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Special Contractual Terms & Quality Assurance Agreement for Automotive Bearing Technique Customers

As of 26.08.2022 (Document QM-5-424-B)

The following points apply to all contractual relationships of igus GmbH and its affiliated companies ("igus"); they supersede the general terms and conditions of the contractual partner with regard to all orders, delivery call-offs, order confirmations, deliveries and individual contracts, without the need to object to the application and inclusion of the contractual partner’s general terms and conditions in each individual case:

I.

1. Any and all agreements and contractual conditions as well as their subsequent amendments require the express written consent of igus. igus is not obliged to enter into agreements or to accept orders or to approve contract amendments.

2. Declarations and statements of the contractual partner, in particular purchase orders or call-offs of goods, orders, prices, quantities and delivery dates, which are made by means of electronic data interchange (EDI), are only legally binding if they have been expressly confirmed by igus in text form. This shall also apply if igus has agreed to an electronic data exchange. igus shall not be liable for system failures or transmission errors within the scope of an electronic data exchange.

3. Agreements with a fixed term are concluded for the expressly agreed fixed term. In the event of unforeseen changes in raw material, personnel or energy costs or other circumstances that are so serious that igus cannot reasonably be expected to uphold the agreed upon contractual terms, igus may also terminate contracts with a fixed term with a notice period of six months to the end of each calendar month if the parties cannot agree on an adjustment of the contract.

4. Agreements with no fixed term may be ordinarily terminated by igus with a notice period of twelve months to the end of each calendar month; if the agreement provides for a shorter notice period, this shorter notice period shall apply.

5. If a contract is terminated by the contractual partner for reasons for which igus is not responsible, the contractual partner shall be obliged to pay (i) the agreed prices for all finished products in the quantities already ordered or approved; and (ii) igus actual cost of work-in-process. Further rights remain unaffected.

6. The contractual relations of igus and all disputes arising therefrom are exclusively governed by the laws of the Federal Republic of Germany excluding any conflict-of-law or choice-of-law provisions that would require the application of any other law The UN Convention on Contracts for the International Sale of Goods is excluded.

7. igus does not accept arbitration clauses in contracts with contractual partners from Germany, EU countries and EFTA countries. In contracts with contractual partners from other countries, arbitration clauses must be agreed expressly and outside of general terms and condition.

II.

1. Irrespective of a deviating choice of law in individual cases, igus' liability from contractual relationships, in particular for breaches of duty and for defects, shall always be governed by German law, i.e. igus shall be liable as if the applicability of German law had been agreed in this respect, whereby the following provisions shall apply.

2. igus shall be liable without limitation for intent and gross negligence and for injury to life, body or health.

3. In all other cases igus shall only be liable for simple negligence in the event of breach of essential contractual obligations, the fulfilment of which is essential for the proper execution of the contract and on the observance of which the contractual partner may rely (cardinal obligations). igus’ liability shall be limited to the direct, foreseeable damage typical for the contract; in determining the amount of the compensation claims to be fulfilled by igus, the type, scope and duration of the business relationship, any causation and fault contributions of the contractual partner and a particularly unfavourable installation situation of the goods shall appropriately be taken into account. In particular, the compensation payments, costs and expenses to be borne by igus must be in reasonable proportion to the value of the goods. In application of these principles, igus’ liability is limited to the lower of the following two amounts: (a) the amount equaling three times the turnover (net) made by igus with the contracting party in the last 12 months before the occurrence of the damage event, or (b) the amount of EUR 1,000,000.

4. igus does not accept contractual penalties or lump sums for damages or costs or any reversal or easing of the burden of proof not prescribed by law. When determining failure/error rates for contract products, the reference market must comprise at least 40% of the total market.

5. As far as igus is liable for infringements of industrial property rights, this only applies to actual infringements of industrial property rights, but not to mere claims or allegations. Insofar as igus is liable in connection with recall actions, this only applies to those which have been ordered to be mandatory by the competent authorities, but not to voluntary recall actions.

6. The warranty/guarantee period is 24 months from the date of delivery of the contractual goods by igus.

7. igus does not accept any obligation to include the contractual partner or other third parties as coinsured or entitled persons in the insurance contracts concluded by igus.

8. As igus does not know where its products are ultimately being used, any compliance with law guarantee shall be limited to the laws of the countries of manufacture and delivery.

9. igus does not accept any obligation (a) to transfer a Purchase Order or supply agreement to a third party, in particular replacement supplier, during or after the termination of the Purchase Order or supply agreement and (b) to provide support or to carry out certain actions or make certain declarations to enable or facilitate such transfer.

III.

1. Agreed delivery dates are not fixed dates but estimated dates; igus is in default only after receipt of a written reminder and expiry of a grace period of at least 48 hours.

2. Events of force majeure release igus from its performance obligations for their duration. Events of force majeure are in particular, without limitation, (a) natural disasters such as fires, floods, windstorms, earthquakes, hurricanes, severe weather or other extreme natural events (b) unrest, wars, sabotage, terrorist attacks, epidemics or widespread, international dissemination of infectious diseases and other similar unforeseeable events (c) freight embargos, strikes, lockouts and other measures in the context of industrial disputes (d) power failures or the failure of telecommunications connections (e) measures taken by the legislator, government or by courts or other authorities, irrespective of their legality. Events of force majeure also include shortages of raw materials or delays or bottlenecks in the supply of raw materials or spare parts if and to the extent that these are caused by (i) an event of force majeure at igus’ suppliers or (ii) severe market disturbances or (iii) result from the fact that a supplier of igus ceases production or supply of the raw material or spare parts for reasons for which igus is not responsible. igus is not liable for damages or costs caused by an event of force majeure.

3. The contractual partner is only entitled to set-off if the counterclaim has been awarded by a final and binding court decision or if the counterclaim is undisputed or acknowledged by igus.

4. igus may retain deliveries if the contractual partner is in default with a due claim and does not perform/pay even after a second reminder.

IV,.

1. The tools used for the manufacture of the contract products are always the sole property of igus, even if it was exclusively manufactured or acquired on behalf of the contractual partner for certain products, and irrespective of whether the contractual partner has contributed to the costs of the manufacture or acquisition of the tools.

2. Tooling and/or set-up costs to be paid by the contractual partner as agreed, including pro rata costs, shall become due for payment after presentation of the IO initial sample with PPAP Level 3 or VDA (Association of the Automotive Industry) documentation, without formal release by the contractual partner or its end customer being required.

3. Information on hazardous and controlled substances based on the Global Automotive Declarable Substance List will be provided with the PPAP / PPF (VDA) initial sample documentation in the International Material Data System. Any other additional or deviating requirements cannot be reviewed or verified and hence not be accepted by igus.

4. igus does not provide a best price guarantee or a "transparent" calculation, i.e. the bases and parameters for the calculation of prices and costs will not be disclosed.

5. Confidentiality agreements must provide igus with the same protection as the contractual partner

6. igus reserves the right to (a) not disclose competition-relevant information and data or information and data that concern business secrets or special igus know-how or that are subject to confidentiality obligations and to (b) limit the contractual partner’s access to its records and facilities to protect such information and data.

7. All intellectual property rights arising at igus as a result of or in connection with the manufacture and delivery of contractual products shall be the sole property of igus. Intellectual property rights arising as a result or in connection with paid development orders or joint development projects shall be addressed and allocated in the respective agreement.

8. Subcontractors, in particular raw material suppliers, of igus will not be named, cannot be audited and cannot be obligated to further customer requirements or codes of conduct.

V.

1. Packaging is always carried out according to igus standards (one-way packaging in cartons + PE bags) with VDA (Association of the Automotive Industry) barcode labelling. Deviating regulations for individual products must be agreed separately.

2. Due to their small component size, the contractual products often cannot be marked with batch number and date of manufacture. However, traceability via delivery bill to the production and material batch is ensured (FIFO).

3. The contractual partner shall carry out an inspection of the delivered goods as to identity, quantity, obvious defects and transport damage immediately – at the latest 24 hours after receipt of the goods – even if igus waives the objection of delayed notification of defects.

VI.

1. igus is only obliged to set up and maintain a safety stock if this has been expressly agreed. Unless otherwise agreed, the "FIFO" principle (first in first out) does not apply. a contract, which also provides for the installation and maintenance of a safety stock, is terminated by the contractual partner for reasons for which igus is not responsible, the contractual partner is also obliged to accept and pay for the safety stock existing at the time the termination takes effect. Further rights remain unaffected.

2. The prices for spare parts to be supplied by igus for a certain period after completion of series production shall be agreed separately and are not limited to a certain factor or percentage of the price for the serial products.

VII.

1. In the automotive sector igus only enters into agreements for "iglidur® plain bearing" products, which become part of components that are installed in the vehicle itself. igus does not offer product safety-relevant components and processes. To supplied equipment only igus standards apply; any quality requirements deviating from or going beyond these standards are not recognised and are not owed.

2. For igus standard products that are used as operating equipment, documentation for quality assurance is always subject to a charge.

3. Requirements beyond the current IATF 16949:2016 standard, in particular those of OEMs, apply only if they have been expressly agreed by igus in writing.

4. Only the igus (parts) drawing(s) and the igus material specification(s) apply. Other or further specifications of the contractual partner only apply if they have been expressly agreed by igus in writing. igus always supplies single parts; the contractual partner is responsible for testing these in the assemblies.

5. PPAP Level 3 or PPF (VDA Volume 2 Submission Level 2) documentations are made for igus special parts when one or more cavities are completed or when changes are made for the component. Additional documentation or PPAPs for igus standard catalogue dimensions are always subject to a charge.

6. APQP (Advanced Product Quality Planning) is carried out within the usual framework for the business sector and the product concerned; its content and scope are adapted to the scope of production (individual parts), i.e. to the fact that the products have already been manufactured millions of times in proven processes. Further requirements shall have to be coordinated and agreed upon on a project-by-project basis.

7. Process capability tests with proof of CPK / CMK >= 1.33 / 1.67 shall only be carried out for the dimensions marked accordingly on the drawings; deviating or further tests must be expressly agreed in writing.

8. Factory test certificates 3.1 are only created within the framework of PPAP initial samples. Reset samples are only archived for PPAP parts.

9. An annual re-qualification of individual components shall only be carried out on the basis of a separate agreement. igus carries out annual re-qualifications for component families for individual articles on its own responsibility, depending on the PPM rate and delivery quantity. Upon request, PSW and data from the igus CAQ can be provided once a year free of charge. Annual PPAP Level 3 is always subject to a charge.

VIII.

1. There is no central product safety officer at igus based on the “VW Formel Q konkret” demands. However the essential part of the VDA / QMC recommendations “product integrity” (1st issue of November 2018) is fulfilled at igus, distributed across several employees from different departments.

2. Should one of the above provisions be or become invalid, it shall be replaced by a provision that comes as close as possible to the economic purpose of invalid provision.