Purchasing General Terms and Conditions

These General Terms and Conditions of Purchase, any appendix and exhibit, specifications, plans, notes, instructions and other information, whether physically attached or incorporated by reference (collectively the Purchase Order or Order), constitute the complete and exclusive agreement that governs the purchase of any good (Good, Material or Product) by Chesterton Mexicana, S.A. de C.V. (Chesterton) from the Supplier (the Supplier). This Order is expressly limited to, and expressly made conditional on, Supplier´s acceptance of the terms of the order and purchase order Terms and Conditions. Chesterton objects to any different or additional terms contained in any order confirmation or order document sent by the Supplier. Notwithstanding the foregoing, if a framework agreement covering the acquisition of the Goods described in the Purchase Order exists between the Supplier and Chesterton, the terms of such framework agreement shall prevail over any term contained in this document.

1.- Acceptance of Order– Chesterton requires written Purchase Order confirmations for all orders placed (Order). Any terms proposed in Supplier´s acceptance of the Agreement between Chesterton and the Supplier shall consist of the written terms on the Order, these printed terms and conditions, and any detailed specifications, drawings and samples which Chesterton incorporates by reference.

2.- Pricing– All prices contained on the Order are firm and are inclusive of any taxes and other charges such as shipping and delivery charges (including sales, use, or similar tax), license fees, customs fees, duties, fees, surcharges imposed by the government and other charges on your bills. The Supplier shall use its best efforts to assist Chesterton with all legal measures to minimize taxes resulting from the performance of this Order. Payment will be made in the currency of the country in which the entity or affiliate of Chesterton identified in the Order resides, and if the price stipulated in the Order is not in the local currency, Chesterton will determine the local currency equivalent of the price on the payment date. In no event shall Chesterton be liable for paying in advance funds to the Supplier.

3.- Payment Terms– No invoices shall be sent until the goods have been shipped to Chesterton. Payment terms are according payment calendar and agreements from the date of delivery. Chesterton may hold back on payment an amount equal to 10 % (ten percent) of the applicable invoice in order to guarantee that Supplier will effectively fulfill its responsibilities agreed upon in these Terms and Conditions, the PDF and XML files of your invoice should be sent to recepcionfactura@chesterton.com according to the circular regarding payment schedule and invoice shipments for review.

4.- Labeling, Packaging and Shipping- Supplier shall give written notice of shipment to Chesterton when the goods are delivered to a carrier for transportation. Supplier shall provide Chesterton all shipping documents, including origin certificate, the commercial invoice, packing list, [bill of landing/landing invoice] and any other documents necessary to ship and release the “Goods” to Chesterton, as well as components or elements therein or used in manufacturing, as may be required by Chesterton to fully comply with all applicable government regulations. Goods shall be labeled and packed for shipment in compliance with applicable laws (including but not limited to the laws of México) and according to Chesterton´s instructions or, if there are no instructions, in a manner sufficient to ensure that the goods are delivered in undamaged condition. If the Goods are not shipped in accordance with Chesterton specifications», the «Supplier» will pay or reimburse Chesterton for any excess costs caused by this situation. Supplier must provide Chesterton prior written notice if it requires Chesterton to return any packaging material shall be may at supplier´s expense. Unless expressly stated otherwise in this Order, the Supplier will not charge Chesterton for labeling or packaging regardless of the type of container. Supplier will indemnify and hold harmless Chesterton, its subsidiaries and affiliates, their successors, assigns, representatives, employees and respective attorneys as well as the Client from and against all liability, claim, loss, cost, damage and expenses of any nature or class (including fines and penalties) arising from or as a result of: (i) the delay of the Supplier in the provision of any documentation or other information mentioned above to “Chesterton”; (ii) any errors or omissions contained in said documentation; and (iii) any breach by the Supplier with respect to the regulations.

5.- Delivery and delivery location– Supplier shall deliver the Goods in the quantities, place and on the date (s) and times specified in this Order or as otherwise agreed in writing by the parties (the “Delivery Date”). Timely delivery of the Goods is of the essence. If Supplier fails to deliver the Goods in full on the Delivery Date, Chesterton may terminate the Order immediately by providing written notice to Supplier shall indemnify Chesterton against any losses, claims, damages, and reasonable costs and expenses directly attributable to Supplier´s failure to deliver the Goods on the Delivery Date. Chesterton also has the right to return any Goods received after the specified Delivery Date. All Goods shall be delivered to the address specified in this Order during Chesterton´s normal business hours or as otherwise instructed by Chesterton. Supplier shall promptly give written notice to Chesterton if the Supplier is not in a position to deliver the Goods on the delivery dates and times specified in this Order. The Goods delivered that exceed the quantities or that anticipate the dates or delivery times specified in this Order will be at the risk of the Supplier and may been returned to it by Chesterton, and all transportation charges to and from the original destination will be paid by the Supplier. Chesterton will not be required to make any payment for the Goods delivered to the above mentioned that exceed the amounts specified in this Order, unless expressly stated otherwise in this Order or is authorized by Chesterton. Likewise, Chesterton will not be obliged to buy the Goods exclusively from the Supplier.

6.- Cancellation and Amendment of the Order– Chesterton has the right to make modifications to this Purchase Order at its discretion. If a change, results in any changed pricing or delivery schedule, such changes shall be equitable and the Supplier shall not proceed with any changes until Chesterton confirms any updated pricing or delivery schedule in writing. No change or cancellation to this Order is binding upon Chesterton unless it is in writing, specifically states that it amends this Order, and is sent by an authorized representative of Chesterton.

7.- Quality– Supplier shall maintain a quality assurance program to ensure the quality of the Goods. Supplier shall promptly notify Chesterton if it discovers or suspects any concern with the quality of the Goods provided under this Order, regardless of whether or not the Goods have been provided. Supplier shall provide Chesterton with information and materials necessary for Chesterton to analyze the quality of the Goods.

8.- Inspection, Acceptance, and Quantity of Goods– Goods purchased under this Agreement are subject to inspection by Chesterton. Chesterton reserves the right to reject and refuse acceptance of any Goods not in conformance with the Purchase Order or any instructions, specifications, drawings, data, or Supplier´s warranties. Any such rejected Goods shall be returned to the Supplier at Supplier´s risk and expense. Supplier shall repair or replace the Goods, or refund amounts paid with respect to the nonconforming Goods, at Chesterton´s option. If Chesterton does not reject the Goods and instead accepts the delivery Goods, the Price for the Goods shall be adjusted on an equitable basis. Chesterton reserves the right to charge back to the Supplier the cost of any or all material, labor, freight and duty costs if material does not meet specifications and causes rework or delay to Chesterton.

9.- Warranties– Supplier warrants to Chesterton that for a period of two years from the Delivery Date, all Goods will: (a) to be newly manufactured and free of any defects in workmanship, material and design; (b) conform to applicable specifications, drawings, designs, samples and other requirements specified by Chesterton; (c) to be shape for their purpose and operate as intended; (d) be merchantable; (e) clear of all liens, security interests or other encumbrances; and (f) not infringe or misappropriate any third party´s patent or other intellectual property rights. These warranties survive any delivery, inspection, acceptance or payment of or for the Goods by Chesterton.

10.- Security– Supplier must guarantee security in the supply chain and undertake the necessary organizational instructions and measures, particularly in the fields of physical security, personnel and information security, and packaging and transport, for any and all Goods and services provided to Chesterton. Supplier must guarantee that the Goods and services are protected against unauthorized access during their provision, production, storage handling and processing, loading and conveyance.

11.- Force Majeure– Supplier will not be liable for loss or damage arising from from delay or inability to deliver on account of acts of God, fire, acts of civil or military authorities, or any other conditions beyond Supplier´s control, excluding labor disturbances of the Supplier. Supplier will provide Chesterton with prompt written notice of any such delay. The notice shall include a description of the cause of the delay and an estimate of the duration of the delay. Supplier must demonstrate that reasonable steps are being taken to minimize delay or damage cause by the Force Majeure. Chesterton may terminate the Purchase Order immediately upon written notice, without any liability, if such Force Majeure event lasts longer than five (5) days.

12.- Confidentiality– To facilitate Supplier´s supply of Goods to Chesterton, Chesterton may disclose information to Supplier that Chesterton considers confidential, including but not limited to product design information, product formulas, and/or information about Supplier´s manufacturing processes (Confidential Information). Supplier shall maintain in confidence and not disclose any Confidential Information, using the same degree of care that it uses to protect its own confidential information of like nature, but no less than reasonable care. Supplier may not use Confidential Information for any other purpose besides satisfying the terms of this Order. Supplier shall treat its relationship with Chesterton as Confidential Information. At the end of Chesterton´s relationship with Supplier, Supplier shall destroy or return to Chesterton all copies of Confidential Information in Supplier´s possession.

13.- No Waiver Clause– Chesterton´s right to require strict observance or performance of each of the terms and provisions here of shall not be affected by concurrent waiver of any other term or provision or any previous waiver, forbearance of course of dealing. Any waiver must be in writing.

14.- Compliance with Laws– Supplier must be in compliance with and shall comply with all applicable local and México laws, regulations and ordinances, including but not limited to applicable national laws, the international Foreign Corrupt Practices Act, safety and environmental regulations, international treaties and conventions such as the Convention on Combating Bribery of Foreign Public Servants in International Business Transactions and the United Nations Convention against; safety and environmental regulations, import and export regulations, and labor laws, including but not limited to prohibitions on using child labor. By accepting this Order, Supplier certifies that no conflict minerals were used in production of the Goods. Supplier has and shall maintain in effect all the licenses, permissions, authorizations and consents that it needs to carry out its obligations under the Order.

15.- Governing Law & Jurisdiction– These Terms and the accompanying Order and all other disputes arising out of or relating to these Terms or the Order shall be construed, and the rights and obligations of the parties shall be determined by and in accordance with the laws of the Commonwealth of México, without reference to any conflicts of laws principles. All such disputes shall be adjudicated only in and before the federal or state courts located in Estado de México, México.