless agreed otherwise, all deliveries shall be made to Würth's office as specified on the order. The place of destination is also the place of performance.

(2) The risk of accidental loss of or accidental damage to the goods or services passes to Würth when the goods or services are delivered at the place of performance. In case ac-ceptance of the goods or services is agreed, the risk passes upon acceptance.

(3) The supplier shall solely be responsible for the transportation, packing and packaging of the Goods. The Goods shall be packed with protective measures, such that packing shall be suitable for long-distance transportation, in accordance with applicable law and well-protected against any kind of influence such as corrosion, dampness, moisture, freezing, shock, and rust so as to ensure that the Goods will safely arrive at the destination without any damage. No additional charges for packing and packaging will be allowed unless specifi-cally agreed in writing. The supplier shall be liable for any corrosion, damage and/or loss caused by inadequate or improper packing. The supplier shall label each package with the corresponding order number. The supplier shall prepare an itemized packing list bearing the order number, description of items, part number, and quantity shipped for each package. One copy of the packing list shall be placed in the shipping container and one copy shall accompany the supplier’s invoice. No values are allowed to be shown on the packing list.

V. Duties to inform, subcontractors

(1) The supplier shall inform Würth in writing of any changes to manufacturing processes, changes in materials or upstream deliveries of parts for products or services, changes in manufacturing locations as well as of changes to processes or facilities for the testing of parts or any other quality assurance measures in good time. To the extent necessary, Würth may examine whether the above changes have a negative effect on the product. Upon request, the supplier shall provide all documents required for such an examination and allow for audits to the extent required. If the change fails to pass the examination/audit, Würth may, at its discre-tion, to terminate the contract(s)/purchase order(s) with the supplier.

(2) Würth must be notified in writing of the use of subcontractors, freelance staff, upstream suppliers and other third parties ("authorized agents") who are not actual employees of the supplier in the provision of the agreed goods or services. The supplier shall ensure in its contractual relationships with authorized agents that all goods and services are provided fully and in due form, the due and timely provision of goods and services can be monitored through appropriate documentation as well as regular audits by Würth and that all obliga-tions arising under the contract with Würth also apply to the contractual relationship with the authorized agent.

(3) Authorized agents shall be considered legal representatives of the supplier within the meaning of the PRC laws. Losses, delays, interruptions, insufficient performance or any other defects or errors in the deliveries and services of the authorized agents, regardless of the cause of these losses, shall not release the supplier from its obligations under the contract concluded with Würth.

(4) In the event the supplier or one of its authorized agents has to provide services on the premises of Würth, the supplier shall ensure the authorized agents have signed the external company agreement presented by Würth before provision of the services and that this exter-nal company agreement as well as all other provisions contained in Würth's plant regulations are observed fully by the persons concerned.

VI. Prices, VAT Invoices, payment terms, set-off and retention

(1) The price shown in the order is binding. All prices are inclusive of VAT and any and all applicable taxes even if VAT and other tax is not shown separately. This also applies to any additional services performed by supplier.

(2) Unless otherwise agreed in individual cases, the price shall include all services and addi-tional services provided by the supplier as well as all incidental expenses (e.g. appropriate packing, customs duties, import charges, transport costs including any transport and liability insurances).

(3) The original VAT invoice shall be submitted to Würth including the invoice number, order number, quantity, price and other order details (including, but not limited to, the Würth article numbers). Invoices shall be sent separately from goods deliveries.

(4) Payments shall be made in accordance with the agreed payment terms. Payments by bank transfer shall be considered made in due time provided the transfer order by Würth is re-ceived by Würth's bank before expiry of the payment term. Würth will not be held responsible for delays caused by the banks involved in the payment process. Payments are only made after receipt of a proper and correct VAT invoice.

(5) Würth may exercise its legal rights of set-off and retention as well as the right to refuse performance in accordance with the PRC laws if the supplier fails to render the agreed con-sideration. Würth's rights include, but are not limited to, the right to refuse payment, provided Würth still has outstanding claims against the supplier resulting from incomplete or defective goods or services.

(6) The supplier may only claim a set-off or exercise its right of retention to the extent that its claim is uncontested or has become res judicata.

VII. Retention of title and provision of materials

(1) Title to the goods shall pass to Würth upon delivery regardless of whether the price has already been paid. However, in the event Würth accepts an offer of the supplier subject to full payment of the agreed price in individual cases, title to the goods shall pass upon full pay-ment of the goods delivered. Any extended reservation of title on the part of the supplier is hereby excluded.

(2) The supplier processes, blends or combines materials provided by Würth on behalf of Würth. Both parties agree that Würth acquires joint ownership of the new products created proportionate to the value of the materials provided Würth compared to the total value of the new products. Supplier shall store these new products for Würth until delivery.

VIII. Confidentiality, documentation and references

(1) Supplier shall not disclose to third parties any commercial or technical information provided or made accessible by Würth, to the extent this information is not already publicly known, and may only provide this information to persons required for the performance of deliveries to Würth in the course of their own business operations, provided these persons are also subject to appropriate non-disclosure obligations.

(2) Würth reserves all property rights and copyrights in and to all documents and other resources made available to supplier for the execution of an order placed by Würth includ-ing, without limitation, drawings, illustrations, designs, calculations, descriptions, plans, models, samples, technical specifications, data storage media, other documents, tools, parts and materials. All of the above documents and resources may only be used for the perfor-mance of the agreed contract and shall be returned (including any copies or other records made) to Würth upon completion of the contract. Any works or products created on the basis of documents and resources provided by Würth may not be used by the supplier nor offered or delivered to third parties.

(3) Any technical documentation, drawings, diagrams, tables, charts, photographs, layout templates and other documentation – be it on data storage mediums, printed copies or printing materials – as well as all samples, tools, materials and other operating resources provided by the supplier shall become property of Würth upon provision by the supplier. To the extent legally permissible, Würth shall further receive all property rights and rights of use and exploitation in all aforementioned copyrightable works. The transfer of the above rights does not require any separate remuneration by Würth; it is fully covered by the prices given in the orders.

(4) Without Würth's express prior written consent, the supplier may not use the business relationship between the supplier and Würth as a reference in any form whatsoever.

(5) Subject to the aforementioned provision VIII..I to IV, In case of any breach by the supplier and/or the supplier’s officers, directors, employees, the supplier shall be liable for a penalty equivalent to CNY 500,000 per instance of breach and a penalty of CNY 50,000 for every day that such breach continues. In case such fine is insufficient to cover the actual damages suffered by Würth, the supplier shall be liable for the actual damages. Any and all direct or indirect income of the supplier arising from the said breach shall belong to Würth while any and all costs and expenses including legal fees incurred by Würth arising from pursuing the supplier for liabilities as a result of the said breach shall be borne by the supplier.

IX. Defective deliveries

(1) Unless otherwise provided below, the rights of Würth in the event of material and/or legal defects and/or other breaches of duty by the supplier are subject to statutory requirements.

(2) In accordance with statutory requirements, the supplier's liability shall include, without limitation, the assurance that the goods have the agreed quality at the passing of risk to Würth. The product descriptions which have been incorporated into an individual contract – for instance by reference thereto in Würth's order – and therefore constitute part of the subject matter of this contract or which have been included in the contract in the same way as these conditions of purchase shall be deemed the agreed nature and quality of the goods. Within the meaning of the above provision, it does not matter whether the product description has been provided by Würth or by the supplier.

(3) Würth shall be entitled to claims for defects without limitation even if Würth did not be-come aware of the defect upon conclusion of the contract due to gross negligence.

(4) Würth’s obligation to check goods upon delivery shall be restricted to defects that can be detected by Würth's incoming goods inspections by means of visual checks including the delivery documents and by random checks of Würth's quality assurance personnel (e.g. damage in transit, wrong or short deliveries). 如:运输过程中造成的损坏,错发或少发的情形)。The above provision does not affect the obligation to notify supplier of defects dis-covered at a later time. In all cases, a complaint by Würth (notice of defects) shall be consid-ered to have been made in due time and without delay if Würth sends this notice within the agreed warranty period.

(5) The supplier shall bear all inspection and rectification costs (including any removal and installation costs) even if it is discovered that the goods in question were not defective. Würth’s liability to provide compensation for damage caused by unjustified claims for the rectification of defects remains unaffected. However, Würth shall only be liable if Würth was aware of the fact that the goods in question were not defective or was grossly negligent in failing to recog-nize the absence of any defects.

(6) In the event the supplier does not fulfill its obligation to provide a remedy (either by rectifying the defect or by delivering a non-defective product as chosen by Würth) within a reasonable period determined by Würth, the latter may rectify the defect itself and claim compensation for the expenses and/or an advance payment from supplier. In case the sup-plier’s remedial measures were not successful or would impose an unreasonable burden on Würth (e.g. because of special urgency, operational safety hazards or the potential of excessive damage), no grace period needs to be determined. Würth shall notify supplier without delay – if possible in advance.

(7) In the event the supplier provides a replacement delivery as a remedial measure, the replacement goods will again be subject to the original limitation period, unless the supplier expressly and effectively declares that the replacement delivery was made out of goodwill and/or to avoid disputes and/or to secure the continuation of the supplier relationship.

(8) In all other respects, Würth shall be entitled to reduce the purchase price or rescind the contract in accordance with statutory requirements in case of material or legal defects. Würth may further claim damages and the reimbursement of expenses in accordance with statutory requirements.

(9) In the event Würth discovers a defect in a product delivered by the supplier or a defect is discovered as a result of a justified customer complaint at a later time and the product has to be returned and/or blocked by Würth for this reason, the supplier shall pay a flat handling fee in the amount of RMB 1,000.00 to Würth. This handling fee may not be offset against any resulting claims for damages. Würth may collect defective items, including, but not limited to, bulk items, and return them to the supplier in larger shipping units. The supplier shall pay a handling fee of RMB 1,000.00 for each return shipment of defective products. In this respect, the supplier waives the defense of treating consecutive violations of this provision as one violation for the purpose of this provision. In this case the supplier shall bear all rectification costs and other expenses incurred by Würth.

(10) Any products marked with the Würth brand which have been legitimately returned or not accepted by Würth must be destroyed by the supplier and may not be sold on to third parties. Each violation of this provision shall be subject to a penalty amounting to twice the value of the goods, but no less than RMB 100,000.00. The defense of treating consecutive violations of this provision as one violation for the purpose of this provision is hereby excluded.

X. Supplier recourse

(1) Würth may seek legal recourse within a supply chain in addition to any claim made by Würth based on any defect in the quality or condition of the goods. Würth's right of recourse includes, but is not limited to, demanding exactly the same remedy (repairs or replacement deliveries) from the supplier that Würth has to provide to its customer in the case in question. However, the above provision does not in any way limit Würth's right to choose an appro-priate remedy.

(2) Before Würth recognizes or settles a claim for defects made by a customer (including reimbursement of expenses), Würth shall notify supplier, provide a brief description of the matter and request a written statement from the supplier. If this statement is not provided within a reasonable period of time and no amicable solution can be found, the compensation which was actually provided by Würth shall be deemed owed to the Würth’s customer. In such a case, the supplier retains the right to provide proof to the contrary.

(3) Any claims made by Würth under Provision X.(1) shall also apply if the goods have already been processed or treated further by Würth or a customer of Würth, e.g. through installation, before being sold on to a consumer.

XI. Product liability and compulsory insurance

(1) The supplier shall indemnify Würth against any product liability claims made against Würth to the extent the damage incurred is the result of a defect of the goods delivered by the supplier. This provision shall also apply to liability claims resulting from fault or negligence on the part of the supplier. To the extent the cause of the damage falls under the responsibility of the supplier, it is the supplier's responsibility to establish that it is not liable.

(2) Under the above indemnification provision, supplier shall bear all costs and expenses incurred by Würth in connection with claims made by third parties including any recall campaigns conducted by Würth. Würth shall notify the supplier in advance of any recall measures, make sure supplier can assist in the recall and coordinate the efficient execution of the recall with supplier. However, this is not necessary if the notification and involvement of the supplier is impossible because of the urgency of a recall.

(3) Further, the supplier shall be liable for any damage incurred by Würth as a result of reasonable precautions to limit any claims under non-contractual liability which fall under the responsibility of the supplier (e.g. public advertisements).

(4) The above provisions shall apply without prejudice to any further legal claims by the parties.

(5) For the duration of the contractual relationship with Würth, the supplier shall maintain a sufficient product liability insurance policy at their own expense. Upon request, supplier shall provide the corresponding proof of insurance to Würth.

XII. Limitation period

(1) The warranty period of the goods supplied by the supplier is [24] months upon the deliv-ery of the goods.

(2) Unless agreed otherwise in the provisions of this section, the parties' claims shall be subject to the statutory limitation periods.

(3) The limitation periods specified in the PRC laws shall apply to all contractual claims based on defects to the extent legally permissible. Any non-contractual claims for damages based on a defect are subject to the applicable statutory limitation periods, unless the appli-cable PRC Laws require longer limitation periods in individual cases.

XIII. Export controls and customs duties

(1) The Supplier shall comply with applicable export control, customs and foreign trade regulations. The Supplier shall submit Würth in writing within two weeks of receipt of the order –and in case of any changes without undue delay – of any information and data required by Würth in the order to comply with all foreign trade regulations in case of export and import as well as re-export, including without limitation:

• the Export Control Classification Number (ECCN) of the US Commerce Control List, provided the goods are subject to the US Export Administration Regulations (EAR);

• the commodity code (HS/CN code);

• the country of origin (trade agreement / non-preferential origin), explanation of the label of origin ( D = third country / E = EU / F = EFTA);

• (long-term) suppliers' declarations for goods having preferential origin status (EU suppliers) or certificates of origin (non-EU suppliers);

• all other information and data required by Würth for the export and import as well as the further distribution and re-export of the goods.

In the event the supplier violates its contractual obligations under provision XIII.(1) 1 of this clause , the supplier shall bear all expenses and damage incurred as well as other disad-vantages suffered by Würth as a result of this violation (e.g. subsequent claims for foreign import duties, monetary fines). However, this provision shall only apply if supplier is responsi-ble for this breach of contract.

XIV. Compliance

(1)Würth shall not be liable for any damages where Würth cancels an order/contract due to the fault of the supplier, which including but is not limited to:

(i) the supplier fails to timely deliver the products as per the order/contract confirmed by Würth, unless the supplier receives Würth’s written approval to deviate thereof.

(ii) the samples of any products either submitted by the supplier or procured by Würth in any inspection under this conditions of purchase, do not satisfy the aforementioned standards, and after notifying the supplier of the discrepancy, the products still does not meet such mentioned standards in subsequent inspections.

(iii) the supplier fails to make delivery in accordance with the order/contract, or otherwise fails to observe or comply with any of the terms or conditions herein, or fails to make progress so as to endanger performance thereof, or in the event of any grounds for insecurity in rela-tion to the supplier’s performance.

(2) Appendix Code of Conduct of Würth Line China is a valid supplement to these conditions of purchase and legally binding upon both parties.

XV. Applicable law and place of jurisdiction

(1) These conditions of purchase and all legal relationships between Würth and the supplier are subject to the laws of the People’s Republic of China under exclusion of all international and supranational (contractual) legal systems including, without limitation, the UN Conven-tion on Contracts for the International Sale of Goods. The legal requirements and effects of the retention of title clause are subject to the laws applicable at the location of the goods to the extent the choice of Chinese law is invalid or ineffective under the applicable national law.

(2) Unless otherwise agreed, in case of any disputes arising in connection with these condi-tions of purchase, either party shall submit the dispute to the Shanghai International Economic and Trade Arbitration Commission (“SHIAC”) in Shanghai for arbitration according to SHIAC’s arbitration rules in effect at the time of applying for arbitration. The language of arbitration shall be Chinese and the arbitration place shall be Shanghai. The arbitral award shall be final and binding upon both parties.

XVI. Code of Compliance

Supplier undertakes to abide by Wuerth Code of Compliance (a most updated copy of which can be accessed and retrieved at https://www.wuerth.cn/media/downloads/pdf/compliance_1/CN_Code_of_Compliance.pdf). In case of any violation of Wuerth Code of Compliance by Purchaser, Wuerth shall be entitled to terminate any agreement concluded by the parties hereto without bearing any liability, and Supplier shall defend, indemnify and hold Wuerth harmless from any direct or indirect loss, expense, costs and third party claims arising therefrom.

Acknowledged, agreed to and accepted by

[Supplier’s official company name] (Stamp)

Signature of authorized representative:

Date:

[Würth’s official company name] (Stamp)

Signature of authorized representative:

Signature of authorized representative:

Date: