(Rev. 00)

1 Introduction
These General Terms and Conditions of Supply (hereinafter referred to as “GTS”) are applicable to all Supplies (e.g. purchase contracts, contracting of goods and/or services, etc.) provided to Lovato Electric S.p.A. (hereinafter referred to as “Lovato”) save for exceptions specifically agreed in writing, and govern relationships between Lovato and its Suppliers, forming part of the order that Lovato sends to the Supplier, and lead to the non-application of the general terms and conditions of the Supplier. Therefore, any clauses inserted by the Supplier in their confirmations, invoices and correspondence, whether in contrary or additional to the present GTS, are to be considered as non-applicable unless otherwise expressly and exceptionally accepted in writing by Lovato.
These GTS have been announced and fully accepted following publication of the same on the Lovato corporate website (https://www.lovatoelectric.com/, section Download), from where they can be freely accessed and consulted. Specific wording in reference to these GTS is to be found at the foot of each Purchase Order sent by Lovato, and acceptance of the same by compliant Suppliers is required at the end of the registration procedure for the Lovato Supplier Portal.

2 Prohibition of transfer and sub-contracting
The Supplier cannot in any case or even partially transfer to third parties the rights deriving from supply relationships. The Supplier is always obliged to inform Lovato and to obtain prior written authorisation in the event that it intends to sub-contract the supply of goods or services. Any authorisation obtained for the sub-contracting of supply does not exempt the Supplier from its contractual obligations and responsibilities. The Supplier will answer in full for the work and personnel of sub-contractors as well as their own. Lovato will remain completely removed from said relationship.

3 Order confirmation
Any Suppliers receiving an order for the supply of products/services is obliged to send an Order Confirmation via email as acceptance within three working days from the date of receipt of the same.

4 Confidentiality and Intellectual Property
Technical and technological information as well as any samples sent to the Supplier, and the relative intellectual property, remain the exclusive property of Lovato, which reserves the right to request the return of the same at any moment. The Supplier is forbidden from reproducing or copying said information or property and to not distribute or reveal the content to third parties, and in general is obliged to maintain the utmost confidentiality regarding all the information to which it becomes aware of in relation to the supply relationship.
The Supplier assumes responsibility for ensuring that all its employees, collaborators and suppliers in turn maintain the utmost confidentiality regarding the aforementioned documentation. The Supplier recognises as illicit and illegitimate the fabrication and sale of products constructed on the basis of equipment, machinery, drawings, models or samples belonging to Lovato either for purposes of production or spare parts of any kind, or for any other purpose, if carried out beyond the confines of the supply activities set out in this contract.

5 Deliveries
The delivery of the products, goods or services relative to the agreed supply must be carried out in compliance with the indications in the order or confirmed in the Order Confirmation. The Supply undertakes in any case to do all that is necessary in order to promptly fulfil the entire delivery schedule.
In the event of possible delays, the Supplier must always promptly inform the Lovato Procurement Department in writing, indicating the products subject to delay, the relative causes and the new forecast date of delivery. In certain cases, Lovato reserves the right to apply a penalty to the Supplier in accordance with other specific agreements between the parties.

6 Packing and identification of the products
In the absence of particular instructions in the contractual documentation, the conditions regarding protection and packing must be such that the products or goods to be supplied are not subject to damage during transportation and can be stored without deterioration, in normal warehouse conditions, for a period of at least 12 months.
When specifically provided for, the Supplier undertakes to deliver the products with suitable identification via dedicated labelling containing the product code as well as the production batch number.

7 Lovato equipment and material sent for processing
Any equipment or other goods that Lovato loans to the Supplier for use remain the exclusive property of Lovato. The Supplier takes responsibility for any loss or destruction of, or damage to, the same. The Supplier undertakes:
• to keep and maintain them in perfect working condition;
• not to carry out any modifications that are not agreed with Lovato;
• to use them exclusively for the fulfilment of orders from Lovato;
• not to transfer them to third parties for any reason.
In the event of a breach of this obligation, Lovato will have the right to ask the Supplier for payment of damages suffered for a sum no lower than the value of the equipment tampered with or modified. Lovato’s ownership of said equipment does not exonerate the Supplier from the responsibility to obtain a product/service in line with the drawings and technical specifications provided.
The Supplier is, in any case, obliged to communicate any anomalies detected regarding the equipment and goods supplied.

8 Management of modifications to products, goods and services
On specific request from Lovato, the Supplier undertakes to make modifications, including partial modifications, to the characteristics of the product, good or service, while maintaining the original date of delivery. Any variations in cost or date of delivery caused by the modification introduced must be communicated to and agreed with Lovato’s Procurement Department.

9 Warranty
The Supplier warrants that the products, goods or services supplied are compliant with the documentation and/or technical specifications provided by Lovato, and free of all apparent and/or non-apparent nonconformities, faults and defects. Said warranty will have a duration of 24 months from the date of delivery or provision of service. In the event that the product, good or service proves to be defective either before or after its use and/or introduction onto the market during the period of validity of the warranty, Lovato may, after having provided the Supplier with prior notice, request the repair and/or substitution of the product or good in question. Substitutions or repairs under warranty must be carried out at no cost whatsoever.

10 Supplier responsibility
In accepting these GTS, the Supplier assumes full responsibility for the fulfilment of the supply and for any damaged deriving from defects in products, goods or services. The Supplier is responsible for nonconformities, non-apparent faults in the product, good or service supplied, whether present at the moment of delivery or emerging at a later date within the warranty period.

11 Express termination clause
All contractual relationships between Lovato and the Supplier may be legally terminated pursuant to article 1456 of the Civil Code with written notice of 6 months declaring the intent to apply this express termination clause in the event of repeated delays in delivery and/or noncompliance with the agreed level of quality.
Any contractual relationship between the parties is to be considered automatically terminated, pursuant to article 1353 of the Civil Code in the event of the institution of proceedings for bankruptcy, liquidation (including extra-judicial liquidation), agreements with creditors, court receivership, administration or any other procedure that nullifies the solvency or reliability of the Supplier. Said termination clause is intended as in the interests of Lovato, which has the right to waive the clause within 15 days of applicability by providing written notice to the Supplier.

12 Inspection visits
The Supplier undertakes to allow Lovato personnel access to its plants at any moment during working hours on suitable notice in order to carry out inspection visits. These visits are in order to assess the technical/organisational and production capabilities of the Supplier in respect of the orders and obligations assumed.
The Supplier must be willing to provide Lovato personnel technical and technological documentation defining the production process (e.g. reliability of equipment, verifications carried out, monitoring programmes, quality levels, corrective actions applied, etc.) with the exception of that concerning industrial secrets and know-how.

13 Prices
The prices indicated in the order or on price lists are fixed and have a standard validity of one year. Automatic variations based on successive increases in costs are therefore excluded, unless otherwise agreed between the parties.

14 Payment and invoicing
In return for the products and goods delivered and/or services provided by the Supplier in compliance with the Contract, Lovato will pay the Supplier the purchase price indicated in the Contract on condition that the relative invoice complies with the requirements set out by Lovato. The price is inclusive of all taxes and duties (other than VAT or equivalent) and all costs relating to production, manufacturing, warehousing and packing (including the restitution of all returnable packing) for any goods or services. Lovato will pay the invoice in accordance with the payment terms and conditions agreed with the Supplier.

15 Applicable law and Jurisdiction
These Terms and Conditions of Supply are governed by Italian law. Any disputes regarding the execution, interpretation, validity, termination and cessation of this contract and supply relationships existing between the parties will be the competence of the Bergamo court.

16 Validity
These GTS will be applicable as of the date of publication on the Lovato website (4th of November 2020) and will be valid for a period of 5 (five) years. These GTS will in any case be considered as accepted following the fulfilment of Lovato purchase orders issued after the publication of these Terms and Conditions of Supply as well as a consequence of registration on the Lovato Supplier Portal. Special clauses agreed with the Supplier in partial modification and/or integration to the General Terms and Conditions in this contract must be confirmed in writing and signed by both parties in order to be considered valid.

17 Prohibition of the advertising, use or reproduction of the Lovato brand
The Supplier must ask for prior express written permission from Lovato for any advertising or commercial information that makes reference to commercial relationships with Lovato.
The same written authorisation is required for any use, publication or reproduction of the Lovato brand.

18 Health and Safety of workers involved in the production process
The Supplier undertakes to manage its production processes in full respect of mandatory regulations regarding protection of the environment (e.g. Italian Legislative Decree 152 of 2006 and successive modifications and integrations) and the protection of worker health and safety (e.g. Italian Legislative Decree 81 of 2008 and successive modifications and integrations).

19 ISO 9001, REACH, CLP and ROHS Regulations
The Supplier declares under its own responsibility and in full awareness of legal consequences and obligations that the goods supplied are produced in compliance with Regulation UNI EN ISO 9001, Regulation (EU) n. 1907/2006 (REACH), Regulation (EU) n. 2172/2008 (CLP) and directive 2011/65/EU (ROHS), as well as their successive modifications and integrations.
20 Environmental protection
Lovato assumes responsibility for providing the Supplier with appropriate advance warning in the event that the latter is provided with loaned machinery that emits airborne chemical substances. The Supplier is responsible for the correct conveyance of said emissions in compliance with legal limitations (Italian Legislative Decree n. 152/2006 and successive modifications and integrations).
The Supplier is also responsible for the recovery or disposal of all waste resulting from the processing carried out by the machinery. In this case, Lovato will provide the Supplier with adequate information regarding the type of waste that may be generated by the relative processes, in order to allow for it to be correctly recovered or disposed of.