General conditions of sale

I - GOAL


These “General Conditions of Sale” govern all ordinary commercial transactions celebrated between CMV Construções Mecânicas Ltda, (henceforth referred to as “CMV”) and the purchasers (henceforth referred to as “PURCHASER”) of the products of their Industrialization and/or Commercialization line, (henceforth referred to as “EQUIPMENT”), with the exception of operations that, in view of their special characteristics, demand conditions that are not expressly mentioned herein. In this case, for such special conditions to become mandatory, must be the object of a complementary instrument (“Special Conditions of Sale”), thus ensuring that, in case of conflict between the general and the special conditions, the latter shall prevail over the former. After an agreement has been reached between the parties, CMV shall send the Purchaser its “Confirmation of Order for Goods”, of which these “General Conditions of Sale” shall also be an integral and inseparable part. The signature by the BUYER of the “Goods Order Confirmation - CPM” issued by CMV, will confer to the agreed-upon business the nature of the irrevocable and irreversible agreement, without the possibility of repentance by any of the parties, except, however, in case of the possibility of CMV considering the transaction terminated, under hypotheses and conditions expressly established in this instrument.

 

II - PRICES


The prices stated in the “Sale Proposal” issued by CMV refer to the Equipment FCA (Incoterms) at the CMV factory and are calculated based on the taxes in force on the date of issuance. Prices may or may not include taxes, according to what has been specified. Any revisions of said taxes or fees shall imply modifications in the prices. Any additional costs by demand of the PURCHASER, such as changes in technical specification, bond or additional warranties, shall be added to the price.

 

III - PRICE CORRECTION


The prices stated in the “Sale Proposal” of CMV are subject to correction:

a) By a readjustment formula, always in accordance with the law in force, that integrates the “Sale Proposal” of CMV, and

b) On the occurrence of the hypotheses set forth in clause II above.

IV - PAYMENT

a) The installments of the price shall be corrected, always according to the readjustment formula mentioned in item “a” of the previous clause up to the date of payment. If the receipt of a delayed installment is effected within the maturity month, the calculation shall be made “pro-rata” for the days of delay, and issuance by CMV of a complementary invoice and the respective duplicate for collection is hereby authorized;

b) The receipt by CMV of any installment after the date of its respective maturity shall be considered an act of mere liberality, and shall not constitute novation or transaction, reserving CMV the right to collect charges regarding price correction and late payment charges, even if not collected or paid for with the principal amount;

c) In case of delay in payment for the Equipment or a temporary or definitive suspension of any installment, CMV may retain delivery of the Equipment or suspend, either temporarily or definitely, the execution of the job or construction of the Equipment, without prejudice of considering the celebrated business terminated in full right, and to retain all amounts that have been paid by the PURCHASER until such date, as anticipation for losses and damages, in addition to adopting all other applicable measures to compensate itself for possible damages and occasional default by the PURCHASER;

d) In case the delay by the PURCHASER refers to past installments after the delivery of the EQUIPMENT, such installments shall be increased with late payment charges calculated according to the usual rates practiced by the financial market upon a “pro-rata die” calculation, and CMV shall be authorized to issue a complementary invoice and duplicate, referring to additions, even if the principal amount has been or will be paid, either directly or in a registry office of protests. This addition shall be calculated from the maturity date of the installment up to the day of issuance of the complementary invoice. The same rules shall be followed in case of a delay also of the complementary invoice and so successively, up to the date the payments of the full debt and its additions are totally settled. Any taxes on the complementary invoice shall be charged to the PURCHASER in the complementary invoice;
e) In case of need for judicial collection, the respective amount shall continue being adjusted, according to the contracted formula, including with the addition of late payment interests of 1% (one percent) per month, in addition to the legal costs, suit expenses and CMV attorney fees, which are stipulated at 20% (twenty percent) of the amount of the full debt, duly corrected.

 

V - FINANCING


In case the PURCHASER wished to benefit from the financing by any organism, either official or private, they shall previously notify CMV, who will be entitled to accept or not the conditions of payment as established by the financial agent. Even if CMV accepts such modality of business, it shall not assume any responsibility for the fulfillment of any requirements of the financial agent, which shall be on the account, risk and responsibility of the PURCHASER, neither shall it waive any right or guarantee of being paid, directly by the PURCHASER, of the price and its additions of any kinds, and the PURCHASER may not invoke any problem with the financial agent as a reason for force majeure or act of God to justify delays in payment.

 

VI - VALIDITY


The validity of the “Sale Proposal” of CMV, of which these “General Conditions for Sale” are an integral and inseparable part, is indicated in the proposal. In case no validity is mentioned in the proposal, this is stipulated at 20 (twenty) days from the date of issuance. After the expiration of the validity of the proposal, the price and the conditions may be changed.

 

VII - PLACE OF DELIVERY


The Equipment shall be delivered at the CMV factory, and therefore all transportation and insurance expenses up to the place of assembly shall be borne by the PURCHASER.

 

VIII - PACKAGING


The packaging included in this proposal is of the wooden crate type (when we consider it necessary), while the machine shall be protected by a plastic film (ditto). If another type of packaging is required, this will be added to the price, as per conditions to be agreed upon between the parties.

 

IX - DELIVERY TIME


CMV does not assume any responsibility for any delay or failure in the delivery of the Equipment of for the non-execution of the order when these are resulting from Acts of God or force majeure that prevent or hinder the delivery of the Equipment, such as measures adopted by the federal, state or municipal governments or other public authorities, situations of strikes, accidents of any kinds, lack of fuel or raw materials, etc. In any of such instances, deliveries may be partly or totally suspended, and will only be resumed from the date on which the reasons causing the stoppage to cease to exist. Any changes after the acceptance of the “Sale Proposal”, in the technical characteristics, construction of installation of the Equipment shall depend on acceptance by CMV and, if accepted, may result in the extension of delivery time, change in the storage costs and possible price variations and possible price correction, up to the effective delivery time. The delivery time count shall start after the cumulative satisfaction of the following conditions:

a) Receipt of down payment;

b) Receipt, when necessary, of all technical data, drawings, parts, molds and models vital to the execution of the order; should drawings be needed for approval, they shall be returned within 5 (five) days from delivery;

c) Receipt on the respective contractual dates of all intermediate installments, their respective adjustments, and possible late payment fees. Non-fulfillment by the PURCHASER of any of the conditions above shall constitute a fair reason for CMV to postpone the delivery times stated in the order.

X - WARRANTY OF THE EQUIPMENT

a) The equipment stated on the enclosed “Sale Proposal” is guaranteed for a period of 24 months from the startup date of the equipment, limited to 30 months from the Ready Notice, for operation during a shift of 8 (eight) hours per day, provided the customer operates and maintains the equipment as established in the corresponding Operation and Maintenance Manuals and meets the specific instructions as defined by the CMV technical team at startup. For operation in more than one shifts, the warranty period shall be proportionately reduced. This warranty is valid against defects in workmanship and materials, provided the equipment is used within the conditions for which it was dimensioned. All commercial items or components installed on the Equipment and acquired by CMV from third parties shall have the same warranty given by such suppliers to CMV, which, if necessary, may be lower than one year;

b) CMV shall not assume any responsibility, either directly or indirectly, for any components acquired directly by the PURCHASER from third parties and that may not rigorously follow the technical characteristics recommended and provided by CMV, even if the installation of these components on the Equipment is made by the CMV technical team;

c) Expressly excluded from the warranty are those parts that show normal wear due to usage, failures resulting from accidents, operator lack of expertise or inadequate use of the equipment, its parts or components;

d) Any defects found on the equipment shall be immediately reported to CMV so that CMV may inspect the indicated defects “in loco”. Failure to immediately report a defect, as well as the attempt by the PURCHASER to repair the defect on its own account, without the express and written consent by CMV shall imply the immediate loss of the warranty granted;

e) Services resulting from this warranty shall be executed by CMV personnel or by personnel expressly indicated by CMV, during normal daily working hours, from 8:00 am to 5:00 pm, from Monday to Friday. If, for any reason and at the request of the PURCHASER, the warranty services have to be executed during shifts that exceed the normal daily working hours, or on Saturdays, Sundays or holidays, additional fees on such services, as requested by legislation in force for work during extraordinary hours, shall be borne by the PURCHASER.

f) The decision to repair or replace any component of the equipment during the warranty period, in such cases where the need for such repair or replacement within the warranty is proven, shall be at the exclusive discretion of CMV.

g) Services on account of this warranty may be executed at the discretion of CMV, both at its workshops or at the location where the Equipment is located. In the first case, Equipment transportation expenses to the CMV workshops shall be the responsibility of the PURCHASER. In the second case, the PURCHASER shall respond for the expenses regarding travel, meals and lodging of the CMV technicians, as well as for expenses regarding freight of any parts shipped to the customer facilities;

h) Any responsibility of CMV for losses exceeding the limits established by the warranty, in item “a” of this clause, or resulting from improper use of the equipment is expressly excluded. CMV shall also not be responsible for any legal actions against it or against the PURCHASER by third parties, as a result of the improper use of the Equipment. In such a case, if CMV undergoes legal condemnation, the PURCHASER shall immediately reimburse each and every expense, whether legal or extralegal, that it may have borne as a consequence of such a demand. This responsibility of the PURCHASER shall subsist regardless of delivery times agreed upon in the “Sale Proposal”, of the warranty period or of the contracted deadlines.

 

XI - EXTINCTION OF WARRANTEE


The warranty shall be extinct in the following cases:

a) For a lapse of time.

b) Late debt, by the PURCHASER, of any payment installment for the EQUIPMENT.

c)  At any time provided the following is occurring:

- Non-fulfillment of any of the recommendations in the Operation Manual and in the terms of warranty;

- Modification, addition or removal of any part of the equipment without the express consent of CMV;

- Modifications or changes on the equipment, with the exception of those carried out due to an express recommendation by CMV or by personnel indicated by CMV;

- The use of non-original parts, components, and accessories;

- Defects caused by natural phenomena such as fire, accidents, robbery, etc;

- Operation of the equipment by untrained or unqualified personnel.

XII - TRANSPORTATION


The transportation of the Equipment, either initial transportation from the CMV factory to the facilities of the PURCHASER or from PURCHASER facilities to CMV and respective return, in case of need for repairs, shall always be on account of the PURCHASER, who shall provide for shipment, insurance and each and every other provision necessary toward that end. The responsibility of CMV regarding the Equipment shall always cease with the delivery of the Equipment to the PURCHASER, at the CMV factory. The same applies to the occasional supply of parts for warranty;

 

XIII - ORDER CANCELLATION


If in spite of the express irrevocability and irreversibility of the business, established in the form and the conditions provided for in clause IX above, the PURCHASER should determine the cancellation of the delivery of the Equipment or refuse to receive it, CMV may at their discretion choose between:

a) Consider the business deal terminated, and the PURCHASER shall lose all amounts they may have already paid, as anticipation for losses, and authorize CMV to sell the Equipment to third parties at any price, or reuse its parts, components and accessories, regardless of any previous authorization by the PURCHASER and without prejudice of being able to also collect from the PURCHASER any differences of losses as may be calculated;

b) Judicially consign the Equipment and collect the PURCHASER for any still unpaid installments, all of which duly corrected according to the above provisions, with the addition of late payment interests and attorney fees.

XIV - PAINTING


The Equipment shall be painted according to the CMV standard as established in the offer. Should the PURCHASER wish for a painting outside of this standard, additional costs are to be collected as necessary. Components such as motors, gear motors, fans, valves, shall be delivered in the color/painting of their respective manufacturers.

 

XV - NOTIFICATION FOR DELIVERY, INSPECTION, AND STORAGE


THE BUYER shall, as soon as notified by CMV by letter, fax or email, or by any other electronic means, show up at the CMV factory in order to inspect and collect the Equipment, and CMV shall be authorized to, within the 3 (three) business days following this communication, issue the invoice for the Equipment, and collect henceforth the due installments under the terms and conditions of payment established in the “Confirmation of Order for Goods”. After 30 (thirty) days of notification, if the PURCHASER has not yet collected the Equipment from the CMV factory, CMV shall be authorized to charge for storage at the rate of 1% (one percent) per month over the amount of the uncollected Equipment, for as long as it remains in its facilities, and the number of expenses for storage carried out by CMV (including those for packaging and transportation) should CMV choose to transfer the Equipment for storage in third-party warehouses, at its exclusive discretion.

 

XVI - ASSEMBLY SUPERVISION AND/OR WARRANTY PERIOD


Whenever established in the proposal, in order to supervise the assembly and check the perfect operation of the Equipment, CMV shall make a technician available for a period of days and deploy specialized technicians at the disposal of the PURCHASER, and the following expenses shall be borne on PURCHASER:
 

Tickets (return) in a class that allows changes of flights, lodging and other reasonable expenses by CMV employees, and their contracted parties:

1) Daily rates or hourly rates that exceed those specified in the proposal, while daily rates shall be contracted to form the moment of departure up to the date of return of the employees, including Saturdays, Sundays and holidays;

2) Each daily rate refers to 8 (eight) hours of work during business hours;

 

Freights for parts, tools and other materials necessary for the supervision of assembly and commissioning of the Equipment.

 

XVII - “START-UP”


When specified in the supply proposal, CMV shall place a technician at the disposal of the PURCHASER, for a maximum period of 1 (one) day, during normal business hours, equivalent to 8 (eight) business hours, to check the adequacy of the assembly, carry out initial adjustments train operators, etc., in order to ensure the start-up of the Equipment within the standards established by CMV. The working hours of the CMV technician shall be free of charge, for the maximum period of 1 (one) day, during normal working hours, except on Saturdays, Sundays and holidays, and these daily rates shall be calculated from the moment of departure up to the date of return of the technician, including Saturdays, Sundays and holidays, and all expenses regarding transportation, lodging and meals shall be on account of the PURCHASER. If for any reason and at the request of the PURCHASER, the services have to be rendered at times that exceed the daily normal working hours, or on Saturdays, Sundays and holidays, CMV shall have the right to collect the difference in price resulting from these overtime hours, according to the percentages agreed upon with the trade union of the class in force at the CMV factory. Should there be more hours or additional days necessary, these shall give rise to a separate budget whose conditions shall be agreed upon prior to the execution of such additional services. CMV shall have the right not to promote the start-up if there are pending issues regarding previous payments, and it is established that if the PURCHASER decides to carry it out without the presence of CMV personnel, the PURCHASER shall be the sole party responsible for the consequences of such an act, and CMV shall be exempt of any burden resulting from this action. If the start-up or the commissioning of the Equipment is not possible due to problems of the Purchaser, this activity shall be considered as executed for the effects of counting deadlines for the payment of remaining installments.

 

XVIII - STATEMENT BY THE PURCHASER


a) The PURCHASER declares having carefully read these “General Conditions for Sale”, and that he is aware of all its terms and conditions, regarding which he does not have any doubts, and is aware that they are an integral and inseparable part of the “Confirmation of Order for Goods” which has been signed between the parties, as a result of the corresponding “Sale Proposal”, on which occasion all these documents, including this very one, shall have the force of an irrevocable and irreversible contract, except for those conditions expressly provided for in this document.

b) The PURCHASER declares he is aware that the EQUIPMENT is not a good regularly offered on the consumer market, but rather a product manufactured for the exclusive use by the PURCHASER, according to their specific needs.

c) The PURCHASER also declares that the EQUIPMENT shall be incorporated into their production chain and used exclusively for commercial and/or corporate purposes, so that the legal relationship between the PURCHASER and CMV is not covered by Act 8,078 of September 11, 1990.

XIX - COURT


The parties elect the court of the city of Porto Alegre, RS, with the exclusion of any other, no matter how privileged it may be, or may become, in order to resolve any doubt, question or litigation that may arise from this document.