GENERAL BUSINESS TERMS AND CONDITIONS

General Terms and Conditions of Business and Delivery (hereinafter referred to as the "Terms and Conditions") of HERN s.r.o. Kliňanská cesta 564, 029 01 Námestovo, Slovak Republic, Tax ID: 2020129188; Company ID: 36381047; VAT ID: SK2020129188 (hereinafter referred to as the "Buyer")

Company registered in the Commercial Register of the Žilina District Court, Section: Sro, Insert no.: 54196/L

I. Subject of the Terms and Conditions

These Terms govern the rights and obligations of the Contracting Parties to contracts whereby the Seller undertakes to deliver goods to the Buyer and to transfer to the Buyer the title to those goods, and the Buyer undertakes to pay the purchase price.

II. Orders

1. The Contracting Parties agree that the Buyer shall specify its requirements for delivery of goods in separate binding or framework orders.

2. The written order shall be deemed a proposal for the conclusion of a purchase contract.

3. Written orders shall preferably be sent by email and shall be deemed received at the moment of delivery to the supplier.

4. The order contains, among other information, in particular:

a) the type of goods; the material standard; the quantity; the price; the delivery date; the delivery terms and conditions in accordance with INCOTERMS 2010; the due date of the relevant invoice.

5. Unless otherwise agreed in the order or in writing, it is agreed by the Contracting Parties that:

a) the delivery condition under INCOTERMS 2010 is CPT Námestovo and the place of performance is the Buyer's premises;

b) invoices are due 90 days.

6. The Buyer is entitled to cancel the order only until the order is confirmed in writing or by email by the Seller, or until the conclusion of the contract by the expiration of the calendar day following the receipt of the order pursuant to Article II(7) of these Terms and Conditions. Confirmation of the order by the Seller or the expiration of the calendar day following the receipt of the order pursuant to Article II(7) of these Terms and Conditions shall constitute the conclusion of the contract and may only be cancelled or changed by agreement of both Contracting Parties.

7. By sending a confirmation of receipt of the order via email, the Seller agrees with the order or the draft contract as well as with the Buyer's Terms and Conditions. If the Seller does not send confirmation of receipt of the order by the end of the calendar day following the calendar day of receipt of the order, the purchase contract is concluded, unless the Buyer notifies the Seller by the end of the next calendar day following the calendar day of receipt of the order that it does not insist on the order, or the Seller notifies the Buyer by the end of the next calendar day following the calendar day of receipt of the order that it does not accept the order.

III. Delivery of goods

1. The Seller undertakes to deliver goods to the Buyer in accordance with the terms and conditions agreed in the purchase contract concluded in accordance with the Buyer's order and these Terms and Conditions.

2. Upon delivery of goods at the place of performance, the Seller is obliged to present and hand over to the Buyer the following documents:

a) a delivery note with the exactly specified quantity and type of goods and the Buyer's order number;

b) documents enabling proper acceptance and use of the goods;

c) certificates and attestations for the delivered goods, or other documents required by the Buyer and specified in the order or in these Terms and Conditions.

3. The Seller is responsible for ensuring that the goods meet all standards and technical conditions applicable in the Slovak Republic, which shall be demonstrated by the submission of valid certificates and attestations for the Slovak Republic at the request of the Buyer. The Seller undertakes to pay to the Buyer any damages resulting from the breach or falsity of this representation.

4. The Seller is obliged to package and mark the goods in a manner guaranteeing the preservation of the quality of the goods, their protection during transport, handling and storage and their proper identification. The Seller shall be liable for damage caused by improper packaging and marking of the goods.

5. Unless otherwise specified in the order or the contract, it has been agreed by the Contracting Parties that the fulfilment of the Seller's obligation and the creation of the right to charge the agreed purchase price occurs at the time of acceptance of the goods by the Buyer.

6. The Seller may not, without the Buyer's consent, deliver the goods earlier, divided into more deliveries, or in a different quantity, quality and type than agreed in the contract.

IV. Quality, Defects and Complaints

1. In the event of delivery of defective, incorrect goods or goods that do not meet the conditions under the contract or general applicable standards, the Buyer is entitled to return the goods to the Seller at the Seller's expense, while the Seller must promptly replace the defective goods for the Buyer. If the Buyer incurs damage due to defective delivery of the goods, the Seller undertakes to compensate the Buyer in full.

V. Payment Terms and Conditions

1. The Buyer undertakes to pay the Seller the price according to the Terms and Conditions of the contract.

2. The price stated in the contract was agreed as a price without VAT and VAT shall be charged at the statutory rate.

3. The price shall be paid by wire transfers to the Seller's account notified to the Buyer. The Seller's obligation to accept the price for the goods or work shall be deemed fulfiled at the moment of debiting the funds from the Buyer's account to the Seller's account.

4. Unless otherwise agreed in the contract, the Seller has the right to issue a tax document – invoice on the date of delivery of the goods to the Buyer.

5. If the tax document – invoice does not meet the requirements according to special regulations (in particular the VAT Act), the Buyer shall return the tax document – invoice – to the Seller for reworking, stating also the reason for the return. In this case, a new payment period shall run after delivery of the tax document – invoice.

6. The Seller is not entitled to assign any of its rights (including claims) and/or obligations arising under the contract to a Third Party, except to factoring companies for the purpose of factoring, without the Buyer's prior written consent.

VI. Contractual Penalties

1. If the Buyer fails to pay the invoices by the due date, the Seller has the right to charge the Buyer default interest at the rate of 0.02 per cent of the value of the unpaid amount for each day of delay.

2. If the Seller fails to deliver the agreed goods to the Buyer, the Buyer is entitled to impose on the Seller a contractual penalty of 0.05 per cent of the price of the undelivered goods or work for each day of delay.

3. The application and/or payment of the contractual penalty shall not relieve the supplier of its obligations under this contract. The application and/or payment of the contractual penalty shall be without prejudice to the right to full damages, whereby the contractual penalties shall not be counted towards the damages.

4. The Buyer shall have the right to withdraw from the purchase contract if the Seller breaches its obligations under Article III of these Terms and Conditions. In such a case, the Buyer shall return to the Seller, at the Seller's expense, all goods delivered, and the Seller undertakes to take possession of them and to compensate the Buyer for any damage caused to the Buyer as a result of the Seller's breach of its obligations.

5. The Buyer shall also have the right to withdraw from the purchase contract if the Seller breaches its obligations under Article IV(1) and/or Article VII of these Terms and Conditions. In such a case, the Buyer shall return to the Seller, at the Seller's expense, all goods delivered, and the Seller undertakes to take possession of them, return the purchase price to the Buyer and compensate the Buyer for any damage caused to the Buyer as a result of the Seller's breach of its obligations.

VII. Confidential Information

1. The Contracting Parties agree that for the purposes of the contract, "Confidential Information" shall be deemed to include, but not be limited to, drawings, technical documentation, individual and all information provided by the Buyer to the Seller for the purpose of fulfiling the Seller's obligations under the contract, in particular technical, commercial and organisational information, whether provided before or after the conclusion of the contract, with the exception of the following:

a) information that has become public knowledge and available to the public otherwise than by breach of contract;

b) information that was demonstrably in the possession of the supplier before it was disclosed to it by the Buyer – the burden of proof shall be on the Seller;

c) information that the Buyer has expressly marked as non-confidential when handing it over;

d) information required to be provided by a generally binding regulation or by order of a court or other public power in accordance with the law. If the Seller is required to provide such information, the Seller shall notify the Buyer in advance and the Contracting Parties shall mutually agree on the manner in which such information shall be provided.

2. During the term of the contract and for a period of five years thereafter, the Seller undertakes to:

a) keep and protect as confidential and secret each and all information provided by the Buyer;

b) use the Confidential Information provided solely for the purpose of performing the Seller's obligations under the contract (the Seller shall not be entitled to use the Confidential Information for any other purpose);

c) not disclose to any Third Party (except as provided in these Terms and Conditions) any Confidential Information provided by the Buyer;

d) ensure the proper and secure storage and retention of all Confidential Information provided by the Buyer;

e) not to make a copy of the Confidential Information without the prior written consent of the Buyer.

3. The Seller may disclose the Confidential Information provided only to those of its employees or authorised persons who are directly involved and whose knowledge of the Confidential Information is necessary and essential for the purposes of the performance of the Seller's obligations under the contract. The Seller shall be fully responsible for ensuring that all its employees and any other authorised persons are made aware of the contents of this clause, and shall at the same time bind them to its performance.

4. Upon termination of the contract, or upon the Buyer's written request, the Seller shall return all Confidential Information and copies thereof or, at the Buyer's discretion, destroy all Confidential Information and certify in writing that all such information has been destroyed.

5. The Seller is obliged to respect all intellectual and/or industrial property rights relating to the Confidential Information provided.

6. Expiry of the contract shall not affect the supplier's obligation to comply with its obligations under this provision.

VIII. Common and Final Provisions

1. These Terms and Conditions shall enter into force and effect on 1 October 2015.

2. These Terms and Conditions shall be concluded for an indefinite period of time.

3. These Terms and Conditions and all contractual relations between the Buyer and the Seller shall be governed by the law of the Slovak Republic. Contractual relations not expressly regulated by these Terms and Conditions shall be governed by the relevant legal regulations, in particular Act No. 513/1991 Coll., the Commercial Code, as amended.

4. The Contracting Parties agree to maintain the confidentiality of all facts which have come to their knowledge in the performance of their obligations under these Terms and Conditions and the contract.

5. Each of the Contracting Parties shall, having regard to the circumstances and practices of the engineering industry, take measures to prevent or mitigate damage.

6. The Contracting Parties agree that in the event of a dispute or any disagreement or inconsistency under these Terms and Conditions, they shall endeavour to resolve such disputes primarily by negotiation between the Contracting Parties.

7. The Seller shall be responsible for the organisation and safety at work and the health and safety of its workers, the safety of its machinery and equipment used at work, and for the protection against fires in its activities on the premises of HERN s.r.o. The Seller shall ensure that its activities do not endanger the safety and health of HERN s.r.o. employees.

IX. Additional Requirements for Contractors Arising from the Integrated Management System (hereinafter referred to as the "IMS")

The supplier undertakes to comply with the requirements of HERN s.r.o. (hereinafter referred to as the "Organisation") and acknowledges the following policies:

1. Respect the Organisation's Policy (IMS Policy) where HERN s.r.o. undertakes to meet the requirements of ISO 9001, ISO 14001, as well as to comply with legal and other requirements in the areas of quality compliance and workplace conditions, environment, OSH and fire protection.

2. In the case of long-term or recurring activities on HERN s.r.o. premises, it shall create the opportunity to work with competent personnel of HERN s.r.o. to identify environmental aspects and assess the significance of their impact on HERN s.r.o. in order to eliminate or minimise adverse impacts.

3. In the case of a one-off activity, it shall comply with the following requirements for environmental behaviour on the premises of HERN s.r.o.

4. It shall enable its employees who carry out activities at HERN s.r.o. premises to be retrained on environmental requirements (including fire protection, OSH, QMS) by its personnel. It shall also make this training available to its supplier's personnel, if necessary.

5. When carrying out activities on the premises, it shall act in such a way as not to degrade the company's environment by excessive emissions from vehicles, unauthorised burning of materials and waste, and discharge of volatile substances and chemicals into the air without prior consultation and agreement with the responsible representatives of HERN s.r.o. It shall conduct its activities on HERN s.r.o. premises in such a manner as not to cause pollution of the environment, soil or water by oil, chemicals of any kind, or hazardous wastes.

6. It shall allow HERN s.r.o. personnel to conduct a review of activities as part of the scheduled internal reviews of the IMS. It will enable the inspection, even in the event of an emergency situation, in the organisation's premises. It shall dispose of all waste arising from its activities outside the premises of HERN s.r.o. in accordance with the applicable legal regulations of the Slovak Republic, or it shall arrange for the disposal of HERN s.r.o. waste on the basis of a contract. It shall ensure the temporary collection of waste in accordance with the relevant legislation.

7. It acknowledges that in the event of non-compliance with these requirements, HERN s.r.o. shall take appropriate measures to enforce compliance through legislation or termination of the relevant contracts.

The contractual partner acknowledges that in the event of a gross violation of legislative requirements in the field of environment, OSH, or in the event of causing an accident, HERN s.r.o. shall exact compensation for the damage incurred or the costs of elimination of the accident, including the relevant financial costs (fines).