Purchase terms and conditions Of the company Polycom Škofja Loka d.o.o.

Poljane nad Škofjo Loko 76 / SI – 4223 Poljane nad Škofjo Loko / Slovenija
Version: 18.6.2009

1.1 By confirming (or otherwise explicitly or implicitly accepting) and filling any orders, given by Polycom Škofja Loka d.o.o. (hereinafter called the Client), the Contractor submits to these Purchase terms and conditions of the company Polycom Škofja Loka d.o.o., Poljane nad Škofjo Loko 76, SI - 4223 Poljane nad Škofjo Loko (hereinafter referred to as terms) and therefore accepts and agrees that any contracts and other arrangements between the Client and the Contractor shall solely be based on these terms. Any other general conditions do not apply, although not explicitly rejected.

1.2 All contracts as well as orders, confirmations of orders, delivery forms and their amendments are valid and binding only if made in writing.

1.3 Any communication with the Client shall be done through its Purchase department. Arrangements made directly with other departments of the Client are subject to written confirmation of the Client's Purchase department, otherwise be not valid, constituting neither alteration nor addition to any provision of the contract.

1.4 Orders and delivery schedules made by the Client are deemed to be confirmed tacitly by the Contractor, if not explicitly rejected by him within three (3) working days from the receipt of order.

1.5 The Contractor shall consider the contract and any information regarding stipulation or execution of the contract with due diligence.

2.1 Contractual prices are fixed during the lifetime of a contract and are valid "CIF" to destination "Poljane nad Škofjo Loko" (according to Incoterms 2000) and include package costs, if not explicitly agreed otherwise

2.2 The Client reserves the right to accept or to reject the goods received by the Contractor, if they are deficient or excessive in quantity.

2.3 Interpretation of the INCOTERM clauses shall consider the last valid version at the time of forming a contract.

3.1 In the case of such demand by the Client, the Contractor shall fill in the certificate of origin with all the needed data and information, undersign it and send it to the Client immediately. The same is valid in the case of a demand for any other certificate (as for instance a certificate for tax purposes regarding international sale of goods within the territory of any economic union etc.).

3.2 The Contractor shall promptly advise the Client of any export prohibitions and restrictions, enforced by European Union or other competent authority, if such are being either partly or wholly related to the consignment, delivered by the Contractor.

4.1 The Contractor is bound to deliver the goods at the time and place as defined in the contract. In order to accomplish the contract, the Contractor is obliged to deliver both the goods and the documents, including the documents of title, which enable the acceptance of goods and passing of title. The Contractor shall immediately notify the Client about any anticipated delay in delivery. The notification does not suspend any delivery terms nor preclude the Contractor from any contractual obligation.

4.2 If the Contractor does not perform the contract within agreed delivery term, the Client may rescind the contract, or state an additional fixed delivery term in which the contract must be performed. If the Contractor does not perform the contract within given additional delivery term, the Client may rescind the contract.

4.3 Acceptance of late consignment does not exclude the Contractor from any claims by the Client, including claims for any reimbursement or damages regarding the delay in delivery. Failure to act or any delay on the part of the Client does not imply the unqualified acceptance of goods or services, until the outstanding arising from such delivery or execution is settled at full.

4.4 Partial deliveries are not allowed unless particularly agreed by the Client.

4.5 Force majeure and other extraordinary events beyond the control of the Contractor do not entitle the Contractor to cease the contract, neither partially nor wholly, providing these unexpected circumstances do not last unreasonably long. As generally reasonable term is deemed 1 month from the fulfilment date.

5.1 The goods or services, delivered or preformed by the Contractor (hereinafter as: consignment) shall have no faults or defects nor any legal errors (hereinafter as: fault or faults), and must be in accordance with the most advanced technology and the relevant statutes, regulations, directives and standards. In the case that the consignment does not meet the above requirements, it shall be regarded as deficient.

5.2 The Contractor shall permanently update the quality of his products in accordance with the latest technology, and shall inform the Client about the opportunities for improvements and technical changes.

5.3 The Contractor shall establish and maintain appropriate quality assurance system, suitable to the type and volume of particular shipment. The system shall be updated permanently. The Contractor shall keep the records and especially the record on the quality- inspection, which he must present to the Client on his request.

5.4 The Contractor shall submit to audits and quality checks carried out by the Client or his representatives, and which will be performed in the presence of the Contractor as far as possible.

5.5 The Contractor ensures that he shall execute all matters relating to the safety (of products and features that require special verification) in accordance with the latest version of VDA "Nachweisführung Leitfaden zur Dokumentation und Archivierung von Qualitätsanforderungen.

6.1 The Contractor is liable for the faults and defects of any consignment (liability for faults) and for the proper functioning of the goods supplied (warranty).

7.1 The warranty period is six (36) months from the delivery date, unless otherwise agreed in the contract. In contrast to that, the liability for legal errors lasts for ten (10) years reckoning from delivery date, but it ends up each time within one year after the Client is being presented any right of a third-party, in accordance with the 2nd paragraph of Article 495 of Obligacijski zakonik (Slovenian Civil code).

7.2 The Client reserves the right to request an additional service, but the Contractor is given the right to refuse additional services, selected by the Client.

7.3 The warranty period for the spare parts, repaired or replaced within the warranty period, starts running again from the moment when the warranty repair is executed. The applicable warranty period is in accordance with section 7.1.

8.1The Contractor declares that the goods are not lacking in any malfunction and that they bear all the qualities that are necessary or requested by the Client. The Contractor is liable both for any faults uncovered at the time of delivery (visible faults), and for any fault which existed at the time of delivery but are uncovered only later within the period of thirty- six (36) months from delivery date (hidden defect). If the hidden defect is uncovered within a period of twelve (12) months after passing of title (delivery of goods), it is presumed that the defect existed at the time of passing of title of the goods. Liability for faults does not interfere with warranty.

8.2 The fault is real,

• If the goods do not have the usual qualities, requisite for trade or generally intended use;
• - If the goods do not have the special qualities, required for special purpose;
• - If the goods do not have orally or, written agreed qualities; and
• - If the goods does not conform to the sample, model, prospectus or offer.

8.3 The fault is visible, if it can be easily noticed by averagely attentive examination on the façade of the goods, if the goods are delivered unpacked; or on the outside of damaged package, if the goods are delivered packed. The fault is hidden, if it cannot easily be seen from the outside by normal examination (hidden fault). The fault on façade of the goods is deemed a hidden one, if the goods are packed and the package is not damaged nor damaged so much that this damage can be easily noticed by averagely attentive examination.

8.4 The Client will take over the received goods (examine the quantity and quality) as follows:

• Examine the quantity of the goods, packed separately, after receiving them;
• Examine the quantity of the goods, packed together in one body, within 8 days after receiving them;
• Examine the quality of the goods, not intended for further treatment (remaking, completion, assembling) within 15 days after receiving them;
• Examine the quality of the goods, intended for further treatment (remaking, completion, assembling) at his or any other place, during the regarding process at that place, but at least within 15 days after finishing the process.

8.5In the case the goods are, without or with reasonable delay, resold and dispatched onward without being put off , taken over and examined at the Clients', the examination may be postponed until examined by the Client's customer, when the goods are handed over to him at his destination.

8.6 The Client shall notify the Contractor about visible faults within 8 days after careful examination according to the paragraph 6.1... The Client shall notify the Contractor about hidden faults at least within 8 days after he uncovered them or, after his Client inform him that he uncovered theme. The Client shall notify the Contractor about visible and hidden faults through e-mail, facsimile or letter. It is sufficient that the failure is indicated and shortly described.

8.7 By notification, the Contractor is summoned to check the goods and

• To remove the fault; or to recognize the fault and reimburse the repairing costs, if it is specially agreed with the Client in the particular case;
• To replace the goods with good ones, if the fault cannot be removed.

8.8 The Contractor is obliged to check the faulty goods wherever they are placed within 15 days. The Contractor is obliged either to remove the fault, to replace the goods or to reimburse the costs for repair to the Client, within 30 days after the notification. Instead of the claim for a removal of a fault or for changing the faulty goods, the Client is allowed to claim the reduction in price of the faulty goods, if this may give satisfactory indemnity.

8.9 In the case the Contractor does not recognize the legitimate claim for repairing the fault, or if he does not either remove the fault, change the faulty goods or agree with price reduction, the Client is entitled to rescind the contract for not been accomplished.

8.10 Next to the claim for removing the fault, the Client is authorised to claim damages in compensation. By damages is meant all the damages, including business damages, loss of profit and goodwill. The Client is allowed to compensate any his claims (of price reduction, costs, damages etc.) with the claims of the Contarctor for the delivered goods (or services).

8.11By the other reasons herein or in the contract, the Client may rescind the contract for the following reason:

• If it is obviously according to the circumstances that the Contractor is not able to fulfil the contract within delivery term;
• If the Contractor declares, that he is not going to check or remove the fault;
• If the Client's customer countermand the order owing to the Contractor or the property of his product.

8.12 If i) the goods produced or, sold by the Client to his customer are returned to the Client; or ii) the price of the goods is reduced at the Client' s expense; or iii) the Client is obliged to reimburse any costs or damages to his customer or any third party; and provided that such engagement is due to the fault or malfunctioning of the goods of the Contractor or arising from his side, the Client is entitled to reimburse any compensation from the Contractor.

8.13 According to the paragraph 8.12. above, the Contractor is obliged i) to reimburse the Client any damages, costs, expenses or loss, including any consequential costs, provoked to his relations with his customers; ii) to compensate to the Client any penalty, liquidations of damages or indemnity, paid by the Client to his customer or any third party due to Contractor, the quality of his goods or his provoked delay in delivery.

8.14 The supplier shall bear any costs of recalling the goods due to the faults in the goods, incurred by or being the responsibility of the Contractor.

8.15 The limitation period for claims referred to the paragraph 8.13 is three (3) years from the time when the Client has fulfilled all its obligations to its customers, and not more than five (5) years from the date of delivery of goods by the Contractor.

8.16 In addition to the provisions of the paragraphs above, for the reimbursement or any compensations are applicable all regulations and legal rules, relating to the matter and being valid at the time of such claim.

9.1 The Contractor shall repay all the costs and recover any damages arising from the claims by third parties, if the reason for such claim arises from the goods delivered by the Contractor.. The burden of proof shall be born by the Contractor.

9.2In all the above cases the Contractor shall bear any and all costs including any lawsuits and / or product recalls.

10.1 The Contractor grants the Client general, irrevocable and non-exclusive right to produce, repair and sell the products comprised in the contract. Licence fee is included in the purchase price. Licence fee includes the right to sublicense.

10.2The Contractor grants the Client the right to all inventions and property rights that may originate from the contract. This granted right is extended to the Contractor's subcontractors, cooperative partners and his workers as well. The Contractor shall be bound and liable to assure and enforce that the subcontractor, cooperative partners and workers comply with this provision.

11 Drawings –Documentation for implementation - Tools

11.1 Drawings and other documentation, equipment, samples, tools and other production tools, which are lended to the Contractor, shall remain the property of the Client. Ownership of tools and other production facilities, not paid by the Client, must be settled in a separate contract. If such a contract is not being made, they are deemed as the Client's property.

11.2 The above mentioned items will not be either discarded or made available to third parties (e.g. for production purposes) without the prior written consent of the Client. These items will not be used for other purposes than agreed in the contract (for example: a shipment to a third party). The Contractor will keep these items for the Client at its own expense during the execution of this contract.

11.3 The Contractor shall repair, maintain and replace these items at their own cost.

11.4The Client retains all rights to design, to products manufactured in accordance with his instructions and to the process developed by the Client.

11.5The Contractor shall provide service and spare parts at a reasonable price in accordance with the Client's schedule of shipments at least for fifteen (15) years after the last shipment of the products of a particular series.

12.1 Invoices and documentation must contain details on order number, production number, serial number of the products and place of delivery. In the case of data missing, Client has a right both to return the goods and to charge the additional costs incurred. Consequently, the Client is not bound to pay the consignment.

12.2 In the event that the Contractor does not agree to individual conditions of the contract, he must give reasons in writing explaning why he does not agree to these terms. The refusal of the contract itself without justification is not sufficient to change any proposed condition of the contract.

12.3 Any invoice which differs from the order without the prior written agreement of the purchasing department of the Client, gives the Client the right to reject the invoice and charge any costs to the Contractor.

12.4The Client agrees to pay the invoice within ninety (90) days reckoning from receipt of both the shipment and the invoice, or else in the case of earlier shipments, reckoning from the appointed date (by order and confirmation) for the delivery. Alteration to this provision is valid only if confirmed in writing.

12.5 Payments made by the Client do not constitute acceptance of goods or the correctness of the invoice or delivery itself.

12.6 In the event that the Contractor wants to transfer the contract, accounts receivable or any claims arising from the contract, to a third party, he must obtain the prior written consent of the Client.

12.7 The Client has the right to set off, either his or by him anyhow obtained claims against the Contractor, with that claims of the Contractor against both the Client and any of his associates. At the customer's request, the Client shall notify him of the associates, affected by this rule.

13.1 Place of fulfilment is the registered head office of the Client.

13.2 All disputes will be settled in an amicable way. If an agreement cannot be achieved, any dispute will be referred to the competent court in the Client's State, regarding the subject and the Client's registered head office. Notwithstanding that, the Client is entitled to choose by his sole decision any other competent court in the Contractor's State, conferring jurisdiction to that court by naming it in a suit or other legal application.

13.3 The construction, interpretation and performance of any contract between the parties shall be governed in accordance with the positive law of Slovenia. In this manner the Slovenian Civil Code (Obligacijski zakonik Republike Slovenije) shall be applied. The use of the UN Convention on Contracts for the International Sale of Goods (UNCISG, 11 April 1980) is excluded.

13.4 If one of the provisions of this terms or any contract shall be found illegal, invalid or unenforceable, it shall not affect the legality, validity or enforceability of any of the remaining provisions of this terms or any contract. The illegal, invalid or unenforceable provision shall be substituted by similar provision of preceded contracts that achieves to the greatest extent possible the objectives of the illegal, invalid or unenforceable provision. If there is no such a provision, the issue shall be interpreted by intention and purpose of these terms and the contract, provided that the Client is not prejudiced or deprived of his rights.