General Terms & Conditions of Purchase of schwartz GmbH

1 Applicability and order of precedence, scope, rules as to form, legal requirements

(1) All goods, services and proposals furnished by our Suppliers are governed by the following provisions:

(a) All goods, services and quotations from our suppliers are provided exclusively on the basis of these General Terms & Conditions of Purchase (GTCP). The latter form part of every contract concluded with our Suppliers for goods or services offered by them. They also apply to all future deliveries, services or quotations provided to the Purchaser even if they have not been separately agreed upon again. These Terms & Conditions of Purchase shall govern even if we receive goods without reservations although we are aware of conditions that are inconsistent herewith or contradictory hereto.

(b) Any Supplier terms and conditions inconsistent herewith, or contradictory or supplementary hereto, shall become part of the Contract only if, and to the extent that, we have expressly agreed to their applicability in writing. This approval requirement shall likewise apply in any event – including, e.g., if we receive deliveries without reservations despite being aware of Supplier’s general terms and conditions.

(c) Terms and conditions issued by our Suppliers or third parties shall not apply, even if we do not separately dispute their applicability in an individual case. Any reference on our part to a written communication containing or mentioning a Supplier’s or third party’s terms and conditions shall nevertheless not constitute consent that such terms and conditions are to be applicable. In any event, the express approval requirement provided under Article (1)(b) of these GTCP shall apply.

(d) Any individual agreements entered into with the Seller in a given case (including ancillary agreements, supplements and amendments) shall in any event prevail over these GTCP. The content of such agreements shall be determined, subject to proof to the contrary, by a written contract or by our written confirmation thereof.

(e) As to the nature and scope of mutual performance, the following shall govern in this order of precedence:
• Provisons of the purchase order or of the underlying contract;
• If stated in the purchase order or the underlying contract, any further contractual conditions as well as special and general technical conditions (performance specification);
• These General Terms and Conditions of Purchase for goods, services and quotations furnished by our Suppliers.

(2) Scope of these GTCP:

(a) Personal scope: The present GTCP apply to all business relations with our business partners and suppliers. However, the GTCP shall only be applicable if the business partner or supplier is an entrepreneur within the meaning of Section 14 of the German Civil Code, a public law entity, or a separate property fund under public law.

(b) Material scope: The GTCP apply specifically to contract on the sale and/or supply of movable property (“goods”), regardless of whether Supplier manufactures these goods itself, arranges for them to be manufactured by subcontractors, or purchases them from subsuppliers (Sections 433, 651 of the German Civil Code). Save as otherwise agreed, the GTCP apply as valid at the time of our purchase order, and in the case of international transactions within the meaning of Article 14 hereof, in the version last communicated in text form to Supplier; they shall also govern future contract of the same or similar kind as a Master Agreement without our having to refer to them again in every individual case.

(3) Any legally relevant declarations and notices made or given by Supplier in regard to the contract (e.g., setting of a time limit, default notice, withdrawal from contract) must be made in writing, i.e., in written (letter) or text (email, facsimile) form. Any rules as to form imposed by law and requirements regarding additional evidence, specifically where the declarant’s identity and/or authority is in doubt, shall remain unaffected.

(4) Any reference to the applicability of statutory provisions is made solely for the avoidance of doubt herein. Accordingly, even without such clarification, statutory provisions shall apply to the extent that they are not directly modified or explicitly ruled out in these GTCP.

2 Purchase orders and contracts (quotation and acceptance), deliverables and exclusion of delivery

(1) If our quotations (purchase orders) do not expressly state a commitment period, we shall be bound thereby for one week from the date of the quotation. Acceptance thereof shall be deemed to have occurred in a timely manner if the statement of acceptance (order confirmation) reaches us by the due date.

(2) Seller undertakes to accept the purchase order under these GTCP within a reasonable period, such period not to exceed one (1) week.

(3) In the case of call-off contracts we shall be entitled to change the time and place of delivery as well as the packing type by written notice in reasonable time before the agreed delivery date, but at least five (5) calendar days before such date. The same applies to changes in product specifications

to the extent that such changes can be implemented without substantial extra cost and effort within the Supplier’s normal production process; in such cases, the period of notice according to the foregoing sentence shall be at least four (4) weeks, but may be longer if applicable, depending on the nature of the product (see above provisions relating to the production process). We shall reimburse the Supplier for any reasonable extra cost that has been demonstrably incurred in each case as a result of such change. If the change gives rise to delays in delivery that cannot be avoided with reasonable effort in the ordinary course of Supplier’s production and business operations, the originally agreed delivery date shall be postponed accordingly. Supplier shall notify us in writing in good time before the delivery date, but no later than three (3) working days from receipt of our notice under sentence 1, of any extra costs or delivery delays which Supplier anticipates upon careful evaluation.

(4) We may terminate the contract at any time by written notice stating the reason therefor if we are no longer able to use the ordered products in our business operation due to circumstances that have arisen subsequent to the execution of the contract. In this event we shall compensate the Supplier for its partial performance rendered.

(5) When carrying out joining and separating processes, it is of the essence that the Supplier shall ensure the use of absolutely silicone-free lubricants and parting agents. By acknowledging our purchase order, the Supplier warrants to schwartz GmbH that only silicone-free and asbestos-free materials are used, both in its own manufacturing and with respect to the materials, components and supplies/work contributed by its subcontractors. Any delivery of items containing any of the substances and materials listed in Article 2 Section (5), 1st and 2nd sentence, of these GTCP is expressly prohibited and is herewith rejected beforehand as unsuitable by ourselves (exclusion of delivery). Any processing and integration of these substances in goods delivered to us shall be deemed a hidden defect, with all associated statutory consequences (e.g., commencement of the warranty period no earlier than upon our discovery of the defect). In addition to this mention in Article 2 Section (5), 1st and 2nd sentence, of these TCP we also indicate this condition explicitly in the context of our purchase orders.

3 Prices, payment conditions, invoice data

(1) The price stated in the purchase order is binding.

(2) Save where otherwise agreed upon in writing, the price shall include delivery and transport to the delivery address stated in the contract, including packing.

(3) To the extent that, under the agreement made, the price of packing is not included in the purchase price and the compensation for such packing (provided it has not been made available on loan only) is not expressly specified, it shall be charged at a cost price that can be duly substantiated. At our request, Supplier shall take back packing materials at its own cost.

(4) Save where otherwise agreed, we shall pay the purchase price either at a 3% cash discount within 14 days from delivery of the goods and receipt of the invoice, or net within 30 days. The payment term begins with the appropriate invoicing date. For timely payment of amounts owed by us, it shall suffice that our transfer order is received in due time by our bank.

(5) Our order number, item No., delivered quantity and delivery address must be stated in all order confirmations, shipping documents and invoices. Should one or more of these data be missing, causing our processing to become delayed in the ordinary course of business, the payment terms indicated in Article 3 Section (4) of the GTCP shall be extended by the duration of such delay.

(6) In case of delayed payment we owe interest on arrears at a rate of five (5) percentage points above the base interest rate in accordance with Article 247 of the German Civil Code.

4 Delivery time and delivery, delay in performance, passage of risk

(1) The delivery time (delivery date or term) stated in our purchase order or otherwise applicable hereunder shall be binding. Early delivery is not acceptable.

(2) Supplier undertakes to inform us in writing forthwith if any circumstances occur or emerge which indicate that the agreed delivery date cannot be met. Accordingly, the Supplier must notify us forthwith of any impending or actual inability to meet a given delivery date as well as of the causes thereof and the expected duration of the delay. The occurrence of default in delivery (Sections 4 and 5) remains unaffected thereby.

(3) If the date by which delivery must be made at the latest can be determined from what is stipulated in the contract, the Supplier shall be deemed to be in default as of the end of that day, without any default notice on our part being required.

(4) In the event of default in delivery we are entitled to full legal remedies, including the right of rescission and the right to claim indemnification in lieu of performance, once a reasonable grace period has elapsed fruitlessly.

(5) In case of delays in delivery we are entitled to claim from the Supplier, following prior notice, a contractual penalty of 0.5% of the respective order value for each week of delay or fraction thereof, up to a maximum of 5%. This contractual penalty shall be set off against the default damage for which the Supplier must provide compensation.

(6) The Supplier is not authorized to make partial deliveries without our prior written consent.

(7) The risk of accidental loss or accidental deterioration of the deliverables shall pass to us, even if shipment has been agreed, no earlier than upon due and complete hand-over of the goods to us on a DDP basis at the agreed destination.

5 Intellectual property and confidentiality of business data, tool clause and reservation of title

(1) We reserve title and copyright to the purchase orders and contracts issued by ourselves, as well as to diagrams, drawings, illustrations, calculations, descriptions, execution instructions, product descriptions and other documents and data (“confidential information”) made available to the Supplier, irrespective of whether these are physically embodied or not, stored on data carriers, or transmitted electronically or by postal mail or verbally only.

(a) The Supplier shall not make the confidential data and other objects constituting our property, whether intellectual or otherwise, available to third parties, nor use or reproduce them whether on its own or through third parties. Such documents, data and objects that are our property, whether intellectual or otherwise, shall be used exclusively for purposes of performing the contract and shall be returned to us upon fulfilment thereof The Supplier shall otherwise return such documents and data to us in full at our request, namely if he no longer needs them in the ordinary course of business or if negotiations have not resulted in the closure of a contract. Any copies made thereof by the Supplier shall be destroyed, except where they must be kept in order to comply with legal retention requirements or where data are saved for data backup purposes as part of standard data backup procedures. Documents and data shall be kept secret from third parties, including after the end of the contract. The confidentiality obligation shall expire only after and to the extent that the knowledge contained in the disclosed documents has become general knowledge; in all other cases, it shall expire three (3) years after completion of the contract.

(b) Furthermore, the confidentiality obligation shall be subject to the provisions of Article 10 of these GTCP.

(2) The foregoing provision also applies, mutatis mutandis, to substances and materials (e.g., software, finished and semi-finished products) as well as to tools, templates, samples and other items we make available to the Supplier for manufacturing purposes.

(a) Pending processing of such items, they shall be separately kept in safe and separate custody and adequately insured against destruction and loss at the Supplier’s expense. Such tools, fixtures and models that are made available to the Supplier by ourselves, or are made for purposes of the contract and invoiced separately to us by the Supplier, shall remain or become our property, respectively. The Supplier shall mark them as our property, keep them in safe custody, protect them from damage of whatever kind, and use them exclusively for purposes of the contract. The cost of maintenance and repair thereof shall be borne on a 50:50 basis by the parties to the contract, save where otherwise agreed. However, to the extent that such costs are attributable to defects of such Supplier-made items or to any improper use made thereof by the Supplier or its employees or agents, they shall be borne by Supplier alone. The Supplier shall notify us forthwith if any of these items is damaged to a more than insubstantial extent. At our request, these items shall be surrendered to us in a proper state once they are no longer needed by Supplier to perform the contracts concluded with us.

(b) Any processing, intermixing or commingling (further processing) of provided items by the Supplier is carried out on our behalf. The same applies if goods supplied undergo further processing by ourselves, so that we shall be considered their manufacturer and acquire title to the product latest upon such further processing as stipulated by law.

(3) Any reservation of title imposed by the Supplier shall be valid only to the extent that it relates to our payment obligation for the respective products over which Supplier’s reservation of title is made, i.e., only an ordinary reservation of title can be exercised. In particular, any expanded or extended reservation of title shall be inadmissible. If, in an individual case, we accept a Supplier’s offer for transfer of ownership that is conditioned on payment of the purchase price, Supplier’s reservation of title shall expire, at the latest, upon payment of the purchase price for the goods delivered. In the ordinary course of business we shall be authorized to resell the goods even prior to payment of the purchase price with anticipatory assignment of the resulting claim (alternatively, application of ordinary reservation of title with extension to resale). At any rate, all other forms of reservation of title are thereby excluded, specifically the expanded or forwarded reservation of title and the reservation of title extended to cover further processing.

6 Warranty claims, recourse against suppliers, limitation period, notice of defects

(1) In the case of material defects or defects of title we shall be entitled to legal remedies, without limitation, save where otherwise stipulated below. In derogation of the foregoing, the warranty period shall be 30 months. In particular, we shall be entitled to request, at our own discretion, removal of the defect, delivery of a non-defective product or indemnification, respectively.

(a) If there is danger in delay we are authorized by way of exception, subject to the prerequisites of Article 637 of the German Civil Code, to cure the defect(s) ourselves at Supplier’s expense after having given the latter due notice (right to self-help). In this context, ‘danger in delay’ means that given the special urgency of the matter, we are unable and cannot be reasonably expected (refer to the 2nd sentence) to demand supplementary performance from the Supplier. If the Supplier does not meet its supplementary performance obligation in this respect by failing to effect, at our discretion, either a removal of the defect (rectification) or delivery of a defect-free product (replacement) within a reasonable time period fixed by us, we may cure the defect ourselves and shall be entitled to compensation for the expenses incurred as a result and/or to an advance payment in respect thereof from Supplier. If Supplier’s supplementary performance has failed or we cannot be reasonably expected to opt for it (e.g., due to special urgency, a hazard to operating safety/reliability, or imminent occurrence of a disproportionate loss or damage), no such time limit needs to be set; we shall notify the Supplier of any such circumstances without delay, if possible in advance.

(b) The Supplier is liable by law to ensure specifically that the goods have the agreed properties at the time the risk passes to us. Properties shall be deemed to be agreed, in any event, as appearing in product descriptions that are made an object of the contract or integrated into the contract in the same manner as these GTCP, particularly by being mentioned or referred to in our purchase order. It makes no difference in this context whether any such product description was created by us, by the Supplier, or by the manufacturer.

(c) In derogation of Article 442, Section 1, 2nd sentence, of the German Civil Code, we have the right to assert claims under warranty without limitation even if we remained unaware of the given defect due to gross negligence at the time of concluding the contract.

(d) As regards commercial inspection and defect notification obligations, statutory regulations (Articles 377, 381 of the German Commercial Code) shall apply subject to the following provision: Our inspection obligation is limited to defects that are openly apparent on external visual inspection, including of the delivery documents, as part of our incoming goods checks (e.g., transport damage, supply of incorrect items, insufficient quantities) or can be discovered by sample checking in our quality control process. If an acceptance has been agreed upon, no inspection obligation exists. It also matters to what extent an inspection is feasible or advisable in the ordinary course of business considering the circumstances of the individual case. Our obligation to give notice of subsequently discovered defects remains unaffected thereby. Without prejudice to our inspection obligation, our complaint (defect notice) shall in any event be deemed to have been raised forthwith and in a timely manner if it is dispatched within five (5) working days from discovery of the defect or, in the case of readily apparent defects, from the time of delivery.

(e) Supplementary performance also includes dismounting and remounting of the defective product if the product, in order to serve its intended purpose, has been installed in another object. The costs of inspection and subsequent performance incurred by Supplier (including costs of dismounting and remounting, if any) shall be for the Supplier’s account even if it emerges that, in fact, no defect existed. Our liability for indemnification in the case of an unjustified demand for defect rectification remains unaffected thereby; however, we shall only be liable in this regard if we had in fact discovered, or failed to discover due to gross negligence, that no defect existed.

(f) Furthermore, as for the right to claim indemnification for dismounting and mounting costs incurred during defect rectification or replacement delivery, the provisions of the new law of sales effective since 1 January 2018 shall apply. This implies, inter alia, that the regulations governing recourse against suppliers apply, mutatis mutandis, with regard to Seller’s recourse along the delivery chain; more specifically, it means that we have recourse against the Supplier and will claim reimbursement, irrespective of whether Supplier is at fault or not, for any expenditures we incur in our relationship with our buyer.

(2) Complaints for quality and quantity non-compliances shall, in any event, be deemed to have been lodged in a timely manner if we give notice to Supplier within five (5) business days from receipt of the goods at our site. Complaints for hidden material defects shall, in any event, be deemed to have been lodged in good time if notice thereof is given to the Supplier within five (5) business days from discovery thereof.

(3) Any acceptance or approval on our part of samples or specimens submitted shall not constitute a waiver of warranty claims.

(4) Delivery of our written defect notice to Supplier shall suspend the limitation period until Supplier either rejects our claims, declares the defect to be rectified, or refuses to continue negotiations on our claims. Upon replacement delivery and rectification of defects, the warranty period shall begin anew for the replaced and rectified parts unless we had cause to assume, judging by Supplier’s conduct, that the latter did not consider itself obliged to take this action but merely effected replacement delivery or rectification of defects as a goodwill gesture or for similar reasons.

7 Product liability

(1) The Supplier is responsible for all claims asserted by third-parties for personal injury or property damage attributable to a defective product supplied by it, and shall hold us free and harmless on first demand from the resulting liability vis-à-vis third parties and/or from any third-party claims deriving from the manufacture, delivery, storage or use of the goods supplied. The obligation to hold us free and harmless shall not apply to the extent that a claim is based on a grossly negligent or intentional breach of duties on our part. If we must recall products from third parties due to a defect of a product sourced from the Supplier, Supplier shall bear all costs associated with such recall activity. We shall inform the Supplier of the content and scope of recall activities to the extent that this is feasible and can reasonably be expected of us, and will afford the Supplier an opportunity to comment. Any further legal rights or entitlements shall remain unaffected thereby.

(2) The Supplier shall take out and maintain in force, at its own cost, a product liability insurance providing adequate coverage in an amount of at least EUR 10 million (ten million euros) per insurance claim in respect of personal injury or property damage; save where otherwise agreed in an individual case, such insurance need not cover the recall risk nor any penal or similar damage. The Supplier shall submit a copy of the third party liability insurance contract to us at any time upon request. Any further indemnification rights or entitlements shall remain unaffected thereby.

8 Intellectual property rights

(1) The Supplier warrants, subject to the provisions of Article 8 Section (2), that the products it supplies will not infringe any third-party intellectual property rights in European Union member states or any other countries in which it produces the products, or causes them to be produced.

(2) The Supplier shall hold us free and harmless from all third-party claims asserted against us for infringement of industrial property rights as set forth in Article 8 Section (1), and shall reimburse us for all necessary expenditures incurred as a consequence of such claim(s). This entitlement becomes void if Supplier demonstrates that it is neither answerable for such infringement of intellectual property rights nor was required to be aware thereof at the time of delivery provided it exercised due commercial care and diligence.

(3) Any further statutory rights and entitlements we may have because of defects of title to the products supplied to us shall remain unaffected.

9 Spare parts

(1) For the products supplied to us, the Supplier undertakes to provide spare parts over a period of at least 10 years from delivery thereof.

(2) If Supplier intends to discontinue the production of spare parts for any products supplied to us, it shall notify us forthwith after having taken that discontinuation decision. Without prejudice to Article 9 Section (1), such decision must precede the actual discontinuation of production by at least 6 months.

10 Confidentiality obligation

(1) Supplier undertakes to keep the terms and conditions of the purchase order and all information and documents made available to it (except for information that is publicly accessible) secret for a period of three (3) years from the execution of the contract and to make use thereof only for purposes of fulfilling the order. Upon request, Supplier shall return such items to us without delay after processing an enquiry or purchase order, without retaining any copies thereof.

(2) The Supplier shall not disclose our business relationship in any advertising material, brochures, etc., nor display any deliverable products made for us, without our prior written approval.

(3) The Supplier shall impose an obligation equivalent to the provisions of this Article 10 on each of its subcontractors.

(4) Furthermore, the provisions of Article 5 Sections (1) and (2) shall apply.

(5) Any separately executed non-disclosure agreement, whether based on our own schwartz Confidentiality Agreement or Supplier-based, shall take precedence where its provisions is inconsistent with these GTCP; any non-disclosure agreement based on a Supplier proposal shall take precedence to the extent that it has been negotiated with us into a separate detailed accord.

11 Assignment

The Supplier shall not assign any claims arising out of this contractual relationship to third parties. However, this does not apply to the extent that such claims are for money due.

12 Offset, right of retention

We shall have offset and retention rights, without limitation, to the full extent stipulated by law within the meaning of Articles 387 et seq., 320 of the German Civil Code.

13 Place of fulfilment, jurisdiction for national transactions, arbitration for international transactions

(1) The place of fulfillment shall be Aachen for both contracting parties.

(2) If the Supplier has its principal place of business in Germany (national transactions), the courts of Aachen shall be the exclusive forum for all disputes arising from the domestic contractual relationship.

(a) If the Supplier is a merchant as defined in the German Commercial Code or a public law entity or a separate property fund under public law, the courts of Aachen shall likewise be the exclusive forum for all disputes arising from the domestic contractual relationship. The same applies, mutatis mutandis, if the buyer is an entrepreneur within the meaning of Article 14 of the German Civil Code.

(b) In any event, however, we shall also have the right to sue at the place of fulfilment of the delivery obligation hereunder or of any individual accord taking precedence, or to file suit in the jurisdiction of Seller’s domicile. Any overriding legal provisions, especially concerning exclusive competence, shall remain unaffected.

(3) If the Supplier has its principal place of business outside Germany (international transaction), all disputes arising from or in connection with the contract and with the present GTCP shall be finally resolved according to the Rules of Arbitration of the Deutsche Institution für Schiedsgerichtsbarkeit e.V. (German Arbitration Institute, abbreviated to DIS) by arbitrators appointed in compliance with said rules, without any recourse to the ordinary courts of law.

The court of arbitration shall consist of one arbitrator sitting alone who must hold the qualification for judicial office.

The place of arbitration (venue of proceedings) shall be Aachen, Germany.

The language of the proceedings shall be German. In case the contractual negotiations were conducted in English, the language of the proceedings shall be English as well.

The arbitration award shall be final and binding on both parties. The arbitration fees shall be borne by the losing party.

This arbitration clause (Article 13 Section (3) of these GTCP) is also governed by the applicable material law of Switzerland, with the exception of non-mandatory Conflict of Law rules and of the UN Convention on Contracts for the International Sale of Goods (CISG).

14 Applicable law in national and international transactions

(1) Contracts concluded between ourselves and the domestic Supplier (national transactions) are subject to the laws of the Federal Republic of Germany, to the exclusion of the UN Convention on Contracts for the International Sale of Goods (CISG) and non-mandatory Conflict of Law rules (private international law),

(2) Contracts concluded between ourselves and the international Supplier (inter national transactions) are subject to Swiss law, to the exclusion of the UN Convention on Contracts for the International Sale of Goods (CISG) and non-mandatory Conflict of Law rules (private international law).

15 Social Responsibility

(1) The supplier undertakes to comply with and implement the statutory regulations which we have laid down as a minimum standard within the framework of our voluntary commitment, named Verhaltenskodex und Ethikgrundsätze der schwartz GmbH für Geschäftspartnerinnen und Geschäftspartner – Code of Conduct and Code of Ethics for Business Partners (available on the homepage at www.schwartz-wba.com).

Code of Conduct and Code of Ethics for Business Partners

I. Introduction and purpose

1. In line with a corporate ethics embodying the concept of sustainable “Corporate Social Responsibility”, i.e., the socially responsible management of its company, the following requirements specify schwartz GmbH’s expectations on attitudes and policies pursued by its business partners in their operations.
Consequently, the following requirements form a basic part of the business relations between schwartz GmbH and its business partners, serving each partner’s corporate success in a sustainable manner.
Given their shared recognition of legal and ethical minimum standards, the business partners, by conforming to these requirements, will contribute significantly to the implementation of fair and sustainable practices in areas including, without limitation, working and social conditions as well as ecological commitment.
2. Thus, the business partners expressly undertake to comply with and abide by applicable laws in the country in which they maintain business relations or other service relations with schwartz GmbH.
This compliance obligation shall specifically apply with regard to the law prohibiting child labor, stipulating minimum wages, working hours and environmental protection standards, and combating bribery, corruption, exploitation or other criminal offences.
Aside from the foregoing, the business partners undertake to comply at all times with the laws governing labor, non-discriminatory practices, occupational health and safety, data protection, social security, taxation, and fair competition.

II. Policies and addressees of these requirements

1. The policies and associated requirements laid down herein are based on national and international codes, conventions, and values defined by the company itself. They relate, inter alia, to principles of the Global Compact, the International Chamber of Commerce’s “Charter for Sustainable Development”, and the relevant conventions of the International Labor Organization. Moreover, schwartz GmbH derives ecological objectives and environmental requirements, a quality policy, and the assurance of social rights from these rules.

With its successful and sustainable business performance, schwartz GmbH has gained credibility in the international marketplace, advancing to the vanguard of its industry through the quality and value of its products and services. But schwartz GmbH’s success is also a function of the conduct of its business partners. Effective and excellent business relations can only arise and prevail in a sustainable manner through honest dealings on the part of the business partners, both between themselves and in relation to their environment including personnel and resources. This is essential if a business relationship is to gain strength through mutual trust, enabling both partners to attain maximum success. These principles, on which schwartz GmbH is founded, also drive the collaboration with its business partners. Authenticity, integrity, fair play and transparent dealings form the central pillars of this concept.

The name “schwartz” stands for honest, authentic and lawful business conduct, which should also be reflected in the practices of our business partners. In this context, the respect for human dignity and human rights in any form, as well as for the legal matters stated at I.2. above, are of particularly high importance. schwartz GmbH therefore expects all business partners and their employees, as well as all participants in the delivery chain, to act in a law-abiding and responsible manner. Consequently, the requirements laid down herein are binding for the business relationship. This implies that schwartz GmbH expects its business partners to impose these requirements on their suppliers as well, whereas no claims arising from these requirements may be asserted by third parties.

2. The principles laid down herein apply to the relevant business partner’s company in its entirety, i.e., including its associated undertakings. In addition, the respective business partner must ensure that these Code of Conduct principles are applied along its delivery chains, too. The obligation to fulfill these requirements and the responsibility for compliance with the principles enshrined in this Code of Conduct and Code of Ethics, as well as for the implementation of all necessary measures for a continuous review of the boundary conditions and resulting workflow and performance improvements, rests solely with the business partner committing himself thereto.

III. Field of application and auditing

1. These policies and their requirements apply globally, across all sites and business units, to all schwartz GmbH relations with its business partners, who must in turn impose an equivalent commitment on their suppliers and shall communicate it, especially vis-à-vis groups of people requiring protection (children, adolescents).
2. schwartz GmbH reserves the right to see to it that the fulfillment of the requirements set forth above and below will be audited at the business partner’s site following due prior notice, such audit to be conducted in the presence of the business partner’s representatives and during normal business hours. Throughout this process, schwartz GmbH shall at all times proceed within the confines of applicable law, specifically by safeguarding data protection requirements and by taking into account the confidential nature of trade and business secrets.

IV. Requirements in detail

The requirements stated below are mentioned by way of example only and do not constitute an ultimate list. They represent schwartz GmbH’s minimum requirements.

1. Rights of employees

For schwartz GmbH, the respect of internationally recognized human rights constitutes the basis of all business relations. The following provisions, as well as the labor law of the country in which the business partners operate, shall be particularly taken into account:

No discrimination
Equal opportunities and equal treatment, irrespective of ethnic origin, skin color, sex, religion, nationality, sexual orientation, social background or political attitude – to the extent to which the latter is based on democratic principles and tolerance towards those holding opposing views – shall be ensured. Employees shall be selected, hired and promoted, on principle, by virtue of their qualification and skills.

No forced labor
schwartz GmbH rejects any conscious use of forced or compulsory labor, including bonded labor and non-voluntary work by prisoners.

No child labor
Child labor is prohibited and shall not be used. The minimum age for admission to employment, as stipulated in government regulations in each case, shall be observed.

No harassment
Employees shall not be subjected to any physical punishment whatsoever, nor to any other physical, sexual, psychological or verbal harassment or abuse.

Compensation and benefits
The compensation and benefits paid or provided per normal working week shall correspond at least to the legally applicable and guaranteed minimum. In the absence of statutory regulations or collective bargaining agreements, compensation and benefits shall be based on industry-specific collective agreements consistent with local custom and practices that ensure an appropriate standard of living for the employees and their families.

Working hours
Working hours shall correspond at least to the respective national legal requirements or to the minimum standards of the respective national economic sectors.

Occupational health and safety
The business partner shall at least fulfill the respective national standards for a safe and hygienic working environment and shall take appropriate measures in this context in order to guarantee health and safety at the workplace so that beneficial working conditions are ensured.

2. Transparent business relationships

Avoidance of conflicts of interest
schwartz GmbH’s business partners shall make decisions solely on the basis of objective criteria that are not influenced by personal interests or relationships.

Combating corruption
schwartz GmbH supports the national and international efforts undertaken to protect competition from the influence or distorting effects of corruption, and rejects all corrupt practices and other conduct that could harm the company. schwartz GmbH expects its business partners to reject and preclude all forms of corruption, including so-called facilitation payments (payments effected to speed up routine official procedures). The business partners shall ensure that their personnel, subcontractors and agents will not grant, offer or accept any bribes, facilitation payments, inadmissible donations or other inadmissible payments or undue benefits, whether to or from customers, officials or other third parties.

3. Fair market behavior

Free competition
schwartz GmbH expects its business partners to abide by all valid and applicable competition and antitrust laws. In particular, they shall not enter into any anti-competitive agreements with competitors, suppliers, customers or other third parties and shall not abuse a dominant market position should they hold one.

Import and export controls
In importing and exporting goods and services, the business partners shall comply with all valid and applicable laws.

Money laundering
The business partners shall only maintain business relationships with partners whose integrity they are convinced of. They shall ensure that the relevant provisions of anti-money-laundering law are observed and are not violated in any case.

4. Due diligence to promote responsible supply chains for minerals from conflict-affected and high-risk areas

schwartz GmbH expects its suppliers to avoid any use of minerals sourced from conflict-affected smelters. Minerals are classified as conflict-affected if non-government armed groups are supported directly or indirectly through their extraction, transport, trade, handling/processing, or export.

Information on smelters or refineries used by suppliers or sub-suppliers for minerals such as tin, tantalum, tungsten and gold shall be disclosed to schwartz GmbH upon request.#

To this end, schwartz GmbH recommends the use of the standardized Conflict Minerals Reporting Template developed by the Conflict-Free Sourcing Initiative (CFSI). Using the CFSI data, schwartz GmbH will advise suppliers doing business with conflict-affected smelters or refiners on existing options for sourcing from conflict-free smelters or refiners.

schwartz GmbH’s suppliers and customers are requested to exercise due diligence along their supply chain. This includes the implementation of measures which assure that the minerals they are using – particularly tantalum, tin, tungsten and gold – will not help to sponsor or support any armed conflicts, either directly or indirectly.

These due diligence requirements constitute an extension to the abovementioned sustainability criteria regarding environmental protection, employee rights, transparent business relations and fair market conduct, which form an integral part of the due diligence process to be applied to mineral supply chains.

5. Environmental protection

schwartz GmbH is active in the automotive sector, serving car manufacturers and their direct suppliers. The company develops and produces heat treatment systems for press hardening, hardening, annealing, forging and brazing of steel, aluminium and nonferrous metals and markets this equipment worldwide. schwartz GmbH takes responsibility for steadily improving the environmental compatibility of its products and for minimizing the use of natural resources, duly considering the economic efficiency of such use. Accordingly, schwartz GmbH l considers it no less essential that its business partners should likewise comply with relevant environmental law in all countries in which the company operates.

Against this background, schwartz GmbH considers the following as binding:
– The sustainability of an environmental policy of its business partners
– Current environmental standards
– The German Environmental Protection and applicable regulations under
European law
– Compliance with legal limits and government requirements
In addition, schwartz GmbH expects its business partners to observe and comply with the following:

Creation and application of environmental management systems
Environment-oriented management is a priority objective of corporate policy. schwartz GmbH therefore expects all business partners with production sites to have in place a suitable environmental management system. In addition, schwartz expects its main suppliers to possess a certified environmental management system compliant with the international standard ISO 14001 or the European Union’s EMAS Directive.

Active approach to ecological challenges
Ecological challenges shall be addressed with circumspection and foresight. Measures shall be taken to ensure that environmental issues are handled in a responsible manner. The aim shall be to develop and disseminate eco-friendly technologies.

Avoiding damage to health and the environment; products and processes involving low resource use and greenhouse gas emissions
Negative impacts on the environment and on employee health shall be avoided or minimized in all activities. Throughout the development, manufacture and service life of products as well as in other operations, the efficient use of energy and materials, the minimization of greenhouse gas emissions, the use of renewable resources and the minimization of damage to health and the environment shall all be borne in mind.

Waste and recycling
The avoidance of waste, the re-use and recycling of resources, and a safe and eco-friendly disposal of residuals shall be taken into account during the development, production and service life of products.

Employee training
Employees shall be motivated, instructed and trained in a manner consistent with the environmental relevance of their tasks.

V. Legal consequences of any violation of requirements

schwartz GmbH considers the observation of the requirements set forth herein essential to the respective contractual relationship. In case a business partner does not comply with these requirements, schwartz GmbH reserves the right to terminate its relationship with that business partner for cause. However, schwartz GmbH shall be free to forgo, at its own discretion, any such consequence and to take alternative steps instead, always provided the business partner can demonstrate to schwartz GmbH’s satisfaction that it has instituted countermeasures without delay so as to prevent a re-occurrence of similar violation in the future.