General Purchasing Terms and Conditions

1. Agreement

1.1 Scope. These Terms and Conditions govern the terms of the purchase of Products by Niro Ceramic Group of Companies (“NCG”) from the Vendor named in these Terms and Conditions for such Products as are listed on the Purchase Order issued by NCG and accompanying this Agreement or such Purchase Orders as are issued to the Vendor for the Products subsequent to the date of this Agreement (“Purchase Order”). “NCG” means Niro Ceramic parent company and/or its holding company, subsidiaries, related and associated companies. All Purchase Orders issued incorporate these terms and where applicable and reference to Agreement shall mean the terms of the Purchase Order and these Terms and Conditions read together. Both parties shall be bound by the terms & conditions in this Agreement upon the Vendor’s signing acknowledgement and returning of acceptance copy of the Purchase Order within Acceptance Period of 1 working day from the date of the receipt of the Purchase Order. In the absence of this acknowledgement of receipt, the start of the performance of the Purchase Order will be automatically considered to be an implicit acceptance of the terms & conditions in this Agreement.

“Products” shall mean (i) any raw material supplied to NCG, which raw material shall conform to the Specifications and Standards agreed to between the parties; and/or (ii) any Products which are manufactured by the Vendor for NCG, which Products shall be manufactured in accordance with and conform to the Specifications and Standards and/or quality plan agreed to between the parties ; and/or (iii) Products purchased from time to time as are described in a Purchase Order and/or (iv) any services to be performed by the Vendor for NCG described and delivered in accordance with the terms for Development and Delivery of Professional Services and/or finished Products and services as agreed between the parties, and/or any equipment to be delivered and customized in accordance to the user requirement / specifications agreed between the parties.

1.2 Exclusion of conflicting terms. All Purchase Orders issued by NCG for the Products shall be on the terms and conditions herein and the terms of the Vendor’s acceptance which seek to vary or amend or is in conflict with these terms are hereby expressly objected to. If any Purchase Order is issued in response to an offer made by a Vendor which are upon terms which vary or is in conflict with the terms herein, then the issuance of such Purchase Order by NCG shall be a counter offer to the Vendor upon the terms and conditions herein and the Vendor shall be deemed to have accepted such terms upon the issuance of an order confirmation, whether written or verbal or if the Vendor proceeds to a supply of the Products.

2. Transport and Delivery

2.1 Trade Terms. Reference to trade terms such as EXW denoting Ex-Works, FCA denoting Free Carrier, CIF denoting Cost Insurance and Freight and other trade terms and the responsibilities of parties to a transaction shall be interpreted in accordance with Incoterms 2000 issued by the International Chamber of Commerce (“Incoterms”) unless specified to the contrary in the Purchase Order.

2.2 Delivery. “Delivery” of the Products shall be defined and interpreted in accordance with the relevant Incoterm designated in the Purchase Order. Where no term of delivery is stated in the Purchase Order, delivery of the Products shall be constituted by the handing over of the Products to NCG at NCG’s designated warehouse as instructed by NCM. Where the Products are made up of services, delivery shall be constituted in the manner as agreed between the parties, prior to the desired delivery date specified in the Purchase Order. Where the Products are equipment required to be customized and operational to a specific level of requirements, delivery shall be constituted in the manner as provided as per user requirement / specifications.

The Vendor shall, at its own expense, deliver the ordered Products in accordance to the quantity, delivery date(s) and location stated in the Purchase Order. Products must (i) be suitably packed and prepared for shipment to secure lowest transportation rates but must meet the delivery date specified. (ii) comply with NCG’s requirements and packaging regulations and (iii) be in accordance with all applicable statutes, rules and regulations.
Unless expressly agreed by NCG, The Vendor shall not charge NCG for packing, crating or express freight. The Vendor shall use the most economical means for timely shipments, unless otherwise directed by NCG. The Vendor shall be liable for excess transportation costs resulting from any deviation from the NCG’s instructions, if given. Shipping or receiving of any Products under this Purchase Order shall not constitute a waiver of any right or remedy of NCG hereunder or at law or of any obligation of Vendor to comply with any of the provisions hereof. For bulk order, Vendor to follow delivery schedule provided by NCG.

2.3 Time. Time is of the essence. Delivery in respect of Products purchased shall be as defined in Incoterms 2000 and shall be on or prior to the date as specified on the Purchase Order or Agreement.

If Vendor becomes unable to deliver the Products by the date as specified on the Purchase Order or as agreed between the parties, Vendor shall immediately notify NCG. Such notification shall not however constitute any form of waiver of NCG’s rights arising from any late or non-delivery nor shall constitute an extension of the relevant date to effect delivery.

2.4 Packing List. All deliveries must be accompanied by a packing list / delivery order listing the Purchase Order number, article reference number as provided by NCG and an exact quantity and description of the Products delivered.

2.5 Late Delivery. In the event of late or non-delivery of the Products, NCG reserves the right to accept or reject the Products, or any part thereof at NCG’s discretion, to cancel the Purchase Order and/or Agreement without any penalty or liability and/or to claim for any damages, whether direct or consequential arising from the late or non-delivery of the Products including claims from third parties against NCG for NCG’s non delivery of Products which require the Products in the manufacture of.

3. Transfer

3.1 Risk. The Products shall be transported at Vendor’s sole risk until delivered to NCG at the point specified in the Purchase Order and accepted by NCG.

3.2 Title. Title to the Products shall pass to NCG at such time when the goods are being transported or on transit to the NCG’s destination.

4. Defective Products

4.1 Rejection of Products. NCG retains the right to test, inspect and reject the Products (“Defective Products”) which are in NCG’s opinion defective in any way or which do not conform to the warranties given by the Vendor as stated herein. Acceptance by NCG arising from any incoming quality or inline inspection based on a sampling of Products do not derogate from NCG’s right to test, inspect and reject Defective Products. Products may be returned to the Vendor at the Vendor’s expense including the costs of re-packing and return transport for the excess Products. The expenses incurred will be set off against any amounts howsoever due by NCG to the Vendor.

4.2 Damages for Defective Products. Any Defective Products may be rejected at any time and arising from any tests conducted by NCG or arising from any complaint by third party to whom the Defective Products have been supplied to by NCG. Should any of the Products be discovered or determined by NCG to be a Defective Product, NCG further reserves the right to (i) return Products upon such discovery and to require a replacement; and/or (ii) to claim consequential damages including damages for loss of profits and loss arising from lost production time and/or (iii) make a claim on a full indemnity basis against the Vendor against claims made by third parties against NCG arising from the use of the Defective Products and/or claims by third parties for late or non delivery where the Defective Products have been onward sold or which are to be used in the manufacture of products for sale to third parties.

4.3 Damages for Defective Equipment. Any equipment or machinery which does not, during any agreed warranty period, perform up to the agreed level of efficiency and/or other key performance indicators as agreed between the parties, shall be considered as defective and the Vendor shall be liable to rectify such defect. The Vendor shall further be liable to NCG for (i) any claim for consequential damages including damages for loss of profits and loss arising from lost production time (ii) claims by third parties against NCG for late or non delivery or defects in Products which arising from the failure of the machine to perform.

4.4 Remedies Cumulative. The remedies provided in Clause 4.2 and 4.3 shall be cumulative and do not exclude any rights in law which NCG may have arising from the purchase of defective Products.

4.5 Survival. NCG’s rights arising out Clause 4 and Clause 2.5 together with the Vendors liability to NCG in respect of the supply of Defective Products and late delivery shall survive the termination of this Agreement.

5. Testing and Inspection

5.1 Right of Inspection. NCG shall have, at any time, the right to examine and test the Products ordered, whether at the premises of the Vendor, during manufacture, in the places of shipping, during transport or upon delivery and the Vendor shall provide, all possible means and facilities for any such examination.

5.2 Scope of Inspection. Where the Products ordered are on the basis of specifications and standards or for the manufacture of Products by the Vendor in accordance with specifications and standards stipulated by NCG, examination and testing shall be carried out to verify the conformity of the Products to the standards and specifications as well as to verify the Vendor’s manufacturing processes to any standards and specifications stipulated.

5.3 Costs. Each party will bear their own cost and expenses arising out of the conduct of such tests, provided however that if NCG requires the results of the tests conducted by NCG and/or Vendor to be verified by independent third parties, NCG shall bear the cost of such additional tests.

5.4 Good Faith. All tests and inspections shall be carried out in good faith.

6. Warranty

6.1 Specifications. The Vendor expressly warrants that all Products supplied shall be free of any manufacturing defect, conform to all standards and specifications as well as perform up to the performance levels, efficiencies and other key performance indicators as agreed upon between the parties and that all Products supplied will, prior to the expiry date of the Products (or if no expiry date is specified in the agreed terms, for a period of 6 years after delivery of the Product, or in the case of machinery and equipment, for the warranty period as agreed), be fit and sufficient for the purpose for which it was intended, merchantable and of good material and workmanship.

6.2 Replacement and Reworks. Vendor agrees to replace or make good, at the NCG’s sole discretion and without cost to NCG, any Products not conforming to the foregoing requirements. Vendor shall bear all costs of retrieval and redelivery to NCG’s facility. At NCG’s sole discretion, the Vendor shall re-perform any Products not performed to the NCG’s satisfaction at no cost to NCG. The warranty period shall commence upon delivery or acceptance of the Products performance and remain valid for one year or the length of Vendor’s standard warranty period, whichever is longer. The warranty period for repaired or replaced Products shall commence only when they accord with all relevant warranties and specifications, and the warranty period for replaced Products shall commence upon delivery of replacement products.

6.3 Patent and Other Intellectual Property Rights. Unless the Products ordered are to be manufactured in accordance with a design or process directed by NCG, the Vendor expressly warrants also that the supply and/or manufacture of the Products do not infringe upon any patent rights, industrial design rights, trademarks and any other intellectual property rights of any third parties. The Vendor will defend, indemnify and hold harmless NCG against any and all suits, claims, losses, costs, damages, expenses (including but not limited to all expenses of litigation, court costs and attorney’s fees), action or proceedings based upon a claim that the Products or any part thereof constitute an infringement of any third party intellectual proprietary rights and the Vendor shall pay all damages and cost awarded in such proceedings.

In the event, there is found to be any infringement of third party rights, the Vendor shall at Vendors own cost and expense procure for NCG the right to continue to use the Products supplied.

6.4 No waiver. The obligations of the Vendor pursuant to this Section 6 shall not be affected by any test or inspection conducted by NCG or any acceptance of the Products or by any payment there for and neither shall the obligations of the Vendor be affected by NCG’s dealing (including the sale of the Products or the use of such Products by NCG) in the Products.

6.5 Survival. The obligations of the Vendor in this Section 6 shall survive termination of this agreement between the Vendor and NCG.

7. Price and Payment

7.1 Price. The Products shall not be supplied at prices higher than the Prices (“Prices”) as shown in the Purchase Order or where applicable, as agreed between the parties in writing. Any increase in price must be agreed to in writing by NCG.

7.2 Lump Sum. Prices as quoted shall be on a lump sum or fixed sum basis and where the purchase refers to the purchase of Professional Services and/or finished Products and services, such Prices shall include material and labor as well as equipment, packaging, transport, handling of materials and all other things necessary for the delivery and completion of the scope of Professional Services and/or finished Products and services purchased. No extra cost charge to NCG for multiple deliveries for same/one Purchase order.

7.3 Payment. Payment of the Prices, whether in full or by progressive payments shall be as stated in the Purchase Order agreed between the parties. Vendor shall send to NCG an invoice for the Products delivered. Such invoice shall be addressed to NCG and marked to the attention of the Finance Department. The invoice shall contain particulars of the Purchase Order and shall be supported by evidence of delivery of the Products. Unless otherwise stated in the Purchase Order, or otherwise agreed to in writing, payment on the invoices shall be made no later than sixty (60) days from the end of the calendar month in which the invoice was received by NCG. In the event of non-conforming Products or Service performed, default or termination, NCG may withhold any monies payable hereunder. Should the Vendor fail to make delivery on time as stipulated in the Purchase Order and/or Agreement after deposit payment made by NCG to the Vendor, NCG reserves the right to impose interest rate of 0.1% per day on total deposit amount effective from delivery due date as penalty which shall be deducted by the paying bank from the payment.

7.4 Taxes. Vendor shall be responsible for any and all taxes that are lawfully due by the Vendor with respect to Products provided or performed to NCG, including but not limited to the Malaysian tax laws pertaining to any provision of Vendor’s Products hereunder. Vendor is liable for costs and expenses according to trade terms agreed between NCG and Vendor in accordance to Incoterms 2000. With respect to Products, NCG if required by law, will withhold from payment to the Vendor taxes or any other amounts NCG is required to withhold under the laws of any taxing jurisdiction having authority over NCG where the Products is being performed or provided by Vendor. Any such taxed or other amounts withheld shall be paid by NCG to the appropriate taxing or other authority in a timely manner. At the written request of Vendor to NCG, NCG shall provide Vendor with receipts evidencing tax payments withheld from amounts payable to Vendor.

8. Confidential Information

8.1 Access and Scope. Vendor acknowledges that in the course of supply of Products to NCG, it may have access to non-public information (“Confidential Information”) about NCG’s existing or proposed business or products and that such information is valuable to NCG and the disclosure or unauthorized use will cause substantial harm to NCG. Confidential Information includes without limitation any information designated by NCG as confidential or which NCG does not designate as public and information that is provided to third parties who are under an obligation not to further disclose. Confidential Information does not however include information which is in the public domain or which becomes part of the public domain other than as a result of Vendor’s breach of its obligations herein.

8.2 Non Disclosure and Use. Vendor shall not disclose to others or to use Confidential Information for any purpose other than as required to perform its obligations to NCG. Should it become necessary for Vendor to disclose any of the Confidential Information to the employees of the Vendor, Vendor shall ensure that such employees comply with the restrictions imposed by this Section 8.

8.3 Remedies. It is acknowledged that damage to NCG resulting from an unauthorized disclosure of Confidential Information is irreparable. Consequently, NCG shall be entitled to injunctive relief preventing any or further disclosure in addition to other available relief, including damages.

8.4 Return. Upon NCG’s request made at any time, Vendor shall return to NCG all tangible material which may contain or store the Confidential Information and shall erase and delete all Confidential Information from Vendors own records or storage retrieval system.

8.5 Survival. The obligations of the Vendor in this Section 8 shall survive termination of this Agreement.

9. Trademarks and Other Intellectual Property Protection

9.1 General. Vendor acknowledges that the supply and/or manufacture of the Products herein do not grant the Vendor any right over any trademark, tradename, design, design process, patents and other intellectual property rights of NCG which NCG may allow the use of in the manufacture of the Products for NCG by Vendor. All intellectual property developed as a result of this Agreement shall be exclusively the property of NCG, save where expressly agreed to the contrary.

9.2 Return. The ownership of any artwork, design, films, plates, discs, drawings, moulds and other material provided by NCG to the Vendor or developed by the Vendor for the purposes of this Agreement (collectively “the Material”) shall reside in NCG. Such Materials shall be maintained in good order and returned to NCG upon request by NCG or destroyed at the request of NCG.

9.3 Infringement. To the best of the Company’s knowledge, any design, design process, trademarks, tradenames and other intellectual property rights contained in the Specifications and Standards and in the Materials do not infringe on any third party rights. The entering into this Agreement to the Vendor however shall not be construed as a warranty of non-infringement.

9.4 Non-use. Vendor shall not use in any manner howsoever, any of information contained in the Materials in the manufacture, supply or sale of any Products to any third party.

10. Insurance

10.1 Protection & Coverage. Vendor shall at its own cost arrange with insurers acceptable to NCG such minimum insurances as follows at the very least to include worker’s compensation insurance or similar coverage sufficient to satisfy all applicable laws and regulations of each jurisdiction in which Vendor and its employees are performing work on behalf of NCG. All policies shall contain a waiver of subrogation rights from Vendor and its insurers against NCG and shall contain a provision that coverage shall not be suspended, voided, cancelled, reduced in coverage or in limits except after thirty (30) days prior written notice has been given to the NCG. Any coverage required to be provided by Vendor will be considered primary and not in excess of or contributory with any similar coverage carried by NCG.

11. Health, Safety and Environment

11.1 Compliance. The Vendor shall comply with any and all applicable regulations pertaining to safety, health and the environmental protection.

11.2 Hazardous Substances. The Vendor represents and warrants that all goods are and will be when delivered free of all hazardous substances and that no claim, demand or notice has been filed nor any proceeding commenced alleging liability of Vendor in connection with the use of any hazardous substances relating in any way to the manufacture or sale of Products.

12. General Provisions

12.1 Non-assignment and Subcontracting. The Vendor may not assign, transfer, or sell its rights under this Agreement, or delegate its duties hereunder, to any person including any Associates (as defined below) of the Vendor, without the prior written consent of NCG, which may be granted or withheld in sole discretion of NCG. A transfer of a controlling interest in the Vendor shall constitute an assignment. Any purported assignment without NCG’s consent shall be void and shall constitute a material breach of this Agreement.

12.2 Entire Agreement; Modification. This Agreement contains the entire and final agreement between the parties. No modification of any of its provisions, or any future representation, promise, or addition, shall be binding upon the parties unless made in writing and signed by both parties.

12.3 Waiver. A waiver of any obligation the Vendor has under this Agreement shall be effective only if in writing signed by NCG. Any waiver shall not affect NCG’s right to require strict compliance with this Agreement in the future.

12.4 Indemnification. The Vendor shall defend, indemnify and hold harmless NCG and each of NCG’s shareholders, officers, directors, agents, and employees from any claims, demands, loss, damage, liability, or expense, including solicitors fees and costs (on a solicitor client and full indemnity basis) arising out of or attributable to the Products or any part thereof, the manufacture, design or formulation of the Products or any part thereof , any acts or omissions of the Vendor or its employees or agents or any breach by the Vendor of any provisions or representations contained herein.

12.5 Notices. Any notices hereunder shall be given in writing directed to the address of each party set forth on the cover page of this Agreement, or to such other address as either party may substitute by written notice to the other, and shall be deemed given (i) when personally delivered; (ii) if sent by an international courier service, on the third working day after deposit with such courier, properly addressed and fee prepaid or billed to sender; (iii) if sent by facsimile, upon and after the receipt of a machine-generated written confirmation report confirming transmission to the proper facsimile number of the receiving party.

12.6 Governing Law. The rights of the parties shall be governed by the laws of Malaysia. Vendor represents that it has obtained all licenses and authorizations necessary to export or re-export goods, technology or services under the Purchase Order to NCG or to the ultimate end user as identified by NCG to Vendor.

12.7 Force Majeure. Neither party shall be liable for any delay or default in performing its obligations if such default or delay is caused by any event beyond the reasonable control of such party, including, but not limited to, acts of nature, war or insurrection, civil commotion, destruction of production facilities or materials by earthquake, fire, storm or flood, labor disturbances or strikes. Labor and materials shortage shall not be considered as a Force Majeure event.

12.8 Associates. Any breach or violation of any term of this Agreement by any Associates of the Vendor shall be deemed to be a breach or a violation by the Vendor. An “Associate” is (i) a director or officer of the Vendor; or (ii) a person or entity controlling, controlled by, or under common control with the Vendor and their directors and officers; or (iii) a person or entity related to or in which the directors and officers referred to in (i) and (ii) have substantial interest in

12.9 Working days. Where reference is made to a working day in this agreement, it shall mean a day on which the offices of NCG and the financial institutions in any state location are open for business.

12.10 NCG’s Remedies. NCG’s exercise of any of its rights and remedies under this Agreement or at law following the Vendor’s breach shall not be the exclusive rights or remedies of NCG and shall in no way limit NCG additional rights or remedies available to it under this agreement or law. Without limiting the foregoing, in the event of a breach by the Vendor of any of its obligations under this agreement, NCG may, upon notice to the Vendor and as determined in NCG’s sole discretion, terminate this agreement in its entirety and to cancel any Purchase Order as yet unfulfilled.

12.11 Severability. The illegality, invalidity or unenforceability of any part or parts of this Agreement for any reason shall not prejudice or affect the validity of the remaining parts.

12.12 Official Language. The official language of this Agreement is English. Documents or notices not originally written in English shall have no effect under this Agreement until they have been translated into English, and the English translation shall then be the controlling form of such document or notice.