GENERAL CONDITIONS OF SUPPLY - DIRECT PURCHASE

Transcription

1 GENERAL CONDITIONS OF SUPPLY - DIRECT PURCHASE ZF DO BRASIL LTDA., with its head office located at Conde Zeppelin Avenue, no. 1935, District of Éden, City of Sorocaba, State of São Paulo, dully enrolled at the Corporate Taxpayer s Registry (CNPJ/MF) under number / , hereinafter referred to as ZF ; TRW AUTOMOTIVE LTDA., with its head office located at Anhanguera Road (SP 330), km 147, District of Pires, City of Limeira, State of São Paulo, dully enrolled at the Corporate Taxpayer s Registry (CNPJ/MF) under number / , hereinafter referred to as ZF TRW ; and SUPPLIER dully identified at the REGISTRY FORM and/or PURCHASE ORDER, hereinafter referred to as SUPPLIER. WHEREAS: (i) the SUPPLIER received, during the quotation process, these GENERAL CONDITIONS, having read, understood and accepted them, without any restriction; (ii) the SUPPLIER defined the price for the supply of goods and/or services described in the PURCHASE ORDER, fully abiding by these GENERAL CONDITIONS; (iii) the receipt of the PURCHASE ORDER by the SUPPLIER, without any contrary statement, in writing, within 48 hours, represents its full, irrevocable and irreversible agreement with all conditions set forth in these GENERAL CONDITIONS. (iv) the SUPPLIER shall comply with any changes to these GENERAL CONDITIONS, published on the websites and or otherwise made available to the SUPPLIER. 1. DEFINITIONS 1.1. The expressions described below, whether in the singular or plural, shall have the following meanings: (i) COMPONENTS are the parts, components and/or raw material of the PURCHASE ORDER. (ii) GENERAL CONDITIONS are the set of contract clauses that establish the general obligations of the AGREEMENT. (iii) BUYER is the company ZF and/or ZF TRW, purchaser of the COMPONENTS, duly qualified in the REGISTRY FORM and/or PURCHASE ORDER. (iv) AGREEMENT is the set of obligations undertaken by the PARTIES, including the following documents: GENERAL CONDITIONS, REGISTRY FORM and PURCHASE ORDER. Page 1 of 13

2 (v) REGISTRY FORM contains the SUPPLIER's registry information and the set of contractual clauses and/or annexes included the GENERAL CONDITIONS, if applicable. (vi) SUPPLY is the services performance and/or the supply of goods. (vii) PARTIES are the BUYER and SUPPLIER. (viii) PURCHASE ORDER is the document that formalizes the engagement of the SUPPLIER to perform the SUPPLY. 2. PURPOSE 2.1. The purpose of this AGREEMENT is the SUPPLY described in the PURCHASE ORDER, by the SUPPLIER to the BUYER. 3. STANDARDS AND PATTERNS 3.1. The SUPPLIER states that it had access, read, understood, agrees and undertakes to comply with the technical specifications, quality standards and patterns adopted by the BUYER, as listed in Annex I and Annex II of the AGREEMENT. 4. SUPPLY 4.1. The commercial conditions applicable to the SUPPLY will be formalized between the PARTIES through the REGISTRY FORM, PURCHASE ORDER or amendment to the AGREEMENT The COMPONENTS will be manufactured by the SUPPLIER. In case of BUYER s prior written consent, the COMPONENTS manufacture may be subcontracted under the sole and full responsibility of the SUPPLIER The SUPPLIER warrants and undertakes, in order to meet the aftermarket demand, to have technical and operational conditions to produce the COMPONENTS for a period of fifteen (15) years, as from the termination of the serial production of the COMPONENT The BUYER may, at any time, change the specifications of the COMPONENTS. If the SUPPLIER deems necessary to review the price as a result of these changes, it shall send a proposal to the BUYER, as well as documents proving the cost variation, within ten (10) days from the receipt of the change request The SUPPLIER will not make any changes related to the product and/or its specifications, as well as in the manufacturing process, if there is no prior request and subsequent approval in writing by the BUYER. Page 2 of 13

3 5. SUPPLIER S OBLIGATIONS 5.1. The SUPPLIER S obligations are: (i) Comply with all law and technical standards applicable to the AGREEMENT performance, as well as submit to the BUYER, upon request, the documents proving the fulfillment of this obligation; (ii) Act according to the BUYER's Business Partners Principle available on the websites of ZF ( and ZF TRW ( as well as ensure that its supply chain meets such Principles; (iii) Provide, whenever requested by the BUYER, clarification on the AGREEMENT performance; (iv) Allow the representative appointed by the BUYER to visit, inspect and check both the production of COMPONENTS and their samples, at a day and time agreed by the PARTIES; (v) Provide the COMPONENTS complying with all the quality standards and patterns provided for in the AGREEMENT; and (vi) Maintain regular and valid government licenses required for its activity and COMPONENTS production, as well as submit to the BUYER, upon request, the documents proving compliance with this obligation. 6. LOGISTICS CONDITIONS 6.1. The SUPPLIER shall comply with the logistics conditions determined by the BUYER, especially those contained in the Logistics Protocol, as specified in Annex I and Annex II, in order to avoid SUPPLY breakage or failure If the SUPPLIER does not meet the deadlines established by the BUYER in the delivery schedules, the BUYER may request extra shipping, at the SUPPLIER's cost, as well as request to the SUPPLIER the reimbursement for any costs it may have as a result of these delays. 7. QUALITY WARRANTY 7.1. In the manufacture of the COMPONENTS, the SUPPLIER shall only use good quality inputs, meeting the standards and good manufacturing practices of the COMPONENT The BUYER may inspect the COMPONENTS, anytime and anywhere, without prejudice of subsequent refusals of COMPONENTS which do not meet the specifications set forth in this AGREEMENT The SUPPLIER guarantees the quality of the COMPONENTS for a period of thirty six (36) months from the Sale Invoice issuance, except as otherwise provided in the PURCHASE ORDER or REGISTRY FORM. Page 3 of 13

4 7.3. The SUPPLIER shall indemnify damages caused to the BUYER resulting from the supply of the COMPONENTS in disagreement with this AGREEMENT, technical specifications, standards or patterns provided by the SUPPLIER The SUPPLIER declares and accepts as minimum standards for indemnification to the BUYER, resulting from the breach of this AGREEMENT, those established in Annex I and Annex II of this AGREEMENT The compensation payable by the SUPPLIER shall be paid within thirty (30) days, as of the BUYER s written notice. 8. COMPETITIVENESS 8.1. The SUPPLIER shall promote continuous improvement in its production processes in order to ensure the reduction of defects, waste and rework in the COMPONENTS, as well as maintain its prices competitively with the market The SUPPLIER targets regarding its performance increase ("Competitiveness Target") shall be periodically informed by the BUYER through its Purchasing Policy. 9. NON EXCLUSIVITY 9.1. This AGREEMENT does not establish any kind of exclusivity between the BUYER and the SUPPLIER. 10. PRICE AND PAYMENT TERMS The BUYER shall pay to the SUPPLIER the price established in the PURCHASE ORDER for the execution of the purpose of this AGREEMENT The price includes all costs and expenses required for the execution of the purpose of the AGREEMENT, unless otherwise agreed by the PARTIES The payments to the SUPPLIER shall be made as follow: (I) Invoices issued to ZF: the first Wednesday after sixty (60) days of invoice issuance, unless otherwise provided in the PURCHASE ORDER and/or REGISTRY FORM. The SUPPLIER shall issue invoice of sale indicating the Corporate Taxpayer s Registry (CNPJ) number of the BUYER provided in the PURCHASE ORDER, under penalty of not proceeding payment until regularization; or (ii) Invoices issued to ZF TRW: on the due date, as payment term provided in the PURCHASE ORDER and/or REGISTRY FORM The invoice of sale shall be issued on the same day of the COMPONENT shipment, under penalty of extension of the payment term by the BUYER in proportion to the delay time If the invoice of sale is irregular or contains errors, the BUYER, at no cost, shall retain the payment to the SUPPLIER until such documents are properly delivered. In this Page 4 of 13

5 case, the payment term shall be counted from the date on which the SUPPLIER delivers the documents duly regularized to the BUYER Payments shall only be made through deposit in current account held by the SUPPLIER. The issuance of bank payment slip is forbidden. The deposit slip is the proof of payment receipt of the amounts due by the BUYER to the SUPPLIER If the payment day is a public holiday or a day when there is no banking hours, or in an event of bank strike, the day of payment will be extended to the first working day with banking hours, without arrears or any penalty to the BUYER In the event of payment delay, the BUYER shall be subject to a fine of two percent (2%) and moratorium interests of half percent (0.5%) per month or fraction calculated on a pro rata basis If the SUPPLIER fails to comply with any provision contained in the AGREEMENT, the BUYER may, without any charges, suspend the payment of the Invoices of Sales, the payment remaining suspended until the performance of the obligation by the SUPPLIER. 11. PRICE REVIEW 11.1 Prices are fixed and will not suffer automatic review, except for the automatic application of Competitiveness Target set out in clause 8.2. The PARTIES may, after a period of twelve (12) months, review the price upon prior trading, based on the presentation of documents proving the costs changes While the PARTIES fail to reach an agreement on the price review, the SUPPLIER will continue to provide the COMPONENTS at the current price In the event of changes which result in increase, reduction, creation, or termination of direct taxes on the price, the PARTIES shall negotiate in good faith the price review. 12. TERM This AGREEMENT shall remain in force for an indefinite period, commencing as from the execution date of the REGISTRY FORM or the PURCHASE ORDER submission, whichever occurs first, except as specified in writing between the PARTIES. Page 5 of 13

6 13. TERMINATION AND RESCISSION The current AGREEMENT for an indefinite term may be terminated by either PARTIES, upon a written notice to the other party, at least one hundred and eighty (180) days in advance During the notice period, the PARTIES shall continue to fulfill their obligations, the claimant being entitled to exempt the respondent from the compliance with any obligation The AGREEMENT may be rescinded, regardless of prior notice, in or out of court summons, as follow: (i) default of any obligation and, upon written notice by the innocent party, the other party does not remedy it within the period specified in the notice; or (ii) if the other party files a petition for bankruptcy, has its bankruptcy required or declared, as well as requires its court or non-court supervised reorganization; or (iii) changes in the SUPPLIER economic and financial situation, that, at BUYER's criteria, may affect its financial capacity and/or imply risks of non-execution of the purpose of the AGREEMENT; (iv) if the SUPPLIER does not communicate, in writing, at least thirty (30) days in advance, any change in its shareholding structure, directly or indirectly, or if the BUYER, even if previously noticed, does not approve this shareholding structure change. 14. PENALTY CLAUSE The party that violates any obligation under this AGREEMENT, except obligations that contain specific penalty, shall pay to the other party a fine equivalent to two percent (2%) of the amount paid by the BUYER to the SUPPLIER, in the month immediately preceding the breach, or on the value contained in the PURCHASE ORDER, whichever is greater, without prejudice to the plead, by the innocent party, of damages resulting from the breach. 15. CIVIL, CRIMINAL, LABOR, SOCIAL SECURITY, AND TAX LIABILITY The SUPPLIER shall reimburse the BUYER for damages resulting from the latter s conviction in judicial actions filed by third parties against the BUYER concerning the performance of this AGREEMENT, including, but not limited to: labor claims filed by its employees and subcontractors or tax lawsuit of direct responsibility of the SUPPLIER The reimbursement due by the SUPPLIER to the BUYER includes, but is not limited to, all amount that the BUYER disbursed as payment of the principal obligation, monetary adjustment, moratorium and/or compensatory interests, fines, guarantee or appeal deposits, expert fees, court costs, traveling expenses, telecommunication and document preparation, legal fees, etc. Page 6 of 13

7 15.3. The reimbursement due by the SUPPLIER shall be paid within thirty (30) days as of the written notice by the BUYER. 16. INTELLECTUAL PROPERTY The SUPPLIER, its employees and subcontractors shall respect and shall ensure the respect of the intellectual property rights of the BUYER and/or its economic group companies It is deemed to be sole property of the BUYER all intellectual property provided in the intellectual property protection law resulting from the SUPPLY performed by the SUPPLIER as ordered or specified by the BUYER At the end of this AGREEMENT, the SUPPLIER shall deliver to the BUYER all the documents produced during the performance of the purpose of this AGREEMENT, as well as refrain from using any intellectual property of the BUYER and/or its economic group companies This AGREEMENT does not grant to the SUPPLIER and to its managers, contractors, employees or representatives any property rights or rights to use any intellectual property of the BUYER and/or its economic group companies. 17. CONFIDENTIALITY The PARTIES shall comply and shall make its employees and service subcontractors comply with the obligation to maintain the confidentiality of this AGREEMENT, as well as the documents and information resulting from this instrument For the purposes of this AGREEMENT, the information mentioned in the preceding clause, include, but are not limited to, all discoveries, ideas, concepts, know-how, techniques, designs, specifications, drawings, diagrams, models, samples, trial balances, data, computer programs, records, tapes, marketing plans and other technical, financial, commercial or intellectual property information These documents and information will be provided or disclosed only to the people directly involved in the execution of this AGREEMENT and their use is forbidden for any purpose other than the strict compliance with this instrument The disclosure of any document or information may only occur with prior written authorization of the owner of the information The PARTIES undertake to return immediately after the AGREEMENT termination the property data and/or information of the other party in its possession. The confidentiality obligation shall even persist after the AGREEMENT, regardless of the reason. 18. GENERAL PROVISIONS Page 7 of 13

8 18.1. All notices between the PARTIES, relating to this AGREEMENT shall be in writing as follows: (i) To the BUYER: addressed to the Purchasing Manager in office at the time of notice; and (ii) To the SUPPLIER: addressed to the legal representative The notices shall be deemed received if: (i) sent by mail or courier, exclusively at the address in the preamble of this AGREEMENT; or (ii) sent by There is no corporate or associative bond between the PARTIES, and this AGREEMENT shall not establish an employment relationship between the BUYER and employees or subcontractors involved in the performance of this AGREEMENT The SUPPLIER authorizes the BUYER to offset amounts due to the SUPPLIER with any amount due by the BUYER to the SUPPLIER This AGREEMENT or any right or obligation herein established may not be assigned to third, in whole or in part, without the prior written consent of the other Party, signed by its legal representatives The BUYER may, regardless of SUPPLIER authorization, assign this AGREEMENT or any right or obligation hereunder to a holding, subsidiary or under common control, or in the event of a merger, spin-off or acquisition Without BUYER s prior written authorization, the SUPPLIER is prohibited to issue securities and/or credit instrument with collateral in this AGREEMENT and assign or cash them in factorings, banks or any other financial institution or with any third party This Agreement binds the parties and successors at any title This AGREEMENT may only be amended by written agreement between the PARTIES The non-exercise of any right and/or tolerance to comply with any requirement of this AGREEMENT shall not constitute waiver or renewal, or affect the right of the PARTY to exercise it at any time If any of the contractual provisions is deemed to be unenforceable, void or voidable, in whole or in part, the other contractual provisions shall not be affected Should there be a specific agreement signed between the PARTIES, whose object is identical to the provision described in the PURCHASE ORDER, these provisions shall prevail over this AGREEMENT. Should there not be a specific agreement signed, this AGREEMENT constitutes the entire agreement of the PARTIES, and, expressly revokes and supersedes any negotiations between the PARTIES, concerning the purpose of this AGREEMENT. Page 8 of 13

9 In case of conflict between the provisions contained in the AGREEMENT, the provisions contained in the following documents shall prevail, in this order: 1st REGISTRY FORM, 2nd PURCHASE ORDER and 3rd GENERAL CONDITIONS Given the features of the automotive production chain, the supply interruption without observing the prior notice provided in clause 13 may cause serious damage to the BUYER. In light of this, the PARTIES acknowledge that this AGREEMENT is enforceable in accordance with Articles 497, 498, 536 and 815 of the Civil Procedure Code, not preventing the recovery of eventual loss and damages. 19. APPLICABLE LAW AND JURISDICTION The PARTIES agree that this Agreement shall be governed and interpreted according to Brazilian laws The court of the BUYER s head office included in the PURCHASE ORDER is hereby elected, with express exclusion of any other, however privileged it may be. ZF DO BRASIL LTDA. TRW AUTOMOTIVE LTDA. Page 9 of 13

10 ANNEX I - RULES APPLICABLE TO ZF PLANTS The rules provided in this Annex shall only apply to supplies made to ZF's plants. 1. ZF'S STANDARDS AND PATTERNS 1.1. The SUPPLIER shall comply with the current and futures ZF s standards and patterns available on Supplier Portal link, such as: (i) LR10; (ii) QR83 Standard; (iii) Subcontract Receipt; (iv) Logistics Receipt; (v) Purchase Policy and its updates The SUPPLIER declares to be aware and agree that any updates of the GENERAL CONDITIONS or applicable standards will be published on the Supplier Portal, as well as the creation of new standards and patterns, and the SUPPLIER will take the necessary measures to regularly access it The SUPPLIER is aware that the standards and guidelines published in the Supplier Portal, current or future, reflect the quality standards and requirements of ZF's clients, which is why, if the SUPPLIER does not comply with the standards and patterns published in the Supplier Portal, ZF may, with cause, terminate the AGREEMENT, without any charges and penalties If the SUPPLIER does not agree or verifies the impossibility to comply with the new standards and patterns available in the Supplier Portal, it may request the AGREEMENT termination, observing the prior notice provided in clause herein. 2. MINIMUM PARAMETERS FOR INDEMNIFICATION 2.1. If the SUPPLIER does not comply with any of its obligations set forth in this Agreement, it shall indemnify ZF observing the following values: Nature ZF Downtime ZF s Clients Downtime Labor for inspection Labor for rework Standard Amount 4, BRL/ downtime hour, the minimum charged will be 1 hour 10, BRL /downtime hour, the minimum charged will be 1 hour BRL /hour, minimum charged BRL BRL /hour, minimum charged BRL Page 10 of 13

11 Extra hours made by ZF's employees Extra freight hired by ZF Noncompliance with quantity or delivery schedule Others not specified above Administrative fee (levied on the entire amount due by the SUPPLIER) 3, BRL/hour 1, (domestic highway) 55.00/kg (air) BRL /case According to the occurrence 10% The above established amounts will be adjusted every 12 months, according to the adjustments reported by ZF, which will take effect after thirty (30) days of notice. The new list will be informed to the SUPPLIER, which will form an integral part hereof for all legal purposes. The SUPPLIER shall provide response to the non-compliances identified by ZF through ("ANC") within up to: (i) 24 hours to answer the containment actions; (ii) 7 working days for root cause analysis and definition of corrective and preventive actions. 3. SUPPLYON 3.1. The SUPPLIER is aware that all non-compliances in the COMPONENTS will be duly appointed by ZF in the website SupplyOn. The SUPPLIER shall get access license on the website. Page 11 of 13

12 ANNEX II - RULES APPLICABLE TO ZF TRW'S PLANTS The rules provided in this Annex shall only apply to supplies made to ZF TRW's plants. 1. ZF TRW'S STANDARDS AND PATTERNS 1.1. The SUPPLIER shall comply with the current and futures ZF TRW s standards and patterns available at such as: (i) (ii) Global Supplier Quality Manual - GSQM Logistic Receipt; 1.2. The SUPPLIER declares to be aware and agree that any updates of the GENERAL CONDITIONS or applicable standards will be published on the ZF TRW Portal, as well as the creation of new standards and patterns, and the SUPPLIER will take the necessary measures to regularly access it The SUPPLIER is aware that the standards and guidelines published on the website current or future, reflect the quality standards and requirements of ZF TRW's clients, which is why, if the SUPPLIER does not comply with the standards and patterns published in the Supplier Portal, ZF TRW may, with cause, terminate the AGREEMENT, without any charges and penalties If the SUPPLIER does not agree or verifies the impossibility to comply with the new standards and patterns, it may request the AGREEMENT termination, observing the prior notice provided in clause herein. 2. MINIMUM PARAMETERS FOR INDEMNIFICATION 2.1. If the SUPPLIER does not comply with any of its obligations set forth in this Agreement, it shall indemnify ZF TRW observing the following values: Fines per event Nature Selection and Rework Concern A Concern B Concern C Deviation detected by the supplier and previously noticed to ZF TRW. Deviation detected at ZF TRW Standard Amount 2, BRL 2, BRL 1, BRL BRL Without cost 1, BRL Page 12 of 13

13 Costs Transference Nature ZF TRW s Client Downtime Downtime hour Support Hour to Quality Auditor Support Hour to Engineer / Quality Analyst Support Hour to Quality Supervisor Selection and Rework (collection by use of area) Selection and Rework (labor for review) Notice of Non registered receipt (ASN) Quantity and Price divergence in the Invoice Standard Amount Transferring of 100% of charged amount by TRW's Client BRL hour/man BRL hour BRL hour BRL hour BRL hour Cost transferring charged by service provider by invoice BRL by item 3. QUALITY AND PACKING 3.1. ZF TRW shall periodically send the COMPONENTS Delivery Schedules. ZF TRW can modify the quantities of COMPONENTS provided in the Delivery Schedules, for more, upon previous consult to the SUPPLIER, and, to less, automatically after simple notice, unless the PURCHASE ORDER explicitly expresses a specific amount of COMPONENTS The Seller will provide the components packaged as specified in the Global Logistics Manual (available on according to the PURCHASE ORDER or according to any other guidance in writing by ZF TRW. Page 13 of 13