General Purchasing Terms and Conditions

The "General Purchasing Terms and Conditions" apply exclusively to all procurement activities of Nanhua Electronics (Taicang) Co., Ltd. and Nanhua Electronics (Taicang) Co., Ltd.(hereinafter "Nanhua Electronics"), unless otherwise agreed in writing by both parties. Nanhua Electronics will not accept any Supplier terms that deviate from these conditions, unless explicitly agreed to in writing. Even if aware of such deviations, Nanhua Electronics’s acceptance of delivery or payment does not imply consent to alternative terms. These terms govern all procurement agreements for goods, products, materials, or services ("Goods") and serve as the basis for the initiation of such contracts.

2.1 An agreement is deemed valid based on the terms of Nanhua Electromechanical's written order or contract. The Supplier must sign and return the order or contract within three (3) working days of issuance. Failure to do so will be considered acceptance. Any changes to the order or contract must be explicitly agreed upon in writing. If the Supplier neither signs nor returns the order but delivers goods, this will be deemed acceptance of the terms outlined by Nanhua Electronics.

2.2 The Supplier is required to notify Nanhua Electronics of any discrepancies or deficiencies in product specifications during the quotation stage and must clarify product requirements, accident prevention requirements, technical standards, official permits, agreements, or certificates (if applicable), or technical terms. Approval of designs or specifications by Nanhua Electronics does not relieve the Supplier of their responsibilities. 2.3. Trade terms shall adhere to Incoterms 2010.

3.1 At the commencement of cooperation, Suppliers must undergo a "Qualification Audit" conducted by Nanhua Electronics's Procurement Department, including on-site evaluations. Any deficiencies identified will require corrective action within ten (10) days of notice.

3.2 The Supplier’s quality management system must hold necessary certifications, and participation in Nanhua Electronics’s Supplier quality and development programs is mandatory. Nanhua Electronics and its clients reserve the right to inspect facilities and conduct audits with three days' notice.

3.3 The Supplier must adhere to Nanhua Electronics’s procurement specifications, ensuring consistency in quality, appearance, features, materials, and production processes. Changes to specifications or processes require prior written approval. If required by Nanhua Electronics, the Supplier shall provide samples for testing before delivering any new or modified Goods.

4.1 The delivery schedule is determined by Nanhua Electronics. Failure to meet the agreed delivery date grants Nanhua Electronics the right to cancel the order or contract and seek alternative Suppliers. Timely and complete delivery is required, except in cases of "force majeure" such as natural disasters, terrorist attacks, or governmental actions.

4.2 Late delivery may result in liquidated damages amounting to 1% of the contract value for each day of delay, without waiving the right to claim additional damages.

4.3 The Supplier must provide advance notice of shipment and ensure the goods are ready for transport. The risk of loss remains with the Supplier until delivery to Nanhua Electronics’s designated location.

4.4. All shipments must be adequately packaged and accompanied by a delivery note with relevant details. Defective packaging or documentation may result in rejection of the delivery.

4.5 Delivery of Goods requires the appropriate inspection documentation for acceptance.

4.6 Partial deliveries are not permitted without prior written approval. Over-delivered goods may be returned at the Supplier's expense.

4.7 Minor defects will not waive Nanhua Electronics's right to pursue claims. Ownership transfers upon delivery to Nanhua Electronics’s designated premises.

5.1 The Supplier shall comply with all relevant laws, regulations, directives, guidelines, rules, ordinances, and standards of the countries of origin and destination related to the manufacturing, labeling, transportation, import, export, licensing, approval, or certification of goods. This includes, but is not limited to, laws concerning environmental issues, data protection, wages, working hours, working conditions, subcontractor selection, discrimination, occupational health and safety, and automotive safety.

5.2 Prior to transporting any hazardous materials, the Supplier must comply with all applicable laws and provide safety data sheets and other necessary information for the goods.

6.1 Unless otherwise specified, Nanhua Electronics’s purchase orders/contracts adopt RMB (CNY) settlements, including applicable taxes and duties. If another currency is used, it must be stated in the order/contract.

6.2 The prices listed in the orders or contracts are fixed and non-negotiable. Domestic prices include VAT, while international prices are "Delivered Duty Paid" (Incoterms 2010), inclusive of packaging. If the Supplier is responsible for installation, assembly, or commissioning, the associated costs will be borne by the Supplier unless otherwise agreed. Additional fees not stated in the contract will not be reimbursed.

6.3 Invoices must be sent separately, referencing the relevant Nanhua Electronics order/contract information, and must be delivered by the specified due date. If delayed, payment will be rescheduled for the next payment cycle.

6.4 Payment terms will be as mutually agreed upon.

6.5 The Supplier guarantees that, under similar quantity and quality conditions, pricing for goods supplied to Nanhua Electronics is no less favorable than for any other customer.

6.6 All payments are conditional and do not imply acceptance of quality or compliance with contract requirements. Nanhua Electronics reserves the right to assert lawful and reasonable claims.

7.1 The Supplier warrants that the goods conform to specified standards, including environmental regulations like RoHS, REACH, EU directives, and industry standards, and are suitable for their intended purpose. This includes compliance with the Dodd-Frank Act Section 1502, ensuring conflict minerals are not used in ways that fund armed groups in the DRC and surrounding areas; the goods are new, free from defects, and of merchantable quality; goods are properly packaged and labeled; and goods meet intended purposes within reasonable use. The Supplier agrees to indemnify Nanhua Electronics for damages, including costs from modifications, recalls, and any incidental or consequential damages from warranty breaches. Inspection or lack thereof by Nanhua Electronics does not waive the Supplier's warranty obligations.

7.2 Nanhua Electronics retains the right to make all reasonable warranty claims. If defects or incorrect goods/quantities are found, the Supplier shall correct (repair or replace) them within the specified timeframe. If corrections are not completed as required, Nanhua Electronics reserves the right to repair or replace items at the Supplier’s expense. In emergencies, Nanhua Electronics may also involve third parties for corrective measures at the Supplier’s expense.

7.3 Warranty claims are valid until the agreed expiration date or, if legally required, for a longer period. This term starts from the delivery or formal acceptance. Repairs or replacements within the warranty period restart the warranty period from the date of completion.

7.4 If customer returns, penalties, or claims against Nanhua Electronics result from Supplier-related defects, Nanhua Electronics may seek recourse and cost reimbursement from the Supplier.

7.5 The Supplier guarantees ownership rights and indemnifies Nanhua Electronics against any claims of third-party rights violations. The Supplier shall provide all necessary documentation for Nanhua Electronics’s defense against such claims, covering defense costs.

7.6 If product liability claims are made against Nanhua Electronics due to the Supplier’s goods, the Supplier shall indemnify and assist in defense efforts. The Supplier shall bear associated legal costs and fees.

7.7 Under liability terms in clause 7.6, the Supplier will also cover recall costs related to defects in the goods.

7.8 The Supplier must retain records of goods for at least five years post-delivery and provide them upon request from Nanhua Electronics.

7.9 In claim events under clause 7.6, Nanhua Electronics and its insurers may assess and resolve claims independently, without assuming liability.

8.1 All intellectual property provided to the Supplier, including drawings, models, and tools, remains the property of Nanhua Electronics and is strictly for use in fulfilling orders. The Supplier may not use or disclose it without permission. Nanhua Electroonics may request its return at any time.

8.2 Tooling equipment costs included in goods pricing will be Nanhua Electronics’s property upon payment. The Supplier will maintain the equipment and transfer it upon termination of the order/contract. In cases of partial amortization, pricing adjustments will be made according to fair market value.

8.3 The Supplier guarantees that the Goods, in whole or in part, do not infringe any intellectual property rights. Should any claims or actions arise, the Supplier agrees to indemnify, hold harmless, and defend Nanhua Electromechanical, its affiliates, successors, customers, and Goods users from all related losses or damages and to cover all expenses for defending such claims.

8.4 Supplier shall ensure confidentiality of all proprietary knowledge, processes, and information obtained from Nanhua Electromechanical. Disclosure of information is restricted and extends to third parties and employees, with confidentiality obligations continuing post-contract. Any breach resulting in loss to Nanhua Electromechanical shall render the Supplier liable.

8.5 The Supplier warrants that Goods do not infringe any third-party intellectual property rights across regions of manufacture, supply, or usage. Supplier shall indemnify Nanhua Electromechanical against any claims, costs, or losses from such violations.

A waiver of enforcement for any provision does not waive enforcement of other provisions. Amendments are effective only with written agreement by both parties. Nanhua Electronics may modify orders regarding quantity, specifications, transport, or delivery location. Adjustments to cost or delivery schedules will be made as necessary.

Nanhua Electronics reserves the right to cancel orders in cases of Goods defects, non-compliance, Supplier insolvency, or if Supplier’s performance is impaired. Reasonable costs incurred up to cancellation will be compensated.

Employees of Nanhua Electronics are prohibited from soliciting or accepting bribes or gifts. The Supplier shall avoid actions that may improperly influence Nanhua Electronics personnel. Nanhua Electronics may audit Supplier’s records to ensure compliance.

12.1 The legal relationship is governed exclusively by the laws of Nanhua Electronics’s primary business location, excluding any conflict of laws provisions. The CISG is explicitly excluded.

12.2 If the "Supplier" is an individual businessman or company, the appropriate judicial performance and jurisdiction is where Nanhua Electronics issues the order.

13.1 All agreements require written consent; Supplier may not assign duties without approval.

13.2 Nanhua Electronics reserves the right to process business-related data.

13.3 Invalid provisions will not affect remaining provisions. Both parties shall substitute any invalid provision with an effective, economically similar one.

13.4 Dispute resolution will be conducted in Chinese unless agreed otherwise, under CIETAC rules. Both parties agree to final and binding arbitration and waive immunity rights where applicable.

13.5 If the contract is written in English, the English version of the contract and its terms and conditions shall be interpreted with authority.

13.6 Supplier must obtain prior written consent for promotional use of Nanhua Electromechanical’s name.