Standard Terms and Conditions of Purchase

1.1 The legal relationship between the seller ("Seller") and PreZero – PreZero Polymers Austria GmbH, or PreZero Sorting Austria GmbH, both having their business address at Industriezone Ost 5, 9111 Haimburg, Austria ("PZ") shall be governed by these Standard Terms and Conditions of Purchase ("Terms and Conditions"), unless otherwise agreed.

1.2 These Terms and Conditions shall apply exclusively. The Seller's terms and conditions shall not be incorporated into the Agreement except to the extent that PZ expressly consents to their application in writing, whereby the Terms and Conditions shall always take precedence over them, particularly in the event of conflicts.

1.3 The Terms and Conditions as amended shall furthermore apply to all future transactions with the Seller, even if they are not agreed separately.

2.1 The entry into, amendment of or additions to the Agreement shall only be valid if agreed in writing. A qualified electronic signature shall be deemed to comply with the written form requirement only in exceptional cases to be agreed separately between PZ and the Seller.

2.2 PZ shall be bound by placed orders for 2 weeks. Acceptance of orders by the Seller after 2 weeks requires a new written confirmation by PZ in order to enter into a valid agreement.

3.1 Unless agreed otherwise, deliveries are to be made "free domicile" ("DDP", Incoterms 2020) to the destination specified in the order. If no destination is specified and no other provision is made, the destination will be the location of PZ's branch placing the order. The Seller shall be obligated to inquire about the destination in the event of uncertainty. The Seller shall also assume the costs and risks of unloading deliverables.

3.2 In the case of deliverables, the destination shall be both place of performance (Erfüllungsort) and place of fulfillment (Erfolgsort). For other goods or services, the place of performance and place of fulfillment shall be the location of the branch placing the order, unless agreed otherwise.

3.3 In the case of deliverables, PZ shall receive a delivery note containing the following information: PZ's order number, order position, product description, the name of the party placing the order, item numbers of PZ and the Seller, serial number (if any), quantity (excluding price), customs tariff number, place of departure of the goods, delivery address and delivery date. The Seller shall have the receipt of delivery confirmed by having PZ sign and date the delivery note.

3.4 If PZ is contractually or legally obligated to accept the goods or services, formal acceptance will be required. The Seller shall give PZ at least two weeks' advance written notice of readiness for acceptance. The parties shall prepare a joint acceptance report indicating the nature and scope of any defects as well as the timeframe for remedying any such defects. Section 377 of the Austrian Commercial Code (Unternehmensgesetzbuch – UGB) is excluded.

3.5 In the case of deliverables, the risk of accidental loss or accidental deterioration of the goods/services shall pass to PZ at the place of performance (upon signature of delivery note). If PZ is contractually or legally obligated to accept the goods or services, the risk shall pass to PZ upon acceptance.

3.6 Concurrent with the transfer of risk, title in the goods shall pass to PZ directly and free and clear of any and all encumbrances.

3.7 The partial provision of services is only permitted subject to PZ's prior written consent.

3.8 Unless performance in personam has been agreed, the Seller may engage third parties to perform its obligations (e.g., subcontractors). The Seller shall notify PZ in advance of its intention to engage third parties. PZ may object to the use of a third party if it has good cause to do so (e.g., such third party is unreliable or a competitor). The Seller shall remain fully liable for the conduct and performance of the third party.

4.1 Agreed dates and deadlines shall be binding.

4.2 The Seller may not commence its performance prior to the agreed date except with PZ's prior consent. If PZ does not consent, the Seller shall bear the risk of accidental loss and deterioration until the agreed date.

4.3 If delays are expected or occur, the Seller shall promptly notify PZ thereof in writing, specifying the reasons for and the expected duration of the delay. Specifically, the Seller shall notify PZ promptly if the Seller is unable to perform by the agreed date because it requires materials or assistance to be provided by PZ.

4.4 In the event of default on the part of the Seller, PZ may claim a contractual penalty (Vertragsstrafe) in the amount of 0.3% of the net order value per working day of the delay, but not more than 5% of the net order value. PZ must assert the strict contractual penalty (verschuldensunabhängige Vertragsstrafe) claim upon payment of the agreed remuneration at the latest. PZ shall have the right to set-off. Any further rights of PZ shall remain unaffected. The actual occurrence of damage is not required for the contractual penalty.

5.1 The agreed prices are fixed prices and are net of statutory VAT.

5.2 Unless otherwise agreed, prices shall include all agreed goods or services and agreed ancillary services of the Seller (e.g., assembly, installation) as well as all incidental expenses (e.g., proper packaging, travel expenses, shipping costs, customs duties and other charges).

5.3 The Seller shall prepare a correct and proper invoice in accordance with applicable laws and regulations and containing the following information: PZ's order number, name of the party placing the order, PZ's cost center, item numbers of PZ and the Seller, quantity, place of departure of the goods (in case of deliverables), delivery address, delivery date, agreed bank account details. Invoices shall not be enclosed with deliveries, but sent under separate cover or, if so requested by PZ, by electronic data transfer (e.g., email).

5.4 To the extent not otherwise provided, the payment term for all invoices shall be 60 calendar days. The payment term shall commence upon receipt of an invoice complying with the requirements of clause 5.3. If PZ receives the invoice before receiving the services, the payment term shall commence no earlier than upon receipt of the services. If PZ is contractually or legally obligated to accept the services and PZ receives the invoice before accepting the services, the payment term shall commence no earlier than upon acceptance of the services.

5.5 If the delay in payment is the fault of PZ, the Seller shall charge interest on arrears at a rate of 4.0% per annum.

5.6 The Seller's rights to set off or to withhold performance may only be exercised with counterclaims that are recognized by PZ or have been declared final and binding by a court of law.

5.7 Payments may be made only to Seller. The Seller may not assign its claims against PZ to third parties. If claims are nevertheless assigned and PZ is notified of this, PZ may still discharge its obligations by effecting payment to the Seller.

6.1 The Seller warrants that at the time the risk of loss transfers to PZ, the goods/services shall comply with the currently applicable state of the art and the respective applicable national and European waste law requirements and be of merchantable quality at the location of PZ's branch placing the order; specifically it warrants that all applicable requirements as to characteristics, condition, quality, design, materials, safety and recyclability shall be met. The Seller warrants that when providing goods/services on site, it shall comply with the currently applicable local laws and rules and regulations, in particular relating to consumer and environmental protection, waste law, occupational health and safety and hazardous substances or materials, as well as building codes and laws relating to public health. The Seller shall conduct the necessary procedures in accordance with applicable legal requirements in its own name and on its own account, i.e., it shall procure, at its own expense, the necessary permits, authorizations, licenses or registrations (including those within the scope of Regulation (EC) No 1907/2006 ("REACH")) and shall issue the necessary reports, notifications and disclosures. If necessary, the Seller shall appoint a suitable representative for its own account.

6.2 If waste is produced within the scope of the contractual services, the Seller warrants that it possesses the necessary state or official permits for the handling and transportation of waste and that it is classified and documented in accordance with the applicable waste laws and regulations.

6.3 The Seller shall fulfill all legal or contractual information, verification, classification and labeling obligations towards PZ, in particular regarding waste, hazardous substances and hazardous materials contained in deliveries, as well as existing take-back or recycling or recovery obligations arising from the implementation of the requirements under clauses 6.1 and 6.2. Furthermore, the Seller shall provide PZ upon request with any and all information necessary to the fulfillment of the requirements under clauses 6.1 and 6.2 by submitting suitable accompanying or verification documents (e.g., accompanying certificates, notifications, declarations of conformity, safety data sheets or inspection reports).

6.4 The Seller has factored the separate requirements set out in clauses 6.1 and 6.2 into its prices.

To the extent not otherwise stipulated below, the statutory provisions on defects in quality and defects in title shall apply.

7.1 PZ may, at its option, require the Seller to remedy the defect within a reasonable period or replace the goods with conforming tender.

7.2 If PZ fails to cure performance within a reasonable grace period set by the Seller under threat of effecting substitute performance, the Seller may remedy the defect itself at PZ's expense.

7.3 If both repair and replacement are impossible or involve disproportionately high expense or inconvenience for PZ, or if the Seller does not fulfill the warranty obligation in due time, or if both repair and replacement are unreasonable for good reasons attributable to the Seller, PZ may demand a price reduction or termination of the agreement.

7.4 PZ shall indemnify the Seller upon first demand against any claims asserted by third parties for defects, in particular based on non-merchantable tender or non-compliance with applicable rules and regulations under clause 6.1, except where PZ is not at fault for the defect or the Seller's warranty claims are time-barred. The Seller shall bear the burden of proof.

7.5 The warranty period for defects shall be 36 months from the date on which risk of loss transfers.

8.1 The parties shall be liable in accordance with the statutory provisions.

8.2 The Seller shall take out and maintain adequate general business liability insurance.

8.3 The Seller shall be liable to PZ for the conduct of third parties (subcontractors, sub-suppliers and manufacturers) as it would be for its own conduct.

9.1 If with respect to the services purchased by PZ, the Seller is shown to have been involved in any anti-competitive practices (antitrust violations) deemed unlawful under European or national law, PZ shall have a claim to liquidated damages for the period of proven involvement in the infringement ("Relevant Period").

9.2 In cases of proven submission, price or quote fixing, or territorial or customer allocation, liquidated damages may be claimed in an amount equivalent to 5% of the revenue generated by the infringing services of the Seller provided to PZ within the Relevant Period.

9.3 In cases of unlawful exchanges of information between competitors, liquidated damages may be claimed in an amount equivalent to 0.3% of the revenue generated by the infringing services of the Seller provided to PZ within the Relevant Period, up to a maximum of EUR 25,000.

9.4 The Seller shall have the right to show that less damage was incurred. PZ shall have the right to assert further claims for damages.

9.5 Liability for damages shall attach even if the Agreement has already expired or been terminated when the claims are asserted.

9.6 Involvement in an unlawful anti-competitive practice must be proven by a final and binding decision of an administrative agency or court of law or by execution of a corresponding settlement.

10.1 The Seller warrants that third parties cannot assert any intellectual property rights, copyrights and related rights or other rights against PZ with regard to contractual services or work products to which PZ is entitled and that the Seller has procured the transfer of all rights of use and exploitation in advance. The Seller shall indemnify and hold PZ harmless.

10.2 Upon full payment of the remuneration, all rights of use and exploitation with respect to the contractual services or work products to which PZ is entitled shall be transferred to PZ.

10.3 Insofar as claims are asserted against PZ by third parties in connection with contractual services or work products to which PZ is entitled due to the infringement of intellectual property rights or rights of use, the Seller shall indemnify PZ upon first demand, unless the alleged infringement is not based on a defect in title or the Seller is not at fault.

11.1 Materials or parts provided by PZ shall remain the property of PZ and may only be used as intended. The processing of fabrics and the assembly of parts shall be carried out for PZ. It is agreed that PZ shall become co-owner of the products manufactured using the materials and parts provided by PZ in the ratio of the value of the materials and parts provided to the value of the overall product, which shall be held in safe custody by the Seller for PZ. In the event of impairment or loss, the Seller must provide compensation.

11.2 Tools, molds, samples, models, profiles, drawings, test specifications, standard sheets, print templates and instructions for use provided by PZ, as well as items manufactured on the basis thereof, may not be passed on to third parties or used for purposes other than the contractual purposes without the express written consent of PZ. They must be secured against unauthorized access and use. Subject to further claims, PZ may demand their surrender if the Seller breaches these obligations. The Seller shall be liable to PZ for any (material or non-material) damage incurred in the event of non-compliance.

11.3 The Seller shall supply spare parts for a period of at least 10 years at reasonable, customary market prices, even after discontinuation of series delivery.

12.1 The parties shall treat confidential information disclosed by the other party as confidential for an indefinite term; specifically, they shall not disclose such information to third parties, shall protect it against unauthorized access by implementing appropriate technical, organizational and legal non-disclosure measures, and shall use it solely within the scope of the cooperation. The right of termination subject to a notice period with respect to this non-disclosure obligation shall be excluded.

12.2 The Seller may not use the cooperation as a reference vis-à-vis third parties, be it expressly or by allusion thereto. The Seller shall be liable to PZ for any (material or non-material) damage incurred in the event of non-compliance.

12.3 The Seller shall comply with the requirements of the EU General Data Protection Regulation (GDPR).

13.1 The parties warrant that all relevant legal provisions are being complied with within their area of responsibility and in connection with the performance of this Agreement. The foregoing applies in particular with respect to compliance with anti-corruption, antitrust, data protection and foreign trade laws.

13.2 The Seller shall not give inducements or gifts to agents or employees of PZ if these are to be granted in connection with their function as agent or employee of PZ.

13.3 In particular, if a party breaches the provisions in clause 13.1 and fails to remedy the breach within a reasonable grace period which the other party shall be entitled to set, the non-breaching party may rescind the Agreement or terminate it for good cause, unless it involves a minor or non-material breach. In the case of serious breaches of the provision in clause 13.1, the Agreement may be terminated without setting a grace period.

The Seller's compliance with internationally recognized minimum social and ecological standards shall constitute a fundamental basis for the cooperation between the parties. As such, the Seller agrees to comply in particular with the minimum standards set out in PZ's Code of Conduct (see the ANNEX to these Standard Terms and Conditions). The Seller accepts the provisions set out therein as the basis of contract.

15.1 Valid notice of termination must be executed in writing.

15.2 PZ may, in particular, terminate this Agreement for good cause, where:

• a material change in the Seller's direct or indirect ownership/shareholder structure occurs;
• the financial condition of the Seller materially deteriorates such that it may be expected to be permanently unable to meet its contractual obligations;
• there have been/are numerous breaches or a serious breach of statutory or contractual provisions;

and therefore, in reasonable consideration of the totality of the circumstances, it would be unreasonable to continue the contractual relationship.

15.3 If an event of force majeure occurs which makes it impossible or significantly impairs the fulfillment of the contractual obligations in whole or in part, the parties shall be released from their contractual obligations and any claims for damages for the duration of this period. The affected party shall notify the other party without undue delay in writing of the occurrence and expected duration of this situation. If the situation makes it unreasonable for the parties to continue the contractual relationship or if the service is no longer necessary, either party shall have the right to terminate the agreement in writing without notice and without any obligation to pay compensation. This is irrefutably presumed if the situation lasts longer than 3 months.

15.4 In the absence of proof to the contrary, the following events affecting a Party shall be presumed to satisfy conditions of force majeure: (i) war (whether declared or not), hostilities, invasion, act of a foreign enemy, large-scale military mobilization; (ii) civil war, insurgency, rebellion and revolution, military or other usurped power, insurrection, acts of terrorism, sabotage or piracy; (iii) currency and trade restrictions, embargo, sanctions; (iv) lawful or unlawful official acts, compliance with laws or government orders, expropriation, seizure of works, requisition, nationalization; (v) plague, epidemics, natural disasters or extreme natural events; (vi) explosion, fire, destruction of equipment, prolonged breakdown or outage of transportation, telecommunications, information systems or power; (vii) general industrial unrest such as boycott, strike and lockout, slowdown strikes, occupation of factories and buildings.

16.1 Austrian law shall apply subject to the exclusion of its conflict of law provisions and the UN Convention on Contracts for the International Sale of Goods (CISG).

16.2 Should individual provisions of this Agreement be or become invalid, void or unenforceable, this shall not affect the validity of the other provisions hereof. The parties agree to replace any invalid, void or unenforceable provision with a valid and enforceable provision that most closely reflects the economic intent of the original provision. The foregoing shall also apply mutatis mutandis to any omissions contained in this Agreement.

16.3 The Seller cannot contest the Agreement on the grounds of error, lesion beyond moiety (Laesio enormis) or frustration of contract.

16.4 The exclusive place of jurisdiction for any and all disputes arising out of or in connection with this Agreement shall be Klagenfurt am Wörthersee, Austria. However, PZ may also file suit at the location of the Seller's registered office.

Introduction

The companies of Schwarz Group, which include the retail divisions Lidl and Kaufland, Schwarz Produktion, the environmental division PreZero, Schwarz Dienstleistung, Schwarz IT, Schwarz Digital and other Schwarz companies, consider social and environmental sustainability to be of great importance. They are aware of their responsibility throughout the supply chain, in particular their responsibility to respect human rights and comply with social and environmental standards.

This Business Partner Code of Conduct sets out the basic principles governing the cooperation with business partners and describes what the divisions of Schwarz Group expect of their business partners in terms of human rights and environmental issues.

The principles outlined in this Code of Conduct serve as minimum standards for our business relationships. The Code of Conduct is based on the following international guidelines and principles:

• International Bill of Human Rights
• UN Guiding Principles on Business and Human Rights
• UN Convention on the Rights of the Child
• UN Convention on the Elimination of All Forms of Discrimination against Women
• OECD Guidelines for Multinational Enterprises
• International Labour Organization (ILO) Declaration on Fundamental Principles and Rights at Work
• Paris Climate Agreement
• Minamata Convention
• Stockholm Convention
• Basel Convention
• The ten principles of the UN Global Compact (UNGC)

The national and other relevant laws and requirements applicable in the countries in which business is conducted as well as the principles contained in this Code of Conduct must be complied with. Whatever applicable rules or regulations are best suited to achieve the protected interests, those shall always be controlling.

The standards derived from these principles are addressed below. They are to be implemented and monitored by corresponding company-internal procedures.

Bribery and any other forms of corruption are prohibited. The business partner shall furthermore comply with all professional standards applicable in the industry in which it operates.

1.1 Ban on Discrimination

The business partner must ensure equal treatment and equal opportunity for its employees and avoid any form of discrimination. This applies to the entire employment relationship, in particular recruitment, training, further training, remuneration, promotion, termination, retirement, and disciplinary measures. No person shall be discriminated against or disadvantaged on the grounds of their age, disability, ethnic background, marital status, gender, skin color, membership in workers' organizations, nationality, political persuasion, religion or ideology, sexual orientation, pregnancy, social background, other personal attributes, or for other objectively illegitimate reasons. In addition, the business partner must prohibit, and take active measures to combat, any form of discrimination.

The business partner shall ensure that no individual is exposed to rough or inhumane treatment in the workplace. This particularly includes sexual harassment, corporal punishment, mental and physical coercion, insults, and the verbal abuse of employees. No such conduct may be threatened against employees either.

The business partner does not use forced labor. Forced labor includes any work or service required of a person, under penalty of punishment, for which the person has not volunteered. The business partner observes the ban on modern slavery and any other slavery-like practices. 

These include serfdom or other forms of exercising power or oppression in the work environment, for example through extreme economic or sexual exploitation or humiliation. The business partner shall also respect its employees' right of termination.

All forms of child labor are prohibited. National laws and international standards on the protection of minors must be complied with. The minimum employment age may not be lower than the legal school leaving age. Under no circumstances may employees be younger than 15 years of age, or 14 years of age if permitted under national law pursuant to ILO Convention 138. Nor may young persons aged under 18 work during night hours.

The business partner shall comply with all applicable laws, requirements and industry standards relating to wages and working hours. Wages and other benefits must, at the very least, comply with legal requirements and the standards applicable to the local production industry. They must be clearly defined and paid and/or provided at regular intervals. The aim must be to pay wages and other benefits that will cover the cost of living to the extent that the statutory minimum wage is insufficient in this regard. 

Any deductions for non-cash benefits shall only be permitted provided they are limited in scope and reasonable compared to the value of the non-cash benefit. The business partner shall pay the social security contributions required by law and the benefits to which employees are entitled under national law (e.g., insurance benefits, overtime pay and paid leave).

Furthermore, employees shall receive clear and regular notification of the composition of their remuneration. The obligations arising out of the employment relationship must be set out in text form and provided to the employee in the form of an employment agreement. The business partner shall not withhold any amounts for work equipment or resources. Employees shall not work for longer than the working hours permitted by law and shall take the breaks required by law. Official public holidays shall be observed. In addition, employees may not be regularly asked to work more than 48 hours per week and, including overtime, more than 60 hours per week. Overtime must be performed voluntarily and must be remunerated separately in accordance with national law or with compensatory time. Every employee is entitled to at least one day off after six consecutive working days.

The business partner guarantees its employees freedom of association and the right to engage in collective bargaining. Employees have the right to hold meetings in accordance with applicable laws and to establish or join unions and representative bodies. Employees also have the right to engage in collective bargaining, and the statutory right to strike, to resolve workplace and wage issues. Under no circumstances may the exercise of such rights be met with threats of reprisal.

The business partner shall ensure a safe working environment and compliance with relevant safety standards, as well as ensuring that sufficient protective measures and measures to prevent excessive physical or mental exhaustion are in place. Workplaces and work equipment must comply with applicable laws and requirements. Any violation of fundamental human rights in the workplace and in operational facilities is prohibited. Especially fire safety and emergency care standards must also be complied with.

In particular young persons aged under 18 shall not be exposed to any situations that are hazardous or unsafe to their physical and mental health and development. Employees must have the qualifications required to meet the requirements associated with their role and undergo regular training on health and safety at work. It must also be ensured that workplaces are sufficiently hygienic. If the business partner provides accommodation to employees, the same requirements shall apply to such accommodation.

A representative shall be appointed to be responsible for ensuring a safe and healthy workplace environment for all employees and for introducing and implementing health and safety standards in the workplace.

Disciplinary action must be in accordance with national law and internationally recognized human rights. No unreasonable disciplinary action may be taken, particularly including withholding pay, social security contributions or documents (e.g., identification cards) or placing a ban on leaving the workplace.

When deploying private security forces, the business partner ensures appropriate control and instruction measures, especially to prevent torture, cruel, inhumane, or humiliating treatment, injury to life, limb or health, or the impairment of freedom of association.

The business partner respects the prevailing land rights and refrains from any form of unlawful forced eviction or unlawful deprivation or dispossession of land, forest, or bodies of water whose use secures a person's livelihood or the livelihood of several people, in particular in connection with acquisition or development.

2.1 Environmental Protection Laws

The business partner shall comply with applicable environmental protection laws and regulations, as amended from time to time, as well as the bans resulting from the environmental conventions referred to above regarding mercury, persistent organic pollutants and hazardous waste. The business partner's operations shall meet waste law, emission control and water protection standards and requirements. The business partner shall comply with all regulations relating to hazardous substances. This particularly concerns the storage, handling and disposal of hazardous substances. Employees shall be instructed on how to handle hazardous materials and substances.

The business partner shall not cause any harmful changes to the soil, water pollution, air pollution, harmful noise pollution, or excessive water consumption resulting in significant impairments to the natural foundations to protect and produce food, preventing access to clean drinking water, making access to sanitary facilities difficult or having the potential to be harmful to the health of an individual or several individuals.

Any further pollution of the environment shall be avoided to the extent reasonably possible, or at least minimized. Protection of the environment and climate and promoting biodiversity is an ongoing challenge which can only be met by consistently improving the level of protection, achieved by permanently reducing the consumption of resources and reducing waste. The business partner shall make a reasonable effort to do this in the course of its business activities.

3.1 Implementation Throughout the Supply Chain

The business partner assures that it will address the provisions of this Code of Conduct appropriately along the supply chain and enforce them against its own contractual partners by means of suitable contractual provisions.

The business partner shall establish a company-internal system for reporting violations of the standards set out in this Code of Conduct; employees who report any violations may not be disciplined or discriminated against as a result.

In cases where a violation of the Code of Conduct has already occurred or is at risk of occurring, either in its own business domain or in the business partner’s supply chain, the business partner commits

1. to do everything possible, without undue delay, to put an end to that violation as soon as possible, prevent or at least minimize the extent of the violation;
2. at the request of companies of Schwarz Group, to implement a concept prepared by the latter to put an end to or minimize the violation;
3. at the request of companies of Schwarz Group, to develop and implement together a plan to put an end to the violation, or to prevent or minimize the violation.

Companies of Schwarz Group have the right to conduct appropriate risk-based audits to verify compliance with this Code of Conduct. Within this context, the business partner shall, upon the request of companies of Schwarz Group, provide all necessary information and disclosures and, subject to reasonable advance notice, allow the companies of Schwarz Group to conduct on-site inspections of the business partner’s premises. 

Companies of Schwarz Group may also engage a third party bound by a duty of confidentiality to conduct such audits. The business partner's data protection policy as well as business and trade secrets shall be respected. Audit rights arising from other provisions shall remain unaffected. Upon request, the business partner shall require subcontractors it engages to provide the services to grant corresponding rights of audit in favor of the companies of Schwarz Group.

Any violation of obligations under this Code of Conduct shall give companies of Schwarz Group the right, in particular, to set the business partner a reasonable grace period in which to remedy the violation and, should this period expire without result, to rescind or terminate the agreement. In the case of a serious violation, no grace period need be set. In the event of rescission or termination, the companies of Schwarz Group shall not be obligated to compensate the business partner for damage incurred as a result of such rescission or termination.