General purchasing conditions Of Pacovské strojírny, a.s.

(hereinafter referred to as the "GPC")

1. Contract conclusion

Purchases of PACOVSKÉ STROJÍRNY, A.S. (hereinafter only “PS”) are performed on the basis of written orders and/or contracts. Oral or telephone orders are only binding if the order number is given followed by a written supplier confirmation of the order.

The supplier shall confirm receipt of the oral or telephone order within 5 business days after receiving the order (by signing the copy of the order and sending it back to PS). In the confirmation the supplier shall specify the binding and final price of the goods, including the delivery date.

The concluded contractual relations are governed by these GPC, unless another provision is accepted and agreed by both contracting parties in writing in the individual orders. For this purpose, PS shall include in the written order, or rather in the contract, the following sentence: “Contractual relations are governed by the General Purchasing Conditions of PACOVSKÉ STROJÍRNY, a.s., valid on the date the relevant order/contract is concluded (hereinafter only referred to as “GPC”). The GPC are published on the PS website.

2. Essential delivery documents

Drawings, samples and other documents sent by PS shall be compared by the supplier immediately with the content of the order. In the event of any discrepancies (discrepancies between the essential documents and the order), the supplier is obliged to notify PS of these discrepancies no later than on the day when the order confirmation is sent to PS, otherwise the supplier shall be liable for the occurred damage. These documents are the sole property of the PS and shall be returned by the supplier to PS free of charge and without undue delay upon fulfilment of the relevant obligation.

3. Delivery times and deadlines

The supplier is obliged to notify PS about any sent shipments/orders. PS is entitled, but not obliged, to accept early deliveries. However, early acceptance of shipment does not constitute the supplier's right to receive an early payment for the purchase price from PS.

The obligation to deliver the goods shall be regarded as fulfilled when all parts of the delivery (including plans, drawings, certificates, declarations of conformity, etc.) are delivered.

Should the goods be delivered late by the supplier, PS have the right to demand a late penalty equal to 0.05% of the final price of the goods for each day of delay – after the delivery date confirmed by the supplier. Payment of this penalty shall not terminate the right of PS to receive compensation for any damage incurred by PS as a result of late delivery by the supplier.

The supplier is obliged to subject the goods to quality inspection before shipment. Upon the request of PS, all quality inspection documents shall be sent by the supplier to PS, but no later than on the day the invoice is issued.

The supplier is obliged to strictly adhere to the shipping instructions specified in the order submitted by PS.

PS shall perform a random inspection of the delivered goods. Should PS discover that more than 10% of the delivered goods do not meet the contractual or legal requirements, PS may refuse to accept the entire delivery.

Should the contract obligate PS to pick up the delivered goods gradually and should a partial delivery show that more than 10% of the delivered goods do not meet the contractual or legal requirements, PS is entitled to refuse to accept further deliveries and PS is not obliged to pay the purchase price until the supplier removes the relevant defects.

4. Delivery conditions and purchase price

The prices mentioned in the order / purchase contract are fixed and final, unless otherwise agreed in writing.

Unless otherwise agreed between PS and the supplier, the supplier shall bear the cost and risk of the delivery all the way to the PS headquarters.

Goods packaging is included in the purchase price. The supplier is obliged to choose the packaging properly to make sure that the packaging sufficiently protects the goods from damage, loss and theft during transport. Should the packaging be returned, then the value of the packaging shall be credited or reimbursed. The disposal of the packaging is to be handled by the supplier.

The supplier is obliged to notify PS about the planned delivery of goods 3 business days before the goods are dispatched. Along with the goods delivery, the supplier is obliged to present PS with the delivery note and the bill of lading, which shall include the order number.

The supplier is obliged to immediately provide PS with a written declaration of the goods origin (certificate of origin). The supplier is liable for any damage incurred by PS, providing that the supplier failed to properly deliver the certificate of origin or if the certificate was not delivered at all. The supplier is also obliged to demonstrate the submitted data on the origin of the goods by presenting a customs certificate.

5. Transfer of goods ownership and risk of damage

The delivered goods shall become the property of PS when the goods are accepted and taken over by PS. The risk of goods damage shall pass over to PS when goods ownership rights are transferred.

6. Quality warranty and liability for defects

PS is obliged to inspect the duly delivered goods within 10 business days from the date of their delivery. PS is obliged to notify the supplier about goods defects within 10 business days from the day PS has discovered the relevant defect.

Unless stated otherwise, the supplier provides PS with a 24-month warranty covering the quality of the goods starting on the date when the relevant movable goods have been accepted, and with a 5-year warranty starting on the day when the relevant immovable property has been accepted. As for partial deliveries, the delivery of the last individual delivery shall be regarded as the day when the goods are accepted.

The parties have agreed that a significant breach of the contract represents the actual occurrence of goods defect (defects), which completely or partially prevents the use of the goods, or the occurrence of a larger number of other defects – 3 defects. In the event that PS does not specify any other defect (or defects) in the defect notification, the supplier is obliged to eliminate these defects no later than within 14 days after the supplier received the defect notification and the supplier shall do so at its own expense. Should the supplier fail to do so, PS is entitled to demand a reasonable discount from the purchase price for the delivered goods, or PS may withdraw from the contract, or eliminate the relevant defect or defects alone or through a third party at the expense and risk of the supplier.

Should the relevant defect (defects) represent a minor breach of contract, PS has the right to request removal of the defect, or a reasonable discount on the purchase price. Should the supplier fail to eliminate the defect within 14 days after being notified about the defect by the buyer, PS is entitled to claim a discount on the purchase price, or PS may remove the defect(s) alone or through a third party at the expense and risk of the supplier, or PS may withdraw from this contract.

A proper removal of the defect shall be regarded as the delivery of a new, defect-free item, or delivery of the missing item or elimination through a repair. The right to choose which defect removal is best suited shall always belong to PS. The warranty period shall not apply while the defect is being removed – that is starting at the moment the defect is claimed until the defect is removed by the supplier. Should there be a risk of delay, PS is entitled to remove the defect alone at the expense of the supplier. Other claims and rights of PS related to defects of the subject of the purchase, as defined in generally binding legal regulations, especially the right to receive a compensation for damage, shall remain unaffected.

7. Removal of uncertainties

Should there be uncertainties related to the goods delivery, the supplier is obliged to contact PS at its own risk and clarify all details of the planned delivery. The supplier is obliged to obtain all documents necessary for the delivery of goods. The supplier answers to PS for goods defects and/or for damage caused as the result of the non-compliance of the supplier with the obligations set out in this provision of these General Purchase Conditions.

8. Goods properties

The supplier answers to PS for the fact that the delivered goods are free of defects with regards to structural design, production and instructions, and within the meaning of Act No. 22/1997 Coll., on technical requirements on products, as amended. At the request of PS, the supplier is obliged to identify subcontractors who participate in the fulfilment of the delivery for PS. The supplier undertakes to make sure that the requirements of these GPC are also observed by its subcontractors. Should this provision of the GPC be violated by a subcontractor of the supplier, the supplier is liable to PS for the damage incurred.

9. Invoicing

The supplier is obliged to deliver the invoices to PS electronically to the e-mail address fakturace@pacovske.cz, or by registered mail to the address of the registered office of PS within 3 business days from the date of the performance / taxable performance stated on the invoice. In the case of late invoice delivery, PS is entitled to calculate the payable and due date from the date of the actual delivery of the invoice.

The invoice must comply with all prerequisites specified by the relevant legislation and defined in these GPC (especially the order/contract number). Should the supplier's invoice fail to meet these requirements, or if the invoiced price, quantity or other essential information stated on the invoice differs from the contractually agreed conditions, PS is entitled to reject the invoice and return it to the supplier for corrections. In such case PS is entitled to calculate the payable and due date from the date the corrected invoice is delivered.

If the payment terms stated on the invoice do not correspond with the contractual conditions, PS is entitled to disregard the payment terms stated on the invoice. In such scenario, the maturity of the invoice shall be governed by the applicable contractual conditions.

10. Prohibition of assignment, issuance of collateral and set-off rules

Without the prior written consent of PS, the supplier is not entitled to assign and/or transfer to a third party any receivables, rights or obligations (in whole or in part) arising from or in connection with the contractual relationship existing between the supplier and PS.

Without the consent of PS, and while this contractual relationship lasts, the supplier, as the assignor, is not entitled to transfer any rights and/or obligations, or any part thereof, arising from the contractual relationship between PS and the supplier, to any third party.

Without prior consent, the supplier is not entitled to unilaterally set off any of its receivables payable by PS, and which came into existence under the contractual relationship between the supplier and PS, against the receivables of PS payable by the supplier. Based on prior agreement, PS is entitled to set off any due and outstanding receivables payable by the supplier against the supplier's receivables payable by PS, and PS may even do so against receivables that are not payable.

11. Purchase price payment

PS is obliged to pay for the delivered goods after the goods are delivered properly and completely, and after a proper invoice is issued. Invoices are payable and due within 45 days.

PS shall pay for bank fees charged by the bank where PS maintains its account. All other costs related to the payment of the purchase price shall be borne by the supplier. PS shall only execute the payment transfers in the manner described above to the debit of the supplier and not to the debit of any other third parties, and PS shall do so by crediting the amount to the account number stated on the relevant supplier's invoice. PS's obligation to pay for the purchase price shall be regarded as fulfilled when the amount of the purchase price is withdrawn from the account of PS.

In cases where the purchase price, or a portion of the purchase price, was paid on the basis of a proforma invoice issued by the supplier before the actual delivery of the goods/services and the supplier is late with the delivery, PS has the right to demand payment for late interest fees equal to 0.05% of the amount of the advance payment per each day of delay that comes after the confirmed delivery date. Should the supplier fail to perform the delivery completely or the delivery was only performed partially, PS has the right to demand a return of a proportionate share of the advance payment and to requests payment for late interest fees equal to 0.05% of the proportionate advance payment for each day that has elapsed between the date of advance payment until the return of the payment by the supplier.

12. Third party rights

The supplier guarantees that as of the date the goods are handed over to PS, there are no third party rights that may burden the relevant goods and prevent proper transfer of goods ownership to PS, nor any other rights, in particular applicable industrial property rights, which may prevent PS from using the subject of the purchase properly.

13. Force majeure and danger of change of circumstances

Any war, civil war, export restrictions or trade restrictions applied due to changes in political conditions such as strikes, closures, operational accidents or restrictions and other events that make performance impossible or unbearable, shall be regarded as force majeure and shall exonerate PS from the obligation to accept the delivered goods in a timely manner while the relevant obstacle lasts. PS undertakes to inform the supplier about the existence of force majeure, while both parties undertake to modify and adopt their obligations to best fit the changed circumstances. The supplier hereby explicitly assumes the risk of a change in circumstances.

14. Business secret protection

PS and the supplier jointly declare that they consider all information obtained under their mutual cooperation as top secret and undertake not to disclose such information to any third party, and to use it exclusively for the purposes of mutual cooperation. Such information mainly include technical data, ordered and taken quantities, prices and information on products and product development as well as research and development data of the other contractual partner. The supplier shall keep all obtained images, drawings, calculations and other documents confidential and may only make them available to a third party based on the express consent of PS.

15. Applicable law and arbitration clause

The contractual relationship between PS and the supplier is governed by Czech law. The applicable and competent court having the territorial jurisdiction in the area of the registered address of PS shall be authorised to resolve any disputes between PS and the supplier.

These GPC are valid from 1 December 2020.