TERMS OF PURCHASE

GRUPO BAYER

QUOTATIONS

Suppliers are to comply strictly with the quantities and quality specified in the enquiry inviting quotations. Any departures from those specifications are to be expressly stated. No charge can be made for quotations, and the company shall not be bound by obligations of any kind through receiving a quotation. All drawings, plans and other documentation made available to suppliers to assist them in preparing their quotations are to be returned with the quotation submitted.

ORDERS

Only orders drawn up in writing shall be valid. Verbal agreements or agreements made over the telephone must be confirmed in writing to become valid. This also applies to deliveries or work assignments agreed subsequently. All orders are to be acknowledged in writing by the supplier, and shall be processed separately in all correspondence. All documents are to state the following particulars: the department arranging the purchase, the full order number, the order date, and the reference code of the person issuing the order. If this order acknowledgement is not submitted to the person issuing the order within two weeks from the date of the order, the issuer shall be released from all obligations in connection with it. Suppliers shall state their acceptance of these Terms of Purchase when submitting their quotations or when they receive the order. Even if such acceptance is not expressly given, these Terms of Purchase shall become an integral part of the contract once the order is accepted. Any general terms of supply appended to the quotation or to the order confirmation shall not be valid. Any special conditions that contradict these Terms of Purchase shall only be valid if the person arranging the purchase gives the supplier express consent to them in writing.

DELIVERY TIME

Delivery time is computed from the date of the order. Suppliers are bound to comply with the delivery time stated, except in cases of force majeure, such as strikes, fire, flood, war etc. Suppliers must report such adverse circumstances within a week of their occurrence, stating approximately how long the delivery will be delayed. When such a report is received, and by joint agreement with the purchaser, a new delivery time will be set in accordance with the circumstances. If a supplier fails to fulfil this reporting duty, he shall not have any right subsequently to adduce any such difficulties for justification purposes.

If a supplier fails to comply with the agreed delivery time, his liability shall be as prescribed by current legislation, without detriment to the penalties agreed for cases of late delivery.

GUARANTEES

Suppliers must guarantee that the goods delivered are free of defects reducing their value, their usefulness or their good performance, and they must guarantee that they correspond exactly to the specifications set down in the order, to the qualities confirmed at order delivery, to the latest regulations issued by the Authorities, and to the technical and safety standards applying to the goods concerned. The guarantee period shall be 12 months from the commissioning of the installation or, at most, 18 months from the time of delivery, unless otherwise agreed. In the event of imperfections being encountered, the guarantee period shall be extended for as long as necessary to remedy the defects found.

The purchaser shall be entitled to demand that any parts found, within the guarantee period, to be defective, or to have been delivered under conditions that do not match the specified conditions, be repaired or replaced by the agreed part at the purchaser’s discretion. However, this shall not be operative in the case of parts that are defective or damaged for the following reasons:

a) fully worn out, or

b) damage caused deliberately, or by improper or careless use.

The purchaser shall notify suppliers without delay of any defect encountered in the goods supplied, sending notification as soon as the defect is detected, in accordance with the normal pursuit of the work. These provisions shall also apply, mutatis mutandis, to services rendered, such as fitting work, maintenance etc.

Guarantees given by suppliers are also valid for parts manufactured by their subcontractors. Parts that are the subject of complaint shall remain in the possession of the purchaser until they are replaced, after which they shall once more become the property of the supplier concerned. In urgent cases, or if the supplier is facing a work overload, flaws may be remedied by the purchaser, who shall then be entitled to pass on the relevant costs to the supplier concerned. The guarantee duty of suppliers is not affected by any acceptance given by the purchaser for the deliveries made and the work done.

If the product supplied is replaced in full, the guarantee period shall be re-started; in the case of partial replacement, the guarantee period shall be re-started for the new components.

Suppliers shall hold the purchaser free of all liability in connection with complaints made under the manufacturer’s liability provisions of Statute 22/1994 of 6 July, concerning liability for defective products, in so far as the product defect from which the complaint stems is attributable to the supplier or a subcontractor of the supplier.

In general, suppliers’ liability shall be as set down in current legislation.

TESTS

If tests are planned for the goods supplied, the cost of the testing, in terms of materials and staff, will be for the account of the supplier.

The purchaser will cover the cost of his own staff in carrying out testing.

Suppliers must send formal notification to the purchaser at least one week in advance regarding the availability of the materials and staff for carrying out the tests, agreeing on a particular date with the purchaser. If the goods of the supply are not submitted on the date agreed, any staff expenses incurred by the purchaser in connection with the testing work planned shall be for the account of the supplier.

If tests need to be repeated or supplemented on account of defects having been encountered, the pertinent costs for materials and staff shall be for the account of the supplier. Expenses for materials and staff corresponding to certificates for the materials used shall also be for the account of the supplier.

INSURANCE

Transportation and assembly insurance shall be taken out solely by the supplier.

Suppliers shall take out Public Liability Insurance at their own expense, with sufficient cover for any damages caused by them, their staff or their agents in connection with services rendered, work performed or goods supplied.

Evidence of the amount covered per claim is to be provided for the purchaser at the latter’s request.

Any machinery, equipment etc. lent to the purchaser shall be insured by the latter against the usual risks. No further liability shall be accepted by the purchaser for the deterioration or destruction of the machinery, equipment etc., except in cases of wilful misconduct or gross negligence.

SHIPPING INSTRUCTIONS

On the date of shipment, for each shipment made, the supplier shall send detailed notification of the shipment, sending it separately from the goods and the invoice. The delivery note and packing list shall be sent with the goods.

In the case of shipment by sea, the names of the shipowner and the vessel shall be stated in the documentation and in the invoice.

Suppliers shall choose the mode of transport that is most favourable for and best suited to the purchaser.

All shipment notifications, delivery notes, packing lists, bills of freight, invoices and externally visible packing materials etc. shall bear a full statement of the order particulars required by the purchaser, and particulars of the place of unloading.

Suppliers shall pack, label and ship hazardous products in compliance with current national and international regulations. The accompanying papers must also show the classification category of the hazardous goods, along with all other particulars demanded by applicable transport regulations.

Suppliers shall be liable for any damages arising from failure to comply with those regulations, and shall cover any expenses stemming from such failure. Suppliers shall also be responsible for making sure that their subcontractors comply with these shipping instructions.

All shipments that cannot be accepted through failure to comply with these instructions shall be put in storage, at the risk and for the account of their suppliers. The purchaser shall be authorised to check the contents and state of such shipments. It is forbidden to load tools and capital goods along with the goods to be supplied.

CANCELLATIONS

The purchaser is entitled to cancel an order if the supplier fails to fulfil it within the agreed delivery time and if the purchaser can show that his interest in the supplier’s work has lessened to a greater or lesser extent as a result of that delay in delivering the goods.

PATENT INFRINGEMENT

It is the supplier’s duty to ensure that no third-party patent or property rights have been infringed through the delivery and use of the goods supplied. Any royalties due are for the account of the supplier.

INVOICING AND PAYMENTS

If a supplier reduces his prices or improves his terms between the placing of the order and its delivery, he shall apply the prices and terms in force at the time of delivery. The original invoice is to be sent, posting it under separate cover. Under no circumstances may the invoices be sent with the goods. To facilitate control over invoices, they are to match the text, prices and order laid down in the order.

Any additional work and deliveries are to be indicated separately in the invoice, with a reference to the written approval previously issued to authorise them. Delivery times and means of payment shall be as stated in the order. If the supplier does not deliver the invoice when delivering the goods, the payment time shall be counted from the date on which the invoice is received. Payment shall not be taken to imply acceptance of terms and prices. The payment time shall affect neither the supplier’s guarantee nor the right to lodge claims.

In the case of goods acquired by weight, sold buy unit price, the weight read by the scales we had stipulated beforehand shall be valid. The weight stated in the order is to be respected, within a tolerance of +/- 5%, unless otherwise agreed.

No payment shall be made for material in excess of that weight.

DRAWINGS

All documents, sketches, drawings, analysis methods, formulations etc. granted to suppliers by the purchaser, or prepared by suppliers in accordance with special instructions from the purchaser, shall remain the property of the purchaser, and may not be used by the suppliers for any other purpose, or copied, or made available to third parties. When the order is completed, they are to be returned automatically. The purchaser reserves property rights on all drawings and documents given to the supplier. If their return is requested, they are to be returned without delay, along with any copies made.

Suppliers are to treat orders and work assigned to them as confidential. Suppliers shall thus have full liability for any damages arising for the purchaser through failure to comply with these requirements.

During any technical discussions arranged, suppliers are to show all the drawings and documents needed for the execution of the assignment requested. However, such discussions, or the participation of the purchaser in the preparatory work, shall not release suppliers from their duties as regards guarantees etc.

Suppliers shall provide as needed, at their own initiative and at no charge, any such documents as the purchaser may require to enable him to use, install, assemble, process, store, work with, maintain, inspect, preserve and repair the goods of the supply.

The latest version of all rules and guidelines specified by the purchaser shall be applied in all cases. The purchaser’s manufacturing rules and guidelines are to be requested by the supplier if they have not been provided beforehand.

TOOLING

Any order-specific moulds, patterns, tools, films etc. prepared by suppliers for the purpose of executing the order shall become the property of the purchaser at the time of payment, even if they remain in the possession of the suppliers concerned. This tooling is to be given to the purchaser when requested. All printing plates and moulds supplied by the purchaser or owned by him are to be returned at first request when the order is completed.

RECEPTION

If a specific reception act is designated for the delivery of goods, staff expenses shall be for the account of the purchaser, and material expenses for the account of the supplier. The delivery date for the goods requested is to be confirmed at least one week in advance. If the goods concerned are not made available to the member of staff appointed to receive them on the date announced, staff expenses arising shall be for the account of the supplier.

ADVERTISING MATERIAL

No reference may be made to business relations with us in advertising and publicity materials without prior written consent from us.

ASSEMBLY IN OUR FACTORY

If assembly in our factory is planned in connection with the delivery, the staff of the supplier concerned shall follow the instructions of the purchaser’s Works Management, and shall observe the safety and internal-procedure rules laid down for external companies undertaking work in our factories. These rules and instructions shall be supplied before the work is commenced, and they must be requested in all cases from the safety department.

Risks and liability connected with items owned by suppliers and the staff of suppliers shall not be for the account of the purchaser.

LEGISLATION APPLYING; THE INTERPRETATION OF TERMS

Spanish Law shall apply. The Convention of the United Nations Organisation of 11-04-1980, which came into force on 01-01-1991, shall not be applied.

Customary terms of business shall be interpreted in accordance with the current version of the Incoterms.

THE ORIGIN OF GOODS

All goods supplied shall comply with the EU convention conditions of preferential origin, unless otherwise stated in the order acknowledgement.

JURISDICTION

The parties expressly submit any doubts, issues or disputes that may arise to the jurisdiction of the Courts and Tribunals of Barcelona, expressly waiving any jurisdiction of their own.